Perceptions of Human Capital Measures: From Corporate Executives and Investors
Rent the article at a discountRent now
* Final gross prices may vary according to local VAT.Get Access
This study compared the perceptions of executives and investors in terms of the importance to disclose human capital measures and their knowledge of those measures.
Forty-nine senior-level executives (41% response rate) from service-oriented, public-listed companies in Australia and 33 investors (47% response rate) from various fund management companies responded to our survey.
The investors indicated the importance to disclose certain human capital measures more than the executives. The executives appeared to show a better understanding than the investors on indicators such as staff satisfaction index, staff capacity, motivational index, workforce stability, and workforce competence profile.
To date, researchers have explored human capital from a piecemeal perspective. A more integrated and multifaceted measure of human capital has the potential to benefit fund managers and executives. Disclosure of value added by employees, composition of staff (full-time, contract, or temporary), staff turnover, average years of experience, and average age of management and operational staff would shed some light on investment decisions for fund managers. Executives could utilize the measures to reflect on an assortment of human capital issues that are relevant to their organizations and stakeholders, especially the investment community.
This study proposed a more inclusive measure of human capital by integrating traditional measures of human capital and non-accounting measures (e.g., educational level, experience, and motivation). A comparison of the perspectives of executives and investors revealed preferences for certain information, which can help to improve the perception of transparency and accountability.
- Abernathy, D. (1999). Thinking outside the evaluation box. Training & Development, 53, 18–23.
- Addison, J. T., & Belfield, C. R. (2004). What do unions do? Union voice. Journal of Labor Research, 25, 563–596. CrossRef
- Anderson, R. H. (1998). Regulating corporate annual reports in Australia. Business and Economics History, 27, 522–534.
- ANZ (2001). Australia and New Zealand Bank appoints head of People Capital. Asian Banker, August 1.
- Argyris, C., & Schon, D. A. (1978). Organizational learning: A theory of action perspective. Reading, MA: Addison-Wesley.
- Barbian, J. (2001). How motivated are you? Training & Development, 38, 32.
- Bassi, L. J., & Van Buren, M. E. (1998). The 1998 ASTD state of the industry report. Training & Development, 52, 21.
- Becker, G. S. (1964). Human capital. New York: Columbia University Press.
- Belasco, J. (1993). Leading the new organization. Executive Excellence, 10, 15–16.
- Benschop, Y., & Doorewaard, H. (1998). Covered by equality: The gender subtext of organizations’. Organization Studies, 19, 787–806. CrossRef
- Berkowitz, S. J. (2001). Measuring and reporting human capital. Journal of Government Financial Management, 50, 12–17.
- Blunt, B. (1987). Employee motivation: Two measurement issues. Review of Public Personnel Administration, 8, 64–68.
- Boudreau, J. W., & Ramstad, P. M. (1997). Measuring intellectual capital: Learning from financial history. Human Resource Management, 36, 343–356. CrossRef
- Bowen, C., Busquet, M., & Buhner, R. (1997). Increasing shareholder value through human asset management. Long Range Planning, 30, 710–717. CrossRef
- Boxall, P. (2003). HR strategy and competitive advantage in the service sector. Human Resource Management Journal, 13, 5–20. CrossRef
- Bryson, J. (2003). Managing HRM risk in a merger. Employee Relations, 25, 14–30. CrossRef
- Bukowitz, W. R., Williams, R. L., & Mactas, E. S. (2004). Human capital measurement. Research Technology Management, 47, 43–49.
- Burke, R. J., Graham, J., & Smith, F. (2005). Effects of reengineering on the employee satisfaction-customer satisfaction relationship. The TQM Magazine, 14, 358–363. CrossRef
- Business Queensland (2001, August 17). Products foster business innovation. Business Queensland, 6.
- Chen, P., Ibbotson, R. G., Milevsky, M. A., & Zhu, K. X. (2006). Human capital, asset allocation, and life insurance. Financial Analysts Journal, 62, 97–109. CrossRef
- Chen, H. M., & Lin, K. J. (2003). The measurement of human capital and its effects on the analysis of financial statements. International Journal of Management, 20, 470–478.
