 Hi everyone, this is Dr. Laura Portales and I'm here today to talk a little bit about Managing People Unit 4 with you. We'll be going over the learning objectives, the topics, and we'll be pulling out some of the key points from the study guide and from this unit to talk a little bit more about. So let's get started. Now let's take a look at our course unit structure as our course managing people is divided into eight units. And in this video we will be addressing unit 4, Managing Human Capital. On this slide we'll talk about our learning objectives and learning objectives are very important because all of the test questions both in the practice and the final exam and all of the content actually in the unit is ultimately tied to these learning objectives. So let's take a look at them together. Explain how viewing people as part of the human capital of the firm adds value to the organization in terms of talent management and competitive advantage. The second learning objective is explain the forces such as technology, business processes, workflow, skills gaps, generational changes, and talent development that affect enterprise decision making in managing human resources. And our third learning objective is use ethical principles and employee rights such as trustworthiness and equal pay to fairly manage people and effectively execute corporate social responsibility. Let's now take a look at the list of topics that we'll be addressing. This slide here lists the vocabulary that we will be discussing throughout this video and also words that you should know and be comfortable with to get yourself ready for the practice exam. Our topics for this unit include some reasons why we should invest in human capital and we'll also define what human capital is. We'll talk a bit about talent acquisition. So in other words, how do you get people that are talented? How do you hire them? We'll also talk about how you develop the talent or the human resources that that you've hired. We'll talk a little bit about succession planning and some of the forces that affect human capital and then we'll also address ethics. So let's take a look at our first topic which is human capital. Human capital is critical in just about every organization if not every organization. That's because even though we have a lot of technology available to us, it requires people ultimately to manage that technology and manage other aspects of our business. So we spend a lot of time in this unit talking about human capital and how to manage human capital because they're really a key cornerstone to the success of just about any organization. So when we talk about human capital, we talk about how do we acquire talented people, so how do we attract and retain people that are valuable and can add value to our organization and how do we develop those individuals once we've hired them, and then how can we do some things to plan for turnover and how can we limit the turnover within our organizations by developing people and hiring the right people to begin with. So that's ultimately what human capital is and what we're focused on in terms of this unit. The information presented on this slide focuses on some of the reasons why companies should and do invest in human capital. So let's take a look at some of those together. So when we invest in human capital as an organization, we do tend to see an increase in productivity and that results in more profit and more output. So increasing in productivity, of course, saves a lot of money on costs when people are more productive. So we want to ensure that we make those investments in human capital so that we can get that additional productivity, which eventually results in profitability. Also, we see that we have better attitudes by the people that work for us and that of course contributes to the bottom line as well. We see a decrease of costs related to absenteeism and turnover. Absenteeism refers to an unplanned absence of someone, whereas turnover refers to the loss of an employee, which is very costly when you have a high turnover in an organization or in other words when employees leave frequently. This is a very big cost because now you have to go back to the drawing board and hire someone else. Once you've hired them and spent all of the time and money doing that, then you have to spend time and money training them and developing them and getting them ready to be productive. So when we invest in human capital, we see a decrease in both absenteeism and the turnover that we were just talking about and that can save a lot of money in the long run. We also look at reducing the time necessary for introduction of new technologies. So when we invest in human capital, which could be training of a new technology, for example, we're then better able and better prepared for them to be up and running and more productive more quickly. And of course, that's an advantage to the organization. Also, when we invest in human capital, we're ensuring that the people that work for us, we're using and leveraging their skills and their abilities to the highest potential. So oftentimes if someone is in a job that doesn't make sense for them, for example, or we haven't invested in training them properly, then we're not taking advantage of their full potential and their full range of skills that they can use to contribute to our organization. As we talked about already, there's also a decrease in absenteeism, which of course when an employee has an unplanned absence that costs the company money in terms of productivity. So we see that as a big advantage. We also see more creativity in our organization, which means that we see greater creativity and the ability to solve problems that the organization may face. We also see people use equipment, systems, work processes a lot better, which saves money in the long run. We see our employees become much higher performing. And then also we see an increase in the quality of production and services. So that could mean, for example, we see if we're working in a manufacturing firm, we see that the actual product that is produced is of higher quality. But also if we're in service businesses, we see that our customers are better taken care of when we've invested in human capital. So those are the reasons why we should consider doing that. And in the next few slides, we'll address some of the ways that we can do that. There are several things that we want to consider when we look at how we can measure our investment in human capital. So when we look at indicators of efficiency of investment in human capital, we can look at the investments that we've made and the rate of development and investment that we've made in education. So that might be how much we've spent on training programs per employee, for example. So when we really want to measure that type of investment, we want to look at the actual expenditure that we've undergone in order to invest in that type of human capital and specifically as it relates to the employee development aspect. If we want to measure the loss of human capital, we can look at people that have retired and maybe they retired early. We can look at the turnover numbers that we have. And that can be a really good indicator of whether we're investing enough in human capital or not. Next, we can look at the effectiveness of our human capital. There are a number of metrics we can use here. The cost of staff, the sales per employee, the profit per employee are all ways that we can look at how well we're investing in our human capital. And then we can also look at the value that our human capital brings to the organization. And we can do that also similar to the last one, profit per employee. We can look at the rewards that we give to our top managers and to our first line supervisors. So when we're thinking about developing human capital, we definitely want to provide metrics as it relates to that human capital so that we know exactly how in financial or number terms, how our investments are paying off. That's really important. A lot of companies will just all of a sudden start developing training programs, for example, that really doesn't help with the production or efficiency or really development of human capital. So we want to put those measures into place before we put human capital development programs in place so that we can better measure and understand if we're meeting our goals around the development of human capital. As we consider developing programs around human capital, there are a few things and a few