The Impact Of Effective Human Capital Management Practice On Organizational Growth

The Impact Of Effective Human Capital Management Practice On Organizational Growth (A Study  Of Star Paper Mill Limited, Aba, Abia State)

Human capital management is the management of employee in organization. Just as the name implies, many authors on the subject have defined it in diverse ways. According to Edwin Flip (1980:5), human capital management was defined as planning, organizing, directing and controlling the procurement, development compensation, integration, maintenance of human resources to the end so that individual, organization and social objectives is accomplished. Also Duct and Chapman (1983:4), pointed out that, human capital management is that aspect of management that is concerned with the people at work and their relationship within and outside the enterprises. Its aim is to being together and development into an effective management. These last two definitions and views seem to collaborate with that of Gluck. This is true because  the purpose of human capital management a way that the greatest benefits is obtained from both material and psychological rewards of their effort put in the organization human capital management can also be locked at from the point of view of these that carry its functions. In the world of Robert Apple (1994:3690) human resource management can be said to be the responsibility of all those who managed people as well as a description of person who are employed as specialist. The statement is in line with that made by Kattal (1985:5) when he pointed out that human capital management covers all the activities of both the line managers and human capital department that deal with them. He gave his own definition of human capital management as recruiting and maintaining of human resource. He therefore supports the view that the human capital management is the responsibility of every manager.

Also Read: Personnel Appraisal in a Routinized Management System in University

These assertions are summarized when Muschemen and Hugher (1999:298), states that a human capital management is not the sole concern either the human capital department or the top management. It is part of the deity of every manager for the personnel function is necessary in every operation where people are employed.

In conclusion, the statement of Pigers and Myers (1981:470) that, human capital management should be as something separate from the technological problem. Both are path on a single situation that needs to be understood and death with by line officials beginning with the chief executive.


The concept, human capital has gained tremendous attention in today’s study. Bontis (1999) defines human capital as representing the human factor in the organization; the combined intelligence, skills and expertise that gives the organization its distinctive character. He went on to emphasize that such elements, must be those that are capable of learning changing innovating and providing the creative trust, which if properly motivate can ensure the long time survival of the organization.

Armstrong (2004) defines human capital as all human abilities whether innate or acquired attribute whose value can be augmented by appropriate development investment.

Davenport (1999) observed that human capital consists of the intangible resources that workers provide for their employers. He went further to pass the following comments. People pose innate abilities, behaviors and personal energy and these elements make up the human capital that brings to research. And it is they, not their employers who own this capital and decide when, how and where they will contribute it. Indeed, they can make choices. Work is a two way exchange of value, not a one way exploitation of an asset by its owners. (Adeyeye, 2002).

From the contributions of the various scholars of human resources management, it is obvious that a number of issues addressed in the development of human capital are varied and inexhaustible in modern enterprise.

From the above statement, it can be deducted that it is a need for organizations to administration proper wage system for the employees to put in their best towards meeting the organization.

Byarand (1979:254), noted that en employee who does not have sufficient funds to support their reasonable needs have distracted from their efforts. Musclemen and Hughes assessed that, in wages and salaries administration, that the human capital manager will encounter some problems. In their statement, the development and operation of a fair and equitable wage and salary system is perhaps the most difficult function of the human capital managed. Also, according to them, this function is important to both the employees and the economy and the economy and the company since the amount of money paid to the employee determine the quality of goods and service he can purchase and if employees are overpaid, the company’s product may be over priced, in the competitive market the view are inline that salaries and wages are important in the sense that the determine the quality and quality of human capital management in the organization is able to attract and retain.

In the view of the above statement, it gave certain guide who could be followed when establishing an organization wages and salaries this;

  1. There should be aim to pay wages and salaries of at least equal to those paid for the similar jobs in the area of the industry.
  2. There should be a clearly establishment system of communication for dealing with wages claims and grievance. He also stressed the use for standardizing the function of salaries and wages administration of dividing it between the personal managers and the Accountants.

According to him, the former will be involved in establishing wages and salaries policy and would take part in negotiation seals. Om the other hand, the Accountants should have responsibility for calculating into paying and employee. Some incentive wages system includes;

  1. Time rate: It is a rate calculated by reference to bonus group incentive is mainly meant for direct workers.
  2. Incentives: For indirect workers: These include bonus for manager including supervisor’s incentive payment for salesmen bonuses for cleat staff, e.t.c.
  3. Industrial relation: It is that aspect of human capital management that deals mainly with the legal part of regulations and contracts of employment between the employers and their employers to maintain industrial employers and their employees to maintain industrial harmony.

Olayide (2006:24), defined industrial relation as a network of rules which governs the work place and the work community, the character of rules and manner in which they are formulated and administrated are the proper tools of industrial relation. They are; the employer, the employee and the governments.

According to Pipple (2006:24), collective bargaining is negotiation of working condition and the employees. It employee is not negotiated with the representative.

