PRIORITIZATION OF HUMAN CAPITAL DEVELOPMENT STRATEGY OF IMPROVING THE BANK PERFORMANCE

An Nisaa Noor Rachmawati,Anggraini Sukmawati,M Syamsul Maarif

doi:10.17358/ijbe.6.3.228

An Nisaa Noor Rachmawati, Anggraini Sukmawati + Show 1 more

Open Access

https://doi.org/10.17358/ijbe.6.3.228

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Abstract

A human capital strategy is comprehensive planning about how the company achieves its vision and mission through human resources. This study aimed to formulate a prioritization strategy of human capital development for improving company performance used the Analytic Hierarchy Process (AHP). The hierarchy of AHP was arranged by considering five criteria that include an actor, company strategy, human capital management practice, company performance, the role of human capital division, and there were five alternative strategies. A questionnaire of AHP was arranged and presented to seven experts who were chosen from a multinational bank in Indonesia, they provided judgments based on a priority scale for each criterion. The result of the study showed that an actor who was prioritized was the human capital manager. The prioritization of the company strategy was the defender strategy. A human capital management practice that was prioritized was recruitment and selection. The prioritization of company performance was financial and the role of human capital division that was prioritized as a strategic partner. An alternative strategy that was prioritized to be implemented was building effective recruitment and selection systems. In conclusion, the company's performance can be improved through implementing effective recruitment and selection strategies and using validated psychometric instruments. Keywords: Analytic Hierarchy Process (AHP), balanced score card, compensation, performance management, recruitment and selection

Highlights

The banking industry is being buffeted by a storm of trends and challenges that impact on human capital departments
A questionnaire of Analytic Hierarchy Process (AHP) was arranged and presented to seven experts who were chosen from a multinational bank in Indonesia, they provided judgments based on a priority scale for each criterion
The factors roles of the division of human capital and the practice of human capital management had a positive and significant influence on the factor of company performance, so these were included in the hierarchical structure of AHP, while for the actors obtained through interviews with experts

Summary

Introduction

The banking industry is being buffeted by a storm of trends and challenges that impact on human capital departments. According to Nzuve and Bundi (2012), there are two fundamental challenges that must be handled by any bank that want to survive in this condition : 1. The expenses of human capital must be efficient, 2. Human capital is one of the important factors in the company's competitive advantage to win the competition, where these aspects play a role in increasing the potential of human resources to be optimally empowered (Dewi et al 2017). Good human capital management is needed so that the company can improve its performance. The results of Mulyaningtyas (2020) study showed the direct effect of human capital on financial performance and value finance at several banks listed on the Indonesia Stock Exchange

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