Optimising human capital: measuring what really matters

Abstract

Purpose

Human capital strategies are frequently canvassed in corporate boardrooms and executive suites but are not effectively implemented. This paper aims to identify core measures that senior management can use to increase the effectiveness of their investment in their people and improve organisational performance.

Design/methodology/approach

An internationally researched framework for human capital capability is used as the basis of the paper. This is complemented by an international benchmarking initiative.

Findings

Five key practices that effective organisations use to enhance performance are identified and current human capital practices of 175 organisations are benchmarked against these critical core indicators.

Research limitations/implications

While the international benchmarking sample does not represent a large number of participants, the pilot project provides significant feedback and identifies areas in which the management of human capital can be enhanced. Scope for further research into the relationship between organisational investment in human capital, future earnings and stock market pricing.

Practical implications

The framework provides a basis for identifying areas for improving the relationship between an organisation's workforce investment and its overall business performance. It also facilitates the development of a road‐map for the human agenda that will have the greatest impact on the enterprise.

Originality/value

An international human capital framework that has been extensively researched and developed over a number of years in consultation with business leaders to assist senior corporate executives to increase the return on their investment in people and enhance corporate performance and profitability.

Citation

Pickett, L. (2005), "Optimising human capital: measuring what really matters", Industrial and Commercial Training, Vol. 37 No. 6, pp. 299-303. https://doi.org/10.1108/00197850510617578