Contemporary Management Issues
Academic Year 2023/24
BA Business Studies with Foundation Year
Assessment 1: Individual Essay
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Introduction
Human Capital Management (HCM) adds value to organisations from the perspectives of knowledge, skills, and innovation (Diani et.al, 2024). Within this context, people are considered valuable resources that late talent management policies and learning and development interventions can develop. Yet, the dynamic transformations of business environments in the age of the 21st century have brought new threats and opportunities to organizations. Nowadays business organizations elaborate several ?????? new technologies, changing expectations of the employees, and the growth of telecommuting that influence the approach to human capital management and development. This essay will analyze Armstrong’s statement with reference to current emerging research in knowledge management (KM) and idea management (IM) and then show how these fields support the objectives of HCM and to what extent: agree or disagree with Armstrong.
About HCM
Human Capital Management (HCM) has emerged as a crucial nature for establishments that want to improve the value of people's assets and business outcomes. HCM on the other hand refers to the strategic management of the employees as important organizational capital through talent management, training and communication (Adp.com, 2024). Employees are a key driver of organizational performance and therefore require the development of their knowledge and skills. In the third millennium, HCM combines information technology and business analytics to offer optimum solutions for human capital management. In this way, HCM makes organization changes adaption, geared up to the present day’s effective worldwide business environment (Armstrong and Taylor, 2023).
Future of Human Capital Management
Over the last few decades, Human Capital Management has undergone massive changes because more and more companies consider its members not as mere utilities, but as essential components of the organizational value chains. Based on the current research, organizations that dedicate resources to talent management and revolutionary best HCM practices are likely to have increased levels of staff engagement and performance. For example, Amazon has a great reputation for its focus on learning, particularly professional learning. Policies like Amazon Career Choice afford employees chances to develop new skills, personal and organizational, that prove helpful in performing an organization’s goals. This supports Armstrong’s opinion that by training and developing its people, organizations gain something of value within the organization (Armstrong and Taylor, 2023).
Furthermore, while modern talent management practices within HCM have embraced the use of proper technology, data analysis tools have been adopted to enhance talent management approaches. Modern HCM is rather more data-oriented in the 21st century and focuses on the analysis of the skills deficit with forecasting the future need in human capital, providing organizations with a better understanding of how the strategies on human capital fit the general business strategies of an organization. Google is a perfect example as part of its people strategy it uses people analytics to support the process of hiring and the performance of workers, as well as to help design frameworks for employee retention. The organisation’s Google team known as “People Operations” uses data to tailor desired improvement features for its personnel and embraces the culture of lifelong learning (Deloitte, 2018). It shows that HCM today involves the use of technology and that Armstrong’s ideas in writing the focal HCM book are somewhat more advanced than the current level of technological integration in HCM.
Knowledge Management
Knowledge Management (KM) has emerged as a critical element of HCM since the latter provides various tools that allow the effective acquisition, storage, and distribution of both, explicated and implicated knowledge. KM systems do not only make applicable knowledge accessible within organisations but also support the constant knowledge-building process (Nupap,2022). For instance, Microsoft has embraced an intranet-based collaborative knowledge-sharing program through which employees are encouraged to post informative items in a central reserve. This is in consonance with Armstrong’s view on knowledge and innovations as elements that enhance the value of an organization; this is because it is well-documented that a structured method of nurturing and deploying employee expertise is good for business.
A number of studies carried out in KM in recent years show that culture management that encourages knowledge sharing and cooperation is something that has to be paid attention to. organisations with a well-developed set of KM practices are less sensitive to the fluctuations within a market and prove to be more efficient. Companies like Deloitte have embraced this and thereby instituted KM systems through which knowledge can be shared among workers within common global teams. For instance, the Deloitte KM framework comprises both the structural KM repositories and the relatively open communities of practice through which important practices and findings can be shared within departments (Grant.com, 2024). These systems also assist in the capacity and flexibility of an organisation and show how the dynamics of current KM systems can help move beyond a pure commodity view of human capital.
