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 Human capital as an element of company’s value

 

 

 

Project implemented under EU ESF Human Capital Operational Programme – Priority II Development of human resources and adaptive potential of enterprises and improving the health of workers, Sub-action 2.1.3 System support for increasing the adaptability of employees and enterprises.
Agreement No: UDA-POKL.02.01.03-00-036/11-00
 
Duration of the project: 01.10.2012 – 31.03.2015.
 
Project has been realised in a partnership between:

  • Polish Agency of Enterprise Development (Leader),
  • Warsaw School of Economics (Partner).

 Management of the project at the Warsaw School of Economics:

  • dr Łukasz Sienkiewicz – Project leader, Department of Human Capital Development, College of Business Administration, Warsaw School of Economics,  
(lukasz.sienkiewicz@sgh.waw.pl)
  • dr Dariusz Danilewicz – Project coordinator, Department of Human Capital Development, College of Business Administration, Warsaw School of Economics (dariusz.danilewicz@sgh.waw.pl).

The main objective of the project is to change the perspective of employers on the profits of in-company human capital investments through the creation of human capital measurement tool (NKL), its’ testing and implementation by the end of the project duration.

 Specific objectives:

  1. Creation of the final product by the end of the third quarter of 2014.
  2. Test implementation of NKL in 20 companies by the end of the second quarter of 2014,
  3. Acquisition of the knowledge of NKL by persons covered by dissemination activities by the end of the first quarter of 2015,
  4. Acquisition of practical knowledge on the use of NKL by HR specialists and accountants by the end of the first quarter of 2015.

As part of this project an innovative product (tool for measuring human capital NKL), will be prepared, which, based on existing solutions will be tailored to the capabilities of enterprises, taking into account their size. It will take into account both quantitative and qualitative data, including the possible opportunity to consider the results of surveys conducted among employees in the company. As assumed the product is to be easy to use, so that companies can and want to use it. In addition, the product will be adapted to the Polish conditions, namely the range of activities in the area of human resource development that are used within Polish companies. At the same time NKL, unlike other methods of measurement would be an inexpensive tool to use. Thus, from the point of view of the enterprise, the cost associated with its use does not exceed the benefits.

The final innovative product of the project consists of NKL (tools / indicators to measure human capital) and the instructions on how to use them.

 Physically, a tool for measuring human capital (NKL) has the form of a computer application in a publicly accessible spreadsheet. The work with the application starts by choosing the right starting sheet designed for large, medium or small and micro enterprises.

 The measurement tool is composed of four parts, as follows:

  • Part 1: Key information about the company
  • Part 2: Measurement and evaluation of human capital
  • Part 3: Report on the state of human capital
  • Part 3: Questionnaires

The first part (Part 1: Key information about the company) is designed to gather basic company data, both of quantitative and qualitative character. This information includes:

  • Key personnel data – e.g. number of employees in full-time equivalents, the number of workers employed on temporary / permanent basis, etc.
  • Key data on human resources management system – e.g. information on the areas of human resources management, such as job analysis, planning, recruitment, evaluation, remuneration, training and career management, etc.
  • Key financial data – e.g. profit / loss, income, total costs, labor costs, depreciation and amortization, etc.
  • Key financial indicators – e.g. set of indicators for the analysis of the economic performance of the company, etc.
  • Key business activity data – e.g. description of the industry in which the company operates, the economic situation, business strategy, etc.
  • Key information about the resources – e.g. financial resources, property, market, relations, organizational, etc.

The second part of the tool (Part 2: Measurement and valuation of human capital) contains the indicators used to measure human capital and its valuation. The indicators in the measurement and valuation are divided into two categories: basic indicators and the advanced indicators. This division was dictated by the potential use of these indicators for the construction of a report on the state of human capital. Core indicators of measurement and valuation of human capital are used in the external reporting, while the measurement and valuation indicators of human capital at the advanced level will be used to construct an internal report.

The third part of the tool (Part 3: Report on the state of human capital) contains automatically created reports on the state of human capital. When the two previous parts of the application is correctly fed with the relevant data reports on the status of human capital with information on the results of the measurement and valuation of human capital are generated automatically. Reports can be generated in two versions: for internal use (including information on advanced level) and external (with information on the basic level).

The last, fourth section of the tool (Part 4: Questionnaires) contains links to surveys implemented in the application. Users are able to use them to measure the levels of employee satisfaction and engagement, organizational culture, the level of staff competence, interpersonal relations within the organization, knowledge management and human capital management system’s functioning. The results of the survey will be used to evaluate the key areas that affect the level and quality of company’s human capital. Questionnaires are an inherent part of the measurement tool in order to allow measuring the qualitative characteristics of human capital in terms of organization.

The target groups of the project are: (1) recipients - entrepreneurs, business owners, senior executives and (2) users - HR, accountants, consultants, advisors, representatives of public administration.

Innovation will affect the awareness of entrepreneurs - by showing the real business benefits of investing in employee development and will help to convince them that spending on training should be treated as an investment rather than a cost, as well as help to make rational decisions in the area of human capital development. This will affect the growth of the competitiveness of Polish enterprises. The project will change the position of HR-people in the company – they will become the business partners. It is  expected to improve the situation of workers who are more likely to be able to benefit from the training, which will improve their skills and will have a better position in the labour market. Undertaken actions to extend the mandatory reporting of data on human capital, is to facilitate in the future the access to information on the use of human capital. The project will also, albeit indirectly, affect investors. Access to the wider reports, with more data, especially data on human capital will allow the company to make more accurate, but also more eager investment decisions. It may be influenced by the increased amount of information available about companies and their human capital.

The preliminary version of the measurement tool (NKL) presented above will be tested with the use of qualitative research methods (IDI, active research). In-depth testing will be carried out on a sample of at least 20 companies, on a selected group of companies broken down by micro, small, medium and large, as well as diversified by industries. 

 
 
 

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