HRM8612: Compensation Management

Termpaper

Human Capital Management Practices and Its effect

on Employee Work Performance

Submitted to
Dr. Mohammad Rabiul Bashar Rubel
Associate Professor
Bangladesh University of Professionals

Submitted by
Nabila Ishrat Tuba
ID: EV 18017009
Bangladesh University of Professionals

Date of Submission

May 31, 2020

 LETTER OF TRANSMITTAL
April 28, 2020
Dr. Mohammad Rabiul Bashar Rubel
Associate Professor
Bangladesh University of Professionals

Subject: Submission of Report on Human Capital Management Practices and Its effect on
Employee Work Performance.

Dear Sir,
This is our pleasure to present my report entitled on Human Capital Management Practices
and Its effect on Employee Work Performance. I have tried my level best to portray an
analysis on the given case study. This helped me to learn more about Human Capital
Management practices and its impact on employee work performance. I like to express my
gratitude to you for all your support and guidance during the preparation of this report.

Please accept this report and oblige. I am eager to respond to any questions that you may have
concerning the report.

Sincerely yours,
Nabila Ishrat Tuba
ID: EV 18017009
Bangladesh University of Professionals
 TABLE OF CONTENTS
Executive Summary .................................................................................................................... i

Introduction ................................................................................................................................ 1

Literature Review....................................................................................................................... 1

Data Analysis & Results ............................................................................................................ 9

2.1. Distributions of Respondents ...................................................................................... 9
2.2. Frequency .................................................................................................................. 10

Methodology ............................................................................................................................ 12
3.1. Conceptual Framework ............................................................................................ 12
3.2. Research Hypothesis ................................................................................................. 12
3.3. Data Collection: Sampling Design ............................................................................ 12
Study Area and Target Population.................................................................................... 12
Data and Data Sources ...................................................................................................... 12
Questionnaire Design ....................................................................................................... 12
Research Design ............................................................................................................... 12
Sample Design .................................................................................................................. 13

Discussion ................................................................................................................................ 13

Limitations ............................................................................................................................... 15

Conclusion ............................................................................................................................... 15

Appendix A .............................................................................................................................. 16
Survey Questionnaire ....................................................................................................... 16

References ................................................................................................................................ 18
 Executive Summary
Human Capital Management (HCM) has become the trend of the companies to move in the
direction of globalization day by day which is driving the businesses towards achieving great
dimensions. To stay in the long complex and competitive run, companies focus on applying
their individual unique strategies on overcoming challenges and seize all possible opportunities
to achieve targeted goal. Therefore, organizations need to nurture their employees to in way
with the help of HCM practices for better employee work performance. Employees’
expectations and perceptions are the major component for any company’s growth and
reputation. Thus, every company always focus on introducing innovative and creative training
and development projects to its employees and to maintain that every company has a structured
and documented approach to HCM practices. This study reflects the HCM helps HR managers
to influence employees to move towards to work with motivation. This study contents all the
necessary steps followed by variety of organizations in different industries. This study is
segmented into six chapters. Firstly, chapter 1 described about the problem statement of the
study and what it is the report about. Second chapter focused of theoretical aspects of HCM,
HCM Practices and Employee Work Performance. Third chapter is on methodology. The study
is done by doing a detail market research was conducted in terms of understanding the HCM
practices done in the organizations through targeted respondents. By following descriptive
approach, the study was done among 202 respondents (both male and female) from different
working age groups and different industries by using a structured questionnaire to collect data
primarily. A regression analysis was done based on the collected data. And depending on the
analysis, final chapter is regarding few observations and recommendation which has been
identified during the study analysis. The case study also aims to draw attention towards the
strengths and weaknesses of the HCM practices undertaken by the organizations and the
outcome provides valuable guideline regarding further HCM practices and its effect of
employee work outcome.

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Introduction
In today’s world, organizations are concern on their manpower as well as the business profit;
in short it can be said that human resources and business profit are both simultaneously
priorities in the organization. Therefore, companies now introducing and focusing on talent
development programs to enhance the employee performance through Knowledge, skill,
abilities and competencies. Berceuse these employees are the Human Capital of the
organization; which refers to knowledge (know what), advanced skills (know how), system
understanding and creativity (know why), and motivation to deliver high quality performance
(create why) (Noe, 2013). The study has been done by using qualitative approach, which helps
to identify the important factors of human management capital practices in the organization.
Human capital are the asset of any organization. At the present era more than 70% of the
working population is Millennial; which leads to business to focus on shifting from traditional
thinking to apply modern rational strategies in the business. This has lead managers.to identify
and resolve the gap between Human Resources and Human Capital exist in the organizations.
Human resources are typically refers to the manpower who have the basic general knowledge
to get the job done. On the other hand, Human capital focuses on acquiring required knowledge
and skills that are required to get the job done more efficiently and effectively. The aim of this
report is to portray what types of Human Capital Management are practiced in an organization
and how it effects in enhancing Employee work performance to gain competitive advantage in
the market.
To simplify the objective of the study is to explore the human capital management and its
practices in the business in terms of why human capital requires to be recognized to have a
sustainable business culture and along with that how the practices effects the employee work
performance in the organization in the long run.