Idea management and Innovation
The third part of HCM dedicated to the improvement of individual and organizational creativity is also important, and it is named Idea Management (IM). In the past several years IM has become popular in organizations as companies strive to keep abreast with the ever-changing market by engaging employees in creative and innovative processes. IM is a structured system of communications in an organization, and a significant improvement in the levels of employee engagement and innovation in organizations with structured IM systems (Parthasarathy et.al, 2021). One good example is Procter & Gamble (P&G) which has adopted an open innovation approach where both internal and external parties are encouraged to submit ideas that can foster product design and process innovation. This is actually linked with Armstrong’s conception of employees’ innovative capability as an essential organizational asset although the concept goes beyond it by retaining definite idealisation procedures between organisational divisions (Armstrong, 2020).
In today’s world, many organizations and corporations apply technology to simplify the course of organizing IM and making decisions concerning ideas. For instance, Apple has created an internal app through which users can submit ideas and work on them together and seek the opinion of the company executives. It was realized that such a platform enhances the flow of ideas between departments and results in enhanced council rates of viable ideas. The approach adopted by Apple in managing innovations reflects a programme change in the organisational culture as far as the employees are concerned. This example shows that IM practices can help establish a looser and more interactive work culture, which helps to support Armstrong’s claims that cultivating the imaginative capacity of workers provides impressive added worth to the organization (Aslam et.al, 2020).
HCM practices that are responsive to the change. Armstrong’s view
The increasing need for digital skills in the workforce and organizations’ HCM practices that are responsive to the change. Armstrong’s view could probably prove wanting when it comes to the speed of transformation the advancement of technology brings, which calls for constant training in reskilling and acquisition of new tools for KM and IM (McKinsey.com, 2024).
Also, due to the increase in remote work and more particularly the gig economy, HCM has come across new hurdles. As discussed in Chapter Two, Armstrong’s emphasis on traditional employee development might not prepare organisations for the new types of workforce that are likely to occur due to the increasing use of technology. The latter has become apparent with the growing job market dependence on telecommuting tools and flexible working hours. This shift demands HCM policies that are flexible and encompassing, they need to develop policies that cater for the remote workers and at the same time unify organizational culture. Thus, although in essence, Armstrong’s ideas remain highly effective, current management practices in Human Capital Management cannot be as rigid, coupled with a lack of reliance on technologically friendly approaches (Lam et.al, 2021).
Assessment of Armstrong’s Statement
In the statement on HCM, Armstrong explains the importance of following an organizational framework, in an attempt to imprint the knowledge, skills and creative capital of employees into the firm to reflect their value in the organization. Although this perspective is still valid, it is necessary to question its relevance in the context of the modern 21st-century organization. HCM strategies of today are no longer conventional, encouraging innovation, technology incorporation and a more comprehensive understanding of the engagement of the employees. This is a result of dynamic environments in businesses today and a need to be flexible in today’s technologies.
A feature of Armstrong’s statement is that human resources as values that can and must be invested. This concept harmonizes with modern organizations’ preferences, stating capital in people predictably equals competitiveness. However, Armstrong’s concern is basically on personal development through resourcing, talent management and learning interventions. Currently, companies need a more extended concept of task management that involves extended, geographically dispersed teams, and the use of technologies to improve the employee experience. key tasks that modern HCM strategies have to solve, due to implementing new forms of work organization, include the ones connected with the lack of team cohesiveness and collaboration, as well as the lack of professional development opportunities for remote employees. This underscores the need for Armstrong’s focus on investment to be extended with strategies that will accommodate new working conditions and encompass many employees in need (McKinsey.com, 2024).
Armstrong’s statement is still accurate, though it could not cover some aspects of modern HCM; this is due to the fact that newly-fledged challenges appear as organizations struggle to manage and develop human capital effectively. The practices of HCM, KM, and IM are in many ways today result from technological and data advancements that have refocused organizations’ approaches to talent and innovation.
Recommendation
To remain an aggressive organization and to fully unlock the value of people assets in the 21st century, there should be keen interest in the use of superior technology in the execution of HCM, KM and IM. To begin with, organizations should ensure they key into the availability of learning solutions that happen formally online. For example, AI can tailor learning and development programs by employee roles and training requirements; and embrace a lifelong learning culture that is in line with business objectives. Second, to gain the maximum benefit out of KM, organisations must introduce efficient collaboration and sharing technologies across functional geographical units to bring organisational flexibility & innovation to the next level.
