Human Capital Management: Understanding Its Implications Over the Business

Abstract

In the knowledge-based economy, human has emerged as the major intangible assets of the organizations and key determinant of sustainable competitive advantage. The human resource of an organization is now regarded as invaluable organizational capital, commonly known as human capital. Organizations are now more aware of the effective utilization of its human capital and ensure business success. However, despite the growing awareness of the importance of human capital, it could not get popularity as expected. From the initial investigation, it was revealed that there are several challenges in applying for the human capital management program. The challenges are a lack of precise definition of human capital and human capital management, overlapping scope and jurisdictions, identifying desired human capital and linking it with the business strategy, measuring the outcome of human intervention and reporting and so on. This literary paper would try to resolve these issues in the light of theoretical underpinnings. It is believed that this paper will be able to give HR managers and practitioners a meaningful guideline to apply for the human capital management program more confidently and effectively. In addition, this research would contribute to existing HR literature, too. An extensive literature search was the main source of information for this paper. For data validity and reliability data and information also collected from other sources, too such as, expert interviews, analyzing policy papers and personal observation, etc. To get an in-depth understanding of the research issues exploratory methodology has been applied in this study.