Human Capital Management

Human capital management focuses – as the name suggests – on human capital. But what exactly is it about? We'll explain.

Human Capital Management (HCM) is an extension of personnel management that aims to continuously improve the value creation process of human capital. This includes controlling the development, qualifications and evaluations of a company's employees.

In German, human capital management is often translated as personnel management or operational personnel management. You rarely see the translation human capital management.

The term human capital describes the potential of an employee. This refers to their skills, knowledge and experience. Employees are therefore seen as a valuable resource in a company that must be invested in, which in turn should benefit the company. 

Qualified and motivated employees are a company's capital and ensure competitiveness. In this context, employees are not seen as a cost factor, but rather as an intangible asset.

In short: HCM realizes the development of the company through the development of its employees.

The HCM personnel management process is usually medium to long-term and is divided into the following phases:

1. Evaluation phase: Employees’ performance and existing knowledge are recorded and evaluated.
2. Consolidation phase: An inventory is carried out in which the collected findings are evaluated so that appropriate educational measures can be initiated if necessary.
3. Communication phase: Transparency and a trustworthy atmosphere are important here. The measures discussed are now communicated to the employees by the managers.
4. Implementation phase: Training measures and Training are now being put into practice. This phase therefore determines the success or failure of HCM. Constant communication between all those involved is particularly important here.

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