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Human Capital: Dealing with Challenges
Name: alex peterson

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a. Problem
Human capital is a collection of skills, knowledge and any other intangible assets of individuals that can be used to create economic value. Organizations depend on their human capital so as to realize their overall objective. In an organization, employees are the source of human capital thus making them the most critical assets for any organization. Human capital provides organizations with the information, knowledge, and skills needed to remain competitive in the market. However, the most organization continues to grapple with the problem of retention, engagement and the provision of benefits and compensation to the employees. When the needs of the human capital in any organization are not addressed, the organization is bound to record high turnover rates, low motivation, and low production. Human resource management participates in the acquisition, cultivation, and retention of human capital. The human resource departments strive to find, recruit and select people with the right set of skills and knowledge that fit the needs of the company. However, it is one thing to recruit and select the best capital, but it’s another task to retain them and ensure they remained dedicated and focused on the organization’s objective.
b. Evidence
Benchmarking of human resources strategies has been found to be an effective way of enhancing human capital and improving the overall organizational performance. Specifically, human capital benchmarking strategies have been effective in identifying exemplary practices for human resource practitioners. According to a study by Huang (2002), there are several human resource practices that an organization can adopt including training, participation, and empowerment. Participation and empowerment are considered extensions of job design as they enable employees to perform their jobs. Participation is all about giving employees a voice. Employees must be allowed to voice their opinions and suggestions concerning organizational matters. Instead of managers telling their employees how to do their jobs, the management can encourage employees to participate in addressing issues about their jobs. Employees can pose questions and make decisions on how they can do their job. Such decisions can be made based on the employee’s experience and expertise. Participation also entails engaging employees in decision-making on administrative matters. On the other hand, empowerment is a process of enabling employees to set their work goals, make decisions and solve problems within their spheres of responsibility and authority. In short, employees should have an enabling environment that is flexible enough to allow them make their individual decisions and take responsibility for their actions.
Training is another critical element that organizations can embrace so as to motivate and ensure a productive human capital. Training enables employees to learn specific knowledge and skills so as to improve their current roles. Training occurs based on the training needs of the organization. The management must be in a position to identify the skill gap within the organization. The skill gap is determined by measuring the skills that the company enjoys against the skills that the company expects to have so as to achieve a certain goal. The training initiative is then developed based on the identified gap. Later, the effectiveness of the training is assessed based on the outcomes of initiatives aimed at achieving organizational objectives. The provision of high-impact employee training reduces employee turnover as the employee appreciates the organization’s effort to improve their career growth (Fitzenz, &Bontis, 2002). Training also increases employee motivation which in turn increases production thus enabling the organization to attain its goals. Effective training also improves engagement and speed of employee competency. In short, employees are motivated to stay and work for an organization that demonstrates its genuine interest in the growth and development of its employees through the provision of training opportunities.
The provision of good reward systems can also enhance retention and the performance of employees. According to Akindipe et al. (2013), providing employees with a good reward system helps in improving employee performance. Employees are motivated to work when they are assured that their efforts will be rewarded. Employees leave their employment if they perceive that there is nothing that is compelling them to stay. The presence of an attractive reward system can motivate employees to stay with the company and participate in realizing its overall objective. Rewarding employees after they have achieved their goals and set targets are a critical management tool that most manager and HR practitioners overlook. There is a need for the effective adoption of an effective reward system that can guarantee the presence of a highly motivated workforce that genuinely is working towards the prosperity of the organization.
