Executive Summary

What does it really take to develop and sustain Human Capital? It is the Individual growth we are talking about when addressing the Human Capital issues; where Individual Growth contributes to the growth of the organization, society and / or nation. Individual growth needs to be addressed from all the three dimensions; Personal, Professional and Emotional. Whose primary concern is it therefore, to facilitate and address such growth? Without a doubt, it is the individual themselves. While most perspectives floating around today are mostly around the concept of human capital from a business enterprise perspective, this is restricted to the context of organizational performance. It is proven scientifically that performance at work is productive only when it is balanced emotionally between the professional and personal life.

From family to society to organization and nation, there is a contribution in our lives from diverse sources. Individuals need to address the context of each of the dimensions (Personal, Professional and Emotional) in relation with the contributing sources and shape their aspirations and expectations for growth. While the individuals are themselves accountable for their growth, the organizations and others with the means as well as the distribution and reach, can provide individuals access to mechanisms to manage the rapid cycles of growth. This provision for mechanisms should facilitate individual growth overcoming the ever increasing demands on resource availability and its consequent constraints.

The explicit and implicit contract here is the growth of talent and a productive society, where the organization benefits for its specific contexts and the individual succeeds in building not only a successful career but also a more rewarding society. The premise of a Public Sector Enterprise may have been embedded in this philosophy and would have succeeded without its related isms. It is time to correct the interpretation of such enterprise which may have had more to do with political socialism than socialistic welfare. Let then organizations contribute to their peoples enterprise before contributing to charity. While organizations would undoubtedly benefit from the agenda for creating wealth in society, it would also allow government to seek and tap additional sources of revenue, when individual growth is repetitively rapid; fueled by the engine of wealth creation.

The essence of Human Capital Management is Investment in Growth as opposed to the traditional organizational approach of Investment for Growth. The former takes a proactive approach to developing capabilities and managing change that will service growth requirements while the latter takes a reactive response to developing capabilities based on the priorities of pre-determined growth strategies which is not in consonance with emerging change requirements. This is the area that deserves a missionary zeal on the part of an organization in pursuing capabilities development as a cause to renew and sustain growth continuously. HCM will not meet the requirements of tactical planning that looks for quick ROIs only. It will address the sustenance and consistency of Enterprise Performance, where the present is equally important as the immediate and long term future.

Managing the complex processes of building and sustaining a competitive workforce will become just as important as managing Financial Capital. With employee costs often exceeding 40 percent of corporate expense (even higher in professional services firms), it is essential that companies maximize their return on human capital investment, says Craig Symons, Giga Information Group. The most critical vignette of information that needs to be contextualized against the above quote is that, the financial capital and human capital are interlinked by the common assumptions of planning for growth and therefore mutually serve each other. The danger with misinterpreting the statement would be to take a unidimensional view of cost alone; where the human element of an enterprise strategy is viewed as cost and not asset. The theory of Economics defines clearly that costs are characterized as overheads, while assets are mechanisms of growth and revenue. This document attempts to articulate the process of human capital management from the perspective of enhancing assets for performance.

HCM should not turn into another pitch for a software implementation where the true impact of processes and culture will be left behind, as no one has the time to address the why of performance because resources are being deployed for covering the gaping holes in the software asphalt that has just been laid. Make no mistake; software and technology are an integral part of enriching and enhancing a Business Process. However, they are not the process itself and they do not address the culture issues from a solution perspective. They only create more problems for an organizational culture. This document also attempts to present an objective assessment of the problems in not addressing the Human Capital Management as a co-joined organizational support process.

This document aims to address the process issues and the cultural issues associated with the implementation of the Human Capital Management. There are tons of software that can be made to work to achieve the desired workflow, dataflow and information flow. It is also important to achieve uniformity in the treatment of processes spanning across an enterprise; be it geographically, vertically or operationally dispersed. 

In a recent article in the Financial Times, Thomas Malone Patrick J. McGovern Professor of Management at the MIT Sloan School of Management writes: We are in the early stages of a profound increase in human freedom in business that might, in the long run, be as important for businesses as the change to democracies was for governments. It is in this context that the discussion on Human Capital Management becomes all the more important and relevant. Where the discussion is centered on how an organization can have the right talent and not just a body count. It is pertinent to therefore that the talent is recruited to execute its strategies rapidly without the downtime of learning curve and the organization also gains the loyalty and commitment for repetitive organizational competitive differentiation. This document takes a compassionate view of engagement between Individuals and Organizations serving each others cause continuously. The following Illustration 1 is depicts the sub-processes of the Human Capital Management Process demonstrating through the value of interaction with the process participants.

