Manage and Develop Human Capital Worth

20^th Century Management administers Human Resources as Employees

In most enterprises, human resources are administered as employees and are assigned to positions in organization units. For most, there is no way to measure the value they produce, evaluate performance costs against result value, assess their worth as human capital, or to develop them to provide measured increased value to the enterprise. Administered employees do not have a defined stake in the enterprise.

The only way to manage and develop human capital is through Result-performance Management (R-pM) to manage the development and utilization of specific human capital performance solutions to produce measured result value, increase capital worth, and justify increased performance costs. The time and costs wasted in unproductive human resource administration must be focused on actual and productive human capital management.

Human capital performance and the results produced must be managed to assess human capital worth

There is a lot of talk about human capital, intellectual capital, knowledge management and other means to improve the capabilities, productivity, and output of human capital. But, each item is treated separately. We have no way to integrate human capital performance with the result value created and the worth of human capital.

In order to make human capital a high-worth asset, we need to stop administering human resources and to manage human capital:

• Human personnel capital available and the development and performance costs
• Human capability capital available and the development and performance costs
• Human knowledge capital available and the development and performance costs
• Knowledge and learning for human personnel to produce results across the business
• Special human capabilities required to produce specific high-value results
• Value-added potential to results by developing and utilizing capabilities and knowledge
• Corresponding capabilities possessed or developable in human personnel capital
• Value provided by qualified human personnel capital ready to produce a set of results
• Value-added provided by qualified human capability capital producing a specific high-value result
• Value added by knowledge to utilize solutions to produce higher quality results
• Worth of human capital producing a certain result value-added at a certain performance cost
• Utilization and value creation level that increases capital worth to justify increased reward
• Specific human personnel and capability development needs to increase capital worth and justify increased reward
• Human knowledge required to support human personnel and capabilities to utilize a specific performance solution or to produce a specific result
• Human capital development programs needed to develop personnel, capabilities, and knowledge to utilize specific performance solutions to produce specific results

We cannot manage human capital until we organize and manage each human personnel, the capability solutions provided by human personnel, and knowledge solutions available. We then must manage the utilization on human capital against the result value-added produced to be able to assess the worth of human capital solutions.

Human capital development must increase specific result value added to gain a return

Human capital normally is developed for the sake of human capital development to meet perceived enterprise performance needs. We cannot develop human capital properly today because we measure and manage human performance rather that the results produced by human capital. The key to making human capital a high-worth asset is to manage the results the enterprise produces related to human and other capital utilized.

With R-pM, all capital development, including human capital, must be to add value to results. We need to document the human capabilities required by our business processes to produce specific results. We need to understand the capabilities available in our enterprise and those that need to be developed or acquired. Human capital development programs can focus on the capabilities required in the business to utilize the business process and other performance solutions to add value to specific results.

Instead of deploying personnel to positions, we need to deploy qualified personnel solutions to be ready to produce a specific set of results. Knowledge development and learning programs must provide qualified personnel solutions. When the business process requires a special capability, we must deploy the specific human capability solution required to produce the specific result. Knowledge and capability development must provide the scarce and high-worth capabilities to produce particular results with high value-added. We must support human personnel and capability solutions with the precise human knowledge solutions required to utilize a specific performance solution and to produce a specific result.

Productivity is the volume of quality results produced over a time and cost by human and other capital. We need to understand the volume, value, and quality of results in order to understand the worth of the capabilities essential to producing the result. We can then plan career development for human capital to produce results of increasing value to increase individual worth and justify an increase in their reward. Human capital development increases development costs and increased reward increases operation performance costs, which must be covered by the increased result value-added.

Human capital developed and managed in performance to produce results of increasing value, have a stake in the enterprise

Human capital then can feel that they have a stake in the enterprise. They know that developing their capabilities to increase the value of results produced increases their worth, and that the result value they add enables an increased reward. Increased reward is earned and not simply a matter of time in a position.

The answer is 21^st century management through Result-performance Management (R-pM) to organize and manage the value of business results produced, the cost of human capital development and performance, the value added to results, and the worth of human capital.

The means to develop human capital worth is provided in the R-pM Toolkit

Your 21^st Century Management Manual, The R-pM Toolkit, is available today and is under continual development to expand and refine 21^st Century Management. The Toolkit contains information on the 21^st Century Management environment and development and management of human capital within the environment. Learn more about the R-pM breakthrough for 21^st century management and subscribe to your 21^st Century Management Manual, including free updates through 2009, at result-performance-management.com.