Modern Human Capital Management

Abstract: Title: Modern Human Capital Management Seminar date: 30th of May 2008 Course: Master thesis in Business Administration, 15 ECTS Authors: Madita Feldberger Supervisor: Lars Svensson Keywords: Human capital, SWOT Analysis, Strategic Map, Balanced Scorecard Research Problem: Despite of the success of Human Capital Management (HCM) in research it did not arrive yet in the HR departments of many companies. Numerous firms even have problems to set their strategic goals with focus on HR. The HR Balanced Scorecard approach could be a big opportunity as a help method to assist HCM entering the doors of many organizations and it even could reach understanding about the usefulness of HCM. Research objectives: The purpose of this thesis is firstly to make a SWOT analysis with focus on Human Resources for a specific company, secondly to develop a Strategic Map and thirdly to create an HR Balanced Scorecard for that organization in order to illustrate a way to create understanding about the usefulness of HCM. Methodology: In this master thesis, it has been selected to employ a case study approach in a single organization, Sigvaris, where the data collection is based on both from existing available sources of information and from qualitative interviews. To give this dissertation a practical point of view a thorough SWOT analysis about the Swiss company Sigvaris with focus on human capital was made. Three employees of the HR department were interviewed. The results out of the SWOT analysis are applied to develop a Strategy Map. Then this Strategy Map was shown to the three interview partners and the strategic goals were discussed and the links between them were reviewed as well. For the development of the HR BSC the three interview partners’ assisted to decide which strategic goals are important, which measures are useful, defined the target values and gave examples for the action plans. Theoretical framework: The theoretical framework includes an explanation of the Human Capital, the HCM methods to collect data, the SWOT analysis and the Balanced Scorecard. Conclusion: The conclusion is that regardless of the catchphrases about employees that they are their most essential asset, a lot of managers haven’t methodically explored how and where human capital makes winning strategy execution in their firms. The present HCM realization is characterized through the following three aspects: 1. Quantitative orientation; 2. Operative orientation; 3. Related to the past orientation. The analysis of the HR department at Sigvaris approves this as well. That means that the difference between traditional and modern HCM does not exist in the time dimension. You can not say “yesterday” means traditional HCM, “today” means modern HCM. The practical example with the company Sigvaris shows that the SWOT analysis is a useful tool for obtaining a first impression of an organization’s strategic situation and a big aid to develop the strategic goals. To develop a Strategic Map for Sigvaris made clear how the HR department generates value and therefore it is an important task for planning an HR Balanced Scorecard. HR BSC is a concept that can be used easily to check and apply the HR strategy of the firm. As the work with Sigvaris showed, is the HR BSC a model which should definitely be used more in practice. The HR BSC with help of the SWOT analysis and the Strategy Map is an approach which can open the doors to firms for the HCM.