Human Capital Management for Individual and Organisational Performance: Theoretical Perspective

Abstract

In today's highly competitive global business landscape, organizations across sectors are trying to gain advantage over their competitors. To secure this edge, companies are increasingly recognizing their workforce, the human capital, as a pivotal asset for achieving success. Human capital encompasses employees' knowledge, skills, and abilities. The term was initially coined in the 1960s by Schultz (1961) and later expanded upon in the 1990s. Human capital is not confined to tangible skills but also encompasses the well-being of individuals within an organization. HCM has been considered as a key element in an organization's overall value, including intellectual resources. The theories of dynamic capabilities and the resource-based view support the argument that human capital is a crucial driver of sustainable competitive advantage. HCM plays a central role in enhancing employee competencies, fostering knowledge-sharing, and stimulating innovation and creativity.