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Human Capital Frameworks

How to build a strong organization

 

Eny Lestari Widarni

STIE Jaya Negara Tamansiswa Malang

 

 

 

Published  

30 October 2020

 

 

 

Janega Press

Jl. R. Tumenggung Suryo No.17, Bunulrejo, Kec. Blimbing, Malang City, East Java 65123 Indonesia

OPENING SPEECH Chairman of the Maju Jaya Negara Tamansiswa Foundation

 

Thanks to Allah SWT, Alhamdulillah published the Human Capital Framework Book published by Janega Press, written by Dr. Eny Lestari Widarni, MM. At the Tamansiswa Malang State College of Economics, who inshaAllah greatly helps the needs of students and female students in participating in the Study of the Learning Process at the STIE Jaya State Campus Tamansiswa Malang This book discusses exciting things about Performance Evaluation, including in it the scope, stages in human capital and application in management, as well as what methods exist in human capital that is very useful. May Allah make this book a charity. Jariah for the author and making knowledge, which is a blessing for all of us. Aamiin.

 

 

 

Malang, September 2019

Chairman of the Maju Jaya Negara Tamansiswa Foundation

Drs. Purnomo Adji, M.Pd

 

 

OPENING SPEECH Registrar General of the Supreme Council Tamansiswa Union

Gratitude for the presence of Allah SWT, for the publication of the Human Capital Frame Work Book published by Janega Press, written by Dr. Eny Lestari Widarni, MM. At STIE Jaya Negara Tamansiswa Malang, which is very useful in the world of education.

 

Education is the learning, knowledge, skills, and habits of a group through teaching, training, or research. This book discusses many things about education and applications in the field of Human Capital, which are very helpful in the quality of human resources. The hope is that this book will be a motivation to improve self-quality and charity for the author and make knowledge that is useful and blessed for all of us. Aamiin.

 

 

Malang, September 2019

Registrar General of the Supreme Council

Tamansiswa Union

Ki.DR.Saur Panjaitan XIII, MM.

 

FOREWORD

 

Praise and gratitude, we always pray to the presence of the Almighty God because of the abundance of His grace and guidance so that we can finish compiling this book. Along with the community's demands on the importance of information and education, especially on Human Capital Frameworks, it is the main objective of this book.

 

This book's purpose is to develop the next edition of the book and be a reference for the public, practitioners, and academics. This book contains all aspects related to human capital and the organizational environment.

 

Basically, this book's preparation is also a discourse for us always to learn and have an optimistic view of looking ahead that there is always a way to achieve success by utilizing the right human capital.

 

Not to forget, we also express our gratitude because we might not have been able to complete this book without the help of various parties. The hope is that this book on human capital will benefit the community and become a reference for the community in developing their human capital capabilities. No human being is perfect and His creation, no ivory is not cracked; we welcome all comments, criticisms, suggestions, and messages that can help us be better in releasing the next edition of the book.

 

 

 

Malang, September 2019

Author

Dr. Eny Lestari Widarni, SE, MM

 

 

CHAPTER 1. HUMAN CAPITAL

Definition of Human capital

 

Human capital or human capital is an essential element of intangible assets in the organization. Intangible assets include copyrights, customer relationships, brands, and corporate image. All of this is the organization's wealth, so knowing how employees' imagination and creativity are as important as well for business success is a "hard" asset. The importance of human assets explains why it is vital to measure their value and how well they are used and show what needs to be done to manage them more effectively.

 

As Becker (1993) stated, human capital is that humans are not just a resource, but capital that generates returns. Every expenditure made to develop the quality and quantity of that capital is an investment activity. Human capital theory, as stated by ES Human Resourcesenberg and Smith (1997), the concept of workers is the embodiment of a set of skills that can be "rented" to the employer. Knowledge and skills of workers come from education and training, including training that results in share carrying experience specific and Capital productive skills.

According to Edwinson and Malone (1997), "human capital is the individual knowledge, experience, capability, skills, creativity, innovativeness." Knowledge includes knowledge about academic tests obtained through education; skills can work or fulfill practical abilities.

According to Stewart (1997), human capital is the lifeblood of intellectual capital, a source of innovation and empowerment, but a component that is difficult to measure. Human capital reflects the company's collective ability to produce the best solutions based on the knowledge possessed by the people in the company, which will increase if the company can use the knowledge possessed by its employees.

