International
Medical University (IMU) considering their employees are their main assets. The
employees which falls in human capital play major role in organization
development. Therefore, IMU value its employee base on following criteria;
- Education level
- Year of experience
- Performance rate
Each
of the employee is an assets for the organization. The value for their assets
base on the salaries given to them. The organization will continually accessing
the value of employee by measuring their performance rate. On the other hand,
the organization drive the employee’s knowledge and skills to meet an
organization’s goals.
IMU
consider employee’s knowledge and skills as an assets and measuring it into
number and summarize it from level 1 to level 6. All the measurement will be
done using Performance Review spreadsheet which will be given to employee every
year. Each of the employee goals need to match organization’s goal and create a
value to organization. Following are the component that will include in
employee’s performance review:
- Individual goals that aligned
with the organization’s goal.
- Individual competencies
level in working.
The
accounting method that applied by organization is 30% for individual goals and
70% for individual competencies. Organization give more priority for individual
competencies in order to create an environment where all their employees share
their knowledge and skills and work as a team to create a value to organization.
Value creation
and value extraction activity
How
does the organization get a value from intellectual capital is depends on how
they extract the value from it. Value creation is generate from the human’s
brain. Organization need to well-planned and well-execute set of management
initiative to convert their knowledge and skills into value.
The
value creation activity is a performance of action that generate intellectual
property or assets. For example, we as an instructional designer train the
lecturer to use software application to create an interactive lecture slide for
students. The figure below shows how the value has been generate from above
scenario.
Figure 2: Value creation and value extraction process
Value
extraction means how to utilise someone’s knowledge, skills, and ideas to
benefit the organization and generate the profit. Following are the value that
can extracting from intellectual capital:
- Profit
- Strategic Positioning
- Acquiring the innovation to
others
- Customer loyalty
- Cost reduction
- Improved productivity
Value
creation activities is employees development planning. This can be done by
providing or attending workshop, seminar, or conference that will improve their
skills and knowledge. Some organization funding their employees to continue
their studies to higher level with some bonding to generate value for
organization. On the other hand, organization also creating working environment
and culture that give comfort ability to employee to produce and share good
ideas among the cliques and higher people. For example the group chatting,
cubicle setting, internal email system.
One
of the common value extraction activities is providing projects for employee.
Employee will be rate according to their achievement on their projects that
benefit the organization. Writing journals and conducting training to others
also activities for value extraction. Value extraction activities is anything
that generate value from human capital such as profit from product and cost
reduction from strategic planning.
Value creation
and Value extraction activities in my organization
Major
types of value creation activities that can implement at IMU is in-house
training. Rather than sending large number of employee to same training,
organization can send few selected employees to related training and they train
others in organization. This activities not only creating value, but also
extracting value from those who already went to training. By doing this,
organization cost for training purposes can be utilised more effectively.
Another
value creation activity is to create environment and culture that allowed
employee interact and share their ideas. The good relationship and
communication among other employee from different department can open the room
for them to shares their knowledge. Organization activities such as festival
party and company trip create a platform among employee to mingle and get to
know each other area of interest.
Rather
than providing training and creating a good environment, organization can
manage their intellectual capital by giving good benefit. For example, by
giving good yearly increment, bonus and recognition, employee less changing
their job. The employee knowledge and experience is an assets for the
organization.
The
role for value extraction activities in IMU is given to department’s manager.
The department manager will give the projects to employee under them base on
their skills and measure their achievement during performance review process.
Another
major activities that can applied for value extraction is portfolio creation.
Each employee cam create their own portfolio with all their works and share
with public or own department. By putting all their works into portfolio,
management can value their skills and keep their intervention in a document
format. The employees portfolio also an intellectual assets to an organization.