Purcell and Gray (2006:28), recognizing the need and importance of collective bargaining, from a central features of industrial relation and give the link between the effort and reward.

It can be expected that companies will pay particular attention to the planning conduct and outcome of collective bargaining especially to form wages and salaries negotiation. From the above statement, it can be said that collective bargaining is a step towards industrial democracy in which employers and employees are able to contribute knowledge and experience to the common goal. Trade union is becoming more powerful and visible in the life in most organization. These are clearly seen in almost all state of the personnel management especially in industrial relation.

A trade union is simply defined as the combination of person who comes together towards industrial relation. The growth of labour sector is inevitably necessitated by a definite relationship between the union and the management. This industrial relation contributed to the existence of the firm in order to achieve the purpose for which it was establish at. From this statement therefore, the attainment of organizational goal is influenced by the relationship between the employee and the employers


        Training is a learning process that involves the acquisition of knowledge, sharpening of skills, concept and rules by the prospective employees who are quality, capable       and fit for the job in the organization. Having known what training is all about, it is necessary to know some of the problems associated with training in the organization.

  1. No one learns anything when their employers are unconscious during twining training. In a situation whereby their workers or employees are board during training, there is a tendency that none of the workers will understand what the trainer has been teaching them. The only thing the trainer should so as that moment is to quit for sometime so that, their workers can easily understand what the trainer has been teaching then.
  2. Know your trainees and engage then early during training, there is one principle that applies to all the trainees. They like to hear interesting things from a passionate creation trainee. In situation where the trainer does not engage his training early by making sure that they understand wheat they are trained for because a very big problem of training in the organization.
  3. An event requires a design process, just like managing and buildings of software’s, a trainer need to have a process for setting goals, generating ideas, writing plans and executing it. When he or she lacks all these design process, it becomes a problem of training in the organization.
  4. Illiteracy: Illiteracy among the prospective trainers to deliver well during training is another big problem of training in the organization.
  5. Training and development as a strategy for human capital development practices: Armstrong (2004) define training as the formal and systematic modification of behavior through learning, which occurs as a result of education, instruction, development and planned experience in his research, Armstong (2004) agrees with Devaport (1999) that training is very effective when it is properly planned. An investigation by Adeyeye (2008) centered on the attitudes, fears and hopes of clerical workers and revealed some interesting findings with equally serious implications for staff training. He found that senior clerical workers claimed that they had been frustrated by management, since no opportunity was given to them to improve on their qualification.
  6. New learning paradigm: The question in today’s literature is not just whether employees (the human capital) can be developed through a training and development programmes, the type so far discussed. In today’s competitive business environment, training and development strategies and methods have dramatically transformed. The modern nature of training and development is what can be used to develop today’s human capital.

Leadership style as strategy for human capital development practice: As opposed to the traditional objectives of improving the knowledge and broadening the perspective of participants, contemporary leadership initiates are more likely to focus on development employees who will learn to do the work themselves.

Armstrong (2004) once wrote leaders can perhaps be compared with theater directors. Without whose contribution the play will not happen organizational processes are only the arena and interpersonal process represents the actors. Leaders must therefore need to identify what the priorities and agendas are for each and bring the various actors together, so that act is complete. From this view, It is obvious that leaders should avoid focusing on themselves but rather be concerned with developing the vision and defining the missions, using the people who will in turn use other resources.

Talent management as strategy for had practices: As a concept, talent management comes to the fore when the phrase the war for talent emerged in the 1990 (Armstrong 2004). Talent management is the process of ensuring that the organization attracts, retains, motivates and develops the talented people it needs.


Human capital management: Practice is that aspect of management that is concerned with the recruitment, development utilization and accommodation of human resources in the, towards achieving organizational goal. The effects of human capital management practices on workers’ productivity are as follows

  1. Motivation: this is the inner drive that propels one to do what he want to do in a situation that human capital management motivates its workers by giving them incentives such as, bonus, increasing their salaries, providing conducive environment for them to carry out their test effectively.
  2. Employment security; In a situation where human capital management make provision for adequate security to its prospective employees against external aggression who carrying out their job plays a very good impact on workers productivity and procreativity.
  3. Training of employees: Human capital management enhances workers productivity by or organizing seminars and workshops for the prospective employees to acquire more knowledge and skills needed in order to enable them to perform well in the organization.
  4. Another effect of human capital management practices on workers productivity is by providing medical centre for the employees. This will enable them to receive through or adequate medication when any of them fall sick.


MOTIVATION – This is a critical factor influences workers behaviours and attitudes to work. The word motivation is derived from the word “motive” which means a drive that makes one achieve a goal. There are some major view adopted by scholars in attempt to explain the subject and some of these views will be discussed here.

In Magginson (1981:293) defined the concept as a motivation is a process by which managers stimulates employees behaviours and direct them towards achieving organizational goal. He further stated that, the performance has a function, ability and motivation by this he implies that performance occurs when people are motivated to use their ability to do something as shown in the diagram below.


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