HR Comments:

This column reflects our thoughts on present HR Management vision

Companies have long focussed huge amount of resources or many other aspect of their companies, including financial structure, products development , globalization, advertizing, and outsourcing, just to name a few. All of this was done to increase shareholders value creation in measurable ways. Some - but certainly not all - tried to use their human capital to increase return to shareholders. But even these companies were shooting in the dark because no one could quantify which human capital programs were linked to the best returns.

What to do and what not to do?

As the research grew, something complicated began to seem, if not simple, then at least focused. Looking at the various linkages between human capital practices and high shareholder value, and four themes began to emerge. It became clear that companies seeking to maximise share holders value must focus on the following:

1. Achieving recruiting and retention excellence
2. Creating a total reward and accountability orientation
3. Establishing a collegial, flexible workplace
4. Opening up communication between management and employees

A fifth theme appears: implementing focused HR technology .

* Pfau, Bruce N. and Ira T. Kay, "The human Capital Edge: 21 people management pratices your company must implement (or avoid) to maximise shareholder value", McGraw Hill, Hightstown, N.J, 2002.

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