- Coleman, J. (1988). Social capital in the creation of human capital. The American Journal of Sociology, 94(Suppl), S95–S120. CrossRef
- Cronbach, L. J. (1951). Coefficient alpha and the internal structure of tests. Psychometrika, 16, 297–334. CrossRef
- Davenport, T. O. (1999). Human capital. Management Review, 88, 37–42.
- Davenport, S., Carr, A., & Bibby, D. (2002). Leveraging talent: Spin-off strategy at industrial research. R&D Management, 32, 241–254. CrossRef
- Dixon, J., & Martin, A. (2001). The Australian Accounting Standards Board (AASB) for 2001–2002 (pp. 64–66). Australia: Australian Accountant CPA.
- Edvinsson, L., & Malone, S. (1997). Intellectual capital: Realizing your company’s true value by finding its hidden brainpower. New York: Harper Collins.
- Elias, J., & Scarbrough, H. (2004). Evaluating human capital: An exploratory study of management practice. Human Resource Management Journal, 14, 21–40. CrossRef
- Forrester, R. H. (2000). Capturing learning and applying knowledge: An investigation of the use of innovation teams in Japanese and American automotive firms. Journal of Business Research, 47, 35–45. CrossRef
- Galbreath, J. (2005). The intangible economy and firm superior performance: Evidence from Australia. Journal of the Australian and New Zealand Academy of Management, 11, 28–40.
- Galunic, C., & Anderson, E. (2000). From security to mobility: Generalized investments in human capital and agent commitment. Organization Science, 11, 1–20. CrossRef
- García-Meca, E. (2005). Bridging the gap between disclosure and use of intellectual capital information. Journal of Intellectual Capital, 6, 427–440. CrossRef
- George, R. (2003). External solutions and internal problems: The effects of employment externalization on internal workers’ attitudes. Organization Science, 14, 386–402. CrossRef
- Gottlieben, R. (2000). Star power. Shares Magazine, 5, 32.
- Graham, A., & Schwab, D. J. (1999). Boost your magazine’s intellectual capital. Folio: The Magazine for Magazine Management, 28, 27.
- Guthrie, J. (2001). The management, measurement and the reporting of intellectual capital. Journal of Intellectual Capital, 2, 27–41. CrossRef
- Hair, J. F. J., Anderson, R. E., Tatham, R. L., & Black, W. C. (1998). Multivariate data analysis. Upper Saddle River, NJ: Prentice-Hall.
- Hayton, J. C. (2003). Strategic human capital management in SMEs: An empirical study of entrepreneurial performance. Human Resource Management Journal, 42, 375–391. CrossRef
- Heaton, C., & Oslington, P. (2002). The contribution of structural shocks to Australian unemployment. Economic Record, 78, 433–442. CrossRef
- Herman, R. E. (1999). Stability is watchword for effective workforce. HR Focus, June, S1–S3.
- Hermanson, D. R., Hermanson, R. H., & Ivancevich, D. M. (1992). Human resource accounting in a recessionary times. Management Accounting, 74, 69.
- Johanson, U., Eklöv, G., Holmgren, M., & Mårtensson, M. (1998). Human resource costing and accounting versus the balanced scorecard. OECD Report. Stockholm: School of Business, Stockholm University.
- Kalafut, P. C., & Low, J. (2001). The value creation index: Quantifying intangible value. Strategy and Leadership, 29, 9–15. CrossRef
- Koch, M. J., & McGrath, R. G. (1996). Improving labor productivity: Human resource management policies do matter. Strategic Management Journal, 17, 335–354. CrossRef
- Kowalski, B. (2003). The engagement gap. Training & Development, 40, 62.
- Lev, B. (1999). The inadequate public information on intellectual capital and its consequences. International symposium measuring and reporting intellectual capital: Experiences, issues, and prospects. OECD, Amsterdam.
- Lewis, G. (1997). Building intellectual capital. Management Accounting, 75, 54.
