Employers seek return on their investment. To achieve this aim, they hire talent. A talent is a person who owns the most aspect of human capital. Human capital is a collection of resources, include the knowledge, talents, skills, abilities, experience, intelligence, training, judgment, and wisdom possessed by individuals that is embodied to produce economic value for the organization.
The value is linked to price through the mechanism of exchange between outcomes (result) and compensation. Therefore, in case of company, there will be presented the economic value of outcomes and employee expenses (i.e. salary, allowances, benefits, free-loan interest, free-administration fee, bonuses, incentives, tools, stationaries, utilities, etc). The more effective employee produces outcomes, the more economic value performed (say “profit”), and the more expensive he/she is.
Unfortunately, companies do not measure it. In common stage, they measure only efficiency, availability, utilization, and productivity. They leave effectiveness and economic value of the outcomes. Why? It is the room where human capital management system (HCMS) or human capital information system (HCIS) or e-HCM (electronic human capital management) takes its exclusive part. Conversely, human resources information system miss out of it.
In future, no one in the organization says:”I was equipped high human capital,” without demostrating economic value for his/her organization. For example, Ronaldo may not be paid “as high as sky,” if he scores only “ordinary goals.” His goals are monetary goals, which are able to attract paid tickets, broadcasters, advertisers, sponsors, etc. Everything that is related to money or profit. The profit is calculated based on sales minus expenses, includes compensation for Ronaldo. The higher profit scored, the more expenssive his price. It is the simple philosophy of human capital.
How to measure individual employee’s profit? Look to this example:
An employee is assigned a one manhour’s job. He is able to complete the job in one manhour too, without interuption nor delay. Because of this, his superior grants him some value in quality of work.
Question: Is he making profit or loss? Simply: loss.
Why? How much?
Welcome to human capital management system, a place of mind change. In this case, “Capin”, a human capital management system, provides you the solution, a calculation of profit and loss gained from the individual employee. And unique talent management program, human capital index (HCI) versus compensation, balanced scorecard, training management, e-learning, promotion index (PI) versus compensation, payroll and many more.
Answer: He must perform effectiveness (not limited to efficiency, availability, utilization, and productivity) at least 125%, or in economy, 1-1/4 of his expenses (not merely salary). Because employers invest in employees not only daily work time, but in addition, holidays (exclude week ends, sickness, and other absenteeism), and annual leave, that in total, it costs approximately 15% - 25% for free.
Talents think like employer's. Don't miss it out again. And share it to as many as employees (to the bottom, not limited to directors or managers).
