Human capital is the sum of employee's skills, competencies, talents, creativity and know-how. Within each employee is the knowledge the organization seeks to utilize. This human capital can be acquired through a variety of means—formal education, life experiences, job training, and on-the-job learning—to name just a few. Employees bring their human capital to the job and in return the organization invests in them through pay, benefits, intrinsic job satisfaction, rewards and recognition for good performance and provide a learning environment to help the employee advance professionally. Employees aren't simply a cost of doing business. They are the business. Leading organizations look at their employees not as liabilities but as assets. Employees determine the success of everything an organization does—from servicing customers to running an efficient supply chain. Placing the right people with the right skills in the right positions will culminate into a knowledgeable and committed workforce. H capital management is necessary to ensure that human resources are effectively utilized and they support the vision and mission of the organization.

The essence of Human Capital Management (HCM) is "Investment in Growth" which is a proactive approach as opposed to the traditional organizational approach of "Investment for Growth" which is a reactive response. The former is focused on developing capabilities and managing change that will service growth requirements while the latter believes in developing capabilities based on the plans and strategies prioritized and formulized for growth. This is usually in line with the requirements essential to meet the emerging and dynamic changes that take place. The organization requires a missionary zeal in pursuing `capabilities development' as a cause to renew and sustain growth continuously. HCM does not require a quick ROI for tactical planning. HCM will bring about a continued enterprise performance where the present and the future are equally important.

"Managing the complex processes of building and sustaining a competitive workforce will become just as important as managing financial capital. With employee costs often exceeding 40% of corporate expense (even higher in professional services firms), it is essential that companies maximize their return on human capital investment", says Craig Symons, Giga Information Group. The most critical vignette of information that needs to be contextualized against the above quote is that both—financial and human capital have to plan for growth and mutually serve each other. However, there is danger if the human element of an enterprise strategy is viewed as `cost' and not `asset'. This article emphasizes the process of HCM that should be adopted to enhance performance.

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