Human Capital Strategy

11 Pages Posted: 21 Oct 2008

See all articles by Erika Hayes James

Erika Hayes James

University of Virginia - Darden School of Business

Tom Cross

University of Virginia - Darden School of Business

Abstract

There are two key principles in human capital strategy. One is that people are assets whose value can be enhanced through investment. The other is that an organization's human capital policies must be aligned to support the organization's shared vision. Excerpts from two GAO reports provide an excellent summary of the topic.

Excerpt

UVA-OB-0848

HUMAN CAPITAL STRATEGY

This note recaps the pioneering work that the U.S. federal government did in human capital strategy, a term now being embraced by the U.S. military and major companies such as IBM for maximizing the effectiveness and efficiency of people in organizations. It abridges two very long General Accounting Office (GAO) documents, using selected direct quotes to provide the essence of what the federal government has been doing for the past 10 years in the area of human resources. What follows comes directly from GAO documents as noted; my own comments appear in italics.

What Is Human Capital?

Simply stated, human capital means people. There are, however, two key principles central to the human capital idea. First, people are assets whose value can be enhanced through investment. As with any investment, the goal is to maximize value while managing risk. As the value of people increases, so does the performance capacity of the organization and therefore its value to clients and other stakeholders. Second, an organization's human capital policies must be aligned to support the organization's “shared vision”—that is, the mission, vision for the future, core values, goals and objectives, and strategies by which the organization has defined its direction and its expectations for itself and its people. All human capital policies and practices should be designed, implemented, and assessed by the standard of how well they help the organization pursue its shared vision.

Eight Principles for Managing People

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Keywords: Human Capital Managing People, leadership, organizational behavior

Suggested Citation

James, Erika Hayes and Cross, Tom, Human Capital Strategy. Darden Case No. UVA-OB-0848, Available at SSRN: https://ssrn.com/abstract=1281862 or http://dx.doi.org/10.2139/ssrn.1281862

Erika Hayes James

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4796 (Phone)
434-924-0714 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/james.htm

Tom Cross (Contact Author)

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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