Discussion On The Human Capital And Its Management

With the advent of the fast developing information age, enterprises are facing more and more severe business environment, and the competition is getting tougher and tougher. In order to rapidly get accustomed to such changes and acquire competitive edge in the competitive business arena, to well manage intellectual assets, such as knowledge, brand and patents, is of significant importance. It is people that own knowledge. So, people-centered human capital management is not only the most important but also the most difficult part in modern businesses. Thus the main idea of this paper is the content and management of human capital. This paper consists of four chapters. The introduction briefly shows that intellectual assets are the important manifestation of business core competencies. Since people are the carrier of intellectual assets, to strengthen human capital management and research is of great necessity. In the mean time, the major points of this paper are also included in this part. In the first chapter, the definitions of human capital and human capital management are discussed. The importance and necessity of human capital management are also specified. Then, this chapter points out that human capital management and knowledge management cannot be separated for any companies. Moreover, this chapter addresses that tacit knowledge plays an instrumental role in human capital management. Furthermore, this chapter introduces the difficult parts of human capital management: the ownership of human capital versus business investment on human capital; human capital turnover versus the protection of business knowledge resources. The second chapter brings out the core problems and analyses theproblems. It is also the core of this paper. There are three problems. First, because of the difficulties in defining human capital values, the inseparability of human capital and tacit knowledge, and the asymmetry of human capital information within a company, businesses suffer from knowledge resource and human capital loss. Thus we can see the instrumentality of defining the values of human capital. Secondly, this chapter addresses the importance of human capital investment. The two problems about human capital investment are insufficient human capital investment and human capital overinvestment. The possible consequences of the two problems are also discussed. Then, the causes of the two problems, the ownership of human capital investment return between companies and employees, are also explored. Finally, this chapter explores on the migration of human capital. The main point is the two-fold sufferings, economic and knowledge resources losses, result from losses of human capital. Emphasis are put on the knowledge resources losses caused by the inseparability of tacit knowledge and human capital. Analysis on the causes for human capital migration are also made in this chapter.The third chapter tries to figure out some effective ways to manage and diminish the undesirable effects the above mentioned problems cause. This is also the main part of this paper. First, ways to define human capital value are explored. For instance, the reformation of compensation systems, employee stock program, and stock options and the advantages and disadvantages as well as the possibility to implement them are discussed. Then, this chapter points out that the core of Efficiency Wage can be utilized in resolving the difficulties in defining human capital value. Secondly, this paper talks about means to resolve human capital investment problems. Training contracts, barriers on employees migration to competitors and human capital specialization are reviewed. The common drawback of the above methods is that they put employees in apassive position in gaining human capital returns. This paper points out that the idea of "share" is the key to reach the win-win status between companies and employees. Finally, this chapter explores the keys to human capital migration problems. The first part of this chapter talks about key e...