Dealing With Human Capital: Ten Lessons Learned and Five

Univ.-Prof. Dr. Christian Scholz!

Workshop

Dealing With Human Capital: Ten Lessons Learned and Five Questions Asked

23./24. juin 2016 IAE de Bordeaux

orga.uni-sb.de rigor.relevance @

Lesson #1: !When moving beyond verbal and abstract representations of

Human Capital, the story becomes very complicated.

IAE Bordeaux, Juin 2016, [email protected] 2

Cost based paradigm

Income based paradigm

Performance potential paradigm

Three paradigms



Lesson #2: !The performance potential paradigm is able to overcome the short comes of both the cost based and the income based

paradigm.

Value basis

Full-Time-Equiva-

lents

Marked salary

Value depreciation

Knowledge erosion

Value compensation

Recruit-ment

Personnel develop-

ment

Value change

Commit-ment Context Retention

Performance potential paradigm



Lesson #3: !The performance potential paradigm can be transformed

into a practical mathematical formula.

( )[ ]∑=

••• +=g

1iiiiiiii MPE)b,w(flFTEHC



Lesson #4: !Aiming at a monetary value of Human Capital irritates and

creates enmities.



Lesson #5: !Getting the monetary value of Human Capital out of the HR

data warehouses is currently impossible.

Real 'me

HC costs €

HC perfor-mance

€

SFo-Database

Real 'me

SAP HR Oracle HRM

Controlling

SFo-Data

Value base

Full-Time-Equiva-

lents

Market salary

Value decreciat

ion

Knowledge erosion

Value compensation

Recruit-ment

Develop-ment

Value change

Commit-ment Context Retention



Lesson #6: !The only way towards a true Human Capital Management is

by using national or (even better) international standardization of Human Capital Reporting.

ISO TC 260 Human Resource Management

TC 260

WG 1 Terminology

WG 2 Metrics

WG 3 Human

Governance

WG 4 Workforce Planning

WG 5 Recruitment

WG 6 Knowledge

Management

WG 7 Human Capital

Reporting

Chairman‘s Advisory Group

Communication Task Group



Lesson #7: !International standardization of reporting must respect and

understand national differences in Human Resource Management and its metrics.

For France: •  Document de Référence •  Rapport annuel •  Nouvelles régulations économiques •  Grenelle II



Lesson #8: !The currently most likely set of variables to be used in

Human Capital Reporting allows for various methods to calculate the Human Capital value.



Lesson #9: !Forcing students to calculate the Human Capital values and the outcomes of Human Management practices, increases

the understanding not only of Human Capital, but of the whole Human Capital Management process.

1. Valeo 51% 2. Michelin 47% 3. PNP Paribas 45% 3. LVMH 45%!_____________________________________ 36. Société Générale 22% 37. Safran 19%

1. E.ON 46% 2. Linde 42% 3. Bayer 40% 3. VW 40% _____________________________________ 29. Beiersdorf 9% 30. Siemens 9%

‘HCR10’ (annual report 2015) France Germany

Taken from: Schatton, Mercedes, Bachelorthesis June 2016



Lesson #10: !Human Capital influences directly and/or the relationship to

corporate performance and this effect can be analysed.

Human Capital 2014

Delta !Human Capital

Human Capital 2010

Corporate Performance 2014

Delta!Corporate Performance

Corporate Performance 2010

Staff intensity Research intensity


Open Questions:

(1)  How are tendencies towards convergence and/or divergence, for instance, within Europe, reflected and/or driven by Human Capital philosophies?

(2)  To which degree is Human Capital measurement critically influenced by culture and what could/should we do about it?

(3)  How are differences across countries with respect to Human Capital reporting to be explained and what are the consequences of that explanation?

(4)  What happens to Human Capital valuation when we move on towards the borderless organization and the proportion of cloud workers increase?

(5)  How can we use Human Capital in order to assist Human Capital Management by moving from „more“ to „better“?



Thank You!


Documents

Dealing With Human Capital: Ten Lessons Learned and Five