Measuring intellectual capital: Learning from financial history

Abstract

Emerging evidence from scientific studies and specific organizations suggests that hcnv people are managed significantly affects organizational success, and that certain patterns of human resource activities are associated with financial performance. Most hum.an resource (HR) and line managers, however, find existing measures of human and intellectual capital woefully inadequate. In this article, we suggest that designers ofHR measurement systems can leam from, the success of well-accepted measurement m.odels in the financial and -marketing arenas. We show that the historical development of these m.easurement system.s suggests several lessons for the HR measures of the future. These lessons include articulating the links in the value chain, focusing on key organizational constraints, and using data to make soft intangible factors more tangihle. © 1997 John Wiley &• Sons, Inc.