According to Davenport (1999), human capital is the effort brought by workers to invest in their work. This includes abilities, behavior, enthusiasm, and time.

According to James Hatch (enterprise resource planning rise Magazines, 15 November 1999), human capital is everything about humans (labor), intellectuals, knowledge, and experiences. Labor is a physical or mental effort that is issued by employees to process products and provide services.

 

Scarborough and Elias (2002): explain, “The concept of human capital is beneficial and is seen as a bridging concept. It defines the relationship between human resource practices and business performance. They show that human capital is mostly non-standard, hidden, dynamic, context-dependent, and this characteristic often occurs in society. This trait makes it difficult to evaluate human capital because the human capital that is entrepreneurial resource planning important to company performance is the flexibility and creativity of individuals, their ability to develop skills to respond and be motivated by different contexts. They also mention that: "In human capital theory, references are made to people and skills, while in physical capital theory, references are made to plants and equipment."

 

Stockley (2003) defines human capital as: "The term of human capital is a recognition that people in organization and business are important an essential asset who contributes to development and growth, in a similar way as physical assets such as machines and money. The collective attitude, skills, and abilities of people contribute to organizational performance and productivity. Any expenditure in training, development, health and ". This means that support is an investment, not just an expense. Human capital is a concept explaining that people in organizations and businesses are important and potential assets, contributing to development and growth, just like physical assets such as machines and working capital. Attitudes, skills, and human abilities have a contribution to organizational performance and productivity. Expenditures for training, development, health, and support are not just costs but are investments. Meanwhile (Gary Dessler, 2003, 9) defines human capital as follows: it refers to knowledge, education, and training, skills, and expertise.

 

From the three definitions above, it appears that there is a familiar essence which shows that human capital is something inherent in the individual. What stands out from the above description is the economic dimension that becomes the reference for its usefulness. Meanwhile, according to Fitzens (2000), the notion of human capital can be explained as a combination of the following factors: The characteristics of a person who is born into a job, intelligence, energy, a generally positive attitude, reliability, and commitment. A person's ability to learn, talent, imagination, creativity, and what is often referred to as street smart (intelligence). The motivation of a person for various information and knowledge, team spirit, and goal orientation. Based on these factors, it can be concluded that everything inherent in humans, be it characteristics, creativity, or knowledge, is a company's handy resource. Besides producing the final product in the form of services, human capital is a supporting factor for its goals. Human capital does not position humans as capital like machines, so that it is as if humans are the same as machines, as in previous human capital theories. However, after this theory has become more widespread, social capital can help decision-makers focus on human development by focusing on investment in education (including training) to improve organizational quality as part of national development. Human resources' handling as human capital shows that the returns from non-physical investments are much higher than investment in physical development. Human capital is significant because it is a source of innovation and strategic renewal that can be obtained from brainstorming through laboratory research, management expectations, process re-engineering, and improvement or development of worker skills. Human capital also provides added value to the company every day through motivation, commitment, competence, and effectiveness of teamwork. The added value that workers can contribute is in the form of competency development owned by the company, transfer of knowledge from workers to the company, and changes in management culture (Mayo; 2000 in Rachmawati et al., 2004).

 

Human Capital Components

Humans are an essential component of the innovation process. Humans, with all their abilities when deployed, will produce extraordinary performance. There are six components of human capital, according to (Ancok; 2002), namely:

1. Intellectual capital
2. Emotional capital
3. Social capital
4. Capital of fortitude
5. Moral capital
6. Health capital

These six human capital components will appear in an optimum performance if accompanied by leadership capital and organizational structure capital that provide a supportive working vehicle (Ancok, 2002).

 

Intellectual capital

Intellectual capital is a necessary tool for finding opportunities and managing challenges in life. Many experts say that intellectual capital plays a huge role in adding value to an activity. Various companies that excel and gain many benefits are companies that continuously develop their human resources (Ross et al., 1997).

Humans must have a proactive and innovative nature to manage changes in the environment (economy, social, politics, technology, law, etc.) at a very high speed. Those who cannot adapt to change will find it difficult. In conditions marked by rapid change, humans must continue to expand and sharpen their knowledge and develop their creativity to innovate. Don Tapscott, in his book "Digital Economy: Promise and Peril in the Age of Networked Intelligence (1998)" suggests 12 new economic themes resulting from the widespread influence of the internet. One of the pieces of the new economy is the theme of a knowledge-based economy. Only workers who have extensive knowledge and continue to add to experience can adapt to the rapidly changing strategic environment conditions.