Organizations can also work towards acquiring generation diversity. Hooper & McCrindle (2006) conducted a study where they provide insights on handling Generation Y employees and generation diversity. Generation Y is confident and has high standards of self-esteem. They have the self-belief, and they believe they can handle any hurdles thrown to them. The Generation Y employee also seeks a workplace that is challenging, fun and financially rewarding. The Generation Y employee is also multicultural, and they perceive diversity as the norm. An organization that desires for excellence must be ready to integrate all generations as part of its human capital. The differences between the practices and ideologies of generation X, baby boomers, and millennials can cause friction unless the management intervenes. For instance, baby boomers are hands-on and like doing things the old-fashioned way. In contrast, millennial is tech-savvy and eager to adopt the latest technologies and strategies to improve their work. The two generations can collide especially if one group desires to retain the status quo while the another group of employees is pushing for change. Differences related to attitude towards, and loyalty towards the employer can also cause conflict and impede organizational performance.
c. Recommendation
The organization can establish top-bottom and bottom-up communication channels so as to encourage employee engagement. The management must eliminate the wall that puts the management away from the employees. Activities such as decision making on employee roles can involve the employee themselves. It is the employees who interact with each other, different work processes, as well machinery and equipment. The employees are thus well equipped to give suggestions on areas that need improvement. The involvement of employees can also help the organization see and resolve potential problems that would have interfered with the workflow. Similarly, the organization can engage employees in the creation of policies by receiving suggestions, considering them and implementing those that are feasible.
The organization can embrace work teams thus allowing employees to form teams comprising of individuals with different skills and talents. The work teams would work as a unit towards achieving a common goal. After embracing work teams, the organization would allow the employees to plan, organize, direct and control their work. The supervisors will then take the role of a coach rather than a dominating boss. The management must ensure that the supervisors of the various department transition from the role of bosses to coaches. The first step in the shift from bosses to coaches is delegation. The supervisors can learn to delegate responsibilities to employees thus assigning them greater responsibilities. The senior management must also be willing to lead from the top by ensuring that they adopt the coaching form of leadership and abandon the “boss” attitude.
The organization can embrace training and development as a strategy for retaining and developing their human capital. The company can adopt in-house training methods such as coaching, mentoring and job rotations. In strategies such as mentoring and coaching, the older and more experienced employees can work with the younger employees. The old employees can share details and elements of their work experience while the young and freshly-graduated employees can share insights on the latest developments on matters related to their job. Alternatively, the organization can consider off-the-job training methods such as workshops and academic advancement (Fitzenz, &Bontis, 2002). Off-the-job training methods require the organization to finance the training of some of the employees. The employees will have to be away from their work so as to complete the training session.
The organization can adopt a reward system that will guarantee the improvement motivation and performance among employees. The steps to the effective development of a reward program entail the consideration of the goals that the reward program will be supporting. The organization must also highlight the desired employee performance and or behaviors that will reinforce the existing organizational goals. Thirdly, the organization must determine the key measurement of the performance and or behaviors. Fourth, the organization must determine the appropriate rewards that the can provide to performing employees. Lastly, the organization must ensure that they communicate the reward program to its employees so that the employees are aware of it. In fact, the existence of an effective monetary program can improve motivation and enhance performance as the employees work hard to attain and surpass set targets. There are two types of reward packages that the organization can consider. Monetary reward packages are compensations that involve money such as profit sharing and bonuses. Non-monetary awards include organizational recognitions for efforts, flexible work schedules, employee discounts, healthcare insurance benefits, financial advising services, etc.
The organization can work towards overcoming generational differences by encouraging awareness and appreciation of differences that exists across generation. The senior management can create awareness and encourage employees to work towards learning from each other rather than finding faults and differences. The organization can also establish policies that emphasize on respect for each other with emphasis on finding a ground that fosters the spirit of teamwork and working towards the same goal. The organization can adopt strategies such as team building initiatives where the organization takes employees away from the work environment and encourage interaction that is away from the formalities of the office. Team building can foster rapport building as well as trust. Similarly, it can encourage a change of perception as employees begin to appreciate each other. The employees will begin to see each other as an opportunity to learn rather than a threat or competition.
