Human capital and Performance: A Literature Review by The Judge Institute of Management
Human capital and performance: A literature review
Dr. Philip Stiles Mr. Somboon Kulvisaechana
The Judge Institute of Management University of Cambridge Trumpington Street Cambridge CB2 1AG
Human capital and performance: A literature review
CONTENTS Human capital in context: The resource-based view of the firm Human capital and complementary capitals Intellectual capital Social capital Organisational capital Knowledge Human capital and performance Bundles of human resources Contingency or ‘fit’ approaches Universal or ‘best practice’ approaches Configurations HR practices for developing human capital and performance Difficulties with the link between human capital and performance Measuring human capital Reporting human capital measures Conclusions References Annotated Bibliography PAGE 3 4 5 6 6 8 9 10 11 11 12 13 14 15 17 17 19 29
Human capital and performance
1
Human capital and performance: A literature review There is a large and growing body of evidence that demonstrates a positive linkage between the development of human capital and organisational performance. The emphasis on human capital in organisations reflects the view that market value depends less on tangible resources, but rather on intangible ones, particularly human resources. Recruiting and retaining the best employees, however, is only part of the equation. The organisation also has to leverage the skills and capabilities of its employees by encouraging individual and organisational learning and creating a supportive environment where knowledge can be created, shared and applied. In this review, we will assess the context in which human capital is being discussed and identify the key elements of the concept, and its linkage to other complementary forms of capital, notably intellectual, social, and organisational. We will then examine the case for human capital making an impact on performance, for which evidence is now growing, and explore mechanisms for measuring human capital.
Dr. Philip Stiles Mr. Somboon Kulvisaechana
The Judge Institute of Management University of Cambridge Trumpington Street Cambridge CB2 1AG
Human capital and performance: A literature review
CONTENTS Human capital in context: The resource-based view of the firm Human capital and complementary capitals Intellectual capital Social capital Organisational capital Knowledge Human capital and performance Bundles of human resources Contingency or ‘fit’ approaches Universal or ‘best practice’ approaches Configurations HR practices for developing human capital and performance Difficulties with the link between human capital and performance Measuring human capital Reporting human capital measures Conclusions References Annotated Bibliography PAGE 3 4 5 6 6 8 9 10 11 11 12 13 14 15 17 17 19 29
Human capital and performance
1
Human capital and performance: A literature review There is a large and growing body of evidence that demonstrates a positive linkage between the development of human capital and organisational performance. The emphasis on human capital in organisations reflects the view that market value depends less on tangible resources, but rather on intangible ones, particularly human resources. Recruiting and retaining the best employees, however, is only part of the equation. The organisation also has to leverage the skills and capabilities of its employees by encouraging individual and organisational learning and creating a supportive environment where knowledge can be created, shared and applied. In this review, we will assess the context in which human capital is being discussed and identify the key elements of the concept, and its linkage to other complementary forms of capital, notably intellectual, social, and organisational. We will then examine the case for human capital making an impact on performance, for which evidence is now growing, and explore mechanisms for measuring human capital.
References: Source: Youndt et al., 1996 Human capital and performance