The outcome and impact of outputs on the organization and individuals from the above delineated sub-processes would be as follows: 

Resourcing Strategy: This output from the Planning Process would dictate the recruitment of internal / external talent based on roles and accountabilities, rather than head count. Therefore, it would be an element of the organizational strategy with adequate support of budgetary allocation for promoting or training internal talent or recruiting external talent.
Talent Recruitment: This output from the recruiting process would not focus on a job but a lifecycle of talent and lifetime value of an individual.
Role Based Organization: This output from the Induction Process would prepare roles that perform to a strategic plan and integrated and unified across an enterprise, guided by contextualized intelligence.
Satisfied Employees: This output from the Servicing Process would produce Involved Employees who would live the culture of customer focus, ensuring that the culture permeates across internal and external customers.
Rewards, Recognition & Celebration: This output from the Retaining Process would create a spirit of ownership / entrepreneurship and therefore accountability for strategic outcomes among individuals and the enterprise as a whole.
Employee & Customer Loyalty: This outcome from the Retiring Process will create Brand Ambassadors for the organization as the Individuals grow along with the organization, evoking a strong sense of loyalty for the enterprise and becoming accountable for institutionalizing the mantra of success across the enterprise and outside. 

The outcome of an integrated planning process is Performance Measures. Business Integration and Performance Measures are two ends of a spectrum. The human resource planning needs to be a dynamic process that oscillates between the two ends of the spectrum achieving the accuracy and Quality of delivering time. It is very clear that the success of the planning process is both in the set up of the base plan and its continual fine tuning. The base has to address the business performance while the fine tuning has to address the operational and individual performance. The trouble with most plans from an organizational context is that, they lack the dynamic quality. Dwight Eisenhower, one of the better known planners in the history of civilized society is reputed to have been quoted as saying; A Plan is Nothing. Planning is everything.

First step in addressing the Human Capital Process is the discipline of the organization to conduct a rigorous strategic renewal process. Such a renewal process must be supported by contextualized business and cognitive intelligence. The Business Intelligence platform must be robust in connecting and comparing a dynamically shifting external environment with the current organization scenario, as depicted in the following Illustration 2:

The Cognitive or Experiential Intelligence platform must be a robust real-time Balanced Score Card representation of the organization driven by Organization Strategic Goals, disaggregating to Process Goals, Team Goals and Individual Goals. At the time of planning, it is important to set the key parameters of the process with the following definitions:

Process Definition: How does the business process respond to the strategy of the enterprise which is customer focus driven? It is very important that the differentiation is articulated and designed in the process.
Process Scope: How the process will function in terms of its accessibility within and outside the organization, the accountability and responsibility and other boundary conditions including alterative scenarios. 
Process Roles: How the process will be performed by the people and various mechanisms that will enable their Performance including Information Systems, People Systems and Management Systems (Governance).
Critical Success Factors: Articulation of the factors that are critical for the defined process to succeed in terms of Change Readiness; technical, learning & knowledge and behavioral.
Key Performance Indicators (KPI): The articulation of Customer Expression by means of statistical scores that the organization needs / aims to achieve. This would be in direct correlation to the enterprise strategic measures.
Performance Measures: The agreed set of measures by processes, teams and individuals that may be reviewed periodically to assess against the actual performance and compared against the articulated strategic goals (KPIs). 

A comparison between the expecting external environment and the performing internal organization should provide the delta for improvement and / or growth; be it in the area of Customer Focus, Financial Returns, Learning & Growth and / or Business Process Performance. The development of resources and talent must provide opportunities for growth to internal candidates before looking for external candidates. At the same time, the planning process must be scenario driven across business models to prevent the ugly face of retrenchment and unemployment. If an organization has to retrench people at one time and scamper for talent at another, it demonstrates a poor understanding of the human asset value and an even poorer image of its planning abilities. The core of all planning activities would be to convert existing matter into higher energy that can act as the fuel of future growth. 

