How to Improve Your Human Capital Management 

 January 27, 2017

human capital management

How do we promote and retain the right people? What can we do to continue to develop our employees? How can we enhance our recruitment and onboarding process???

What if I told you that the answer to all of these questions was the same? Human capital management. To solve all of these problems you need only do one thing, improve your human capital management.

Your business has to know how to understand, improve, and manage its employees, its human capital. Here are seven ways you can improve your company’s human capital management.

1. Build Employee Profiles

Employee profiles are a quick and easy way to attach a name to a face. Now managers, new hires, or transfers are free of the stress and pressure involved with getting to know their coworkers.

In addition to connecting employees, these profiles are useful for your human capital management. Managers and supervisors can now gather and store employee data (such as performance reviews, disciplinary actions, customer response surveys, etc.) in one central place.

Consequently, having a central storage location makes accessing this data quicker and ensures that no relevant information is lost in communication between different employees and managers.

2. Performance Reviews

Having reliable and consistent performance appraisals is key to your company’s human capital management. Any performance review system should include multiple forms of feedback including self-ratings, peer reviews, and manager assessments.

There are two keys to ensuring that your performance reviews are effective. The first key is that the reviews are timely. Performance appraisals should occur on, at least, a quarterly basis. The more timely the feedback is, the more impact it has.

The second key is that reviews have to contain valuable information. Seems pretty straightforward, right? Unfortunately, many organizations still complete their performance appraisals with an emphasis on what an employee’s weaknesses are.

This focus is, simply put, wrong. To see real performance gains, and maximize your human capital you should be focusing on an employee’s strengths. When employees are taught to leverage their strengths, they can actually optimize their performance.

3. Make Management Mobile

There are now over 2 billion smartphone users worldwide. And, this number will only grow, there will be an estimated 6.1 billion smartphone users by 2020.

So, if you want your human capital management system to connect with your employees, it will benefit you to account for this increased mobility.


Allow employees to work from home, and give them the option for a flexible schedule. This flexibility can improve staff productivity and performance.

Mobile tools also allow your workers to have access to human capital information such as customer feedback or previous performance reviews whenever they choose. As a result, your staff can now use or review this information anywhere. These tools remove potential barriers to access such as time and location.

4. Unite Human Capital Benefits with Your Overall Business Strategy

One of the most important things your company can do to promote its human capital goals is to join them with your overall business strategy. Your human capital objectives have to match the goals you have laid out for your business.

You want your human capital management to solve specific business problems or questions. The answers to questions such as: How can we improve productivity? How can we increase our sales despite an uneven economy? How do we align our company’s and employees’ values?

Align your human capital management and business goals to be as successful as possible. This alignment will not only increase your HCM program’s effectiveness but will also drive executive support.

5. Train Leaders to Recognize Differences in Employee’s Performance

To properly manage your human capital, it’s vital that your leadership team understands how to identify and measure differences in employees’ performance.

employee benefits plan

Managers in your company need to know how to observe and record this information. Every manager should know what criteria to use when assessing performance. Additionally, there has to be a system in place that allows performance to be objectively quantified.

The quantification of performance information gives your company data that can be used to demonstrate your human capital management system’s effectiveness. Again, this data can be used to show executives your system’s value and garner support.

A proper human capital management system helps to ensure that one manager’s bias or limited interactions with a certain employee do not distort that employee’s evaluation, growth, or future opportunities.

6. Individualize Management

Every person is different. It is a phrase we learn in grade school, yet it rings true your whole life. So, make sure that your leaders acknowledge this difference by managing different employees on a case-by-case basis.

Similarly, guarantee that every employee has a development plan tailored specifically to that employee. A one-size-fits-all approach to human capital management will minimize your company’s efforts, and it will not resonate with employees.

To maximize the engagement in and effectiveness of your human capital development, your system should be able to adapt to any employee.

7. Communicate Better

As your business learns to communicate better, your human capital management will improve as well. Enhanced communication works to improve both employee engagement in and understanding of your human capital management processes.

When communication regarding your human capital management is better, your staff can better understand the system’s processes. Employees can figure out what is expected of them and what they can expect from your organization in return.

From this, employees become more engaged with the human capital management system and ultimately their job. Today’s workforce, especially millennials, want the opportunity to develop their careers, and your company’s human capital management is pivotal in this process.

Additionally, the more engaged your employees are, the more likely your business is going to find success. That’s why improved communication is key for you human capital system.

The Wrap

Human capital management is about more than just scheduling vacation days and building pay structures; it is about growing and developing your employees. Your human capital management system should work with your business goals to promote success.

Use these seven tips to capitalize on your human capital.