Human capital refers to valuable employees in a workforce. Human capital systems manage and control employees through predetermined processes, integrating each employee’s skill set. Human capital management focuses on economic value and getting more value for money spent on an employee. The software used in human capital systems replaces some of the human resource management functions. Different types of human capital systems include administration, manual labor, human resources, and accounting personnel.
The term “human capital” refers to the valuable employees that make up a workforce. The different types of human capital systems include administration, manual labor, human resources, and accounting personnel. Human capital systems can also refer to the organization’s specific system of human resource management applied to technology designed to reduce costs. Generally, human capital systems integrate the various roles of each employee type, maximizing the value of employees’ skill sets.
Human capital management is similar to human resource management, except that human capital management is focused on economic value and getting more value for money spent on an employee. The emphasis may be on recruiting or training an employee with the exact skill set needed for their job. More skills than necessary can be wasteful for the employee and the company, and less skills than necessary can be insufficient.
Human capital systems help manage and control employees through predetermined processes. Employee manuals, worker education and training can all be factors in human capital management. Managers create the systems by studying the factors of production for each type of work and finding the most economical ways to do the work.
The software used in human capital systems replaces some of the human resource management functions. Some systems are databases of human resource information such as benefit plans, employee guidance, and codes of conduct. Sophisticated systems track worker productivity, allowing managers to sift through workforce data and determine where the company can save time and money.
An executive, department head, or project manager can oversee task- or division-specific human capital systems. These systems can be geared toward individual employee motivation and value-oriented goal setting. Employee evaluations of supervisors tend to emphasize productivity and economic goals. The company will hire new employees only when the human resources department or the head of a specific department determines that productivity would increase with the new hire.
For example, management capital systems tend to focus on the short-range performance goals of management personnel and some of the long-term goals of executives and top-level managers. Administration functions may include customer service, office management, secretarial work and data entry. A human capital system for management would focus on training administrative employees to multitask, maximizing the organizational skill set.
Factory or manual labor employees are another example of a type of human capital system. Systems for these types of employees prioritize unit output per hour and staff efficiency. Accident prevention is also a concern for many types of manual work.
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