Literature Review
Human Capital
Capital refers to already produced durable goods which further contribute to the production of
goods and services. To simplify, capital refers to any produced goods or services which enables
an individual or organization to deliver high quality output. Capital acts as a catalyst to increase
productivity in organizations (MSG - Management Study Guide, 2020).
Richard Branson the founder and chairman of Virginia Group once mentioned “Clients do not
come first. Employees come first. If you take care of your employees, they will take care of the
clients.”
Employees are the sustenance of an organization. An organization cannot survive if there are
no employees. Organization runs with the help of individuals who contribute in their own way
in its success and productivity. Employees spend maximum part of their day in offices and
strive hard to achieve the goals and objectives of the organization. Employees ought to be
motivated from time to time so that they develop a sense of attachment towards their
organization and also deliver their best.
Every employee in their tenure acquires some set of skills through their experience, exposure,
trainings and so on which further increase their productivity ultimately benefit the organization.
Knowledge and expertise which employees develop in due course of time to further increase
the productivity of organizations refer to human capital. Every employee tries his level best to
sharpen his/her skills during his stint with the organization. Human capital is defined as the
collective stock of skills, attributes, knowledge and expertise of employees which further plays

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an integral role in increasing the productivity of the organization (MSG - Management Study
Guide, 2020).
Every organization invests its money and resources to train new employees. Employees in turn
work hard, upgrade their existing knowledge and contribute in their own way to increase the
productivity of their organization. The word “Human Capital” was introduced by A. W. Lewis
in “Economic Development with Unlimited Supplies of Labor”. Human capital plays a crucial
role in increasing the productivity and output of an organization.

Human Capital Management (HCM)

Human Capital Management refers to managing an organization’s employees for them to
contribute significantly in the overall productivity of organization. In a layman’s language
managing workforce of an organization refers to human capital management (MSG -
Management Study Guide, 2020). It is the effective acquisition, employment, and development
of a company’s employees through strategic and tactical practices, processes, and applications
in order to maximize their economic value. To be most effective, the set of HCM practices,
processes, and applications should be focused on the organizational need to provide specific
competencies. Strategic and Tactical includes several aspects (BambooHR, 2020).

Importance of Human Capital Management

HCM is important for the reason that employees who spend much time each day working and
contributing to the success of an organization, are a valuable resource that can either make or
break an organization. Therefore, it is essential for acquiring and retaining high-performing
(BambooHR, 2020).
HCM has more to do with how organizations treat their employees. Employees should not be
treated as mere labors. Senior management must ensure timely growth and development of
every individual concerned for their efficient contribution as per requirement. The key
objective of every organization should be to train its employees so that they become efficient
resources for upcoming future challenges. In HCM, organizations treat their employees as
important resources that play an instrumental role in productivity of the organization. The
development and management of individuals in line with their key responsibility areas not only
make them an indispensable resource in the future but also ensure their hundred percent
contribution towards the organization.
The responsibility of human resource professionals is to create and implement ways for
employees to be hired, oriented, trained, motivated, and engaged. HCM plays an essential role
in helping the organization’s human resources department increase the overall productivity and
happiness of employees. In turn, productive and happy employees work harder and care more
about the success of the organization (BambooHR, 2020).

Challenges in Human Capital Management

There are few potential challenges that are seen in HCM. They are poor performance
management, non-strategic workforce planning, weak usage of workforce analytics,
mismanagement of organizational change and the high cost of unsolved challenges
(BambooHR, 2020).
Apart from the internal issues, there are few external factors that influences HCM in any
organization. The changes in the external environment of an organization has a profound
impact on its personnel. These changes include technological obsolescence, cultural and social
changes, policies of the government and many more. The factors consist of technological
innovation, economic factors, labor unions, labor markets, changing demand of employees,

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legal factors and human resources in the country. The structure, values and the level of
education of human resources in the country influence the HRM function of any organization.
The influence of manpower in the country can be studied through:
o Change in the structure of employment with the entry of workforce with different
backgrounds.
o The changes that have taken place in the structure of the workforce over the years and
that have led to the emergence of new values in the organizations.
o Increased level of formal education has led to the changes in attitude of employees.
The well-educated employees always challenge and question the management’s
decisions and want a voice in the company’s affairs that affect their interest.
Thus, many environmental factors affect the performance of specific tasks of HRM. Changes
in the internal and external environmental factors complicate the job both of line and personnel
managers in overseeing the contributions of human resources. Considering the complexities
and the challenges in the HRM now and in near future, management has to develop
sophisticated techniques and competent people to manage personnel on sound lines (Rajsheka,
2020).