Debriefing Report
The meeting with the organizational representatives took place on 29th November 2009. Having made previous calls and booked an appointment, I arrived at the organization at 9 am as agreed. The meeting was held at the organization’s boardroom, and those present included the Human resource manager and his assistant, the chief executive officer as well as the secretary. I was confident of my presentation although I was a bit nervous because of the seniority of the management I was engaging within the meeting. Initially, I was to meet with the human resource director and his assistant. However, last minute inclusion of the chief executive officer was made as after he was informed of my meeting. My nervousness disappeared when I joined the executives in the boardroom. There were very friendly and will to listen to my findings and suggestions on pushing the organization forward. After a brief introduction, the meeting began.
The company was particularly impressed with the recommendation to improve communication and opening up channels of management-employee communication. The company believed that by establishing an effective communication platform, they should be able to handle issues before they get out of hand. The company admitted that in the past they had been caught unawares when employees went on strike or go-slows due to problems that the management was unaware of. The management also admitted that poor communication also contributed to high employee turnover. They agreed that the presence of an effective communication platform would allow employees to air their issues and grievance before they affect the organization, negatively. The management agreed that they would begin to involve employee representatives when making critical organizational decisions so as to eliminate the element of surprise when execute decisions are made.
The company also appreciated and promised to integrate intensive training and development initiatives. The acknowledged that their training and development strategies have not been aggressive since they perceive the initiative as expensive and a detraction from the purpose of the employee i.e. to work. They appreciated the demonstration of the relationship between training and development initiatives and employee productivity. I was able to demonstrate to them that a training session may be expensive at the initial start, but it has significant returns since the trained employee bring new knowledge and skills into the company. The management also appreciated the insights that the old employees can offer training to new employees. The presence of cheaper training alternatives such as mentorship and coaching can be adopted and remain significant as comprehensive and costly training initiatives. The management appreciated that training does not have to be costly and dent the budget (Akhter, & Aslam, 2016).
The management also appreciated the recommendation to increase awareness and appreciation of generational difference. The management admitted that generational differences had been a cause of conflict in the organization. The management also admitted that it has been slow to hire millennial because they find them to be disruptive of the status quo. The millennial comes up with grandiose ideas that the management sometimes finds to be unrealistic. They appreciated that the older and more experienced employees prefer to uphold existing laws and policies of the organization without question. The management appreciated that the awareness initiative might be effective in curtailing conflict and generational differences within the organization. Moreover, intensive awareness and sensitization may eliminate the stereotypical tendencies that the employees have against each other.
However, the management was skeptical on the need to revise their reward system. The management acknowledged that an attractive reward package motivates employees and increases productivity and retention. However, the management felt that the organization did not have the financial capability to provide most of the incentives suggested. For instance, the management acknowledged that their profit margins are low and thus it would be unrealistic to give employees of the company’s share. They also acknowledged that the company is not in a position to provide regular salary increases unless the financial health of the company improves. The management argued that increases the employee’s salary would mean that their operational costs would increase the company’s profits. In the end, the company will be spending more on employee salaries that any other expenses in the organization. In the long-term, the organization believes that such a strategy would leave the organization in the precarious position of laying off some employees so as to cut costs. The management, however, agreed to adopt non-monetary incentives before foreseen financial improvements in the future.
The management also found the adoption of work teams to be tricky for several reasons. First, the management was concerned that some employees may take advantage of the team spirit and relaxes at the workplace. They indicated that it is possible for an employee to take advantage of a group initiative to underperform but still enjoy the benefits of success. The management questioned how they would tell apart hardworking employees and employees that are unable to meet their job instructions. The management also demonstrated concern over the effectiveness of work teams in a scenario where the management wants to recognize individual effort. The organization indicated that they engage in individual appraisal thus their concern over how they shall access work teams. The management argued that they can embrace work teams when they are specific projects that require the pooling together of employees from different departments.
