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1 – 10 of over 98000Progress in human resources accounting must continue to find a clear constructive definition of terms pertaining to human capital and human assets. The present paper is comprised…
Abstract
Progress in human resources accounting must continue to find a clear constructive definition of terms pertaining to human capital and human assets. The present paper is comprised of considerations leading to the proposal of more general definitions of capital that involve human capital. As a complement to Fisher's concept of capital measurement, the present definition explains capital based on the capitalization process. Capitalization should be viewed as an essential attribute of capital. Human resources accounting (HRA) can benefit from improvements in the definition of certain terms related to human capital. Of particular importance is a proposal of a more general definition of capital. The definition leads to an alternative measure,which is more useful in the HRA field than the Lev‐Schwartz model. The proposed measure compliments Fisher's concept of capital measurement and utilizes a compound interest approach. Capital is perceived as a value of economic means capitalized in physical and human resources. The rate of capitalization is determined through natural and social conditions of the environment. The mode of capital measurement results from the above definitions. Moreover, the measure of human capital appears as a generalization of the historical cost concept. The valuation model of human capital involves capitalized costs of living, costs of professional education and value of experience measured by a slightly modified learning curve. Having human capital redefined and measured in these terms, we can introduce human resources into the balance sheet using a set of relevant journal entries.
Susan Cantrell, James M. Benton, Terry Laudal and Robert J. Thomas
Over the past three years Accenture developed and applied a new measurement tool that assesses the maturity of an organization's human capital development processes, benchmarks…
Abstract
Purpose
Over the past three years Accenture developed and applied a new measurement tool that assesses the maturity of an organization's human capital development processes, benchmarks the processes' performance against other organizations, and determines the relationship of each process to bottom line business results. It is designed to help executives make significantly more informed choices about their investments in human capital. This article aims to look at this tool.
Design/methodology/approach
The tool, known as the human capital development framework, now has been tested in more than 60 organizations. This case describes how one organization used it to help turn around a struggling division.
Findings
Results of the initial implementations of the framework suggest that financial performance improves as a company improves its scoring in those critical human capital processes with strong relationships to financial success. As an organization moves from one benchmarking quartile to the next in these processes within the framework scoring, its capital efficiency – or the ratio of total annual sales to the capital invested in the operations of the business by shareholders and creditors – improves from 10 to 15 percent.
Practical implications
The framework outlined in this article provides a tool that enables company leaders to make clear‐eyed assessments of the payoff from human capital investments. It helps organizations diagnose their strengths and weaknesses in key human capital practices, to set investment priorities and track performance, and to establish an empirical link between human capital investments, business practices, and overall business performance.
Originality/value
Those organizations in the study with more mature human capital processes have better financial performance than those organizations with less mature processes. Specifically, those organizations that focus on processes devoted to three key areas – creating a people strategy aligned with the business strategy, providing supportive work environments, and developing employees by giving them ample opportunities to learn and grow – achieve far greater economic success than those that do not.
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The purpose of paper one of the two‐article series exploration of human capital assessment is to examine the strategies by which library administrators can assess and benefit the…
Abstract
Purpose
The purpose of paper one of the two‐article series exploration of human capital assessment is to examine the strategies by which library administrators can assess and benefit the human capital performance of their library and to lay the groundwork for the discussion of the strategic challenges of assessing and valuing human capital in article two.
Design/methodology/approach
This paper uses a literature review to identify potential strategies and metrics for library administrators to assess human capital productivity.
Findings
Human capital is an increasingly essential element of organizational performance assessment. Effectively assessing library staff expenditures (which generally receives the largest expenditure allocations within the library's budget) and the resulting performance generated by the staff, who are the primary knowledge tools and providers of the library's services, is an ever increasing possibility to account for greater amounts of tangible and intangible organizational performance. Library administrators have multiple options for developing effective strategies and metrics by which to assess their libraries human capital performance.
Originality/value
Developing an effective human capital assessment process as a standard component of the library's performance and budgetary assessment processes would benefit libraries and their administrators by increasing the organizational performance information available for resource allocation decisions regarding library staff development, recruitment, and retention in the larger overall management decision making and planning processes.
