Incentive Systems of Human Capital- Labor Market Challenge

8/14/2019 Incentive Systems of Human Capital- Labor Market Challenge

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PhD Ilirjan Lipi, University Ismail Qemali of

VloraMsC (student) Rudina Lipi, Crystal University,

Branch Fier


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You get more of the behavior you reward. You don't get whatyou hope for, ask for, wish for or beg for. You get what youreward.

Human capital is an important part of the organization and caneffect with import impact over the productivity and theirresults.

Human capabilities will determine the winners and losers in

tomorrows global markets. For most organizations today,people are the major source of value. In order to maximize the organization impact of any key asset,

it is necessary to understand its contribution and how it is builtand deployed over time. For tangible assets, such as buildingsand money, the value is easily shown in the balance sheet and

can be monitored over time. However, much of theorganizations share value is made up of intangible assetsincluding the value of peoples potential and actualcontribution. This value can be described as human capital,human resources, and human assets or simply as talent.

23/06/09 2PhD Ilirjan Lipi MsC (student) Rudina Lipi


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An intangible asset at organization re-categorize in different groups,one of them is the intellectual capital, and like element of this group

appear the human capital. These classification have the purpose toemphasize the activities and intangible assets hereby theorganization can produce excellent result and generate competitiveadvantages.

In the organization, human capital together with the organization andrelationship capital, effects the financial results of the company andaffect the advanced value.

In relational capital begin from the rapports with the clients, suppliersand other subjects external like Universities and researches center.The elements of relational capital are: image, reputation andsatisfaction. In the Organization Capital are included: complexprocedure, instruction, organization model, instruments ofcommunication and elements that consists in the individual and

organization sphere. Element of Human Capital are: the product ofknowledge, values and competence of different persons.



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Human Capital, an important part of assets of thecompany.


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The relation between human capital and the performance inthe organization has been analyzed for the fist time at 80.

The importance and the impact to manage of the knowledgeof the human capital has grown up and different countries

have begin to make and publish guide how to helpenterprises like Denmark, Germany. An interesting example to show up the value of human capital

will be the university, the staff and the name formed from thework of these staff.



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The equation is very simple, equal with the value of one build

plus the materials that stand there. May be this is not a little, butthis is more than a little if we add intellectual capital. Humanresources, like other resources, are finite. What makes themespecially unique, however, is that they are intangible. Humancapital can be developed and cultivated, but it can also decide toleave the organization, become sick, disheartened, and eveninfluence others to behave in a way that may not be to theadvantage of an employer, thus usurping or siphoning offresources intended for use elsewhere in the organization. Inother words, the performance of an organizations human capitalis not always predictable and/or within the control of theemployer. So, the measurement and the management of humancapital becomes part art and part science.



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Senior management requires a reference index, therefore, for valuing humancapital within the organization. With the right tools and context, managementwill be in an enhanced position to make decisions that will drive how this

resource, along with other finite financial, product, and customer resourcescan best be allocated.

Are identified three levels at which organizations can measure human capital,or capabilities:

Level 1: Basic Measures. Concerned with headcount, salaries, staffturnover, recruitment costs or training days, these measures tend to relate tocosts associated with people. Although they are relatively easy to obtain and

compare with other organizations, they are much less useful than Level 2 or3 measures.

Level 2: Strategic Capabilities.These measures aim to assess the valueof human capital and how it changes over time. For example, staff turnoversplit by high and low value capabilities. High and low value capabilities couldbe identified, in a simple way, by appraisal or performance rating and/or bythe value of the role. So, for example, 20% turnover of low rated personnel

combined with a 1% turnover of the best might be a cause of celebration,even if the overall rate was therefore higher than average.

Level 3: Differentiating Capabilities.These measures focus on thosecapabilities, which will add sustainable competitive advantage to theorganization. Any organization operates in a unique competitive situation. Inorder to achieve its goals, it must develop and build new capabilities, whichare rare, valuable and difficult to copy. Human capabilities fulfill these

requirements as they arise within unique organizational cultures.23/06/09 7PhD Ilirjan Lipi MsC (student) Rudina Lipi


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Human Capital, an important part of assets of the company.


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Human capital in organization, keeping in consideration development

potential and performance(two dimension of the above matrix), take oneposition of week branches, horses, problematic or stars. Manage of knowledge of human capital effect not only the planning of work

position of the employees in the organization but also the perspective ofdifferent ways of treatment of human capital. If human capital occurs aweek branches position, it can be the result of the nomination of one wrongrole (re-nomination role) and if not it must be removed from the

organization. One horses or problematic position is discomfort and is duty of management

to think about the training, orientation of the employees at work becausethey have deficiencies at knowledge for not being updated with the latestdevelopment. In problematic position is needed a strong discipline for thestaff at organization, in way that it can serve in the realization of the maingoals.

