Human resources (or more simply, people) who work in organizations may have valuable contributions they can make to a firm’s mission based on their human capital. But this will occur only if people are developed and have a reasonable opportunity to contribute.
Managing people ultimately has to do with the decisions these leaders make from among the wide range of possible choices on the formal policies, practices, and methods for managing employees.
A core competency is a unique capability that creates high value for a company. How might employees become a core competency for an organization? One of the main issues that must be addressed is developing human capital in employees. Building positive human capital brings together all assets of an organization so that work gets done and the company functions well.
Organizations must manage four types of assets to be successful. These four types of organizational assets include the following. Physical assets such as buildings, land, furniture, computers, vehicles, and equipment. Financial assets including cash, financial resources, stocks, bonds or debt. Intellectual property assets like specialized research capabilities, patents, information systems, designs, operating processes, and copyrights. Human assets which are Individuals with their talents, capabilities, experience, professional expertise, and relationships.
Human capital is not just the people in organizations - it also involves what individuals contribute to organizational achievements. Broadly defined, human capital is the collective value of the capabilities, knowledge, skills, life experiences, and motivation of an organization’s workforce.
There are many other possible areas in which employees can be core competencies for organizations. Productivity, customer service and quality, and organizational culture represent several of these areas.
At the core of human resource management is the process of designing the formal systems that are used to manage people in an organization.