Benefits of Human Capital Management

 Human capital management helps in extracting the best out of employees. It also plays
an instrumental role in increasing the efficiency of employees, making them an
indispensable resource for the organization.
 Human Capital Management enables the human resource professionals to hire the
right candidate for the right role. Talent Acquisition is one of the most crucial functions
of an individual representing human resource vertical.
 Human Capital management enables free flow of information between superiors and
subordinates. Employees have an easy access to the senior management and hence there
is no room for confusion or misunderstandings. Half of the problems evaporate when
colleagues discuss matters amongst themselves.
 Trainings and skill development activities are essential for upgrading the existing
knowledge of employees. Training program increases the efficiency of employees and
eventually increases the overall productivity of organization. It is essential for every
employee to keep himself/herself abreast with the latest developments in his/her field.
Human Capital management makes an employee self-sufficient. It enables employees to
adapt to changing situations easily. A well trained employee can bring better productivity
than someone who is not trained. The performances of employees must be evaluated from
time to time. Superiors ought to keep a track on subordinate’s work. Proper feedback is
essential. Human Capital management helps in monitoring employee’s performance.
Special online reporting systems help senior management to have a direct access on the
work of their juniors. Employees are aware as to what is expected out of them.
 Human Capital Management highlights the importance of soft skills and personality
development for employees. An employee who can speak well is always considered as a
trouble shooter by his fellow workers. Do not hire someone who has poor communication
skills. Someone with average communication skills can still be considered.
 Human Capital management helps the employees to improve in areas where they feel
they are lacking. It not only benefits the employees but also the entire organization.
(MSG - Management Study Guide, 2020)

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Human Capital Management Practices
Human Capital Management is a comprehensive set of practices for recruiting, managing,
developing and optimizing the human resources of an organization (Rouse, 2019). By this
definition, it is depicted that management has to adopt an approach to human resources
management that perceives employees as assets that can be invested in and managed in order
to effect maximum profit for the success of the organization (Atiku, 2020).
Swanepoel, Erasmus, Schenk and Tshilongamulenzhe (2014) had a similar perspective in
defining HCM from a business based perspective and pointed out that “it is a philosophy of
people management based on the belief that human capitals are uniquely important to sustained
business success. An organization gains competitive advantage by using its people effectively,
drawing on their expertise and ingenuity to meet clearly defined objectives. Human Capital
Management (HCM) is aimed at recruiting capable, flexible and committed people, managing
and rewarding their performance and developing key competencies” (Atiku, 2020).
This task of managing human capital encompasses a number of functions, starting from
bringing people into the organization, then train, develop and retain them. Employees need to
be fully integrated into the socio-cultural environment of the organization, though these main
tasks seem to be costing management’s time, they are expected to perform even harder with
the 4th Industrial Revolution (Kalitanyi & Goldman, 2020).
The performance of human capital influences in business results at diverse intensities
depending on the nature of the business and alongside the working environment. In every
industries, M practices are the significant parts of the organizations regarding companies’
performance in terms of high motivation and high performance team driven culture in the
competitive market and keep the competence level to the top tier (Marcano, 2017).
There are certain major practices are followed in Human Capital Management to maintain the
high team performance. They are as follows.

i. Recruitment and Selection

Clarity on the values and culture of the company increases the success on the recruiting process,
which is only successful if the investment on the employee pays out for the company and the
employee by enjoying a multi-year relationship. The new demographics coming into the work
force are increasingly representing this need. The competencies required for every role,
together with the corporate culture, allow a very clear definition of the ideal candidate, by
fitting culture, values and competencies from the get go (Marcano, 2017).

ii. Training and Development

As organizations strive to compete in the global economy, differentiation on the basis of the
skills, knowledge, and motivation of their workforce takes on increasing importance.
According to a recent industry report by the American Society for Training and Development
(ASTD), U.S. organizations alone spend more than $126 billion annually on employee training
and development (Paradise, 2007).“Training” refers to a systematic approach to learning and
development to improve individual, team, and organizational effectiveness (Goldstein & Ford
, 2002). Alternatively, development refers to activities leading to the acquisition of new
knowledge or skills for purposes of personal growth. However, it is often difficult to ascertain
whether a specific research study addresses training, development, or both. In the remainder of
this review, we use the term “training” to refer to both training and development efforts.
The importance of and scholarly interest in training in work organizations is reflected by the
regular publication of training reviews in the Annual Review of Psychology since 1971
(Campbell 1971, Goldstein 1980, Wexley 1984, Latham 1988, Tannenbaum & Yukl 1992,

