An organization is better placed to improve its earnings if it has control over all the components that are invested in the production process. By isolating each of these components, the organization is able to accurately identify weakness and areas where improvements can be made. Human capital analytics isolates human resources. It analyses data relating to employees with a view to instituting improvement measures.
Before starting the process, it is important to firstly establish the kind of information required by managers. This will ensure that the process is focused on the problematic areas. It will result in insights that can be easily acted upon by the leadership. The metrics should not only be precise, but should be as few as possible.
Analytics should look at, among many other things, the ways in which value can be created in human resource. These include the adoption of policies that serve to motivate employees so as to improve their productivity. If one organization does not have any of these policies, those that are implemented should have measurable outcomes that can be used to make future decisions.
Social capital is one of the most important components of human resource. This area is, unfortunately, commonly ignored by many business leaders in spite of its importance. It refers to the cooperation and cohesion that exists among the employees in an organization. This cohesion and team work is far more important than the individual abilities of individual employees. The process of analysis should try and quantify this cohesion.
At individual employee level, the analytics should point out to the management the areas in which each employee can perform best. They should analyze, for example, the leadership abilities of the individual as evidenced by previous options of responsibility that have been held in the past. For those in some leadership position, there is need to look at the kind of leadership style in use and to determine whether or not there is need for intervention.
There are many organizations which still do not know how to use data obtained from this kind of research. Their main concern is whether or not they are making profit. Information on employee performance is not just useful in explaining past and current events but is, more importantly, useful in predicting future events. It helps an organization to plan strategically and to have an edge over its competitors in the industry.
There are several techniques that have traditionally been used to quantify the return on human resource investment. The main ones have been indices that indicate effectiveness, profit sensitivity and productivity. These indices cannot, unfortunately, isolate the contribution of individual components that go into the production process. It is not possible to establish whether an individual input is improving or negating the gains.
Other techniques that are far more accurate in conducting human capital analytics have been developed by experts. The tools can put an economic value on each unit put in the production process. They can quantify the returns on each of these units and are therefore used in helping managers decide whether or not there is need to make changes.
Before starting the process, it is important to firstly establish the kind of information required by managers. This will ensure that the process is focused on the problematic areas. It will result in insights that can be easily acted upon by the leadership. The metrics should not only be precise, but should be as few as possible.
Analytics should look at, among many other things, the ways in which value can be created in human resource. These include the adoption of policies that serve to motivate employees so as to improve their productivity. If one organization does not have any of these policies, those that are implemented should have measurable outcomes that can be used to make future decisions.
Social capital is one of the most important components of human resource. This area is, unfortunately, commonly ignored by many business leaders in spite of its importance. It refers to the cooperation and cohesion that exists among the employees in an organization. This cohesion and team work is far more important than the individual abilities of individual employees. The process of analysis should try and quantify this cohesion.
At individual employee level, the analytics should point out to the management the areas in which each employee can perform best. They should analyze, for example, the leadership abilities of the individual as evidenced by previous options of responsibility that have been held in the past. For those in some leadership position, there is need to look at the kind of leadership style in use and to determine whether or not there is need for intervention.
There are many organizations which still do not know how to use data obtained from this kind of research. Their main concern is whether or not they are making profit. Information on employee performance is not just useful in explaining past and current events but is, more importantly, useful in predicting future events. It helps an organization to plan strategically and to have an edge over its competitors in the industry.
There are several techniques that have traditionally been used to quantify the return on human resource investment. The main ones have been indices that indicate effectiveness, profit sensitivity and productivity. These indices cannot, unfortunately, isolate the contribution of individual components that go into the production process. It is not possible to establish whether an individual input is improving or negating the gains.
Other techniques that are far more accurate in conducting human capital analytics have been developed by experts. The tools can put an economic value on each unit put in the production process. They can quantify the returns on each of these units and are therefore used in helping managers decide whether or not there is need to make changes.
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