1. Why do senior managers often fail to realize the value of human assets vis-à-vis other assets?
Answer:
Senior managers often fail to realize the value of human assets due to perceiving employees as replaceable and not valuable. In some situations, the senior managers are more concerned about their financial, physical, market, and operational assets, rather than their human assets. Some senior management also fail to recognize that HRM and human capital is a strategic asset, and affect the company’s bottom line.
Human capital is perhaps the most valuable asset of any organization today. Because there are different levels of measurement, some organizations may find that human assets are too difficult to measure. “Human assets is often ignored from consideration when organizations are facing economic and financial challenges. The media and financial markets usually respond favorably when decision makers announce restructurings or right-sizing initiatives,
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It is important to define and acknowledge the value of human capital, find ways to accurately measure it, and to make ensure the investment of human capital. Some organizations that fail to invest heavily in human assets will still be financially successful because they have a product that will sell no matter what, or they were lucky with their marketing strategies. It is quite possible that they only have a few employees, and those few may be what is ensuring the success and financial stability of the organization. Other organizations that do invest heavily in human assets may be financially unsuccessful because humans are unpredictable and there is no guarantee that because you invest, that there will be a return. This is why it is important to calculate the value of employees; they are the biggest asset, yet also the biggest