The hall mark of an integrated planning process would be to ask the following questions:

• How integrated is the strategy with the leadership thought and vision?

• How prepared is the management response to the changing vision?

• How integrated is the planning for various systems; management systems, information systems and human systems?

• How integrated is the planning for managing technical and behavioral change?

• How integrated is the planning for innovation and creativity that emerges from within or outside the business, creating large business discontinuities? 

The advantages of an integrated planning process would be:

• An involved and innovation lead organization.

• Mature leadership that realizes its vision and keeps its promise to its customer universe.

• Measurable Performance and Results enables repetitive and rapid strategic cycle turn.

• Cost effective operations providing more opportunities for growth rather than trade-offs.

• A meritocracy based enterprise that attracts the best talent and motivates energetic performance.

Recruiting: Internal & External Talent

The outcome of a recruiting process is talent which can be both, internal and external. Most organizations realize that recruiting internally is more cost effective and productive than recruiting externally. The argument against that would come from people who hold the view that it is necessary to influx people from outside to rejuvenate the jaded view of people inside an enterprise. There is no absolute answer. Yet, it goes without saying that if an individual can get the challenge of working in the competitors as well as his / her own enterprise, then he / she would be too involved and inventive to be jaded. So why not bring the competitors environment into your own organization?

Remember that an individual takes away a lot from an organization when he leaves, more than what he / she brings in. If we examine the motivation of people being recruited or head hunted or poached (as the process of recruiting familiar with), it is driven by their constant struggle to shorten the distance between needs and aspirations. When will organizations be in a position to recruit people driven by their aspirations? If you examine the recruitment of armed services personnel in India, there are families of service people who for generations have served and continue to serve the country. Usually, each new generation of the family has grown in position and stature over the previous one. On the other hand, there are a multitude of people who join the armed services because they have nowhere else to go. Isnt it time to reflect whom and what kind of talent you need to attract more, irrespective of position and hierarchy? Because, the former is driven by a deep sense of duty and calling while the latter is driven by opportunistic motivation.

From employing a search for an internal or an external candidate to the time that individuals are finalized for specific positions, there are multiple agencies involved in activities relating from creating the right role descriptions to selecting probable candidates, initiating an enquiry / interview process and then negotiating the terms of reference before the candidate can accept the position. If one were to critically look at how these series of activities are performed, it wouldnt be too long to discover that a fairly routine process is often botched and bungled by inefficient and insensitive handling. Therefore the key focus of this entire recruiting process would be care for the recruits preferences and personal requirements. 

As depicted in the following Illustration 3, every individuals Needs, Wants, Expectations and Aspirations must be understood and mapped against the organizations. The base of needs shifts with the fulfillment of expectations (Performance), as Individuals grow. In the process, the wants automatically disappear or get fulfilled with time as an element of what the individual deserves in life. A series of performance or fulfillment of expectations results in the attaining of aspirations as well. This life cycle of needs to expectations to aspirations needs to be understood to make recruiting successful and purposeful from an organization context. This is risk assurance revolving around the alignment of individual and organizational strategic alignment.

Talent is a very context oriented subject and yet it basically defines the capability to make achievements possible to a set of competitive conditions. The life Cycle grid on the other hand is an assessment of an individuals change orientation and readiness leading to the definition of Resilience Factor. The two together define the capability (Ability also known as skills + Willingness). Whatever be the role, it has become important for organizations to recruit people with an ability to change culturally and synergistically perform with the existing organization to emerging challenges, without displaying dysfunctional behavior. Change Management must be an important ingredient of the recruiting process that prepares the Individuals responses to the stimuli driving the organizational strategy he / she are recruited for.

The hallmark of a good recruiting process is asking the following questions:

• What are the roles and the consequential talent required to fulfill the defined enterprise strategy?

• What are the best sources of talent; internal, external or one that needs creation?

• What are the sources of Innovation or partnerships that can enable the organization strategy more rapidly?

• What are the contexts to which an external candidate can respond better than an internal candidate?

• What are the lifecycles of potential candidates and how could they contribute to the organization culture? What is their lifetime value?

The advantages of getting the recruiting process right would be as follows:

• Rightsizing by recruiting and not through retrenchment.

• Strategic Focus and not tactical focus alone; to drive growth and productivity concurrently.