- Lewis, J., Wright, P. C., & Geroy, G. D. (2004). Managing human capital: The study of a self-managed group venturing into the digital economy. Management Decision, 42, 205–228. CrossRef
- Li, L., & Benton, W. C. (2003). Hospital capacity management decisions: Emphasis on cost control and quality enhancement. European Journal of Operational Research, 146, 596–614. CrossRef
- Lim, L. L. K., & Dallimore, P. (2002). To the public-listed companies, from the investment community. Journal of Intellectual Capital, Special Issue, 3, 262–276.
- Lim, L. L. K., & Dallimore, P. (2004). Intellectual capital: Management attitudes in service industries’. Journal of Intellectual Capital, 5, 181–194. CrossRef
- Lin, K. J., & Wang, M. L. (2005). The classification of human capital according to the strategic goals of firms: An analysis. International Journal of Management, 22, 62–70.
- Lynn, B. E. (2000). Intellectual capital. Ivey Business Journal, 64, 48–51.
- Malhotra, Y. (2000). Knowledge assets in the global economy: Assessment of national intellectual capital. Journal of Global Information Management, 8, 5–15.
- Marti, J. M. V. (2001). ICBS—Intellectual capital benchmarking system. Journal of Intellectual Capital, 2, 148–165. CrossRef
- Massie, R. K. (2001, July 1). Reporting on sustainability: A global initiative. OECD Observer, 60.
- Mavridis, D. G., & Kyrmizoglou, P. (2005). Intellectual capital performance drivers in the Greek banking sector. Management Research News, 28, 43–62. CrossRef
- Mayo, A. (2001). Memory bankers. People Management, 4, 345.
- McLinden, D., Casper, W. J., & Kraiger, K. (2004). Contributions of psychological research to HRM: Collaborative planning for training impact. Human Resource Management Journal, 43, 337–352. CrossRef
- Mercer, G. (1998). Operational improvements: How to build cars more effectively. Part 1. Automotive Manufacturing & Production, 110, 74–76.
- Mouritsen, J., Larsen, H. T., & Bukh, P. N. (2001). Valuing the future: Intellectual capital supplements at Skandia. Accounting, Auditing and Accountability Journal, 14, 399–422. CrossRef
- Murdoch, R. (2001). The human wealth of nations. Speech at Keith Murdoch Memorial Oration, Melbourne, Australia.
- Nothdurft, W. E. (1990). How to produce work-ready workers. Across the Board, 27, 47–52.
- Nunnally, J. C. (1967). Psychometric theory. New York: McGraw-Hill.
- O’Loughlin, A., & McFadzean, E. (1999). Toward a holistic theory of strategic problem solving. Team Performance Management, 5, 103–120. CrossRef
- OECD. (1996). The knowledge-based economy. Retrieved 12 November 1998, from http://www.oecd.org/dsti/sti/s_t/inte/prod/kbe.htm
- Olsson, B. (1999). The construction of transparency through accounting on intellectual capital? Journal of Human Resource Costing and Accounting, 4, 7–10.
- Petty, R., & Guthrie, J. (1999). Managing intellectual capital: From theory to practice. Australian Accountant, August 1, 8–21.
- Pfeffer, J. (1994). Competitive advantage through people: Unleashing the power of the workforce. Boston: Harvard Business School Press.
- Quinn, J. B. (1994). Appraising intellectual assets. The McKinsey Quarterly, March 22, 90–95.
- Roberts, P. W., & Amit, R. (2003). The dynamics of innovative activity and competitive advantage: The case of Australian retail banking. Organization Science, 14, 107–122. CrossRef
- Robson, A., Yarrow, D., & Owen, J. (2005). Does quality drive employee satisfaction in the UK learning sector? The International Journal of Quality and Reliability Management, 22, 465–484. CrossRef
- Roos, J., Roos, G., Dragonetti, N. C., & Edvinsson, L. (1997). Intellectual capital: Navigating in the new business landscape. London: MacMillan Business.
