Intellectual Capital

Intellectual Capital includes the following dimensions:

It includes following dimensions:

Customer Capital

This dimension can be audited on the basis of following criteria.

• Increased customer base attributable to competency improvements or other HR interventions.
• Increased speed of service attributable to competency building and other HR interventions.
• Decreased customer complaints and increased praise attributable to HR interventions.
• Increase in customer loyalty and satisfaction attributable to HR initiatives and impact.
• Increase in market share, image and reputation attributable to HR initiatives.
• Enhancements in service levels attributable to HR interventions.
• Popularity of revenue generating activities.

Impact on Structural Capital Formation Attributable to HR Interventions

This dimension can be audited on the basis of following criteria.

• Improvements in internal operations and efficiency.
• Formation of strategies for competitive advantage.
• Formation of new and facilitating structures, sound strategy, systems and methodologies.
• Improvements in operational processes.
• Improvements in documentation, database, and records of knowledge.
• Contributions to patents and Intellectual Property Rights. (IPRs).
• Enhancement of know-how.
• Development, and/or use of technology.

Contribution to Human Capital Formation

This dimension can be audited with the help of:

• Enhancements in individual capabilities and commitments.
• Enhancements of personal knowledge and experience.
• Improvements in the way the people work together and bring synergy at the work place.
• The energizing relationships of the people inside and outside.
• Creation of healthy and energizing culture.

Contributions to Social Capital

This dimension has following attributes:

• Extent to which the „trust’ has been built on the social system.
• Extent to which the „enthusiasm’ has been built into the system or culture.
• Extent to which „team work’ and the ability to work together have been enhanced.
• Extent to which „seeking and giving help’ has been inculcated into the culture.
• Extent of exchange of ideas.
• Contributions to reputation and image in connection with the community that creates brand through various CSR, Health, Safety and Environment (HSE), and other interventions.

Contributions to Emotional Capital

It can be audited based on:

• Extent to which employees exhibit passion, obsession, motivation, innovation, enthusiasm, etc. attributable to HR interventions.
• Achievement motivation or drive for excellence in whatever they do.
• Extent to which the employees passionately speak about the vision, dreams and super-ordinate goals of the organization and the wideness of such shared passion is spread across the organization irrespective of levels, location and departments.

HR contributions to Relationship Capital

It can be audited based on:

• Relationship with customers.
• Relationship with suppliers.
• Relationship within the firm
• Employee relations including teamwork etc.

Contributions to Knowledge Capital Formation

Indicators for evaluation of this dimension are:

• Knowledge coming from new experiences: everyday experiences, problem-solving, experimentation, new projects, markets and mistakes.
• Knowledge capital expressed in terms of new services, revised processes and best practices.
• Tacit knowledge like mobilizing collective intelligence.
• Continuing innovation in products and services.
• Recognizing and respecting competent and knowledgeable people.

HRD Systems, Strategy, and Structural Capital

It measures the impact of organizational structures and restructuring, mergers and acquisitions, and renewal and integration interventions. Indicators are:

• Extent to which employees are clear about their jobs and have well defined performance indicators.
• Extent to which information is shared, and employees are aware of the vision and strategic intent of the company.
• Improvements in cost savings, efficiency improvements, speed of decisions, service quality levels, etc., resulting out of restructuring exercises.
• Smoothness with which mergers and acquisitions are managed, and the extent to which mergers and acquisitions have energized and breathed new life into the organization.
• Smoothness with which the structure is functioning.
• Extent of conflicts and smoothness of conflict resolving mechanism.
• Extent to which they have reviewed organizational structures and mechanisms.
• Extent to which HR can think of business strategies.
• Extent to which HR has quantified service levels and linked performance appraisals with service levels.
• Extent to which HR has encouraged Integrated Performance Review and respect for knowledge.
• Extent to which HR has promoted synergistic partnerships.

HRD Competencies

Indicators of maturity levels of this dimension are:

• Extent of familiarity of HR people with customers and markets.
• Extent to which HR professional are perceived as administrative experts.
• Extent to which firm’s HR professionals are perceived as agents to change.
• Extent to which firm’s HR professionals are perceived as business partners.
• Number of employees per HR professionals.
• Percentage of HR budget spent on outsourced HR activities.
• Extent to which decision making style can be considered participative.
• Extent to which HR systems are seen as credible.
• Extent to which the executive leadership team is visionary.
• Extent of familiarity and use of balanced score card.

Values and Culture Capital

Indicators of this dimension are:

• Adherences of employees to values like cost consciousness, quality, etc.
• Institutionalized climate surveys with follow-up actions.
• Degree to which a shared mind-set exists.
• Effectiveness of information sharing among departments.
• Extent of cross-functional team work.
• Extent of organizational learning.
• Extent to which information is communicated to employees.
• Extent to which firm shares relevant business information widely and freely with employees.
• Percentage of employees making suggestions.
• Extent to which senior management sees each employees as a source of value creation than cost to be minimized.
• Extent to which firm attempts to provide job security even if the performance is declining.
• Extent to which firm has developed and communicated financial performance.
• Extent to which firm has developed and communicated measures of customer reactions and loyalty.
• Extent to which firm has developed and communicated key business processes.
• Extent to which firm has developed and communicated measures for measuring learning and growth.

Methods of Assessment

Interviews – Interviews of

• Customers
• Sales and marketing employees
• Research and development, production and technical teams
• HR staff
• Departmental heads and CEOs
• Employee families

Observation

• Observation from general discussions with employees
• Observation of the CEO speeches, line managers and cross-section of employees

Secondary Data

• Customer praise and complaint.
• Awards, News paper reports, and journal and business magazine articles on the firm and social settings.
• Reports on Organizational Development interventions.

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