How finance can help build a leadership infrastructure

How finance can help build a leadership infrastructure

How finance can help build a leadership infrastructure

Abrams M.N., Ott B. Financial Executive (USA), May 2007, Vol. 23 No. 4, Start page: 36, No. of pages: 4

Purpose – To discuss how finance leaders can help human resources (HR) to monitor and manage human capital. Design/methodology/approach – Points out that although most organizations spend more on human capital than anything else, most management reports concentrate on other capital and expenses. Urges finance executives to apply their disciplined, strategic approach to managing HR, e.g. by assessing organizational practices regularly to identify management practices which jeopardize staff retention, diversity management issues etc. as part of risk management. Explains the advantages of building a leadership infrastructure which defines the competences required in key roles and evaluates those of the role holders; and argues that finance may have a clearer view of people resource gaps than HR. Illustrates and discusses the steps needed to create this infrastructure and its components; and describes how it supports the organization’s strategic goals, training and development programs, recruitment, performance management etc. Originality/value – Shows how strategic finance techniques can be applied to HR. ISSN: 0895-4186 Reference: 36AN412

Keywords: Human capital theory, Human resource management, Competences, Risk management, Strategic evaluation