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Salas & Cannon-Bowers 2001). The present review covers the training literature since January
2000. We provide a review that is comprehensive though not exhaustive. Also, in contrast to
previously published Annual Review of Psychology articles, we readily acknowledge at the
outset that we take a point of view that training in work organizations produces clear benefits
for individuals and teams, organizations, and society. We believe that training in work
organizations is an area of applied psychological research that is particularly well suited for
making a clear contribution to the enhancement of human well-being and performance in
organizational and work settings as well as in society in general. Thus, in this review we first
describe the benefits of training for various stakeholders and then discuss how training can be
designed, delivered, and evaluated so that these benefits are maximized.
We acknowledge three unique characteristics of the present review that also differentiate it
from previous Annual Review of Psychology articles on the same topic. First, because the
training field has grown exponentially in the past decade, we cannot rely on the psychological
literature to be the only or even main source of knowledge that has been generated. In preparing
to write this article, we reviewed about 600 articles, books, and chapters published in
psychology as well as in related fields including human resource management, instructional
design, human resource development, human factors, and knowledge management. We believe
this multidisciplinary approach is needed given the increasing fragmentation of knowledge
generated by researchers in various training subfields. Second, although psychology research
on training has been a topic traditionally studied at the individual level of analysis and more
recently at the team level of analysis, this review also includes organization and society levels
of analysis. The present article goes beyond the traditional levels of analysis because, as noted
by Kaufman & Guerra (2001), “we have entered a new era in which both achieving useful
results and proving that they add value to the organization and our shared society are required”.
Third, thanks in part to the availability of cheaper and faster ways to send and receive
information using the Internet, human resource management interventions and training efforts
in particular are taking place at a global level (Cascio & Aguinis 2008). Thus, a review of the
training literature cannot limit itself to research conducted only in the United States.
Accordingly, this review includes numerous studies conducted outside of North America. In
short, we approached our literature review from a fundamentally necessary multidisciplinary,
multilevel, and global perspective (Aguinis & Kraiger, 2009).
The second section reviews research addressing how to maximize the benefits of training
activities at the individual and team, organizational, and societal levels. First, we focus on the
activities that take place before training is implemented; such like needs assessment and
retraining states. Then, we focus on training design and delivery, followed by a discussion of
training evaluation. We review research regarding transfer of skills and knowledge acquired in
training to work settings. In the third and final section, we address conclusions, including
implications for practice, and suggestions for future research (Aguinis & Kraiger, 2009).
There is documented evidence that training activities have a positive impact on the performance
of individuals and teams. Training activities can also be beneficial regarding other outcomes at
both the individual and team level (e.g., attitudes, motivation, and empowerment) (Aguinis &
Kraiger, 2009).

iii. Performance Management

This process starts with the management philosophy of the company, a common one is
Management by Objectives (MBO) in which the company’s goals are translated into SMART
objectives and are monitored periodically. These objectives are cascaded down through the
organization by translating those into ones that can be executed at the corresponding levels.
When properly designed and looked from the bottoms up, a high level of performance at a

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lower level in the organization produces success in the upper levels. Under this system the
executives’ main function is to enable the success of the main workforce by providing
leadership, resources and support. As we are always learning and adapting, periodic feedback
must be scheduled and if need be completed ad-hoc. Without feedback the individuals isolate
and the team effort loses effectiveness. An important objective here is to complete a gap
identification and if possible develop a plan to close those gaps. Another important outcome is
the necessary quantitative data to decide on variable compensation for management roles
(Marcano, 2017).
There are multiple studies shows that high performance work system in the organization is
related to positive employee attitudes, the underlying mechanism is not yet thoroughly
understood. Similarly, though the benefits of employees’ psychological capital (PsyCap) in the
workplace are well documented, little is known about the extent to which PsyCap stems from
the context in which people work. Adopting a multi-level approach and using the ability-
motivation-opportunity (AMO) framework and the conservation of resources (COR) theory as
theoretical backdrop, we develop and test a moderated mediation model to explain how
organization-level HPWS relate to individual employee work attitudes (job satisfaction and
affective organizational commitment) that reflect well-being through the mediating mechanism
of employees’ PsyCap. Analysis of multi-source data from 569 employees in 44 firms showed
that HPWS were positively related to job satisfaction and affective commitment, and that these
relationships were partially mediated by PsyCap. Furthermore, moderated path analysis
revealed that an interactional justice climate strengthened the direct effect of HPWS on PsyCap
and work attitudes as well as the indirect effects of HPWS on work attitudes. The theoretical
and practical implications of these findings are discussed (Miao, Bozionelos, Zhou, &
Newman, 2020).

iv. Leadership
The leadership is one of important aspect human behaviors and well-studied subject in the
recent times. There are several forms definitions in the literatures for the leadership. The more
accepted form of definition is influence theme. The leaders who influence people are to achieve
the goals and increases organizational performance. It does not translate to that leader having
control over his followers to achieve the goals which leader wants to achieve. The followers
emulate the leader’s attitudes to achieving desired goals. The leader is expected to leader the
process of planning and execution of activities to achieve the organizational goals. There is a
difference between the management and leadership, the management is concerned about the
short-term issues in a company, whereas leaders adopt and look into broader prospective
(Amadi, 2018).
Most of the leadership theories are emerged in organizations to achieve their organizational
objectives as well as their goals. The theories are focused on behaviors, traits, controlling and
circumstances (Mintzberg, 2015). However, the current theories are correlation centered.
Whereas the cooperation between the leader and followers.
Employees must be treated well for them to develop a feeling of attachment and loyalty towards
the organization. Managers must understand that their role is not just to sit in closed cabins and
impose ideas on others. They ought to communicate well with their subordinates. Employees
must have an easy access to the senior management. Communication from management to
employees also known as Top down communication is essential for the employees to be aware
of their goals and objectives and for them to know what is expected out of them. Management
ought to sit with employees on a common platform to invite suggestions and feedbacks from
them. Senior executives and management must reduce the various levels of hierarchy between
them and employees’. Management must interact and motivate the employees from time to