• Creating a winning team.

• Attracting and retaining the best talent.

• Creating valuable assets for the enterprise.

Induction: Experience Perceived Reality

The outcome of an induction process is a role based organization where each role is well defined in terms of the enterprise script for success. During the induction process, an individual needs to be re-conditioned and oriented for integrating with the existing team in the enterprise and meeting the requirements of emerging challenges effectively.

In team sports, when one goes out and plays in a game, it is not only the individual skills that matter. The first condition for success in a team game is trust and inter-dependence. The organization is no different. The process of Induction besides creating and clarifying on the role must clearly establish the element of trust between the inductee and his / her team. Induction should not be a one-way information overload onto an individual. Rather, it must be a real life experience of the organization with a chance for the individual to change the or influence the status quo.

Some of the key aspects of induction that need to be addressed as a process are:

Communicating a Compelling Change Vision: 
This is very critical to the process of induction and can make or mar a successful inductee. The inductee will need to have a very clear view of the Pain or Remedy associated with change he/she will be involved in. This will be linked in clear terms to the business strategy and the priorities. Playing an old corporate film or getting different people in the organization who themselves do not have a clue on the enterprise strategy will only lead to mistrust on the part of the inductee. By doing so is akin to sowing the seed for attrition.

Getting a buy-in on the Visioning: 
When a talent is being inducted, it is important to seek perspectives and views and suitably amend or append to the organizational view. This will go a long way in demonstrating the power of empowerment and creativity and bring about greater synergy and team energy. 

Establishing Accountabilities: 
This is something that has to be addressed in a very concise and definitive manner and contracts established for measuring performance. There must be no ambiguities and a Common Terms of Reference should be put into place. 

Planning & Risk Assurance:
Seeking inputs into an existing planning exercise or creating new plans with associated risk assurance measures is absolutely critical to making an inductee effective in his / her role. Participating in the planning exercise or contributing to a plan and making a difference would create the required level of ownership and synergy with the rest of the team. This is also a must in order to eliminate the emergence of politics and potential sabotage.

Organizational Governance:
All aspects of the enterprise governance with respect to policies & procedures, authorization, authentication and security must be addressed as a closed loop process. All aspects relating to the use and disposal of enterprise assets must be made explicit and an agreement needs to be documented.

With fashionable words like on-boarding process coming into vogue, it is assumed that all the above can be addressed by IT. It is important to understand that IT cannot replace the warmth and reassurance of a human interaction; more so when the individual may be vulnerable in a new environment. Therefore, human intervention must be supported by systems efficiently and ensure that the above and other best practices allow for the induction of a role, which will bag the Corporate Oscars. No matter what the urgency for a position, this process of induction must be addressed even intruding into personal time of an individual, as this is the one that will define the perception and definition of future engagement success.

The hallmark of a good induction process is asking the following questions:

• Have we been able to define the role according to the demands of the enterprise story and the strategy script?

• What do we need to do to engage at the emotional, professional and personal level and keep the interaction between the individual and the organization alive, continuously?

• Do we have the right check list and have we been able to complete them without compromise?

• Do we have all the agreements including legal, performance and statutory and compliance related?

• Have we created the right mechanisms for a cultural osmosis?

The advantages of getting the induction process right would be:

• A well inducted role that will work in alignment with the organization strategy.

• Ownership and accountability to customer outcomes; both internal and external.

• The seeds for institutionalization of systems.

• Establishing trust and confidence in people to respond with courage and conviction under all circumstances. 

Service Employee Satisfaction

The outcome of the servicing employees (temporary, permanent and contract) should result in their satisfaction. All administration functions such as compensation and benefits, Contracts, Assets Management, Legal, Travel, Health and others can be serviced through a combination of self-service integrated with third party service providers with minimal human intervention and uninterrupted automated service remotely. 

In these competitive times, extraordinary demands are made of an employee with respect to speed and dedication. The senior that a person raises in the organizational firmament, the greater is the invasion of work into private time and life. This could result in stress and emotional fracture, when not handled with care. It is most important that organizations address this aspect of emotional repair with care. This extends not only to the employee or the individual concerned, but also to his / her companion or immediate family. It is paramount that all contractual obligations are met without error as per the enterprise governance. Further, individuals need to be provided relief, where the organization and its network of associates can make a difference to the quality of living, of an individual.