Stars position is the most favor position for the human capital at theorganization. The management must be focused in: Keeping the stars position in the organization.

Application of theories like Long Live Learning for Stars to learn how to be and stay Stars (thisemployees typology appear in high technology Company like Nokia, Google).



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When planning for a year, plant corn. When planning for a decade,plant trees. When planning for life, train and educate people.

All learning activity undertaken throughout life, with the aim ofimproving knowledge, skills and competences within a personal,civic, social and/or employment-related perspective.

In addition to the emphasis it places on learning from pre-schoolto postretirement, lifelong learning should encompass the wholespectrum of formal, no formal and informal learning. Theconsultation also highlighted the objectives of learning, includingactive citizenship, personal fulfillment and social inclusion, as wellas employment-related aspects. The principles which underpin

lifelong learning and guide its effective implementation emphasizethe centrality of the learner, the importance of equal opportunitiesand the quality and relevance of learning opportunities.

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Long Live learning their impact in stars attitudes.

PhD Ilirjan Lipi MsC (student) Rudina Lipi


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These proposals principally contribute to or involve creating a

learning culture, facilitating access to learning opportunitiesandstriving for excellence. Creating a culture of learning requires that the question of how to

value learning in formal, non-formal and informal settings, must beaddressed in a coherent way.

Enabling citizens to combine and build on learning from school,universities, training bodies, work, leisure time and family activities

presupposes that all forms of learning can be identified, assessed andrecognized.

A comprehensive new approach to valuing learning is needed to buildbridges between different learning contexts and learning forms, andto facilitate access to individual pathways of learning.

All contributions to the consultation stressed that progress in this

field, particularly in relation to no formal and informal learning, will bea crucial step towards a European area of lifelong learning, buildingon the existing right of free movement within the European Union andmaking the concept of citizenship more concrete.



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Substantial work has already been done at national and Europeanlevel to facilitate the transfer and mutual recognition of formal

qualifications. For example, the Council and the European Parliamenthave adopted a Recommendation on mobility for students, personsundergoing training, teachers and trainers, and Member States haveagreed to an action plan.

In addition, a set of Directives has been produced, designed toguarantee the recognition of qualifications to ensure access toregulated professions in different Member States. This has not,

however, led to a comprehensive framework supporting the overalltransfer of qualifications and competences, either between levels offormal education and training or across institutional, sectional andnational borders. It is essential that learning providers, employers andsocial partners are involved in the development of instruments forvaluing learning, and that all those involved, including individualusers, find methodologies and systems valid, reliable and legitimate.Instruments should also be introduced to help citizens young peopleas well as adults present their qualifications and competencesanywhere in Europe in a transparent manner

Education, therefore, is a process of living and not a preparationfor future living. (John Dewey)

http://www.wisdomquotes.com/001260.htmlhttp://www.wisdomquotes.com/001260.html


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These proposals principally contribute to or involve: insight intodemand for learning, creating a learning cultureand facilitating

access to learning opportunities. The European Councils in Lisbon and Stockholm underlined the

importance of improving basic skills through adequate educationand lifelong learning policies.

Basic skills include the foundation skills of reading, writing andmathematics, as well as learning to learn and the new skills set

out at Lisbon IT skills, foreign languages, technological culture,entrepreneurship, social skills.

The consultation feedback underlined the fundamental importanceof basic skills acquisition in allowing people to engage in furtherlearning and as a basis for personal fulfillment, active citizenshipand employability, particularly given the demands of the

developing knowledge-based society. The foundations for lifelong learning must be provided byGovernments through compulsory schooling, but adults who leftschool with ongoing literacy, numeric and other basic skills needsshould also be encouraged to participate in compensatorylearning.



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These proposals contribute to or involve: insight into demand forlearning partnership working and striving for excellence. Theconsultation feedback emphasizes a shift from knowledge tocompetence and from teaching to learning, placing the learner atthe centre. Such a shift implies that as early as the pre-primarystage people learn how to learn.

Learners should, as far as possible, actively seek to acquire anddevelop knowledge and competences. Different methods arecalled for depending on the situation of the learner, the learningfacilitator and the setting (e.g. community centers, workplace, andthe home).

Work-based learning, project-oriented learning and learningorganized as study circles are particularly useful approaches.New teaching and learning methods challenge the traditional rolesand responsibilities of teachers, trainers and other learningfacilitators.