Last, firms ought to create formal, professional IM systems that require and foster idea contributors’ creation. These feedback loops, gamification, and rewards of recognition inside these platforms enhance employee engagement and can encourage active participation in the firm’s innovation backstop. Together with these approaches, it is possible to attain better compliance with Armstrong’s viewpoint on the significance of human capital within organisations as well as enable the organisations to meet new technical environments and dynamics of the modern workforce. This approach goes a long way in improving the employee’s skill and knowledge, while at the same time promoting organisational innovation which is key to business sustainability.
Conclusion
In sum, Armstrong’s on Human Capital Management (HCM) could be seen as a good basis of this approach, yet this approach should be adjusted in order not to become outdated in the 21st century. This he said has led him to the realization that employees are important capital that requires investment in their knowledge, skills and creativity. Today’s organizations have their distinct characteristics resulting from improvements of technology, and transformation of the human capital and workforce by centralization of work.
Consequently, organizations need to take a more integrated view in their human capital management approaches, requiring them to incorporate such technological tools as big data, and virtual learning systems. Also, the effective implementation of strong KM systems enables information exchange across teams and increases organizational adaptability. In addition, organized Idea Management (IM) fostersthe engagement of employees in the innovation process in order to help organizations sustain themselves in emergent markets.
Lastly, it is possible to develop Armstrong’s basic notions and adopt a broader, open, and technocentric vision of HCM, which would allow an organization to realise the true value of human capital more effectively. Such a consideration does more than improve workers’ organizational commitment and training; it also prepares firms for future stability amid growing competitive pressure and a rapidly changing environment.
References
Adp.com., (2024) Human capital management. Available at: https://www.adp.com/resources/articles-and-insights/articles/w/what-is-human-capital-management.aspx (Accessed on: 8 October 2024)
Armstrong, M. and Taylor, S. (2023) Armstrong's handbook of human resource management practice: A guide to the theory and practice of people management. Kogan Page Publishers.
Aslam, F., Aimin, W., Li, M. and Ur Rehman, K., (2020) ‘Innovation in the era of IoT and industry 5.0: Absolute innovation management (AIM) framework’, Information, 11(2), p.124.
Deloitte., (2018) 2018 Global Human Capital Trends. Available at: https://www2.deloitte.com/us/en/insights/focus/human-capital-trends/2018.html (Accessed on: 7 October 2024)
Diani, R.D., Hamida, H. and Sudiarditha, I.K.R., (2024) ‘The Role of Human Resources in Human Capital Management’, Siber Journal of Advanced Multidisciplinary, 2(1), pp.145-160.
Gartner.com., (2024) Prepare for the Future of Remote Work. Available at: https://www.gartner.com/en/human-resources/trends/remote-work-revolution (Accessed on: 6 October 2024)
Lam, L., Nguyen, P., Le, N. and Tran, K., (2021) ‘The relation among organizational culture, knowledge management, and innovation capability: Its implication for open innovation’, Journal of Open Innovation: Technology, Market, and Complexity, 7(1), p.66.
Mckinsey.com., (2024) A new future of work: The race to deploy AI and raise skills in Europe and beyond. Available at: https://www.mckinsey.com/featured-insights/future-of-work (Accessed on: 6 October 2024)
Nupap, S., (2022) ‘Knowledge management system by applying knowledge creating company: transforming tacit to explicit knowledge’, In 2022 Joint International Conference on Digital Arts, Media and Technology with ECTI Northern Section Conference on Electrical, Electronics, Computer and Telecommunications Engineering (ECTI DAMT & NCON) (pp. 439-444). IEEE.
Parthasarathy, R., Garfield, M., Rangarajan, A. and Kern, J.L., (2021) ‘The case of organizational innovation capability and health information technology implementation success: As you sow, so you reap?’, International Journal of Healthcare Information Systems and Informatics (IJHISI), 16(4), pp.1-27