For example, wouldnt it be wonderful to know that an organizations network can provide for the most cost-effective vacations or school education for the children or extended healthcare for dependents. It should never be the case that the individual in between a painful tooth extraction, have to read the fine print that says that the dental insurance coverage provided by the organization does not pay for the type of extraction the individual is currently undergoing. Professionals need more coaching and counseling on private matters than professional. An emotionally well balanced person will contribute eagerly and energetically to the organizational cause and also maintain a balanced personal life.

A key aspect of servicing employees is the quality of service. It is observed that many organizations resort to tokenism claiming that we do this and that for our employees. The question that needs to be answered is how effective is the service and what is its rate of use? Sometimes a service provided as a token is more irritating and can cause dissatisfaction than not providing the service at all. Employee communications, in form as well as in content, must be responsive and empathetic to the individuals needs. On the contrary, it is often observed that the organization administration takes the haughty stance that the employee is reticent despite being facilitated well. 

Quality is the key here than Quantity. It is not just the number of events that an administration brings but their utility and experience that counts. A pay stub and pay stack available on the enterprise intranet is of great value only if the information contained in them is accurate. Similarly, learning mechanisms and resources which are listed should be made available physically, as easily as the information that is displayed on the intranet. A health check-up program must be communicated well in advance to enable individuals plan their time and schedules.

The hallmark of a good servicing process is asking the following questions:

• Have we got all the administrative contracts with the individual right?

• Have we communicated all the process and procedures and have we kept updating and communicating the changes?

• Have we completed all administrative contracts and do we have a mechanism to update them regularly, based on enterprise governance?

• Have we provided mechanisms for counseling, coaching and guidance on administration and self service?

• Have we created mechanisms to incorporate Personalization and Preferentiated Service to individuals?

• Have we built the right networks to service the individuals?

The advantages of getting the induction process right would be:

• Employees free from the worries of the mundane are engaged energetically towards the organizational cause.

• Employees Quality of Life is enhanced because the Mickey is taken out of the routine; which professionals consider unproductive and unromantic.

• Organization brings its clout, distribution and reach, to bear upon networking partners for price / performance parity and cost effectiveness on products / services.

• An implicit obligation is created on the employees to inherit the service culture, which shows in the way external customers are handled.

• It becomes a cause of pride in an individual as far as the organization qualities are concerned. 

Retention: Building Relationships

The outcome of the retention process is relationships. Where the bond between the individuals and the organization allows for taking trust with commitment, as a given. While the Servicing process addresses the Personal Requirements, the Retention Process needs to address the Professional part of an individuals life cycle. Retaining an individual in the organizations means making him / her part of the growth and celebration of the organization. The accolades and recognition which the organization receives must be shared with the individual. The individual must be recognized and rewarded for his / her contribution by way of their innovation and creativity.

It implicitly follows therefore, that the most important aspect in retention is creating the knowledge and collaboration environment for an individual. This is where he learns and thrives as a professional; sharpening his skills and contributing his intellect to the cause of the organization. It is important for an individual to be in step with the threshold of capability of the organization, effectively contributing and participating in its life cycle. 

The employee must be treated as a customer of the organization. In this case, the individual contributes his / her intellect in the process of wealth or value creation. The best of the buildings and information systems will not be able to create the value of repetitive competitive positioning, which only an individual and his / her intellect can achieve. This positive energy when harnessed across the enterprise produces exponential growth. We all know from experience that it probably costs 20 times more to acquire a customer than to retain one. The same applies to this customer, where even one person could affect the collective Intellectual Quotient of a team. 

The hallmark of a good retaining process is asking the following questions:

• Have we created world class infrastructure that inspires and enlivens the psyche of an individual at work?

• Have we created the right kind of contextualized knowledge management and collaboration platform that enables innovation and creativity?

• Have we taken care to grow the individuals professionally even as the organizations growth context keeps shifting?

• Are we providing the right tools, techniques, methods and frameworks to make the work environment more productive?

• Have we created enough forums and practices for expression of ideas and innovations and creativity across the enterprise?

• Have we created an environment where it is safe to fail and challenging enough to succeed? 

The advantages of getting the retaining process right would be:

• Innovative and Creative organization.