forces that we want to consider as part of this process, as we look at development and the types of development of human capital that we want to do. Of course, virtual workplaces, remote work definitely impacts how they work. So that would definitely be a consideration. The fact that organizations change rapidly in part due to technology, that can be a force that impacts our human capital or our employees that work for us. Generational gaps or generations in general can also impact human capital in that we have people from a large variety of age ranges in the workforce right now. They all have a different set of needs and wants based on events that happened in their formative years. So we want to consider how generational our workforce is and make sure that we're providing human capital development opportunities to really meet the desires and the needs of each generation, which of course are very different. There's a lot more focus on work-life balance, so we want to consider that. Many people feel like they need to check email, for example, seven days a week in case their boss has emailed them. So this is a big force and there are a lot of things that we can do to encourage a work-life balance so people don't feel like they have to be checking email when really they should be off work. And then also another force is the fact that businesses are more focused on succession planning as part of development. So succession planning is when an organization has plans in place that are set to when someone leaves an upper-level management position, they have people trained and ready to eventually take on that position. So of course there are two benefits to that. One of the big benefits to succession planning is that it can provide a clear path to promotion, which is very advantageous to individual, but it's also advantageous to the organization because you've identified these individuals that could take on these management positions and as a result of that you have people that are prepared and ready to go, so there's not a lot of time in between an upper-level manager leaving and before you can replace them. So succession planning is definitely something that impacts human capital as well and can impact it in a positive way as long as we're ensuring that we're developing people to take on those roles as people leave. We are now going to turn our attention to the idea of ethics and we talked about ethics in this unit because most people want to work for an ethical and socially responsible company. So because of that we invest in human capital simply by being ethical and making sure that our organization does the right thing. So we first start with that topic in terms of making sure that we have ethical leaders. We want leaders and managers in the organization that really model the behavior, the ethical behavior that we expect from our employees and we also want to make sure in order to be ethical and legal in some cases is that we ensure that the work environment and the working conditions for individuals are safe. So in the United States we have OSHA which focuses on rules for workplace safety and I'm sure if you don't live in the United States your country probably has something similar that really enforces and sets the standards for creation of a safe work environment for everybody and this may involve how chemicals should be handled within the organization and how accidents should be reported and that type of thing. So in order to be ethical we want to make sure that we have a safe workplace, not just physical safety as we've already discussed but also emotional safety too where people from diverse backgrounds feel like have a say and that they're hired fairly. So in the United States we have a lot of laws around that and in your country there are probably a lot of laws that revolve around being ethical in terms of hiring and promoting people and paying people within our organization. So we may in the United States we do have laws that focus race, gender and religion and makes it illegal for harassment to occur based on any of those elements. We also here in the United States have ADA which is the Americans with Disabilities Act and this act essentially focuses on offering equal access whether or not someone has a disability so if someone for example can't hear well it's up to us as an organization to be legal and ethical and ultimately make sure that we're providing the tools necessary for that person with a disability to be able to work for us. Also the United States had a DEA which stands for Age Discrimination and Employment Act and this of course means that you can't discriminate based on age and it encourages organizations to hire older workers and retain those older workers. Finally when we look at an ethical and legal work environment we look at sexual harassment and really any type of harassment as we discussed just a minute or so ago. So avoiding any type of harassment creates a work environment that makes people be able to work at their best and show their best productivity. So these are all really important when you look at an ethical and a socially responsible work environment. In the last slide we talked a little bit about ethics and social responsibility and I think it's important here to mention the difference between the three terms that we have listed here just to ensure that as a manager and as a work environment that you're being fair to everyone and offering everyone chances to be successful at your organization. So these three terms can be detrimental to that role. Let's first talk about stereotypes. Stereotypes are general cognitive thoughts that we have about a specific group of people with certain characteristics and the challenge with this is that it's overgyzed. So when we have a stereotype about someone and their particular group and we meet them in our mind we have this preconceived notion of who they are and how they are which of course isn't going to be correct because everybody's different whether or not they are of the same race or of the same gender. So we want to make sure that we try to limit the amount of stereotypes that we have although it is natural to have stereotypes we definitely don't want that to turn into prejudice which is our next term. Prejudiced is the negative feelings about people from a group but it can also be positives. So these feelings then can result in how we treat others who we decide we want to hire and who we decide we want to. So our stereotypes can sometimes turn into prejudice which of course again are detrimental to an organization. Now when we look at those two stereotypes and prejudice and nation discrimination is our actual behavior acting on the stereotypes and the prejudice that we all have. So when we act on these like for example not hiring someone of a certain gender that is potentially illegal depending on where you live but also of course it's unethical and doesn't create the environment that you want to create within your organization because then it creates an organization and a culture that is that is negative and where everyone is essentially the same and we know that and this comes from research we know that individuals that companies that have diverse individuals are generally more successful because they have a great idea is a pool of ideas and creativity that they could ultimately pull from. So what I'd like you to take away from this slide is the idea people have stereotypes prejudice and a lot of times those will turn into discrimination which again is illegal and most place but also definitely negative for organizations. Now to go ahead and conclude unit four let's tie back what you learned to our learning objectives. The first thing you learned is how viewing people as part of the human capital of the firm can add value to the organization and this adds value in terms of talent management and it does create a competitive advantage for organizations. We also talked about the different forces that affect decision-making when we manage human resources within our organizations and finally we discuss the use of ethical principles such as being trustworthy having equal pay and being fair as mayors to show our responsibility within organizations. Let's take a look now at what's next to prepare you for the practice exam. I definitely recommend that you do another review of the material maybe especially some of the material that you had some challenges with. Once you review that material you should be all set to take the practice exam and I wish you the best of luck on that.