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time for them to give their level best. Senior executives should support, lead and influence the
workforce so that they contribute effectively towards the organization (MSG - Management
Study Guide, 2020).
The difference between Performance and Potential needs to be well understood. While
performance is based on results compared to an agreed expectation, Potential is the expected
capacity to perform well in higher roles in the organization. It is typically related to personal
competencies, career track record and often linked to high performers. To be successful at
organic growth, it is critical to establish the culture of “filling the open roles from within”.
Every time there is vacancy the leadership must attempt to fill it by promoting or moving the
high potentials, which move the opening to lower level on the organization; once this is not
possible anymore then the external hire should be completed, this is at the lowest level possible
in the organization. Every supervisor level and above should have the succession plan, up to
the CEO of the company, this way when a vacancy occurs the organization can react quickly
and effectively, at the same time all employees will look forward to their career progression
(Marcano, 2017).

v. Compensation
Compensation must be understood in three main groups: base benefits, variable and longer
term. The first group is largely dictated by market, it is competitive and the top leadership must
decide where they want to stand relative to the market, some companies decide to be at the top
quartile and some other at the bottom quartile, it may depend on the type of company not
necessarily on management. The variable compensation normally goes well when the rules and
calculations are agreed from the beginning of the cycle, so the employees focus on achieving
the goals (Marcano, 2017).

vi. Employee Benefits

Offering benefits to the employees is important because it shows them organizations are
invested in not only their overall health, but their future. A solid employee benefits package
can help to attract and retain talent. Benefits can help you differentiate your business from
competitors. Employee benefits can improve your company’s bottom line by engaging
employees to participate in wellbeing programs, such as Virgin Pulse. Healthier employees
mean reduced healthcare costs for your organization. Employees with fewer health risks
experience fewer sick days, fewer trips to the doctor, and spend more time working in your
organization, bringing their best selves to work every day.
Depending on the type of organization and the job, employee benefits may be quite different.
For example, government employee benefit packages for full-time employees look very
different from the packages offered to part-time employees. Employee benefits packages are
typically discussed during the final interview or at the time an offer is extended. The right
benefits package can give you a distinct advantage in competitive recruiting situations.
In business, there is no one-size-fits-all when it comes to employee benefit initiatives and
programs. Every organization and individual’s needs are different. By tailoring programs to
engage employee interests and increasing awareness to drive program usage, organizations
realize improved outcomes and increased business performance (Virgin Pluse, 2020).

Employee Work Performance

There is no general, overarching theory about employee performance. The effectiveness with
which organizations manage, develop and stimulate their employees is an important
cornerstone for how organizations perform. Because of this, people management has a
significant impact on performance (act, process or manner of performing or functioning).

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Performance can be traced back to the behavior of people on the shop floor. Employees work
in a certain way or behave in a way that contributes to the goals of the organization. Employees'
behavior in relation to organizational performance can manifest itself in three different ways.
 Task Performance: Behavior focused on carrying out the task. Task performance is often
regarded as the most important aspect of work-related behavior and is regularly used as a
synonym for overall job performance.
 Organizational Citizenship Behavior: This behavior is also called 'soft performance'. In
short, this is when employees also carry out tasks that fall outside of their direct area or job
description, thereby contributing to the organization’s objectives.
 Workplace Deviant Behavior: This is behavior whereby an employee violates the
organization’s norms, as a result of which he puts the organization or the colleagues in
danger. Spreading rumors, insulting colleagues, theft and sabotage are a few examples.
Actively disengaged employees display this behavior. It is important for employees
to receive feedback on their behavior and their performance. If that is lacking, they will use
the perception of their prior performance as a frame of reference to determine. They are –
 Which tasks they are going to carry out?
 How much effort they will make?
 How much drive they have?
 To what extent they identify and correct mistakes?
(Noordzij, 2017)
Performance management isn’t simply a once-a-year evaluation. Good performance
management is a continuous, positive collaboration between employee and employer. By
staying connected with the supervisor all year round, you can make adjustments to your work
performance as needed, and the supervisor can assess and support individual performance and
ability to meet individual’s annual goals.
Individual and supervisor must have discussion regarding the planning for the year ahead. One
should expect to have a discussion around the time of individual’s annual performance review
for the previous year. The discussion may consist of –
 A review of your job description. Is it accurate and complete?
 A list of goals for the coming year. Your goals should be tied to departmental goals and
your job description.
 An assessment of skills and knowledge you need to develop in order to achieve your goals.
 A discussion of your long-term professional goals. This is a good time to advocate for your
professional growth through training and job opportunities.
(University of Washington, 2020)
Employee work performance leads to different job satisfaction dimensions in today’s work
performance culture. Job satisfaction is one of the most researched variables in the area of
workplace psychology and has been associated with numerous ranging from leadership to job
design. It is more of a journey, not a destination, as it applies to both employees and the
employer. Job satisfaction is influenced or affected by various factors. Job satisfaction is known
as a result of job performance and productivity. There exists a positive relationship between
these variables.
However, the variable can be seen in two categories. They are: Positive Outcome and Negative
Outcome. Positive outcome refers to the employee actions that leads to increase employee
productivity, creativity, innovation, sustainability and many more which comes out of both self
and organizational motivation for individual. On the other hand, Negative outcome drive an
employee to increase absenteeism, increase switching from one department to other

