The
Problem
and
the
Solution. For decades, capital has been considered the scarcest resource in an organization, and numerous financial techniques were developed to ensure maximum returns on the organization's capital The problem is that now the scarcest resource is recognized to be human capital, and using the traditional measurement systems for ensuring maximum returns on this form of capital results only in the misallocation of resources This chapter suggests an alternative to the traditional financial techniques that incorporates the strategic positioning of organization's human capital
Get full access to this article
View all access options for this article.
References
1.
Becker, B., & Gerhart, B. (1996). The impact of human resource management on organizational performance: Progress and prospects. Academy of Management Journal, 39(4), 779-801.
2.
Besanko, D., Dranove, D., & Stanley, M. (1996). Economics of strategy. New York: Wiley.
3.
Bontis, N. (1996). There's a price on your head. Managing intellectual capital strategically. Ivey Business Quarterly, 60(4), 40-48.
4.
Boudreau, J.W. (1983). Economic considerations in estimating the utility of human resource productivity improvement programs. Personnel Psychology, 36, 551-576
5.
Boudreau, J.W., & Ramstad, P.M. (1997). Measuring intellectual capital: Learning from financial history. Human Resource Management, 36(3), 343-356.
6.
Brigham, E.F., Gapenski, L.C., & Ehrhardt, M.C. (1999). Financial management theory and practice (9th ed.). Fort Worth, TX: Dryden Press.
7.
Cascio, W.F. (1987). Costing human resources The financial impact of behavior in organizations (2nd ed.). Boston. PWS-Kent Publishing Company.
8.
Cronshaw, S.F., & Alexander, R.A. (1991). Why capital budgeting techniques are suited for assessing the utility of personnel programs: A reply to Hunter, Schmidt, and Coggin. Journal of Applied Psychology , 76(3), 454-457.
9.
Delaney, J.T., & Huselid, M.A. (1996). The impact of human resource management practices on perceptions of organizational performance. Academy of Management Journal, 39(4), 949-969.
10.
Delery, J.E., & Doty, D.H. (1996). Modes of theorizing in strategic human resource management: Test of universalistic, contingency, and configurational performance predictions. Academy of Management Journal, 39(4), 802-83 5.
11.
Gray, D.H. (1986). Uses and misuses of strategic planningHarvard Business Review, 64(1), 89-97.
12.
Gubman, E.L. (1998). The talent solution: Aligning strategy and people to achieve extraordinary results. New York: McGraw-Hill.
13.
Holton, E.F. Iii. ( 1996). The flawed four-level evaluation model. Human Resource Development Quarterly, 7(1), 5-21.
14.
Hunter, J.E., Schmidt, F.L. , & Coggin, T.D. (1988). Problems and pitfalls in using capital budgeting and financial accounting techniques in assessing the utility of personnel programsJournal of Applied Psychology , 73(3), 522-528.
15.
Huselid, M.A. (1995). The impact of human resource management practices on turnover, productivity, and corporate financial performance. Academy of Management Journal, 38(3), 635-672.
16.
Jarrell, D.W. (1993). Human resource planning: A business planning approach . Englewood Cliffs, NJ:Prentice Hall.
17.
Kaufman, R., & Keller, J.M. (1994). Levels of evaluation: Beyond KirkpatrickHuman Resource Development Quarterly, 5(4), 371-381.
18.
Kirkpatrick, D.L. (1994). Evaluating training programs: The four levels . San Francisco: Berrett- Koehler
19.
Lewis, C. (1997). Building intellectual capital. Management Accounting, 75, (6), 54.
20.
Meyer, P. (1998). Trouble finding good people: Stop trying to hire them. Business and Economic Review, 45(1), 11-14.
21.
Mirable, R. (1998). Technology and intellectual capital: The new revolution . Human Resources Professional, 11 (4), 19-22.
22.
Parsons, J.G. (1997). Values as a vital supplement to the use of financial analysis in HRD. Human Resource Development Quarterly, 8(1), 5-13.
23.
Pfeffer, J. (1998). The human equation: Building profits by putting people first. Boston: Harvard Business School Press.
24.
Phillips, J.J. (1996). Accountability in human resource managementHouston: Gulf Publishing Company
25.
Provo, J., & Neumann, D. (1998, October). Enhancing your role as a strategic partner: Defining and improving the value created by human capital. Public workshop presented at Personnel Decisions International , Minneapolis, MN
26.
Salamon, L.M. (1991). Overview. Why human capital? Why now? In D. W. Hornbeck & L. M. Salamon (Eds.), An economic strategy for the 90s Human capital and America's future (pp. 1-39). Baltimore: Johns Hopkins University Press.
27.
Swanson, R.A. (1998). Demonstrating the financial benefit of human resource development : Status and update on the theory and practice. Human Resource Development Quarterly, 9(3), 285-295.
28.
Swanson, R.A., & Gradous, D.B. (1988). Forecasting financial benefits of human resource development. San Francisco: Jossey-Bass .
29.
Walker, J.W., & Bechet, T.P. (1991) Defining effectiveness and efficiency measures in the context of human resource strategy In R. J. Niehaus & K. F. Price (Eds.), Bottom line results from strategic resource planning (pp. 235-260). New York: Plenum Press.
30.
Welbourne, T.M., & Andrews, A.O. (1996). Predicting the performance of initial public offerings: Should human resource management be in the equation? Academy of Management Journal, 39(4), 891-919.
