Human capital reporting: Should it be industry-specific?
In their paper, O’Donnell, Kramar, and Dyball discuss the importance of a more standardized method of human capital reporting in determining the investors’ decisions. In this case, human capital is viewed as the competencies, attitudes, abilities, qualities, and skills of an organization’s employees. They have proposed the Star Model as a way of standardization and reporting the human capital to investors.
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However, there is a major question of whether the reporting should be industry-specific. From my experience, I have seen many people attempt to demonstrate the need for this reporting to be industry-specific because various industries differ in some ways.
In their analysis, O’Donnell, Kramar, and Dyball base their arguments on three conditions. To start with, they have recognized that there is a need to have a systematic human capital analysis by the financial markets as well as the firms (O’Donnell, Kramar, and Dyball 359). I consider this analysis as important because it is based on the assumption that human resource professionals have the required capabilities to provide such analysis. Finally, they have argued that there is a model through which human resource professionals can apply in order to carry out this analysis in the most effective way.
From my experience, I have seen a number of organizations recording a significant increase in their stock prices following adaptation of a systematic method in reporting their intangibles. This is because the majority of these investors strongly believe that these intangibles play a pivotal role in determining the ability of an organization to execute its strategy. I consider the importance of observers in making critical decisions about an organization’s ability to manage its intangible assets depending on the information they retrieve.
From my experience, I have seen the importance of using human capital as one of the intangibles in an organization. In this case, human capital can be viewed as those abilities, attitudes, skills, and qualities possessed by an organization’s employees. These aspects play a major role as they determine the value of an organization.
I also consider the regulatory responses as an important part although not sufficient in assisting the investors to clearly understand the value in an organization. For instance, an organization may disclose information such as the evidence in the board succession plans, performance evaluation, performance assessment as well as the performance of the committee and board members’ performance. There is always a need for clear information.
I consider systematic human capital reporting in determining the investor’s decisions about a company. In an effort to demonstrate the importance of systematic human capital industrial reporting in an organization, O’Donnell, Kramar, and Dyball have used the Star Model. They have demonstrated that human capital management is the pillars of value creation in an organization. Without effective human capital management, then an organization can achieve very little in its operations.
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I also consider the importance of the various human capital indicators in determining an organization’s level of competitiveness. In their analysis, O’Donnell, Kramar, and Dyball have also identified some unique human capital indicators (O’Donnell, Kramar, and Dyball 363). One of the main indicators identified in this case is creativity. This is an important aspect as it determines the competitiveness of an organization. Creativity helps an organization to improve existing products or coming with high-quality products. This increases the competitiveness of an organization.
From my experience, the majority of the managers have not been using the appropriate measures in reporting the same. This is despite the importance of a systematic reporting of human capital in an organization. For instance, the report has indicated that a significant number of organizations do not have any systematic way of sharing information between human resource professionals and external financial analysts.
From my experience, I have noticed that most analysts have been used in analyzing the tangibles rather than the intangibles in an organization. O’Donnell, Kramar, and Dyball discussed that this can be of little benefit in some sectors which largely requires knowledge in the realization of the set goals. For instance, it may be very difficult to convince the brokers about the expected future value of a certain organization without the provision of such an analysis. This may threaten the success of an organization to some extent.
From the above analysis, I can conclude that both the human resources reporting as well as industry-specific human capital analysis have not yet developed in the modern business world. In connection to this, O’Donnell, Kramar, and Dyball have emphasized the role of the human resource profession to ensure that the value of an organization’s data is communicated to the market.
From my personal experience, I strongly believe that the way an organization reports its intangibles is of great importance in determining the investors’ decisions. Thus we need to have a more standardized method of reporting these intangibles in order to influence investors positively in their decisions. This is more so in the contemporary world where we have an increased demand for investment in intangibles due to recent improvements in intangible investment and reporting.
I consider human capital as one of the main intangible assets in an organization. It is necessary to have an industry-based reporting of the human capital within an organization. I think that signatories would be more willing to invest in an organization that is able to demonstrate a high level of social, environmental, and governance attributes. Therefore, I think it will be important to have a more clear and systematic method of reporting about the intangible in an organization. In the contemporary world, which is characterized by a very high level of competition, this will be vital in the development of competitive advantage.
From past experience, I believe that investors will be influenced in making their decisions depending on the information at hand about a certain organization. One of the most important information that investors can use in judging an organization is its corporate and social responsibilities. This is because CSR is determined by the level of returns for an organization. Those organizations which are able to communicate this information effectively manage to create a good image in the eyes of the public. They also emphasized employee engagement. Such information is recognized since it is useful in estimating future value in an organization.
From my experience, I have noticed that the level of technology has significantly improved in the modern world. Therefore, most production functions are done by machines. This has reduced the gap between the levels of performance of various organizations since most of these machines are similar. For instance, the production of a certain product using similar machines and raw materials will lead to an almost undifferentiated product. Therefore, the only best area where an organization can create its competitive advantage is through intangibles. Therefore, it is necessary to have a more systematic industrial-based analysis for human capital.