The meeting went well, and I believe it was a success. First, the management was eager to hear about my proposal in light with the challenges that the organization is experiencing. Moreover, the management was engaging, and the meeting was more of a dialogue and discussion rather than a presentation. The management was also impressed with the extensive research and facts that I used to support my recommendations. They realized that the recommendations that I provided them were not based on hearsay but facts and evidence of best practices. The presentation was also a step by step process where I provided them with evidence and insights to an issue and provided the recommendation. The management then engaged me in discussions as they shed light on the position of the organization. From our discussion, it was possible to determine the feasibility of a suggestion. For instance, the adoption of an aggressive reward system may be ideal as a retention strategy for human capital. However, the financial position of the company dictates that the management cuts down on its expenses.
During the presentation, I realized that the extent of generational differences in the organization is extensive. I also realized that the generational differences could be one of the reasons why the organization is performing poorly regardless of effective planning. The stereotypical nature of the senior management influences the recruitment and selection process as the selection team opts for older candidates. What the organization fails to realize is that the millennial brings fresh ideas and fresh perspectives to issues within the organization. Millenials are in touch with the changes in the market and thus will have a better understanding of the approach that the organization can adopt (Tolbize, 2008). It is indeed true that millennials are a handful to handle since they crave for a challenge and changes but they provide organizations with the jumpstart they need to move towards success. Millenials are aggressive and more conscious of their competition and thus will be willing to take risks so as to stay ahead of their competitors.
Reflection
Employees are the assets that are critical for any organization and thus the need for organizations to focus on ensuring they are satisfied. Employees that are dissatisfied with the job and their role in their organization will leave at the slightest opportunity. Dissatisfied employees will also be on the lookout for better employment opportunities and thus will never be productive. Employees provide the human capital necessary for the success of the organization. Organizations must, therefore, work toward retaining their employees. Some of the strategies that organizations can adopt include the establishment of a seamless communication network within the organization. There should be no barrier to communication between the management and the employees. Employees should not feel intimidated by the management. Communication must be open and honest. Strategies such as involving employees in critical organizational and administrative decisions give the employee the feeling of importance. Employees appreciate when the management seeks their input before making critical decisions. The management does not have to engage all its employees, but they can have representatives who present employee opinion, suggestions, and ideas. The retention of human capital can also be effective with the adoption of aggressive reward packages. It is critical for an organization to adopt a reward package that matches and also surpasses those of the competitors. An attractive reward package comprises of monetary and non-monetary incentives that demonstrate the management appreciation for the employee’s efforts.
Employees are motivated to remain productive if they realize that their employer is watching and appreciating their efforts. Training and development initiatives are also critical in ensuring that the human capital is retained at any organization. Employees appreciate an organization where they can grow beyond what they had at the start of their careers. The provision of training and development opportunities provide employees an opportunity for growth and career advancement. An employee acquires new knowledge and skills while at the workplace and thus acquire consideration for promotions. The provision of training and career opportunities increases job satisfaction and morale among employees. It also enhances employee motivation thus fostering productivity and the ability of the organization to attain its overall objectives. Training and development initiatives also enhance employee innovation as they engage in the development of new products and services. Training and development initiatives also reduce employee turnover and thus ensuring that the organization has adequate human capital. Employees who believe that their employers have the best interest in them work are motivated to remain in the company and see it succeed.

Reference
Adeosun, O Ogunyomi, O & Akindipe, O. (2013). Effective reward system and worker’s productivity under dynamic socio-cultural and legal environment in selected Nigerian insurance industry. Alleviation, income redistribution & rural development in developing countries.402-421
Akhter, N., & Aslam, N. (2016). Impact of Training and Deveolpment, Performance Appraisal and Reward System on Job Satisfaction. International Review of Management and Business Research, 5(2), 561
Fitzenz, J &Bontis, N (2002). Intellectual capital ROI: causal map of human capital antecedents and consequents. Journal of intellectual capital, 3(3)
Hooper, D &McCrindle, M (2006).Generation Y, attracting, engaging and leading the new generation at work.Drake International White Paper, 3(1)
Huang, G. et al. (2002). Benchmarking the human capital strategies of MNCs in Singapore. An international journal. Vol. 9(4)
Tolbize, A. (2008). Generational differences in the workplace. University of Minnesota

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