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department, demotivation and even leads to resign. Such negative outcome may hamper an
organization to lose it valuable human capita

Data Analysis & Results

2.1. Distributions of Respondents
For the purpose of the study, an analysis has been done among 202 respondents who are HR
employees in different sectors in Bangladesh. While doing the survey, a wide range of diversity
was maintained. For Gender perspective, there are Female, Male and Others who prefer not to
reveal their gender belongs to 30%, 64% and 5% respectively. Alike gender segmentation, 4
ranges of age group has been selected who are currently serving in the workforce. They are: 25
to 30 (37%), 31 to 35 (40%), 36 to 40 (15%) and finally 41 and above category has 8% among
the respected respondents. Following to that 14 different industries have been identified to
collect information from. The following tables is showing the details distribution of the
respondents in different categories.

Gender
Valid Cumulative
Frequency Percent Percent Percent
Valid Female 61 30.2 30.2 30.2
Male 130 64.4 64.4 94.6
Prefer not to say 11 5.4 5.4 100.0
Total 202 100.0 100.0
Age Group
Valid Cumulative
Frequency Percent
Percent Percent
Valid 25 to 30 75 37.1 37.1 37.1
31 to 35 80 39.6 39.6 76.7
36 to 40 31 15.3 15.3 92.1
41 and above 16 7.9 7.9 100.0
Total 202 100.0 100.0
Industry
Valid Cumulative
Frequency Percent
Percent Percent
Valid Finance & Banking 35 17.3 17.3 17.3
Telecom 15 7.4 7.4 24.8
Health Care 28 13.9 13.9 38.6
Education 24 11.9 11.9 50.5
Non-profit Organization 25 12.4 12.4 62.9
Pharmaceutical & Chemical 28 13.9 13.9 76.7
Manufacturing 37 18.3 18.3 95.0
Service 1 .5 .5 95.5

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 Architectural 3 1.5 1.5 97.0
Research 1 .5 .5 97.5
Student 1 .5 .5 98.0
Software & IT 1 .5 .5 98.5
Garments 2 1.0 1.0 99.5
Advertising 1 .5 .5 100.0
Total 202 100.0 100.0

2.2. Frequency
Statistics
Gender Age Group Industry
N Valid 202 202 202
Missing 0 0 0
Mean 1.7525 1.9406 4.4802
Median 2.0000 2.0000 4.0000
Mode 2.00 2.00 7.00
Std. Deviation .54464 .91773 2.57081
Variance .297 .842 6.609
Minimum 1.00 1.00 1.00
Maximum 3.00 4.00 14.00

2.3. Regression Analysis

Model Summary
Std. Error of the
Model R R Square Adjusted R Square Estimate
1 .320a .103 .075 .09547
a. Predictors: (Constant), Influence_of_Employee_Benefits_process,
Influence_of_Recruitment_and_Selection_process,
Influence_of_Performance_Management_process,
Influence_of_Training_and_Development_process,
Influence_of_Leadership_process,
Influence_of_Compensation_process

ANOVAa
Sum of Mean
Model Squares df Square F Sig.
1 Regression .203 6 .034 3.712 .002b
Residual 1.777 195 .009
Total 1.980 201

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a. Dependent Variable: Requirements_of_HCM_Factors
b. Predictors: (Constant), Influence_of_Employee_Benefits_process,
Influence_of_Recruitment_and_Selection_process,
Influence_of_Performance_Management_process,
Influence_of_Training_and_Development_process, Influence_of_Leadership_process,
Influence_of_Compensation_process

Coefficients
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 1.144 .061 18.635 .000
Influence_of_Recruitm
ent_and_Selection_pro .015 .009 .111 1.578 .116
cess
Influence_of_Training_
and_Development_proc -.026 .011 -.196 -2.472 .014
ess
Influence_of_Performa
nce_Management_proc .013 .008 .121 1.579 .116
ess
Influence_of_Leadershi
-.012 .008 -.117 -1.456 .147
p_process
Influence_of_Compens
-.009 .010 -.087 -.968 .334
ation_process
Influence_of_Employe
-.010 .010 -.091 -1.021 .308
e_Benefits_process
a. Dependent Variable: Requirements_of_HCM_Factors

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Methodology
3.1. Conceptual Framework

3.2. Research Hypothesis

H1: Recruitment and Selection practice has significant effect on Employee Performance.
H2: Training and Development practice has significant effect on Employee Performance.
H3: Performance Management practice has significant effect on Employee Performance.
H4: Leadership practice has significant effect on Employee Performance.
H5: Compensation practice has significant effect on Employee Performance.
H6: Employee Benefits has significant effect on Employee Performance.

