UNIVERSITY OF LA VERNE
La Verne, California
HUMAN CAPITAL MANAGEMENT: SAILOR 2025
A Paper Submitted in Partial Fulfillment
of the Requirements for
MGMT 529 Seminar in Human Resources Management
College of Business and Public Management
Department of Management and Leadership
October 13, 2019
HUMAN CAPITAL MANAGEMENT: SAILOR 2025
Sailor 2025 is a new Navy program put into place in order to improve and modernize personnel management and training systems to more effectively recruit, develop, manage, reward, and retain the force of tomorrow. Before a deeper dive into the Navys new program can be reviewed, a basic understanding in terminology on how this is being done should be offered. This can be accomplished via a discussion of the concept of Human Capital Management that will be discussed later on. In a future paper, Sailor 2025 will be discussed.
A company that want to survive and succeed must have a competitive advantage. Competitive advantage also accrues to companies that possess distinctive capabilities or excellence in broader business process. Its organizational strategy should be focused on getting the advantages that can be used to compete and at the same time, the benefits of which have been owned by the company may be obsolete because of its inter-company competition is always dynamic and not static (Sujata & Agrawal, 2012). Competitive advantages possessed must always be adjusted to the level of competition and progress faced as the passage of time, the benefits that may be outdated. With an important competitive advantage, a company can survive or even grow bigger become more profitable. Therefore, the company have to be careful to determine its competitive advantage and become the company’s main priority on creating a strategy that can win the organization from competitors
This competitive advantage can be obtained from various resources such as the efficient use of the companys financial resources / financial capital and should create a high rate of return, the land resources (or means as a strategic locations), and human resources with competencies that possess superior knowledge (Sujata & Agrawal, 2012). This would be Human Capital Management.
Human Capital Management is the driving force of a business because its the backbone of the company. Having a well-oiled machine (employees), you can have a good company. The term Human Capital Management can also refer both to a business strategy and a set of modern IT applications and other technologies that are used to implement that strategy. Though sometimes used interchangeably, the terms Human Resources, Human Resource Management System, and Human Resource Information System do have subtle distinctions and will be defined later on.
Defining Human Capital Management
To understand Human Capital Management better (which includes workforce rewards and talent and workforce management, defined later in the paper), it must be broken up into three different sections and defined. Those sections needing to be further defined are Capital, Human Capital, and Human Capital Management. Capital is all the economic resources invested in a business unit to enable it to operate and create economic value (Sujata & Agrawal, 2012). A good example of Capital is a new restaurant owner does so well, he or she opens another restaurant with what they have gain and the second restaurant continues to make money, that is Capital. Without capital, there would be no income for the business. It thus follows that without income for the business, there would be no business.
The term Human Capital originated from Theodore Schultz in 1961. In defining the term Human Capital, Theodore Schultz considered this to be made up of all human abilities to be either innate or acquired with attributes that are valuable and can be augmented by appropriate investment (Fitz-Enz, 2009). In 1993, Theodore Schultz defined Human Capital as, a key element in improving a firms assets and employees in order to increase productivity as well as sustain competitive advantage (Sujata & Agrawal, 2012, p. 65). To understand this in business terms, per Fitz-Enz (2009, xviii), Human Capital is a combination of the following factors: the innate traits one brings to the job such as intelligence, energy, a generally positive attitude, reliability, and commitment. Additionally, there are ones ability to learn, aptitude, imagination, creativity, and what is often called street smarts, and savvy (or how to get things done), or, ones ability to acquire skills. Finally, ones motivation to share information and knowledge, team spirit, and goal orientation are other traits and interpersonal skills that are key factors in determining an employees human capital.
To have a successful business, two things must happen, a company must have good employees (human capital) in order to increase productivity and the company must also be able to sustain a competitive advantage. By having well trained and motivated employees allows the company to prosper and therefore, sustain a competitive advantage by having good quality products. Additionally, for a business to prosper, it must return on its capital investment in excess of the cost of capital (Sujata & Agrawal, 2012). Finally, Human Capital Management is the recruiting, managing, assessing, developing and maintaining of an organization, and maintaining the most important resource within business, the people (employees) (Sujata & Agrawal, 2012). Take care of the people, take care of the business.
Other terms that coincide with Human Capital Management retrieved from Oracle (2019) are the following terminology that should be known: Human Resources, Talent Management, Workforce Rewards, and Workforce Management. Human Resources refers to a set of traditional employee management functions that includes hiring, job and position management, global Human Resource compliance, and reporting. Talent management refers to and looks at the strategic management of talent throughout the talent lifecycle. It includes sourcing and recruiting candidates, goal and performance management, learning and career development, talent review, and succession management. Workforce rewards refers to all Human Resource functions that manage any monetary or nonmonetary rewards including compensation, benefits, or payroll. Workforce management involves all Human Resource functions that are related to positive and negative time management including time and labor and absence management.
In Fitz-Enz (2009), Peter Senge states, For the first time in history, humankind has the capacity to create far more information than anyone can absorb, to foster far greater interdependency than anyone can manage, and to accelerate change for faster than anyones ability to keep pace (p.5). This is why having the right information technology resources to handle the everyday changing of information is so important. If a company doesnt have the ability to properly support their Human Resource team or the ability to maintain their employee personnel records, then that company will fall. This is why Human Capital Management is such a revolutionary method because of all the information systems needed to run a successful operation.
As such, Information Technology is another significant part of Human capital Management. Some of the technology mentioned earlier were Human Resource Management System and Human Resource Information System. Human Resource Management System is a set of applications and other technologies that support and automate HR processes throughout the employee lifecycle. Human Resource Information System was originally referred to as keeping administrative employee records. It has since been largely replaced by the term Human Resource Management System.
Another important process within a business is their organizational culture. Organizational culture can define a companys internal and external identity (Crews & Richard, 2013). The culture can be a reflection or a betrayal based on a companys core values. The ways in which you conduct business, manage workflow, interact as a team, and treat your customers all add up to an experience that should represent who you are as an organization and how you believe a company should be run. Additionally, while the human resource department is not solely responsible for the creation or modification of an organizations culture, it would be beneficial for them to have a seat at the strategy table to create or change the existing culture. Culture affects service and quality, organizational productivity, and financial results (Crews & Richard, 2013).
Per the syllabus, this paper was one of four. In the next paper, a deeper dive into the Navys Sailor 2025 program and what is happening within the organization and its relation to valuing Human Capital or implementing Human Capital Management strategies will be conducted. Additionally, what the organization is doing to value human capital to generate a competitive advantage in Human Capital Management and Human Resources and how the Navy is implementing its Human Capital strategies will be explained.
Crews, D., & Richard, S. (2013). Aligning Culture with Human Resource Strategies.
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Fitz-Enz, J. (2009). The ROI of Human Capital: Measuring the Economic Value of Employee
Performance (2nd ed.). New York: AMACOM.
Oracle. (2019). What Is Human Capital Management? Retrieved October 11, 2019, from
Sujata, P. D., & Agrawal, V. (2012). Role of Human Capital Management in Economic Value
Addition of Large Scale Organizations. International Journal of Financial Management,
2(1), 45-54. Retrieved from