The painful upheavals in so many companies in recent years reflect the failure of one-time industry leaders to keep up with the accelerating pace of industry change.”It has become increasingly clear that real value is created by organizational actors who can collaborate effectively in order to manage a higher level of complexity. It is against this background that we must explore the evolving nature of “Human Capital”.
Human Capital – The Concept of Global Mental Disposition
Traditional business performance measures do not value knowledge assets (and still less cultural and motivational assets). Human capital is one way to conceptualize these assets. There are probably thousands of definitions of human capital. Rather than review existing definitions, we offer a new definition based on four key dimensions: (1) physical presence; (2) competencies and qualifications; (3) emotional intelligence; and (4) global mental disposition. The first three of these are well-known and relatively trivial, so we will review them only briefly. Our focus will be the fourth dimension, which is not only relatively unknown, but also of increasing importance.Looking at the first of these four dimension, physical presence means that health and strength of employees, as it is applied to their work. How to appraise this dimension is self-evident, as is its importance in all types of work. However, there are certain types of work and work processes where this is the predominant determinant of effectiveness. Physical presence may be the most critical dimension of human capital when we consider simple, transactional processes, that is routine work which is reliant on formal rules and where individual work is repetitive and close to automation. The next of the four dimensions is competencies and qualifications – perhaps the elements most often appraised when considering current performance (or attempting to predict future performance) for most modern jobs. Traditionally, organizations have sought to evaluate this dimension at the selection stage by reviewing resumes, interviewing candidates, and running selection centers (as well as more esoteric methods such as graphology). This dimension is also a mainstay of organizations’’ performance management. Competencies and qualifications are indeed important for most types of work in modern organizations’. However, there are particular areas, which we class as ‘expertise based’ roles, where they are clearly the most important element, roles involving judgement oriented work. A wide definition of our third dimension, emotional intelligence, could include empathy, self-control, emotional maturity, and the ability to perform effectively under pressure. Emotional intelligence can be appraised, although very imperfectly, through personality tests, and, potentially, during interviews. Emotional intelligence is critically important in a range of jobs, particularly those involving high levels of personal interactions, including many modern management roles .Our final dimension of human capital is global mental disposition by which we mean the motivation of employees to involve themselves in the activities of the company, and the will to share knowledge and opportunity in order to address the complex issues they face. It is only with the appropriate global mental disposition that employees will be able to work together in collaborative teams in order to express their ideas and feelings, develop a sense of shared understanding and w or towards mutually acceptable solutions to complex problems.
Traditional models for determining the value of human capital do not attempt to measure the mental disposition of employees. For example, most banks and investors use a model in which human capital is defined as the knowledge, skill and capability of individual employees to provide solutions to customer problems. There is no mention of collaboration, motivation, or effective knowledge sharing. It is to address this deficiency in existing models of human capital. The global mental disposition of employees is critical to improvisational work which is reliant on deep expertise across multiple functions and dependant on fluid deployment of teams. Typical examples include managing change, addressing high levels of diversity in customer demands,, creating business strategies, or working within a complex, matrix-based structure. As we described earlier, this type of work is becoming both more common and more important as we continue to see increasing competition, a greater pace of change and a higher level of complexity in the business environment increase.
We should consider here the interactions between some of our four dimensions. Some observers would suggest that knowledge is critical for success. This may be the case but it is certainly not sufficient, because without effective combination with our other dimensions, knowledge cannot be deployed effectively. While knowledge remains implicit (in the heads of employees), it is not available to the organization. It is only when the emotional intelligence and the global mental disposition of employees allow that knowledge to become explicit at the appropriate time and in the appropriate way that the knowledge becomes valuable. Therefore, one way to consider global mental disposition is as the behaviours which allow knowledge and competencies to become available and effective. Our conclusion at this point is that, with many organisations facing a complex business environment, having employees with good competencies and high emotional intelligence will not be enough to succeed. To achieve the type of effective collaboration that is required, the appropriate global mental disposition is also required.
We should also point out at this juncture that although global mental disposition is essential, it is assessed very ineffectively, if at all. Winning in the new ‘ Corporate Olympics' requires: “faster action, more creative maneuvering, more flexibility, and closer partnerships with employees and customers than was typical in the traditional corporate bureaucracy. It requires more agile, limber management that pursues opportunity without being bogged down by cumbersome structures or weighty procedures that impede action. Corporate giants, in short, must learn to dance.
I enjoyed reading your article.It is fantastic.Really Global Mental Disposition is a key to successful business today.Giant companies should take note of that through their HR dept I guess.As one pursuing a degree program me in HRM I hope to learn more from you.Thanks and have a nice day.
Thanks for your appreciation.Human Resource is the biggest asset of any industry.There is a lot to learn and explore.Human potential is very dynamic.
Hope our association will do a lot of value addition to both of us.