Human Capital Management (HCM) treats people management as an important strategic issue that aims at value-creation by effective utilization of human resources to achieve business goals. It involves five strategic domains: leadership capital, structural capital, workforce capital, cultural capital and intellectual capital. HCM is broader in scope than human resource management. HCM involves several steps: developing a HCM strategy, developing measures to monitor the execution of the strategy, benchmarking the strategy, implementing the strategy and reporting on achievement. Implementing excellent HCM maximizes value added at each stage and ensures that people become the basis for competitive advantage in an environment, where all other sources of competitive advantage have become less important.
S. Aramvalarthan and Kalayil, J., “Human Capital Management: a New Approach to People”, HRM Review, vol. 9, pp. 62-66 , 2009.