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Article
Publication date: 1 January 1998

MIECZYSLAW DOBIJA

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…

1039

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.

Details

Journal of Human Resource Costing & Accounting, vol. 3 no. 1
Type: Research Article
ISSN: 1401-338X

Article
Publication date: 1 March 2006

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

7916

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.

Details

Strategy & Leadership, vol. 34 no. 2
Type: Research Article
ISSN: 1087-8572

Keywords

Article
Publication date: 4 September 2007

Larry Nash White

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…

1647

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.

Details

The Bottom Line, vol. 20 no. 3
Type: Research Article
ISSN: 0888-045X

Keywords

Article
Publication date: 4 April 2019

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…

1542

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.

Article
Publication date: 20 November 2007

Larry Nash White

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…

986

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.

Details

The Bottom Line, vol. 20 no. 4
Type: Research Article
ISSN: 0888-045X

Keywords

Article
Publication date: 1 June 2001

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…

11575

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.

Details

Journal of Intellectual Capital, vol. 2 no. 2
Type: Research Article
ISSN: 1469-1930

Keywords

Book part
Publication date: 4 December 2020

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.

Details

Challenges on the Path Toward Sustainability in Europe
Type: Book
ISBN: 978-1-80043-972-6

Keywords

Book part
Publication date: 12 November 2018

Malcolm Tight

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…

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.

Abstract

Details

Explaining Growth in the Middle East
Type: Book
ISBN: 978-0-44452-240-5

Book part
Publication date: 1 January 2008

Lisa Bryant-Kutcher, Denise A. Jones and Sally K. Widener

Economic theory posits that production factors that are both difficult to imitate and capable of creating organizational efficiencies can generate economic rents and…

Abstract

Economic theory posits that production factors that are both difficult to imitate and capable of creating organizational efficiencies can generate economic rents and sustain long-term competitive advantage. Using survey data for 106 firms, we measure four dimensions of strategic human capital and find that the market values strategic human capital that has the capability to create efficiencies in the organization and is also difficult for competitors to imitate. We discuss implications for the reporting of human capital in intellectual capital reports and offer suggestions for future research.

Details

Advances in Management Accounting
Type: Book
ISBN: 978-1-84855-267-8

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