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Alix Valenti and Stephen V. Horner
Human capital has been traditionally viewed in terms of how an individual’s investment in knowledge, skills and abilities can lead to higher pay or promotions. More recently…
Abstract
Purpose
Human capital has been traditionally viewed in terms of how an individual’s investment in knowledge, skills and abilities can lead to higher pay or promotions. More recently, human capital has been regarded as a unit-level resource using the term “human capital resources” to consider the aggregate effects of human capital. The purpose of this paper is to examine the collective human capital present in a firm’s board of directors as a valuable resource leading to superior firm outcomes.
Design/methodology/approach
The study examined the effects on firm innovation of the scientific expertise of corporate directors, average board tenure and the presence of a firm’s founder on the board. Data from a sample of pharmaceutical firms were analyzed with the dependent variable, innovation, measured as patent applications and both individual and unit-level human capital measures of the predictor variables.
Findings
The results show that the presence of a founder-director is positively related to innovation and more pronounced when combined with the board’s scientific expertise. Board tenure shows a relationship to innovation and is more evident in combination with the board’s aggregate level of scientific expertise. The effect of directors’ scientific expertise is also greater when measured at the board level of scientific expertise.
Research limitations/implications
Future studies should examine these relationships within a broader context extending the research to other industries thereby incorporating wider variation in both the antecedents and measures of innovation. In addition, future studies might investigate a likely non-monotonic relationship of board tenure with strategic outcomes, recognizing the non-linear nature of effects of board tenure.
Practical implications
In addition to the theoretical and empirical implications, this research may also inform practicing managers charged with constituting their boards of directors and provide some guidance for the recruitment and retention of board members. The research may also assist top managers and investors in knowing when the presence of a founder on the board is useful and supportive of the firm’s strategic direction.
Originality/value
The study extends scholarly understanding of human capital theory beyond the top management team to boards of directors demonstrating the importance not only of directors’ individual capital but also how it combines with that of other directors. Moreover, it enhances understanding of board characteristics beyond the bounds of demographic characteristics to show that additional qualities affect firm strategy. This research also informs managers, boards and investors how boards might be more effectively constituted to impact firm strategy.
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This is the second of two papers on the benefits and challenges of human capital assessment. The purpose of this paper is to review the most common challenges that library…
Abstract
Purpose
This is the second of two papers on the benefits and challenges of human capital assessment. The purpose of this paper is to review the most common challenges that library administrators may encounter when developing and implementing a human capital assessment process in their libraries and offer suggested counter‐responses to reduce implementation challenges.
Design/methodology/approach
This paper uses a literature review to identify potential challenges and resolutions for library administrators who are developing and implementing human capital assessment. In reviewing human capital assessment from the literature from both outside and within the library profession, it is hoped that the most common challenges can be identified to allow library administrators an effective opportunity to plan and account for these challenges during development and implementation.
Findings
Human capital assessment is an increasingly essential element of organizational performance assessment for library administrators. There are several types of common challenges in developing and implementing human capital assessment processes: a lack of consensual operational definitions and assessment values for human capital valuation and assessment, complexity of process, subjectivity in application, and misaligned information needs of mid‐level administrators. However, if these development and implementation challenges can be reduced or eliminated through prior planning and aligning the valuation and assessment processes to the organization and its assessment information needs, there are multiple potential benefits for library administrators who wish to assess the human capital of their library.
Originality/value
Identifying the implementation challenges of human capital assessment for library administrators could reduce the initial challenges of in assessing the human component of the library's performance in meeting stakeholder's needs and accountability concerns.
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Lars Nerdrum and Truls Erikson
In this article, intellectual capital is seen as complementary capacities of competence and commitment. Based on theoretically and empirically robust human capital theory, we…
Abstract
In this article, intellectual capital is seen as complementary capacities of competence and commitment. Based on theoretically and empirically robust human capital theory, we define intellectual capital as individuals’ complementary capacity to generate added value and thus create wealth. Resources are then perceived to be both tangible and intangible. This view is an extension of human capital theory to include the intangible capacities of people. Implications for future research are discussed.
