Abstract
Orientation: Physical and natural resources have been surpassed by human capital as aresource of wealth creation. As a result, senior management relies increasingly on appropriatepeople information to drive strategic change. Yet, measurement within the human resourcefunction predominantly informs decisions in support of efficiency and effectiveness. Consequently, dissimilar understanding of measurement expectations between these partieslargely continues.Research purpose: The study explored principles in selecting human capital measurements,drawing on the views and recommendations of human resource management professionals,all experts in human capital measurement.Motivation for the study: The motivation was to advance the understanding of selectingappropriate and strategic valid measurements, in order for human resource practitioners tocontribute to creating value and driving strategic change.Research design, approach and method: A qualitative approach, with purposively selectedcases from a selected panel of human capital measurement experts, generated a datasetthrough unstructured interviews, which were analysed thematically.Main findings: Nineteen themes were found. They represent a process that considers thecentrality of the business strategy and a systemic integration across multiple value chains inthe organisation through business partnering, in order to select measurements and generatemanagement level-appropriate information.Practical/managerial implications: Measurement practitioners, in partnership withmanagement from other functions, should integrate the business strategy across multiplevalue chains in order to select measurements. Analytics becomes critical in discoveringrelationships and formulating hypotheses to understand value creation. Higher educationinstitutions should produce graduates able to deal with systems thinking and to operatewithin complexity.Contribution: This study identified principles to select measurements and metrics. Noticeableis the move away from the interrelated scorecard perspectives to a systemic view of theorganisation in order to understand value creation. In addition, the findings may help toposition the human resource management function as a strategic asset.
Highlights
Senior and line managers and human resource practitioners (HRPs) are experiencing a difference between the demand for and supply of human capital information due to inappropriate measurements
Measurements lack sophistication and cannot provide objective evidence (Boudreau & Ramstad, 2007; Burkholder, Golas & Shapiro, 2007). This leads to HRPs facing challenges in selecting suitable measurements
The purpose of this research was to answer the question ‘what are the principles in selecting human capital measurements?’ and the concomitant research objective was to explore and describe themes amongst a selected panel of expert practitioners at executive level who belong to a community that specialises in human capital measurement, in which they were directly involved, exerted leadership and consulted in the field of human capital measurement
Summary
Senior and line managers and human resource practitioners (HRPs) are experiencing a difference between the demand for and supply of human capital information due to inappropriate measurements. Information supports decisions to drive strategic success (Cascio & Boudreau, 2011), the allocation of resources (Becker, Huselid & Ulrich, 2001) and investment in people and practices (Cascio, 2006; Cascio & Boudreau, 2011). Lawler and Boudreau (2009) highlight that measurements are used to justify investments in HR processes or programmes and to support the utilisation and deployment of resources These contribute to a limited view of organisation-wide information. Measurements lack sophistication and cannot provide objective evidence (Boudreau & Ramstad, 2007; Burkholder, Golas & Shapiro, 2007) This leads to HRPs facing challenges in selecting suitable measurements
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
