There is no doubt that personnel are the most valuable assets of any organization.The human assets are the personnel, the employees who work for an organization. They are the key resources.They possess intellectual capital which is a source of competitive advantage.Intellectual capital is the accumulated stock of knowledge, skills and abilities that individuals possess, which the firm has built up over time through training and manpower development, and which has now become identifiable expertise.
People in different positions actually have different value.What makes them valuable is their knowledge, skills, maturity, experience and personal attributes which position them as valuable assets within the organization.A chief accountant for example, has specialized knowledge in accounting matters, budgeting, cash flow and financial management.With his knowledge and wealth of experience, he is able to provide the required accounting services the firm needs to maintain proper accounting records and manage the resources of the company efficiently.
An IT engineer on the other hand has his expertise in IT related matters.In a core IT firm, he provides specialized knowledge in his core technical functions and handles all activities related thereto.Thus, he provides a valuable professional service to the organization.A marketing manager will have adequate knowledge of the market.He should possess good marketing skills and be able to conduct market research and advise the company on competitive pricing of their products.
Looking at the respective functions of the accountant, engineer or marketing manager, we see each of them performing important but distinct roles towards achieving the overall corporate objectives. This makes each one of them valuable human assets.
Human assets in the corporate world cannot be sold to increase the company’s monetary value.Human assets are human beings and cannot be sold like physical assets to gain monetary value.On the other hand, companies do all they can to retain valuable human assets, that is, key personnel within the company.This can be achieved by providing enhanced reward or compensation package.
Hook (2010) states that ‘people are the most valuable asset a company can have’.This statement is very true and correct.People or employees in an organization are treated as assets rather than costs.They are regarded as a source of competitive advantage and as human capital to be invested in through the provision of learning and development opportunities.
Out of all the assets of production, people are indeed the most valuable.Boxall and Purcell (2003) suggest that, ‘human resource advantage can be traced to better people employed in organizations with better processes’.This echoes the resource-based view of the firm which states that ‘distinctive human resources practices help to create the unique competencies that determine how firms compete’. (Capelli and Crocker-Hefter, 1996).
In the competitive business world, you need human beings with the expertise to translate ideas into reality, to transform vision to actions, and to execute and implement the strategies, processes and decisions of the entrepreneur.Without the functions of human activities, the industrial complex will look like a graveyard. It is the human elements who will operate the industrial machines, drive the vehicles, do quality control, keep records and do all the essential things required to bring out the production of goods and services.
Even with the advent of technology, it has been proved that technology or machines can only assist human beings in the production process but cannot take the place of human beings completely.There are things that people can do that machines cannot do.Machines cannot think, while people can think and produce results.So, people are the most valuable asset any company can have.
Hard HRM advocate usage and treatment of the employees in a same manner as any other resource or factor of production while Soft HRM promulgate the importance of developing the human resource potential in order to encourage employees to pursue shared corporate goals.
Hard HRM ‘reflects a long-standing capitalist tradition in which the worker is regarded as a commodity.’Hard HRM is a business-oriented philosophy which focus is to treat people in ways that will derive the best value from them and thus achieve competitive advantage.It regards people as human capital from which a return can be obtained by investing judicially in their development.The idea of Hard HRM is that employees are just a means to an end.
Soft HRM has a better approach.It involves treating employees as valued assets, a source of competitive advantage through their commitment, their skills, quality and adaptability.The soft approach emphasizes the need to get the commitment of the employees through involvement, participative management, two-way communication and other means of fostering high level of commitment and trust within the firm.
In my opinion, the Soft HRM approach is a better method.Itis similar to McGregor’s Theory Y approach to scientific management - which encourages good and humane treatment for workers, training, motivation, conducive workplace, good lighting and ventilation, and attractive reward system. This approach always works better to get the best out of employees rather than the ‘carrot-and-stick’ approach.
Felix - 2021