Intellectual capital lies in the willingness to think and the ability to think about something new, so a high level of formal education does not always determine intellectual capital. Many people do not have high standard knowledge, but he is a thinker who produces quality ideas.

Bonits (1998) explains that resources are not seen as a factor other than money and their physical assets that provide value for a firm and controlled process. Edvinson and Malone (1997) explain that intellectual capital is a combination of all relationships from inside and outside the organization with consumers. There are three parts of intellectual capital, namely:

• Human capital: knowledge, skills, abilities, and human capacities to be developed and become an organization's innovation.
• Social capital: a structure, network, and procedures that can be obtained by a person and the development of intellectual capital that can be seen from the stock and flow of knowledge that comes from relationships within and outside the organization.
• Organizational capital: The organization's knowledge is institutionalized and stored in a database, instructions, and others.

These three IC concepts indicate that when a person uses their knowledge (Human Capital), the relationship between them (SC) will increase with the advancement of knowledge that is institutionalized by the organization (OC). According to As Chatzkel (2004), the reality is that organizations are nothing more than enterprise resource planning, an extension of human thoughts and actions, namely the knowledge, skills, abilities of someone who creates value and how they maintain how and develop human capital.They display.

An organization's effectiveness depends on how best to use knowledge, how to develop, choose, and choose to create an organization capital. Daft and Weick (1984) say someone will come and go, but the organization will keep that knowledge forever. And according to Fitz-enj (2000), organization capital will remain behind when workers leave; human capital is an intellectual asset that will go every night with the workers returning to their homes.

 

Emotional Capital

 

Goldman uses the term Emotional Intelligence to describe the human ability to recognize and manage one's own emotions and understand others' feelings so that he can take appropriate action in interacting with others. There are four dimensions of emotional intelligence, namely (Bradberry & Greaves, 2005)

1. Self Awareness
2. Self Management
3. Social Awareness
4. Relationship Management

The four dimensions above can be explained as follows: Self Awareness is the ability to consistently and accurately understand one's own emotions in various situations. How do emotions react when faced with an event that provokes emotions to understand his emotional response in both positive and negative terms.

Self Management is the ability to manage emotions well after understanding the feelings he is feeling, whether positive or negative emotions. The ability to manage emotions positively in dealing with one's own emotions will make a person feel maximum happiness.

Social Awareness is the ability to understand other people's emotions from their alleged actions. This is the ability to accurately empathize, understand, and feel the feelings of others. With this understanding, individuals already have the readiness to respond to other people's emotional situations positively.

Relationship Management is people's ability to interact positively with others, even though other people have negative emotions. The ability to manage relationships with others entirely is the result of the different three dimensions of emotional intelligence (Self Awareness, Self Management, and Social Awareness).

People who have high emotional capital have a positive attitude in living life. He has positive thinking (positive thinking) in assessing a phenomenon in life, even though it is seen as threatening by others. especially in dealing with differences of opinion, people who have adequate emotional capital will respond positively to it so that it is obtained

a great benefit for self-development or the development of a concept.

Intellectual capital will develop or be hampered by its development, which is primarily determined by emotional capital. People who are open-hearted and have a positive and open attitude, and avoid negative judgments about others' thoughts will benefit from these differences of opinion. His intellectual capital will increase with a positive attitude.

Many research results show that emotional intelligence determines a person's life success more than IQ (Goleman, 1997). In the last few years, there has been increasing discussion about the importance of emotional intelligence in supporting the success of human life (Goleman, 1997). Daniel Goleman wrote they vary by religious teachings that educate people to be patient, and it is better to be silent if they cannot choose the right words.

 

Social Capital

 

The term social capital has long appeared in the literature. This term first appeared in 1916 when there was a discussion about building a community learning center (Cohen & Prusak, 2001). The concept of social capital to the surface as a scientific discourse by James S. Coleman 1990. The discussion of social capital by Putnam (1993) describes the declining quality of American society's

Impressum

Verlag: BookRix GmbH & Co. KG

Tag der Veröffentlichung: 04.07.2021
ISBN: 978-3-7487-8725-9

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