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What Are the Different Types of Human Capital Systems?

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  • Written By: A. Lyke
  • Edited By: A. Joseph
  • Last Modified Date: 25 October 2014
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The term “human capital” refers to the valuable employees that make up a workforce. The different types of human capital systems include administration, manual labor, human resources and accounting personnel. Human capital systems might also refer to an organization’s specific system of human resource management applied to technology that is designed to cut costs. Generally, human capital systems integrate the various functions of each type of employee while maximizing the value of the employees’ skill sets.

The management of human capital is similar to human resource management, except that the human capital management is geared toward economic value and getting more value for the money spent on an employee. The emphasis might be on recruiting or training an employee with the exact skill set needed for his or her job. More skills than necessary might be wasteful for both the employee and the company, and fewer skills than necessary might be insufficient.

Human capital systems help to manage and control employees through predetermined processes. Employee handbooks, worker education and training might all factor into the human capital management. Managers create the systems by studying the production factors of each type of labor and discovering the most cost-effective ways of performing the job.

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Software that is used in human capital systems replaces some of the functions of human resource management. Some systems are databases of human resource information, such as benefit plans, employee orientation and codes of conduct. Sophisticated systems keep tabs on worker productivity, allowing managers to look over workforce data and determine where the company can save time and money.

An executive, department head or project manager might oversee job-specific or division-specific human capital systems. These systems might be geared toward individual employee motivation and value driven goal setting. Employee evaluations from supervisors tend to emphasize productivity and economic goals. The company will hire new employees only when the human resources department or the specific department head determines that productivity would increase with the new hire.

For example, administration capital systems tend to focus on the short-range performance objectives of the administrative personnel and some of the longer-term goals of the executives and upper-level managers. Administration duties might include customer service, office management, secretarial work and data entry. A human capital system for administration would focus on training administrative employees to multitask, maximizing the organizational skill set.

Factory or manual labor employees are another example of a type of human capital system. Systems for these types of employees put priority on per-hour unit production and team efficiency. Accident prevention also is a concern for many types of manual labor.

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