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Human Capital Management Tools Used on Information Technology Staff

Essay by   •  April 5, 2011  •  Research Paper  •  1,579 Words (7 Pages)  •  1,459 Views

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Human Capital Management tools used on Information Technology staff

Human capital is a way of defining, assessing, and categorizing workers' skills and abilities. In today's business world, successful strategic human capital management and assessment is essential for accomplishing company and organizational program goals. Businesses should focus on one of their core departments - Information Technology (IT). The intent of this study will be to ensure company's human capital approaches are beneficial to their IT department employees. The purpose of this study will be to determine if the current approaches to human capital management are being used on IT staffers effectively. The study will specifically study the results of these approaches to their respective IT departments.

Information Technology (IT) has been an imperative aspect of business. The IT worker needs to have technical capabilities to work within a company to do their job. However, there has been a lack of methodology dedicated to developing and maintaining their technical and personal development skills. Instead, the human capital approach has been directed at sales and other customer service industry related departments. The IT worker is no longer just a separate entity from the company. Today's IT worker must interact with customers, users, and management staff to achieve company and departmental goals. This study will determine the success of current methods of human capital tools and whether current employees are skilled and trained for their present positions.

Companies are trying to find new ways to retain employees. High turnover rates are costly to the business, hurt morale, and adversely affect the continuity of workflow. The concept of building human capital and improving current methods has become increasingly popular. Rather than attaching a dollar value to an employee's knowledge, companies should instead learn to value the people, their intellect, knowledge and experience. The goal is to reduce company turnover and encourage the use of human capital to further their IT employee's career growth.

The common belief is that IS staff must move to a different company to advance in their careers. In today's business, IS support has become highly customized. Training on customized programs and systems can take months to years. Every time an IS employee makes the decision to leave a company for career advancement, an opportunity has been missed by the company and valuable time has been wasted. Companies need an effective solution to retain employees by matching their skill sets to their current profession and career path.

The focus on the IS employee's career advancement and personal development within their current organization, such as education, training, mentoring, and professional development opportunities can help retain valuable IS employees. Companies should determine if their current methods are adequate for there IS employees. The benefits of effective human capital management includes reduced turnover rates, well developed IT staff, and improved relationships between IT and end users/customers.

Weatherly's article, Human capital--the elusive asset; measuring and managing human capital: a strategic imperative for HR - 2003 Research Quarterly, states "human capital is arguably the most valuable asset held by an organization today." Human capital is not a recent concept, but has become a popular in recent years according to Hartog's article Behind the veil of human capital (1999). According to Hartog, the human capital is "an excellent vehicle for framing policy discussions too, whether on schooling, training and labor market performance" (p. 1). The drawback, Hartog argues, is the use of human capital concepts to treat employees with the same approach as a financial market - lacking the human element.

Managers are becoming interested in investments in human capital programs to increase productivity by improving workers' skills and knowledge (Becker, 1964). The article Human Capital Policy suggests the costs incurred early in human capital projects can show slow returns, initially, and are sometimes difficult to measure (Carneiro, 2003). However, the supporters of human capital investments claim these policies eventually contribute to economic growth (Baily et al, 1993).

The 1980's showed an increase in the measurement of human capital, due to an increase in the emphasis on post high school education (Mulligan, 1995). For recent studies, human capital is difficult to measure and businesses do not share a standard approach to reporting the value of their human capital (Hain, 2002). Hain's article, Measuring Human Capital, "found that there is still a considerable lack of clarity around which approaches deliver reliable results and how these measurements can then be used to inform business decisions." Hain also found the most effective tools to be the HR Practice Effectiveness model and the EVA approach.

Walker's testimony to the Committee on Government Reform, U.S House of Representatives stated "No management issue facing federal agencies could be more critical" and "the information technology area, where wide spread shortfalls in human capital have contributed to the demonstrable shortfalls in agency and program performance". These statements show that the United States General Accounting Office (GAO) has seen that viewing their IT staffers as human capital is a very important issue facing them.

In President Bush's 2002 The Presidents Management Agenda the 1st government wide initiative is the Strategic Management of Human Capital. The agenda talks about the reduction in federal government and that on the federal level "High performance will become a way of life that defines the culture of the federal service."(p.15). While the agenda does not directly talk of IT staff it does discuss the use of "information technology systems to capture some of the knowledge and skills of retiring employees"(p.13). The knowledge and skills that are retrieved from this type of system will equal human capital that can be passed on to others.

The Federal Bureau of Investigation's (FBI) Office of Chief Information Officer (OCIO) noted in the Core Competency Progress report, that in order to meet the Presidents Management Agenda the

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