Implications of Intellectual Capital on Human Resources Management

One constant trend throughout many organizations if not all is the struggle in finding qualified candidates to fill job openings. Not only is it difficult to recruit skilled workers, but also to retain them. Going back to my parent’s work experience, companies expected job loyalty, but today, I noticed and read stories of employees accepting other job offers only weeks after being hired. I wonder if people have changed or is it that employers are not able to satisfy employees. To completive and win the battle for workforce share, organizations should rethink their strategies to effectively recruit, motivate, and retain committed employees.

Retaining employees is one way the turnover rate can decrease, Branham (2000), focuses on retaining valuable employees by incorporating four key elements. The first key elements is, “be a company that people want to work for”. There are many companies that have been labeled as, “employers of choice”. These employers all have something in common, which is how they value their employers (Branham, 2000). They treat their employees with respect and like family. With being an “employer of choice,” people are the most valuable asset; not just customers but employees too. Many companies go above and beyond for their customers, but not for their employees, yet they wonder why they are losing valuable talent.

The recession has cost many businesses more than just profits. With unemployment at an all time high and the threat of layoffs looming daily, employee morale is declining at an alarming rate. Threats to increase performance or be fired and the clichéd phrase of, “You should be happy you have a job,” do little more than undermine intrinsic employee motivation. But, is there an alternative organizations

More importantly, these groups see their leaders as walking reflections of the organization’s core values (Dearborn, 2014). This increased productivity carries over to promote employee engagement. Dearborn asserted that engaged employees remain with organizations longer than those who are disengaged (Dearborn, 2014). Furthermore, disengaged employees cost the U.S. between $450 and $550 billion annually (Dearborn, 2014).

52). The knowledge economy, as the author states, is giving rise to outdated corporate laws. While once corporations entrenched themselves in the production of goods and services, there is a transformation today where it is the knowledge of workers that build business. In this case, workers are assets, not costs. In an article by Davenport (2000), the author proposes the idea of employees as “human capital owners and investors” (p. 3). Davenport (2000) further emphasizes that people possess “innate abilities, behaviours, personal energy, and time,” which make up their human capital potential – the currency that employees bring to their jobs (p. 3). Furthermore, Davenport (2000) conveys that the way to energize employees is to relay what is expected and how the business intends to earn their investment (p. 4). He firmly states that businesses should not “liken [employees] to forklifts or other line items on the balance sheet” (Davenport, 2000, p.

Successful organizations demand satisfied employees. Figure 1 below shows a theoretical one-way linkage chain called the "Engagement-Profit Chain." This chain directly shows how active employee engagement leads to good service which ensures that customers will to continue coming back, providing a solid foundation on which the company can grow. As employee effort is indeed discretionary, it has been observed that higher levels of engagement, or the way management commits itself emotionally to employees, pushes a higher level of discretionary effort (Kruse, 2014). It is not by chance that

Breakings through the chains of corporate slavery is in full affect. In other words, nobody wants to work for a heartless corporation that does not value their staff. Individuals are educated and ready to make a career change if necessary. The overwhelming feeling of being imprisoned by a job is dreadful. Even the most loyal captive will seek an opportunity to break free from a dreadful organization. The sensation of being confined within an organization with no room to grow or expand is a daunting feeling. When individuals are treated as if they do not matter, it raises the question; why stay here? If employers are naïve enough to think that there are no other options for hard working people, they are wrong. The information being

Companies that have higher levels of engaged employees have higher earnings per share (EPS) than companies that have lower engagement levels (Kelleher, 2011). Engaged employees are more productive, have higher levels of customer loyalty and help their employers become more profitable. An engaged employee is less likely to leave their current position. This saves their company money because there is no need to spend money to hire and train new personal. These saving can be passed along to the employees for increased wages, bonuses, and benefits. All of these items help in motivating employees, to attempt to engage the disengaged.

While salaries and career advancement are important, Tom adds that, many employees will choose to leave because they do not believe that their work is appreciated. According to surveys, Tom says that more than 40 percent of people leave their jobs because they do not believe that their companies value their contributions. Tom argues that; “a lack of appreciation, a lack of teamwork and the perception that business owners don’t care about their employees are consistently the highest-rated reasons for low job satisfaction. This often stems from poor communication on the part of employees, their managers or both”.

Secondly, the research is by a Havard Business Review Analytic Service that features in depth interview with 12 company leaders and 550 executives around employee engagement. As the result, 71% of respondents agreed that employee engagement is master key to the overall success of the organization. In the research, most leaders understand the importance of engagement but most of employees are not highly engaged in their organization. According to Bates (2004), it is necessary to recognise that employee engagement is on the decline and there is a strongly disengagement among employees today. For example, a half of Americans in the workplace are not strongly engaged or they are disengaged to the business in order that U.S businesses lost $300 billion per year in productivity (Bates, 2004).

Many companies look to salaries and benefits as the first places to cut back when looking to make changes that involve cost-saving. When this happens, it is inevitable that some employees will leave the company to seek employment elsewhere. The employees that remain, whether they stay voluntarily or because they could not find employment elsewhere, are often resentful. Motivation decreases, taking job performance along with it. Employees lose their company loyalty and may even become angry enough to purposefully sabotage the company.

Organizational commitment is critical to organizations due to the desire to retain a strong workforce. Organizations want to know why employees stay or leave their organizations so if correction is needed they have some tools to proceed with the correction. High turnover of employees in an organization can determine if an organization is successful or not. While turnover is related to all three areas of commitment researchers have determined that Affective commitment is one most associated with absenteeism and organizational citizenship (Williams J. 2004).

Rapid changes in the global economic market entail transformations affecting not only the external environment of organizations, but also its internal operations and processes (Hall, 2008; Hodgetts, 2002). One important change that has altered the nature of contemporary organization is the “acknowledgement, development and systematic use of the skills and knowledge of employees” (Ramirez et al 2007, p 496). The central role of employees’ participation in the success of the organization involves not only “high performance work systems… [but] they also involve the decentralization of decisions and work enrichment that is providing employees with opportunities for involvement in decision-making and innovation.” (Wood & de

According to Bloomberg, the retail sector is experiencing staff turnover rate of roughly 5% per month. In following the trend, Wal-Mart would lose 60% of employees on average (Mayer & Noiseux, 2015). Employees site multiple reasons for leaving voluntarily or termination due to lack of job training, and employee recognition Lieb & Lieb, 2013). Companies currently have less than stellar strategies retaining employees resulting in the high turnover rates, which affect profitability (Das, 2015).

Employee engagement and commitment we learned is a common theme that encompasses employee satisfaction and pride in their employer. When an employee becomes dissatisfied in their position, we know this has a direct impact on company turn over. What is