In most enterprises, human resources are administered as employees and are assigned to positions in organization units. There is no way to measure the value they produce, evaluate performance costs against the value created, assess their worth as human capital, or to develop them to increase their worth and provide measured increased value to the enterprise. Administered employees do not have a defined stake in the enterprise.

Conventional human resource management methods prevent good human capital management

There is a lot of talk about human capital, intellectual capital, knowledge management and other means to improve the capabilities, productivity, and output of human capital. But, each item is treated separately. We try to manage human performance, but have no framework to understand real human performance related to measured value to the business. We try to develop human capabilities, but have no framework to relate human capabilities to specific business needs. We have no way to integrate human capital performance with the value created and the worth of human capital.

We try to manage and improve human performance without managing the results humans produce

The key to making human capital a high-worth asset is to manage the results our enterprise produces related to human and other capital utilized.

We need to document the human capabilities required by our business processes to produce specific results. We need to understand the capabilities available in our enterprise and those that need to be developed or acquired. Human capital development programs can focus on the capabilities required in the business to utilize the business process and other performance solutions to produce specific results.

Instead of deploying personnel to positions, we need to deploy qualified personnel solutions to be ready to produce a specific set of results. When the business process requires a special capability, we must deploy the specific human capability solution required to produce the specific result. We must support human personnel and capability solutions with the precise human knowledge solutions required to utilize a specific performance solution and to produce a specific result.

Productivity is the volume of quality results produced over a time and cost by human and other capital. We need to understand the volume, value, and quality of results in order to understand the worth of the capabilities essential to producing the result. We can then plan career development for human capital to produce results of increasing value to increase individual worth and justify an increase in their reward. Human capital development increases development costs and increased reward increases operation costs, which must be covered by the increased result value-added.

R-pM manages the worth of capital in development costs and the future value added to results produced

Result-performance Management (R-pM) organizes the business for 21st century management. R-pM organizes the results needed for business success, the human and other capital solutions needed to produce results, and performance in the utilization of each solution to produce each result. R-pM manages the development and utilization of specific human capital solutions to produce measured result value, to increase capital worth, and justify increased performance costs.

R-pM integrates human personnel, capabilities and knowledge as human capital

In order to make human capital a high-worth asset, we need to integrate the three classes of human capital:

• Human personnel: The specific employees, contracted human assistance, and other external human assistance producing a set of business results. Human personnel costs are in the on-going operational remuneration, contract payments, etc

• Human capability: The specific capability that must be developed to produce a result. All human capital development is directed at a human capability solution. The capability can be salesmanship, machine repair, management skills, business analysis, and other capabilities needed to produce specific results. The solution is in the capability, not the human personnel solution that possesses the capability. Any personnel with the capability should be able to produce the result. Capability solution utilization amortizes the development costs incurred in learning, training courses, tutoring, etc

• Human knowledge: The knowledge solutions utilized for instructions on how to utilize a solution or produce a result. Knowledge is created for every result and capital solution in a development project. Knowledge is created and utilized to develop and implement specific human capabilities. Knowledge solutions capture knowledge creation costs that are amortized against results produced from the utilization of the knowledge

Human capital is deployed as solutions to produce specific results. Human personnel are normally deployed as readiness capital to a result unit to be utilized generally to produce results the unit is responsible for. Human capability capital is deployed as production capital to produce specific high-value or ad-hoc results. Human knowledge is deployed as information capital to be leveraged by human personnel and human capability capital to produce results.

R-pM utilizes information technology to manage human and other capital utilization

R-pM takes advantage of modern information technology in relational database management systems or general ledger systems to set up and process the details of results to produce, capital to utilize, and performance in the utilization of deployed capital to incur costs and produce specific result value. R-pM utilizes information systems solutions to manage:

• Human personnel capital available and the ongoing operation costs

• Human capability capital available and the development and amortization costs

• Human knowledge capital available and the development and amortization costs

• Special human capabilities required to produce specific high-value results

• Value of results produced by applying human capabilities

• Corresponding capabilities possessed or that can be developed in human capital

• Value provided by qualified human personnel capital ready to produce a set of results

• Value-added provided by qualified human capability capital producing a specific high-value result

• Worth of human capital producing a certain result value at a certain performance cost

• Utilization level and value creation that increases capital worth to justify increased reward

• Human knowledge required to support human personnel and capabilities to utilize a specific performance solution or to produce a specific result

• Human capital development programs needed to develop personnel, capabilities, and knowledge to utilize specific performance solutions to produce specific results

• Specific human personnel and capability development needs to increase capital worth and justify increased reward

We cannot manage human capital until we organize and manage each human personnel, capability, and knowledge solution available, plus the result values produced by human capital solutions.

Result-performance Management (R-pM) manages human capital to deploy human personnel solutions to be ready to be managed to produce results, human capability solutions where required by the business to produce a specific result, and human knowledge solutions to develop human capabilities and to utilize specific solutions to produce specific results.

R-pM manages human capital development and utilization to increase human worth

R-pM enables the company to manage human capital worth to increase the value of results produced and justify increases in performance costs. R-pM enables management to:

• Organize and manage the business in terms of specific results to produce and the specific human and other performance solutions required to produce the results

• Define human capability solution and knowledge solution requirements of the business to produce specific results of value

• Develop specific human capability and knowledge solutions for specific result needs

• Manage human personnel capital to be ready and utilized to produce results

• Deploy and manage qualified human capability capital needed to produce specific results

• Manage human performance costs against the result value produced

• Evaluate result value produced and assess human performance to appraise human capital worth

• Define human personnel capital worth as the attributable past or future result value-added over the assessed period

• Develop human capital and capabilities to produce higher-value results, to increase in worth, and to justify increased performance costs

• Create and deliver human knowledge solutions needed to increase human capital worth, to utilize specific performance solutions, and to produce specific valuable results.

By organizing and managing the business and the human capital role in the business, R-pM facilitates the development and management of natural human capital, and provides the structure for human capital to develop specific capabilities, perform, produce valuable results, and increase in worth.

Human capital developed and managed in performance to produce results of increasing value have a stake in the enterprise

Human capital then can feel that they have a stake in the enterprise. They are part of a team responsible to produce specific results. They know that developing their capabilities to increase the value of results produced increases their worth, and that the result value they add enables an increased reward. Increased reward is earned and not simply a matter of time in a position.

The answer is 21st century management through Result-performance Management (R-pM) to organize and manage the value of business results produced, the cost of human capital performance, the value added to results, and the worth of human capital.

R-pM is available today to organize your business for 21st Century Management

R-pM is now being implemented by forward-looking enterprises to gain breakthrough advantages over competitors burdened by unsolvable 20th century management problems. The R-pM Toolkit, is available today and is under continual development to expand and refine R-pM and document 21st Century Management conventions, definitions, and standards. Learn more about the R-pM breakthrough for 21st century management and subscribe to your R-pM Toolkit, including free updates, at result-performance-management.com.