• Highly energized individuals whose identity becomes synonymous with that of the enterprise.

• Meritocracy based organization where rewards, recognition and celebrations are not politicized.

• Risk Assurance and Program Management become synonymous with growth strategies.

• Organizations and individuals embrace change and challenge proactively.

• Mediocrity is shunned for pursuit of excellence.

Retirement: Branding

The outcome of the retirement process is Branding. Irrespective of whether a person graduates from one position in the organization or leaves for the organization on his own violation or even when an employee is asked to leave for reasons of incompatibility; such people could become the brand ambassadors of the organization. Carrying the torch for the organization and creating a positive impact, both within and outside the enterprise.

At the outset, it needs to be understood that if an individual does not work out, it is not the fault of the individual. It is the organizational processes that have failed to make a proper match between requirements and the individual. Therefore, it is not fair to punish or penalize an individual. At the same time, it would serve as a great advertisement that such situations are dealt with dignity and decorum, where the individual carries positive images and signals to the outside world. It is a small price to pay for a mistake committed by the organization. 

The popularly jargoned off boarding process needs to be addressed with care. There are various circumstances in which individuals retire out of an organization or even within the organization, to different positions. Utmost care is essential in transitioning individuals resulting in one less negative factor to worry about, in a new target environment. Consider an employee who moves from one state location to another and the first thing he complains to a fellow colleague is how poorly the organization managed his move! In one stroke, you have managed to create one disgruntled employee and several other suspicious ones. Handling an individual who is leaving for another organization can also be treated with care that might sometimes demand a large heart and flexibility. As long as it does not hurt the enterprise intellectual assets or customer expectations, organizations must learn to not being petty.

The hallmark of a good retiring process is asking the following questions:

• Have we created an environment where every interaction with an individual is marked with dignity and decorum?

• Have we created the right mechanisms for measuring Performance and Succession?

• Have we created flexible governance that allows the organization and the administration not to be petty?

• Have we created enough mechanisms where individuals are able to share their experiences and become brand ambassadors, both internally and externally?

The advantages of getting the retiring process right would be:

• It can bring down the cost of talent acquisition and retention tremendously.

• It can create an unmatched loyalty factor.

• The organization can make unreasonable demands of its people.

• More inspiring leadership and continuous quest for excellence.

Summary

Andrew Mayo, Professor of Human Capital Management at London Business School, in his book The Human Value of the Enterprise (Nicholas Brealey Publishing, 2001) discusses Human Capital Management with the perspective of using people as assets. The following table illustration depicting his model for The Human Capital Monitor is a reference to summarizing this document for HCM process implementation.

It is very evident from the above table that the Human Asset Worth (HAW) Equation looks at Employment Costs that need to be calculated across the Human Capital Management Process. Similarly, Individual Asset Multiplier (IAM) draws from the dimensions of individual Potential, Motivation and Performance that is derived by the organization engaging with the individual, continuously across the HCM process. There is no escape therefore from creating the process discipline to claim the benefits of Managing Human Capital which contributes both, to the current and the future growth. It is sufficient evident to the skeptics who might believe that the foundation and discipline of the HCM processes will not yield immediate benefits

In essence, it is important to understand that it is not enough to bits of disjointed process and expect the outcomes owed from Managing Human Capital. The process as described through this document need to be implemented, with an eye on the following key factors: 

• An integrated planning process that considers business strategy in alignment with individual aspirations allows for recruiting talent internally and externally, using contextualized Business and Cognitive Intelligence as inputs. 

• Talent that is recruited and inducted successfully into the organization culture as a role for achieving the strategic vision, results in aligned organizational and individual performance. 

• Employee Performance that is supported and facilitated by an understanding of the individuals Professional, Personal and Emotional needs and cared for in terms of administrative contractual agreements will yield satisfaction. 

• A satisfied employee is more amenable to a relationship and bonding; where the enterprise can make extraordinary demands which will be met with equally extraordinary and committed response.

• Having addressed the personal satisfaction, when an organization provides a platform and invests in the growth of the individual, the response to that will be multi-fold for the organization in terms of performance and growth.

• This repetitive demand and response becoming integral to the organizational governance and discipline will result in brands; individual and organizational those are mutually complimentary and resonating success, rather than dissenting in failure.