Spanning the Gap in Human Capital Management Philosophy of the Firms – Simplified General Reflections

The current research on human capital management in firms revolves around identifying certain questions that seek answers to what is the actual philosophy behind human resource management (HRM) and how is this philosophy different from that of human capital management (HCM).If HCM is different from HRM, then how, and on what basis?Will firms benefit more if they upgrade to HCM from HRM or is it just a mindset of leaders that make them manage the firm either through HCM practices or through HRM practices?Further, looking at a more optimistic and spiritual meaning of HCM, do firms want to believe that they adopt and follow human capital management (HCM) practices rather than controlled ones or do they really have a mixed approached to run their organization?If the firm has more of a commitment-based philosophy rather than control-based philosophy, then the value addition will be different.But if not, then there is a need to figure out the purpose for improvising or developing the current practices so that there is value creation for value addition.So, depending on the basic ideology of the firm (leader), the guiding principles of defining business practices are framed.Therefore, an attempt to study HRM systems and processes from human capital management perspective is needed.Right from entry of an employee to exit, how processes in existing HR functions, guides human capital to add value to the organization needs to be found.This concept has been deliberated in detail in the following section.The discussion begins with philosophy or guiding principles of human resource management practices and human capital management practices.Based on this, there is an attempt to differentiate between the two.It follows with understanding the HR value chain and then measurement framework of human capital management in terms of systematically understanding the value of people and how value creation leads to value addition in organizations.