Managing Human Capital

28 Nov

Long time no see, some would say. But I must admit that I have used all this time to learn something new, acquire and implement some new knowledge.

As said many times before, one should always invest in its professional development for the purpose of creating and imprvoing a more competitive place on the market.

Therefore, this time I am going to share with you the things I found relevant for every employer and employee to be aware of.

Ladies and gentlemen meet the Lady – HRM 🙂

In the times of repeated ‘’Great Depression’’, having to put up with great development plans with little asset, globalization and economic crises especially emphasized in Serbia, it is very hard for a domestic Company to succeed in business.

I’ll reveal the secret; it’s all about good Human Resource Management, the ability to treat employees adequately according to their personalities and expectations as well as the abilities and skills. The key of its success is that ‘’all managers of this Company are personnel mangers’’. You have to deak with your stuff guys, not just use it.

Human Resource Management (HRM) is defined in a variety of ways, the essence of which is that it is a contributory factor in the employment relationship analysis, a sponsor of a whole new relationship between management and employees implying recruitment, selection, learning and development, reward, communication, teamwork and performance management. Human resource management must be central to organizational performance and have strategic and operational dimension.


Human resource management is all about achieving flexibility in organization and workforce, improving performance through devolving decision-making and empowerment. It attempts to integrate the needs of employees with those of the organization in an explicit manner, the psychological contract embodies mutuality.

Theory Z, as it is focused on increasing employees’ loyalty to the company by providing a job for life focusing on the well-being of employees both on and off the job it is the most similar to the strategy implemented mostly by some privately-owned, family companies in Serbia. However, the responsibility is individual and not a group one. According to Ouchi’s theory Z, management tends to promote stable employment, high productivity and high employee ethics and satisfaction.

There are two types of Managing Human Capital. Soft HRM includes enhancing commitment, quality and flexibility of employees and hard HRM is a type of management where human resource is used as any other kind of resource for achieving business goals.

According to Hall a career has got a life cycle, with different strategies and activities.

Stage 1 is the initial stage of joining the company, learning and following directions of your senior colleagues and supervisors. (apprentice)

Stage 2 is the stage when an employee becomes an independent contributor (in any case depending on how much support he/she gets) (colleague)

Stage 3 indicates the ability to supervise others, to act as a guide, teach, evaluate and modify (mentor growing apprentices)

Stage 4 indicates the ability to shape the direction of enterprise or to sponsor (sponsor)

Stage 5 is the exit

The most common fact is that, bearing in mind the Hall’s analysis, the apprentices are inexperienced and often dissatisfied since they are not able to make challenge for themselves, in opposition to their senior colleagues who can put some new challenges in line and thus create some new improvement opportunities for being rewarded and appraised.

Career shock is the result of constant fluctuations of job requirements and employee’s satisfaction. The problems which may occur are envy and resentment among the colleagues, high expectations, poor performance appraisal, dynamic environment, no proper development, inability to create a challenge for oneself, poor job design. Bearing in mind all these possible issue that HR manager has to face, there are always solutions for the problem such as effective selection (trial period), realistic job preview, and establishing a role of the first supervisor.

High                                      Low

        likelihood of future promotion







According to the table given above, the employees with high performance and high likelihood of future promotion are STARS of every organization. The stars are mostly young but experienced workers. Solid citizens are those employees characterized by low likelihood of promotion but high performance. Learners have high likelihood of promotion but low performance and the least desire position is DEADWOOD, the employees with low likelihood of promotion and low performance. In order to make a healthy organization, it is necessary to have all those types of employees, but to give your best in dealing with each and every type. Most domestic companies have a number of deadwoods, senior employees with few years to retirement, or those with no self-motivation and opportunities. What can be done is to activate the deadwood again, to make them undergo the process of rehabilitation. But anyway, each of the given groups of employee type can be modified into some other depending on the company’s needs at the time.

Performance = (skills + knowledge) x attitude

Everything can be changed except the attitude. The attitude is something that lies inside the person, the only thing that can be changed is the behaviour displaying the attitude according to the job requirements.


Exit indicated the final stage of business life cycle, more precisely, it is the very termination of it. The exit may be the retirement, termination of a working agreement, termination or the end of a project, quitting a job due to unfavourable conditions and firing.

I hope that this post helped you to become more familiar with the people from HRM department, who they are or what they are supposed to be responsible for.

Wishing you a successful business day,




Posted by on November 28, 2012 in Uncategorized


3 responses to “Managing Human Capital

  1. Miloš Stojadinović

    November 28, 2012 at 12:20

    Extensive, yet straightforward presentation of the HRM basics. It has definitely helped me to realize the importance of the HRM in career development.

  2. Aleksandar Vujić

    November 28, 2012 at 15:55

    Odličan tekst.

  3. Andre Damasceno

    November 28, 2012 at 19:13

    really interesting. congrats!


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