- Sáenz, J. (2005). Human capital indicators, business performance and market-to-book ratio. Journal of Intellectual Capital, 6, 374–384. CrossRef
- Seleim, A., & Ashour, A. (2004). Intellectual capital in Egyptian software firms. The Learning Organization, 11, 332–346. CrossRef
- Sesil, J. C., Kroumova, M. K., Blasi, J. R., & Kruse, D. L. (2002). Broad-based employee stock options in US ‘New economy’ firms. British Journal of Industrial Relations, 40, 273–294. CrossRef
- Shamir, B. (1991). Meaning, self and motivation in organizations. Organization Studies, 12, 405–426. CrossRef
- Snell, S. A., & Dean, J. W. (1992). Integrated manufacturing and human resource management: A human capital perspective. Academy of Management Journal, 35, 467–504. CrossRef
- Society of Management Accountants of Canada. (1998). The management of intellectual capital: The issues and the practice. Issues Paper no. 16. The Society of Management Accountants of Canada, Hamilton.
- Stewart, T. (1995). Getting real about brainpower. Fortune, 27, 201–203.
- Stewart, T. (1997). Intellectual capital: The new wealth of organizations. London: Nicholas Brealey.
- Strassmann, P. A. (2000). Intelligence in question. Knowledge Management, 3, 16.
- Sullivan, P. H. (1998). Profiting from intellectual capital—Extracting value from innovation. New York: Wiley.
- Sveiby, K. E. (1997). The new organizational wealth: Managing and measuring knowledge-based assets. San Francisco: Barrett-Koehler.
- Sveiby, K. E. (2001). A knowledge-based theory of the firm to guide in strategy formulation. Journal of Intellectual Capital, 2, 344–358. CrossRef
- Thompson, M., & Heron, P. (2005). Management capability and high performance work organization. International Journal of Human Resource Management, 16, 1029–1048.
- Thorbjornsen, S., & Mouritsen, J. (2003). Accounting for the employee in the intellectual capital statement. Journal of Intellectual Capital, 4, 559–575. CrossRef
- Ulrich, D. (1998). Intellectual capital = competence × commitment. Sloan Management Review, 39, 15–26.
- Ulrich, D., & Creelman, D. (2006). In touch with intangibles. Workforce Management, 85, 38–41.
- Ulrich, D., & Smallwood, N. (2005). HR’s new ROI: Return on intangibles. Human Resource Management Journal, 44, 137–142. CrossRef
- Umiker, W. (1999). Principles of workforce stability. The Health Care Manager, 18, 58–64.
- Van Marrewijk, M., & Timmers, J. (2003). Human capital management: New possibilities in people management. Journal of Business Ethics, 44, 171–184. CrossRef
- Vincola, A., & Mobley, N. (1998). Performance management through a work/life lens. HR Focus, 75, 9–10.
- Walsh, J. P., Meyer, A. D., & Schoonhoven, C. B. (2006). A future for organization theory: Living in and living with changing organizations. Organization Science, 17, 657–671. CrossRef
- Watts, T. (2000). The intangible dream. Business Review Weekly, December 1, 124.
- Weiss, M. (1998). Intellectual capital: Valuable assets in banking. Future Banking, 2, 67.
- Wiarda, E. A., & Luria, D. D. (1998). The best-practice company and other benchmarking myths. Quality Progress, 31, 91–95.
- Wintermantel, R. E., & Mattimore, K. L. (1997). In the changing world of human resources: Matching measures to mission. Human Resource Management Journal, 36, 337–342. CrossRef
- Youndt, M. A., & Snell, S. A. (2004). Human resource configurations, intellectual capital, and organizational performance. Journal of Managerial Issues, 16, 337–360.
- Perceptions of Human Capital Measures: From Corporate Executives and Investors
Journal of Business and Psychology
Volume 25, Issue 4 , pp 673-688
- Cover Date
- Print ISSN
- Online ISSN
- Springer US
- Additional Links
- Human capital
- Executives’ perspective
- Investors’ perspectives
- Industry Sectors
- Author Affiliations
- 1. School of Business and Social Sciences, Roehampton University, Erasmus House, Roehampton Lane, London, SW15 5PU, UK
- 2. Faculty of Liberal Arts & Professional Studies, School of Human Resource Management, York University, 4700 Keele Street, Toronto, ON, M3J 1P3, Canada
- 3. The University of Notre Dame, Australia, 19 Mouat Street, Fremantle, WA, 6959, Australia