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Amir Riaz, Zahid Mahmood, Ahmad Qammar and Imran Ali
This study aims to propose and empirically examine the simultaneous complementary mediating role of bank branch collective human capital and justice climate between implemented…
Abstract
Purpose
This study aims to propose and empirically examine the simultaneous complementary mediating role of bank branch collective human capital and justice climate between implemented high-performance work system (HPWS) and bank branch performance in the banking sector.
Design/methodology/approach
Data were collected at three different intervals of time between March 2022 to July 2022 from a final sample of 323 branch managers and 1,369 employees of commercial banks operating in Pakistan. Partial least square structural equation modeling was used to test the theoretical model proposed by this study.
Findings
Study results revealed that collective human capital and justice climate simultaneously mediate the relationship between implemented HPWS and branch performance.
Research limitations/implications
The study contributes to the strategic HRM theory by proposing the complementary mediating roles of human capital and organizational justice to reap the benefits of implementing HPWS for improving branch-level performance. The managers should focus on developing and exploiting the knowledge, skills and experiences (human capital) of branch employees and improve their collective perceptions of justice to reap the benefits of HPWS for enhancing branch-level performance.
Originality/value
Drawing upon the resource-based view of the firm and organizational justice theory, this novel study examines the simultaneous and complementary mediating effects of collective human capital and justice climate between implemented HPWS and branch performance relationships at the branch-level analysis.
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Christopher M. Harris, Lee Warren Brown and Mark B. Spence
This study examines factors that influence organizations’ choices of an internal human capital development strategy and an external human capital acquisition strategy. The human…
Abstract
Purpose
This study examines factors that influence organizations’ choices of an internal human capital development strategy and an external human capital acquisition strategy. The human resource architecture indicates that organizations will use different human capital acquisition strategies. Following the resource-based view, human capital theory and the human resource architecture, we examine factors that impact the choices of different human capital acquisition strategies.
Design/methodology/approach
We examine these important human capital decisions in the context of Major League Soccer. Data to test the hypotheses were collected from a variety of publicly available sources. We tested the hypotheses with regression analyses.
Findings
We find that while organizations employ both internal and external human capital strategies, organizations may have one dominant human capital strategy and the other strategy may be used to supplement the human capital needs of organizations. Additionally, our results indicate that organizations with an older workforce tend to use an internal human capital development strategy, while higher performing organizations are less likely to use an internal human capital development strategy.
Originality/value
This study makes contributions by examining the choices between internal and external human capital strategies and factors that influence the choice of an internal or external human capital strategy.
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Daša FarCˇnik and Tanja IsteniCˇ
Affordable and clean energy as well as regulation and decrease in emissions are in the heart of sustainable development goals. In order to achieve these goals, cleaner…
Abstract
Affordable and clean energy as well as regulation and decrease in emissions are in the heart of sustainable development goals. In order to achieve these goals, cleaner technologies together with responsible consumption and production need to be adopted. Therefore, the knowledge, skills and habits – the human capital and increased awareness of its importance, play an important role. The relationship between sustainability and human capital has been addressed only recently. There had been two streams of literature, investigating either (i) the relationship of human capital and the economic growth, or (ii) the nexus of economic growth and sustainability, without realizing the interconnectedness of these concepts. In this chapter, the authors add contribution to this scarce, yet growing body of literature by investigating the relationship between human capital (measured by Index of human capital) and two measures of sustainability: electricity use and CO2 emissions for a panel of European Union Member States. The authors show that the increase in human capital is associated with the decrease in energy consumption and CO2 emissions and therefore is associated with the increase in sustainability. This chapter bears important policy implications since it shows that the human capital, its stock and quality, should be included in the sustainability discussions and is important for achieving the sustainability goals.
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The theory of human capital has arguably been the most influential theory impacting upon higher education policy (and educational policy in general) worldwide over the last half…
Abstract
The theory of human capital has arguably been the most influential theory impacting upon higher education policy (and educational policy in general) worldwide over the last half century or more. In more recent years it has been supplemented by social capital theory. This chapter reports on a systematic review of publications that have applied these theories in the context of higher education research, examining the origins and meanings of the theories, their application and practice, and the issues and critiques that have been raised. It concludes that while both theories have underlying faults, most notably perhaps in their treatment of human beings and their relationships as resources, they remain essential to higher education and higher education research in maintaining the interest of policy-makers and funders.
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