Rule No. 8: Manage human personnel, capability, and knowledge capital to increase human worth

20^th century enterprise management administers human resources

20^th century enterprise management provides the human resource function to administer human resources. Human resources provide administration for recruitment, actions, payroll, and some development functions. While human capital may be called human capital, rarely is there any real effort to develop humans as actual capital solutions to meet the specific business needs and increase individual human worth to the enterprise.

20^th century enterprise management cannot develop and apply human and knowledge capital directly to the business

Some more advanced companies try to develop human capital, but as humans rather than as the specific capital solutions needed by the business. They are at a disadvantage because the business is not organized to define specific business needs, to pinpoint where special capabilities are required in the business, to record the value created in the business through application of human capabilities, and to assess the worth added to human capital through greater result value creation.

Rule No. 8 of 21^st century business management: Manage human personnel, capability, and knowledge capital to increase human worth

21^st century business management organizes the business results produced and organizes human capital as specific solutions to be utilized to produce specific results. Rule No. 8 requires that human capital be identified as specific capital solutions utilized to produce business results, investments be made to develop human capital to increase the value of assigned results, human capital performance be managed against the results produced to increase human worth, and that human reward be a commensurate part of proven human worth to the business. As part of this rule, there are business management principles for strong human capital management:

• Analyze the business process to describe the human capabilities that must utilize the process to produce difficult high-value results
• Define specific high-worth capabilities to produce high-value results as capital solutions for specific human knowledge and human capability development
• Focus human capital on results, so that they always know the results expected and how to apply their capabilities to produce results
• Develop human capabilities as specific capital solutions to produce specific high-value results
• Support human capital with knowledge capital to utilize specific capital solutions to produce specific results
• Let human capital know the value of their results and how their performance can add value to results
• Let human capital know the relationship between the value added to results produced and their worth to the enterprise as human capital
• Compensate and reward human capital in accordance with their human capital worth

Strategic human capital development develops the capabilities described in the business process and the knowledge required to produce new high-value strategic results. Human capital worth and human performance costs are managed in relationship to the value of results produced. Improved human capabilities are continually developed to produce higher-value results.

Human capital includes three classes; personnel, capability, and knowledge

21^st century business management provides three classes of human capital:

• Human personnel: Readiness capital solutions in in the individual personnel solutions deployed to be ready to produce a set of results as managed
• Human capability: Production capital solutions deployed to provide a specific capability required by the process in order to produce a specific high-value result. The solution is the capability, not the personnel solution that provides the capability
• Human knowledge: Information capital in specific knowledge solutions for human development and for operations to utilize documented capital solutions to produce specific documented results

Human capital management is responsible for managing personnel capital to keep humans ready to produce routine results, development and deployment of human capabilities when needed to produce high-value results, and development and provision of human knowledge capital that specifically develops and supports the human performance needed to produce results.

Human personnel capital keeps human capital ready to produce results

Human personnel capital provides human capital administration to recruit, orient, reward, and maintain human capital to be ready to produce results. Each individual utilized by the business to produce results at all levels is a human personnel solution. This includes part-time, contracted, seconded, or personnel from another enterprise utilized under enterprise management to produce results. Human personnel capital is utilized to produce the day to day results required by the business. Human personnel are normally assigned to a result organization unit to produce results in the set under the responsibility of the result unit manager. Human personnel capital normally incurs performance costs to charge human compensation and administration costs based on time spent on results produced.

Human personnel capital management produces human capital management results carried over from the existing business. Human personnel capital management also manages periodic human worth assessments to determine and update human capital worth related to performance as human capital solutions and result value added to the business. Human capital worth assessments provide the basis for annual and special rewards and human career planning in capability development and result utilization.

Human capability capital develops and deploys human capabilities to produce specific results

21^st century business management develops needed capabilities to produce result value and increase human capital worth. Every business has some difficult high-value results to produce that require specific human capabilities such as salesmanship, equipment expertise, innate analytical ability, management skills, extensive result experience, technical training, human handling skills, etc. The advanced capabilities needed to produce a result must be defined as a requirement of the business process to enable recruitment and development of human capabilities specifically to add value to the business.

Human capability capital develops, maintains, and deploys the capabilities required by the business. Human capability solutions are defined by the capability required. Several human personnel solutions may be developed to provide the capability. Human capability solutions are developed to enable personnel solutions to produce higher value results to increase their own human capital worth and justify increased reward from the business. Human capability utilization to produce results amortizes the investment in developing human capabilities as a performance cost against each result.

Human knowledge capital develops human capabilities and guides utilization of solutions to produce results

Human knowledge capital may develop and maintain some generally applicable business knowledge, maintained by business subject, as is the case in 20^th century management. But, the focus of human knowledge capital in 21^st century business management is to create and utilize knowledge that is specifically applied to the business. Knowledge is needed to utilize specific capital solutions to produce specific business results and to orient personnel and develop capabilities to utilize solutions to produce results. Human knowledge capital must be developed as a part of every result-driven capital development project, with the documentation records, to provide the human instructions and other knowledge needed to utilize new solutions to produce specific results.

Human knowledge is delivered, usually in conjunction with business data, by specific capital solution or result identifier. Human knowledge is also developed as a solution to develop human capabilities required by the business and to provide specific knowledge solutions that may be needed by management or special business circumstances. The investment in human knowledge development is amortized against the result that employ knowledge solutions to utilize another solution or directly produce the result.

Result-performance Management (R-pM) provides the knowledge for actual business management

Result-performance Management (R-pM) is the only source of knowledge and expertise on how to manage the actual business. Forward-looking enterprises are now using R-pM guidance to organize and manage their business to gain breakthrough advantages over competitors burdened by unsolvable 20^th century management problems. Business management is explained and documented in the Business Management Toolkit. The Toolkit provides procedures for actual business management and maintains emerging 21^st century management conventions, definitions, and standards. Management consultants who base 21^st century business management services on R-pM knowledge are licensed to help enterprises learn, organize, and manage the actual business. Business management knowledge and the Business Management Toolkit are available and supported at result-performance-management.com.

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