Let's start with the definition of HCM (ISHCM 2006):
"Human Capital Management is the term which is used to describe an organisation's multi-disciplined and integrated approach to optimising the capabilities and performance of its management and employees."
Dependent upon the organisation this definition therefore defines the overall context for thew HR function's value proposition.
HCM can be seen as a natural evolution of yesterday's HR practice. It can be viewed as a philisophy toward people as much as to the hands-on understanding of people supported with the appropriate (social) sciences.
The current issue of the Journal of AHCM (announced last Friday) for me encapsulates what HCM is about.
The articles are a quick 360 view:
A strategic evaluative framework that puts human capital management on a par with marketing and finance (Strategic Human Capital Management: Closing the Hole in the Ozone Layer which links back to the major article form last year).
A propensity to utilise measurement frameworks to provide organisation intelligence on human capital, human capital management and organisation dynamics related to performance (The Enterprise-wide Application of Human Capital Management Intelligence - HCMi).
Talent management in its proper context describing the duality between the individual and the organisation in getting the balance right across the various processes and activities (Managing the Talent Equation: The seven fundamentals of Talent Management).
Employee Engagement - the concept (covered in earlier Journal articles) and measurement and the way in which embed practice of monitoring provides organisations with the right intelligence (Employee Engagement: 'Factors' of successful implementation).
Organisation leadership from the perspective of collective day-to-day decision-making not heroic individualism. Effective becoming the operative word as a move to embed Evidence-based Management (EbM) principles gains ground for all management practice (Effective Organisation Leadership: A Case of Adopting Evidence-based Management).
The evaluation and effectiveness of well thought-through reward-performance-decision-making alignment in the achieving of organisational objectives and goals at any level. Or of course not......(On the Folly of Rewarding A, Not Penalising for B and Gettiing C).
And also providing a framework that encapsulates what HCM is to an organisation and its subsequent evaluation using qualitative and quantitative analysis to provide an evaluation to direct startegy and tactics at ground level (Reprint of Organisation Enagagement: Evaluating your Human Capital Management Signature - see Volume 1 Number 2 2007).
What Human Capital Management isn't
Human Capital Management isn't about automating processes through use of software. That's just clever marketing by software companies and HR professionals should know better.
It isn't just a new fancy name - see above section if not sure...
It's not a way for the current HR function to rebadge itself without some shift in capability unlike it did last time (from Personnel to HR)
It's not designed to be trendy - merely the correct use of technical terms to denote the mangement of people as assets (nothing to do with the accounting definition) and their utilisation (not useage which is derogatory). It is thus a difference in philosophy from the term human resources.
The HR function - I was wrong
Sometime ago I blogged on the emergence of HCM would see the dropping of either HR or Personnel related to the naming of the function. My initial default was that Personnel would go being the earliest version. But I think I'm wrong. I think HR will go.
You see many HR functions are really Personnel functions in disguise its just that they rebadged but without any real change in remit or capability.
As for those functions who are making the new journey - well they will eventually be HCM functions. You see there is no place for HR functions - you're either Personnel or HCM.
At least in the UK the qualifications will match (HCMI for HCM, CIPD for Personnel). I suspect that a lot of functions will be happy - indeed a number have never changed to HR they have continued to provide administration and baseline ER services and will probably continue to do so.
The term Human Resources is actually derogatory as Resources in this context implies expendability (think oil, coal, metal, gas etc and should not be applied to people). I presume that is why people tend to say HR. It's also snappy. The only reason I say or quote it is that it has become accepted common language and therefore easy to communicate (forget issues over actual meaning for a moment).
That doesn't mean to say however that I acknowledge or accept human resources as a bona fide term. This is unlike many others who refuse to countenance the term human capital and not even acknowledge its existence which has been around for over 50 years, in some bizarre denial pursuit.
The rationale for dropping HR would also consign much that has been written on this in the last ten years to the BIN (other than those pieces that were clearly talking about HCM but just with the wrong heading).
Because let's be honest I'm not sure what HR has actually 'done for us' - save an extraordinary focus on internal functional operations of limited impact and around fifty varieties of derogatory acronym alternatives.
In fact I think a number of professionals will become more at ease. Choose HCM or Personnel. That's the debate.....You heard it here first............