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These proposals contribute to or involve: insight into demand forlearningThere is, therefore, a strong need to develop theirtraining, including in multi-cultural competences, to ensure thatthey are ready and motivated to face the new challenges, andtherefore to promote tolerance and democratic values. Thisshould also include further reforming and improving pedagogical

approaches in formal, as well as non-formal learning. The exchange of experience between schools, adult education and

voluntary organizations, ethnic minority centers, universities andcompanies should provide insight into learning needs in this area.Higher education, and research institutions, for example, shouldintroduce or increase research and training in the field of lifelonglearning.

All contributions recognize that ICT supported learning offers greatpotential for rethinking and redesigning learning processes, whilstalso recognizing the risk of new technology creating a digitaldivide



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The learning initiative and the learning Action Plan address anumber of important issues in this area, in the context ofcoordinating Member States efforts to adapt education and

training systems to the information society. Many reports stress that ICT based learning should be combined

with other, more social modes of learning (e.g. learning groups,family learning, tutoring or collaborative learning at work) andregular individual and technical support services.

In a rapidly growing market, quality and relevance of learningmaterial, services and learning processes is important, particularlyin terms of consumer protection, motivation and effective use ofresources.



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Brain drain terminology is used from the 1950, symbolizing the lost ofqualification human recourse that could have been more productive forthe economy of their country.The phenomena brain drain categorizes the remove of the brain fromone county toward other development country. In this way is prohibitedand slow down re-generations of economic of countries and also theirconstant economic development.In Albania is discussed a lot for the platform brain gain to gain the brainabroad.The latest development that stands this theory is the strategy of brainrotation or brain circulation. Sample that illustrate this are Albanianuniversities, where equipment with staff of the star category issomething difficult. Normally rise up the question: where can theuniversities found stars, especially those who have a few years that areshown up? Via agreement between universities stars rotate and can

serve to different universities..



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Positive effects of rotation of the brain are:

Stars are not contingent to remove abroad, controlling this waythe exit of brain.

Social effect. The individual revenue of stars gained working willbe increased if they work more.

Quality Effect. Stars will be more stimulated to stay stars,

because in this way their revenue will be increased.Self-realization. Serving some universities stars perfection andrealized completely, becoming this way more motivate to work.

Experience of Stars. Stars in Albania have the Albanian andforeign experience, but those that came from abroad have onlythe foreign one. In this way Stars that came back have the need

to be adapted and to work in groups together with country stars(home talents), to avoid willingness and sporadic mistakes thatcan bring their removal like the fist effect.



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The universities in Albania must give their contribute in thebraking of the phenomena of the removing brain towardscomposition of the quality projects of brain gain.

The Albanian government is propaganda a theory like this. This ispositive, but must be careful, because from one ambitious projectcan be conclude only in one good speech, letting behind themission of the project. Today, there are a lot of Albanianprofessor, who are abroad and have a lot of query for the projectbrain gainshowing doubt in it.

The impact of the theory Brain gain above Long Life Learning isvery essential, because it emphasize the importance of keeping

the stars in the organization and the reverse of those gone. In relation with these theories, their impact and their

implementations we must be careful about the down cases:



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In relation with these theories, their impact and theirimplementations we must be careful about the down cases:

Must be analyzing the phenomena why people go abroad: badwork conditions, wage system unlike, low estimate at work place,infrastructure deficit in reversing the brain back, deficit ininformation for the country institution.

Albanian reality: that this theory to be successful is needed thatcountry stars must be happy with their work and have nointention to move abroad.

Before we take a decision to come back in Albania we must lookthe Albanian ambience and the elements so we can be adaptedand performed at the best way in the moment that we will be part

of this reality. The promotion of the returned from abroad or their marketing. Is

absolutely needed a marketing program for their integrity, but weneed a lot of caution not to violate the human value of the countrythat has resist in time.



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In organization is important to valuate the existing talentsand also to valuate the predisposition to absorb new

talents. Talents that exist in the organization are recommended to

be oriented direct stars position. In this way both will bewin, the organization and the talents. The creation of apositive culture towards existing talents in the organization,

will make it turn in the promise land and will make it veryattractive for her abroad talents.



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Design of the effective system of motivation and stimulation ofthe talents will covert them in a big competitor advantage forthe organization. Is very important not only the wage systemof the talents, but also it must be based in the Principe andobjectives of the organization the valuation and the care forthe talents. In country where the competition is consoled warfor talents is war for the future of the organization. Indevelopment country like Albania, at the begins wasntunderstand war for talents, seem like something abstract.But in those industries where the competition was grown up,was grown up also the demand for talents for ex. In theeducation field, universities have increased the demand for

talents and training persons with grades and degrees becausethese effect in their accreditation and also in their differenceagainst the thirds. (Most likely from the clients or the public ingeneral and the competitors).