3.3. Data Collection: Sampling Design

Study Area and Target Population
Study will be focused on the urban areas of Bangladesh. However, for the ease of study sample
will be randomly collected from different areas of Dhaka city. To understand the analysis, the
targeted population is Human Resources’ Employees of different organizations from different
industries.
Data and Data Sources
Both primary and secondary data have collected to have complete insight in terms of
understanding the current market status and what can be future perspective of opportunities.
For primary data collection, a structured questionnaire (please refer to Appendix A) has been
used to collect responses from targeted population. Also, many journal articles helped to
understand previous studies and what factors in HCM can drives employees’ to make decision.
Questionnaire Design
A standard and structured questionnaire was developed by using technological tools and data
will be collected form respective individuals by both being in-person and using online tools.
The questionnaire was a combination of multiple choice, check-box and Liker-scale question
patterns to collect data.
Research Design
As there are many studies are done by researches previously, descriptive research approach and
cross sectional research design have been followed. Cross-sectional approach was taken
because there are different industries from where employees are currently serving and as the
competitive market increases, ensuring employee sustainability is a challenge. Therefore, to
collect data from different sectors and check regression analysis among them, cross-sectional
research design was chosen.

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Sample Design
As mentioned above, targeted population are belong to HR professionals of different
organizations of various industries. Therefore, sample from these huge population group was
selected very specifically, by using Slovin’s Formula, which led me to have a sample size of
almost 300 individuals. As a matter of fact, this study is completely qualitative focused, some
factors were in concern while choosing the respondents. They are:
 Nature of the study
 Resource availability
 Importance of the decision

Discussion
For the purpose of the study, an analysis has been done among 202 respondents who are HR
employees in different sectors in Bangladesh. While doing the survey, a wide range of diversity
was maintained. For Gender perspective, there are Female, Male and Others who prefer not to
reveal their gender belongs to 30%, 64% and 5% respectively. Alike gender segmentation, 4
ranges of age group has been selected who are currently serving in the workforce. They are: 25
to 30 (37%), 31 to 35 (40%), 36 to 40 (15%) and finally 41 and above category has 8% among
the respected respondents. Following to that 14 different industries have been identified to
collect information from.
The regression analysis has been done among 6 independent variables against the dependent
variable which is Employee Work Performance. From the regression analysis shared above,
showed that as per 5% significant level only one HCM practice got accepted which is Training
and Development process as it is less than the significance level; rest independent variables got
rejected as per hypothesis significance level.
Actual Outcome from the Analysis

Training and development is very important in terms of developing human capital and
managing those talents are important for business future prospects. Training refers to a planned
effort by a company to facilitate learning of job related competencies, knowledge, skills and
behaviors by employees (Noe, 2013). On the other hand, Development refers to training as well
as formal education, job experience, relationship and assessments of personality, skills and
abilities that help employees’ prepare for future jobs and positions (Noe, 2013). Both formal
and informal training and development are important for employees to apply them on their job
and regular work day life. Therefore, according to respective respondents believe that Training
and Development influences the employee work performance significantly. In addition, other
variables have also influence on employee work performance, hence that varies on different

