SAMAR COLLEGE

COLLEGE OF GRADUATE STUDIES

CATBALOGAN CITY
COURSE: MAED-1
SUBJECT CODE: MA038
SUBJECT TITLE: Personnel Administration
TERM: 1st Semester 2019
PROFESSOR: Maria John Ray Rosales
TOPIC: THE HR PROFESSIONALS AS HUMAN CAPITAL MANAGER
Discussant: Aiza A. Baleña
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Personnel/Human Resources Human Capital

To place the right people
with the right “skills”
With the right jobs for the
right cost at the right time.
To place the right people
with the right
competencies in the right
roles that are values-
added at the right time.

THE PARADIGM SHIFT

Tomas Davenport in his book, “ Human Capital” says, “Assets
are passive-bought, and sold and replaced at the whim of
their owners; workers, in contrast, take increasingly
active control over their working lives”. It is about time
that the workers no longer be treated as inanimate objects
without feelings, needs, and aspirations. As author E.G.
Flamholtz, says: “To treat people as an asset is to confuse
the agent itself(the expected services). The agent referred
to here is the worker.
WORKERS AS INVESTORS
This major paradigm shift from attaching financial value to
human resources as assets to one where the “employee-
investor” is treated as an equal partner in business is
anchored on two underlying principles: Ownership and return
on investment.
People come to work in a company with their so called-“hard”
and “soft” skills.

HISTORICAL ORIGIN OF HUMAN CAPITAL CONCEPT

While the term human capital, first appeared in publication
in 1961, Adam Smith, more than two centuries ago, already
conceived of the image of workers as investors. The famous
economists wrote, “The work which he learns to perform, it
must be expected, over and above the usual wages of common
labor, will replace to him the whole expenses of his
education, with at least the ordinary profits of an equally
valuable capital.” Very clearly, Smith refers to the acts of
the workers as an investor who is expecting a return on his
capital.
ELEMENTS OF HUMAN CAPITAL
Author Thomas Davenport breaks human capital into three
elements: ability, behaviour, and effort.
o Ability means proficiency in a set of activities or
forms of work. Ability comprises these subcomponents:
 Knowledge-command of a body of facts required to
do a job. Knowledge is broader than skill; it
represents the intellectual context within which a
person performs.
 Skill- facility with the means and methods of
accomplishing a particular task. It may range from
physical strength and dexterity, to specialized
learning.

o Behavior means observable ways of acting that

contribute to the accomplishment of a task. Behaviors
combine inherent and acquired responses to situational
stimuli. The ways we behave manifest our values,
ethics, beliefs and reactions to the world we live in.
o Effort- is the conscious application of mental and
physical resources toward a particular end. Effort
activates skill, knowledge, and talent and harnesses
behaviour to call forth human capital investment. In a
“pwede na” culture, one may forgive lapses in
knowledge, skill or competence, but not effort because
without effort, a wealth of knowledge and skills are
useless.
Author Thomas Davenport sums up this multiplicative
relationship in the following equation:

TOTAL HUMAN CAPITAL INVESTMENT= (ability+behavior)x effort x

time

ACQUIRING HUMAN CAPITAL

Given the fact that it is human capital that makes or
unmakes a company, one has to be scrupulous and rigid in the
selection process. Consider the acquisition costs of a wrong
selection: advertising expense, time lost in the test and
interview, salary for someone who did not contribute to the
company’s operation, time costs of his failure or mistakes
while on the job, and opportunity loss. The costs of
selecting the wrong employee could be staggering.
Steeve Kneeland gives us tips on what to look out for when
hiring people who will be able to perform well in the needed
job. He pointed out four things that really matter.

 Start with job description (competency-based job

evaluation now calls this “role description”, identify
what the job requires in terms of knowledge, skills,
and job related qualities.
 Focus on behaviour. Observe the candidate’s past
performance and, on the basis of that performance,
project the candidate’s future performance, in the job
you are offering.
 Look at what people actually do. You should ask two
important questions:

 What specific behaviours do you see in your

people that account for their producing good
results? What specific behaviour do you see that
you wish everyone would display?
 What specific behaviours do you see in your
people that seem to impede successful
performance?

 Avoid pitfalls. Problems may arise if you apply too

literally the analysis of what makes your successful
people succeed and then look for those characteristics
in your winning candidates.