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Make your top managers rich and they will make you rich.

in Vietnam War the slogan of the USA army that was use tosimulate the solders was: alive or died, we must win the war.in

the II world war the slogan was to be back home, we must winthe war (management by objective).

The first slogan caused a lot of demotivation in the army, but inthe second cause the people where more motivate that the warshould be win, because was the only way to come back home.(the only dream of any solders in the army).

Robert H. Johnson



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Stimulation system of human capital.


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Hygiene factors together with motivates one effect in the happiness inthe work

position. Hygiene factors .Hygiene factors jointly with motivates oneeffect in thehappiness in the work position. Hygiene factors only reduce the

dissatisfaction inwork. People in the organization are motivated mostly by a group

factors like: jobdesign, achievements, learning, distinction, rationality.

The effects of satisfaction in work (presented in the illustration 3) bringbetter results

in the organization.Human competencies are dependent on: Tacit knowledge: tacit knowledge consists of what we absorb and

learn on the job without even realizing it. Explicit knowledge critical to an organization normally exists within

the context of structural knowledge, i.e., it is generally documentedand available in some form.

Core competencies generally refer to those competencies that areunique to the culture of a particular organization; as such, thesecompetencies are considered nontransferable and/or would differin order of importance from one organization to another.



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The acquisition of competencies and/or up-skilling enhances the

employability of an individual. Individuals who are highly skilledand/or who possess highly transferable competencies are not tiedto an organization. In a knowledge-based society, with scarcestrategic resources, competitive advantage will depend to a largeextent on the caliber of the people working for the organization.

Following are what some of the top HR strategic business partnersand their organizations are doing to build and maintain theirhuman capital investment:

1. Managements stance in relation to continuing education and on-the-job training for employees is the single most influential factor

in the success of workplace learning programs; the president/CEOholds the key in this regard, i.e., if the CEO is convinced that thereturn on investment (ROI) justifies the expense and stands firmlybehind a program, the rest of the management team will follow.



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2. Executives have long argued that superior people managementpractices will result in superior business profits.

The question remains, however, how do you go about measuring

progress?Thousands of texts, theories, articles, and working papers have beenput forward and

the best thought leaders of the past decade have offered their opinionson this

subject.The good news is that it appears that we are making progress. The

answer has to do,in part, with the universal acceptance of the language of numbers.This is a language

that can be readily understood across organizational and functionallines.



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The organizations objectives, fulfillment and their effective excess is the

main purpose in every organization and will be stimulated and welldirected if in the organization applied even the MOB approach. PeterDucker has treated the management through the objective in the 1950-s

This type of managing hasn't been around forever: It's an approach calledManagement by Objectives; a system that seeks to align employees' goalswith the goals of the organization. This ensures that everyone is clear about

what they should be doing, and how that is beneficial to the wholeorganization. It's quite easy to see why this type of managing makes sense- when the parts work in unison the whole works smoothly too. And byfocusing on what you're trying to achieve, you can quickly discriminatebetween tasks that must be completed, and those that are just a waste ofvaluable time.

Setting performance targets is a crucial exercise in the operation of anyincentive plan. If the probability of achieving some payment from the planis seen as too low, it will not motivate participants to change behaviors. Onthe other hand, goals that are set too low provide inadequate returns to theorganization and an entitlement expectation among employees, which maynot be reversible without damage to morale. The definition of precise

performance targets, triggers, performance periods and otheradministrative design elements requires data analysis and modeling with23/06/09 29PhD Ilirjan Lipi MsC (student) Rudina Lipi


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If you pick the right people and give them the opportunity to spreadtheir wingsand put compensation as a carrier behind ityou almost

don't have to manage them. Is recommend for the organization totake in considerate: Value and human capital contribution in the organization is an

important part of it. Universities as intelligence factories have to give their contribution

in approximation of human capital. Universities impact have to beorientated in this directions:

Giving their example related with knowing and values stimulation that descend fromhuman capital. Contributing in specialists preparation evidenced to them their humans capital in the

organization.

Their project for the application of Long Live Learnings , Brains Gain theory, Staremployees keeping , have to be example and stimulation of this approaches in otherorganizations.

We have to attend more importance to the incentive systems ofhuman capitals design, because only in this way we can keep stars

and the organization and only in this way we can recoup our loststars.

Incentive systems of human capital have to be design with clearelements and not forked estimation performance of organizationGive to Cesar what is Cesars

Intellectual capital is the present and the future of organization.



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Incentive Systems of Human Capital- Labor Market Challenge