North Bay Business Journal

Monday, March 11, 2013, 5:30 am

Six steps for developing human capital

A human-capital review process can help identify strengths, weaknesses

By Jeannette Feldman

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    Jeanette FeldmanAs human resources professionals, we are champions for success in our organizations through the best deployment of our people.

    In this role, one of our greatest desires is to have supervisors and managers think about their staff as valuable, strategic resources.

    How can we help our supervisors and managers identify and build the strategic value of their employees? How can we ensure that our supervisors and managers have the human capital they require to achieve great things? Creating and implementing a human capital management review process within your organization is one way to accomplish this task.

    A human-capital management review process provides a systematic assessment of an organization’s structure and staffing. It is a method for supervisors and managers to evaluate the readiness of their business units to accomplish their objectives. Often this activity is part of the budget process and provides information that can be very useful to forecast resource needs for staffing and development.

    The following topics are usually covered during the human-capital management process:

    Strategic alignment and business goals

    This topic provides an opportunity for HR managers to gain a deeper understanding of the business and its challenges. The purpose is to discuss key initiatives and on-going responsibilities that the manager must deliver through the efforts of their staff. Clarifying the work of the unit and required results establishes the foundation for the rest of the assessment. 

    Typical questions:

    • What are the strategic objectives and/or measures that this organization is accountable for?
    • What business goals is this organization working towards this year? What results must be achieved?
    • What measures of success are of concern to the managers? What issues must be resolved?

    Organization structure

    The discussion of the organizational structure is useful to clarify reporting relationships and review span of control. It also provides an opportunity for HR managers to put on their “organizational development” hat and educate managers about the elements of leadership and team dynamics that effect productivity, such as: clear roles and responsibilities, adequate delegation; decision-making authority, workflow, etc.

    Typical questions:

    • How is the organization currently organized?
    • How effective is this structure to meet the organization’s business objectives? 
    • What changes are needed or planned? Will these changes require additional staff or new skills for current staff?

    Resource plan

    This discussion is the heart of the process and may require thoughtful preparation to guide managers through the analysis. The challenge is to step back from the day-to-day work of the unit and think about the organization’s strategy for success. Strategic impact leads to priorities. What differentiates you from other similar organizations? What approach is your organization taking to be the best? 

    Typical questions:

    • What are the strategic job families or positions that have the greatest impact on the attainment of the business unit’s objectives? Which specific tasks or responsibilities contribute to the business unit’s success?
    • How effective are the staffing levels in these positions to meet business objectives? What are the current and future resource needs of the business unit? 
    • What specific staffing changes are anticipated based on changes in business conditions, promotions, retirements, etc.? How do these impact the ability of the business unit to meet its objectives?

    Individual competency assessments

    Once you have established the overall resource plan, you can evaluate each employee’s skills and abilities against the needs of the business unit. Creating a matrix, with critical competencies listed on one side and employee names on the other, is a useful tool for capturing this assessment. It is also helpful to include each employee’s performance rating and salary on the assessment report, and compare this data with the skills assessment information. This process provides the information necessary to plan and prioritize development needs, as well as opportunities to recognize valued employees through increased compensation, promotional opportunities, or visibility assignments.

    Typical questions:

    • What are the critical job requirements (knowledge, skills and work values) and required proficiency level (expert, proficient, developing) for each strategic job family or position in the business unit?
    • What is the competency of individual staff in each job requirement? 
    • How effectively can the business unit meet its objectives based upon the current competency levels of the staff?
    • Which skills gaps are the highest priorities? What training or development experiences can address these needs?
    • Are there highly skilled employees who are not currently being recognized? How can their strengths be leveraged? Are adjustments in pay, assignments, opportunities, needed to retain them?
    • Are there  employees who might be more suited to another assignment, better suited to their strengths?

    Rewards and retention

    A “vulnerability assessment” is a useful tool to facilitate a discussion geared at the retention of high potential employees.

    • Identify and discuss key areas of vulnerability and potential turnover.
    • Describe and discuss individual retention plans for high potential employees.

    Internal-external bench strength

    Describe the business unit’s overall succession depth (i.e., the availability and readiness of enough people to assume higher positions immediately). Comment on specific bench strength problems.

    • Assess the business unit’s capability to meet training needs of identified successors and identify sources/support needed from outside the organization to deliver these needs.
    • List any potential job candidates from other departments or competitors.

    Jeannette Feldman, principal of Santa Rosa-based The Personnel Perspective (personnelperspective.com, 707-576-7653), has over 20 years experience as a management consultant, human resources generalist and leadership trainer. She has held management positions in both HR and employment for technology and manufacturing organizations. As a consultant, she provides expertise and counsel to CEOs and senior management on issues related to all facets of organizational development, team development, human resources, management training, and recruitment.

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    1 Comment

    1. March 11, 2013, 7:18 am

      by Jayashree

      Good points on Human Capital Management System.With the help of HCM system companies automate a few HR functions increasing efficiency and reducing costs at the same time.Read a whitepaper about this very topic that readers will find useful ” Microsoft Dynamics AX potentially increases HR efficiency while reducing overhead at http://mcgladrey.com/Dynamics/Microsoft-Dynamics-AX-potentially-increases-HR-efficiency-while-reducing-overhead?cmpid=017syn.

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