An Application of Knowledge Management and Human Capital Valuation

Abstract

The purpose of this study is to investigate the level of Knowledge Management (KM) and Human Capital Valuation (HCV) as it is applied in credit unions. Knowledge has been recognized as one of the most important assets, which if appropriately managed, provides a foundation for creating core competencies and competitive advantages for organizations. KM applications and strategies have become critical and significant in the credit union industry, as they operate in a highly competitive and knowledge-intensive financial marketplace. A few factors depict the level of KM maturity within an organization, the priority of implementation, and the availability and affordability of resources. HCV is the balance sheet metric from a development of systems and infrastructure, which can tie metrics of employee behavior of value offering back to the member owners (stakeholders). The case studies described in this chapter are based on the business experience of the author, a credit union CEO of 12 years and a business consultant to the Midwest-region of the United States, in the credit union industry for 6 years. A KM audit and an HCV were conducted in a mid-sized credit union. The appreciation of KM and HCV are developing in the credit union industry; however, it is found that organizations have not been able to capitalize on the expected benefits and leverage their performances with KM solutions and HC Strategies, unless it is priority and a planned event. This is a developing industry with signs of future improvement. There are examples siting various Midwest credit unions, where KM applications and HC Strategies are evident at various stages with opportunities for intellectual growth and learning.