Team development at Fisher and Paykel: The introduction of ‘Everyday Workplace Teams
This article was written by Mallon from the University of Otago and Kearney of Fisher and Paykel, New Zealand. This paper seeks to address the issue of change in an organization and the importance of employees’ groups in this change. In their paper, Mallon and Kearney emphasized the importance of teams in facilitating change within an organization. In particular, self-directed teams are of great importance in an organization.
I consider it important for every organization to keep up to date with recent management practices. I consider the fact that the largest potential for improvement is among the people because they are the ones who use various processes within an organization. Skilled and high-performing teams that are focused on the realization of organizational goals facilitate the development of an organization.
I also consider it necessary to emphasize the need to have every individual get determined in performing the best in their respective areas of responsibility in promoting the success of an organization. Therefore, it is important for an organization to develop self-directing teams within the organization. The essence of this is to come up with work teams composed of individuals who are fully committed to making improvements in their respective areas in the workplace.
From my experience, I have seen the importance of teamwork among the employees in promoting innovation within an organization. When an organization adopts teamwork in its operations, this improves the exploitation of the new technologies. Each member of the team will have an opportunity to contribute to their teams and hence apply their unique skills. Since every team specializes in its respective area, it will be easier to maximally apply the new technology for the benefit of an organization. Mallon and Kearney observed that this will. Mallon and Kearney further added that teamwork encourages innovation among the employees. This is because there is an exchange of ideas among employees sharing related skills.
I consider it disastrous to have team-working in promoting unhelpful and rigid altitudes among the workers. In some cases, it is not every team member who will tend to respond positively to the team’s genders. For instance, the already established organizational norms may be violated by the introduction of the team working. In such a case, it may be very difficult to overcome such difficulties. There are also some complications related to power within teams in an organization.
This paper also emphasized the importance of necessary training among the employees in the realization of the desired goals (Mallon and Kearney 98). Team training plays an important role in maintaining good performance among employees both in the present and in the future.
From my experience, I discovered the importance of the implementation team in promoting the performance of a certain team in an organization. This team ensures that every participant is fully informed about the functions of a certain team. These teams are built within operational boundaries. However, the major challenge is posed on the introduction of the change which would transform and challenge the already established comfort zones (Mallon and Kearney 98).
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From my past experience, many organizations have applied the idea of the workbook in promoting the Mallon and Kearney also talked about the idea of the workbook in their explanations. This is highly interactive and is supposed to be used by every member of a team. An organization can use a workbook in facilitating a common understanding among the employees. This acts by reducing the level of misunderstanding among the workers. There are several advantages associated with the use of a workbook in a team. To start with, the workbook promotes the development of functional teams. It also encourages the team members to direct all the resources available towards the improvement of activities in their respective working areas.
I consider the fact that change is of great importance in every organization. This is more so in the contemporary world where the level of competition is extremely high. Therefore, it is necessary to have the effective change to retain competitiveness.
I consider teamwork as a very important aspect of every organization. It helps an organization to build its competitive advantage. For instance, through teams, an organization is able to disintegrate various parts of an organization into small functional groups representing various activities in an organization. By so doing, it will be easier to identify which specific teams are failing the organization before an organization fails completely. I also think that small teams are easier to manage than larger ones.
From my experience, I don’t believe that teamwork always comes along with achievements in an organization. Although Mallon and Kearney made important contributions to the importance of teamwork in an organization, there are some areas where I completely disagree with their observations. I disagree with the fact that teamwork always encourages innovation and creativity, among the employees in an organization. When employees are organized in teams dealing with a certain field, this discourages diversity among employees.
I think that when employees are forced to interact in a team, for instance, they are denied a chance to interact with other employees from outside their department. In this case, teamwork discourages employee’s creativity to some extent. Since various activities or processes within an organization are related to others in one way or another, it is important for the employees to have some ideas about other departments. In other words, teaming employees undermines diversity.
I also disagree with the point that workers do always respond positively to teamwork. Mallon and Kearney have overemphasized the fact that teams are always yielding positive achievements in an organization. In some cases, some workers may tend to oppose teamwork depending on the prevailing situation. The opposition is always likely to occur among the workers. It is therefore not realistic to assume that workers will always be receptive when subjected to teams.
It is also not realistic to assume that teams will always lead to the realization of organizational goals. Several cases have been observed where workers have used their teams in organizing strikes and go-slows. This undermines rather than encourage the performance of an organization. For instance, workers may use their teams to reject a certain change within an organization collectively.
Mallon Mary and Kearney Tania. Team development at Fisher and Paykel: The introduction of ‘Everyday Workplace Teams’ Asia Pacific Journal of Human Resources 2001; 39; 93-106.
O’Donnell Loretta, Kramar Robin and Dyball Maria. Human capital reporting: Should it be industry specific? Asia Pacific Journal of Human Resources 2009; 47; 358-374.