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Apart from the above analysis, there are few interesting outcomes have seen in the survey
result. Firstly, one important aspect that has been identified that individuals do not have clear
understanding regarding Human Capital Management (HCM) and often mislead it with Human
Resources Management (HRM). However, in the first question 94.5% respondents are agreed
that HCM is important in an organization in terms of their manpower empowerment and
management.
Secondly, respondents are asked to rate (Strongly Negative 1, Negative 2, Neutral 3, Positive
4 and Strongly Positive 5) which HCM practices have influences in their work performance;
which leads to the interesting findings from individuals’ perspectives. In this study the HCM
practices are: Recruitment and Selection; Training and Development; Performance
Management; Leadership; Compensation and Employee Benefits (Independent variables).
According to the purpose of the study, these independent variables leads to Employee Work
Performance (Dependent variable). The results are as per below.
 Recruitment and Selection: 52.2% respondents from different industries positively agreed
that recruitment and selection process influence their work performance.
 Training and Development: Training and development indeed very important for any
organization to enhance their employees’ skills, knowledge and capabilities. Therefore,
45.3% and 43.8% respondents from different industries strongly positive and positive on
the influence of the employees’ work performance.
 Performance Management: Performance management is very important to keep the work
in discipline and that effect on an employees work performance as well as future
improvement (e.g. increment, promotion, etc.). Henceforth, 44.8% respondents strongly
agrees on performance management in the organization.
 Leadership: Leadership is one of the key factors in HCM. As researchers said leaders can
make motivate a team or individual towards achieving organizational target and self-goal.
Consequently, our 49.8% respondents believe the same.
 Compensation: Compensation is the return of contribution of an individual’s work toward
an organization. Compensation is a tool of competency in the organization in terms of
influencing employees’ work performance as per their knowledge, skills and abilities. Alike
leadership, 48.9% respondents strongly believe that compensation is one of the strong
HCM factors that influences one’s work performance.
 Employee Benefits: 51.2% respondents from different industries strongly positive that
employee benefits has influence their work performance.
To end with, there are many insightful recommendation were identified on the importance of
HCM practices and have effect on their work performance; one question that reflect that 90%
respondents shared their perspectives and each shows the level of significance each practices
have on their everyday work in the organization. Few of the statements are:
 The set of Human Capital Management practices, processes, and applications should be
focused on the organizational need to provide specific competencies.
 These factors influence the employee to give his/her best performance.
 Human Capital Management is essential for hiring, managing, training and retaining
talented and high performing employees. Human Capital management plays an important
role in the recruitment process. It ensures that human resource professionals hire
individuals who really deserve to be in the organization.
 It transforms Human resources into human capital.
 Human is the main key of gaining success for any organization and effective human capital
management (compensation, promotion, employee benefits, training & development)
aligned with organization goal results as superior performance through competitive
advantage.
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It’s important because people who works for the company are the one solves most of the
problem and runs the whole system and increases revenue. If we can’t care about them and
don’t take care of them then the revenue of the company will not be up to the mark and thus
profit will be less

Limitations
Different studies have been done to understand the HCM practices; however, it always varies
from one organization to another. The paper is the attempt to highlight that how HCM practices
can be developed by an organization and ensure employee work performance with success.
Alike other researches, I also faced some limitations which may be improved for future scope
of studies. The study has been done by using qualitative approach, which helps to identify the
important factors or features of HCM desired by HR professionals mostly. This also can be
converted into quantitative research by following up with different approaches used by
individual organizations.
In addition, due to confidentiality, appropriate information was unable to collect. The
questionnaire could be also developed in a way that would have fulfilled the core objective of
the study entirely and more information could have been gathered.
This report can be handy for all industries who deal with Human Capital. In terms of developing
human capital, this study can help in understanding who are the potential talents in the
company.

Conclusion
Bangladesh market is growing so fast by creating variety of opportunities for the individuals
who are both working in an organization and individually doing business. Therefore, human
capital management has become a significant factor to consider and practice in all the
organization and business; it does not matter the size of the business, it is matter the individuals
who are working for it.
A human capital is nurtured in an organization in the purpose of doing better at the work with
satisfaction so that the business can do well in the competitive market. Nevertheless, business
world is changing as mentioned earlier due to fourth industrial revolution in which one of the
characteristics is continuous change. HR managers need to cope up with the changes and build
strategies with the help of HCM practices accordingly that matches best with their employees
work performance and their satisfaction.
To conclude, HCM is a major concern in current days for organizations to practice for the sake
of their human capital. And from this study’s survey it can said clearly that Training and
Development process is the most effective practice for organization to organize and conduct to
develop their human capital in more efficient way to become more competitive in the market
and become a sustainable asset for the respective organization.

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 Appendix A
Survey Questionnaire

Human Capital Management and Its effect on Employee Work Performance

I am a student at Bangladesh University of Professionals and conducting this survey for my
acknowledgement. The main purpose of this survey is to gather information and have an
idea about the employee work outcome (Performance or Turnover) from different sectors of
Bangladesh. All the information of this questionnaire shall be kept confidential and will be
used for observation analysis purpose only.

SECTION A

Name (optional): ______________________________________

Gender: Industry:
 Female  Finance and Banking
 Male  Telecom
 Prefer not to say  Health Care
 Education
Age Group:
 Non-profit Organization
 25 to 30
 Pharmaceutical and Chemical
 31 to 35
 Real Estate
 36 to 40
 Manufacturing
 40 and above
 Others (please specify) ____________

SECTION B
Q1: Is Human Capital Management important for you?
 Yes
 No

Some Human Capital Management (HCM) factors have given below. Please choose your
preferences according to the segments. How much the below mentioned factors influence your
decision in the organization you are with?

Q. Strongly Strongly
HCM Factors Negative Neutral Positive
No. Negative Positive

Do you think Recruitment and

Selection process has
2 1 2 3 4 5
influence in your work
performance?

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 Do you think Training and
Development process has
3 1 2 3 4 5
influence in your work
performance?
Do you think Performance
Management process has
4 1 2 3 4 5
influence in your work
performance?
Do you think Leadership
5 process has influence in your 1 2 3 4 5
work performance?
Do you think Compensation
6 process has influence in your 1 2 3 4 5
work performance?
Do you think Employee
7 Benefits process has influence 1 2 3 4 5
in your work performance?

Q8: Do you believe that the above mentioned factors are required in HCM?
 Yes
 No
 Why? _______________________________________________________

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