Human Capital Management- Achieving Added Value Through People

Human Capital Management- Achieving Added Value Through People

HUMAN CAPITAL MANAGEMENT HUMAN CAPITAL MANAGEMENT ACHIEVING ADDED VALUE THROUGH PEOPLE Angela Baron & Michael Armstrong London and Philadelphia Publisher’s note Every possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publishers and authors cannot accept responsibility for any errors or omissions, however caused No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the editor, the publisher or any of the authors First published in Great Britain and the United States in 2007 by Kogan Page Limited Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permi�ed under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmi�ed, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the CLA Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned addresses: 120 Pentonville Road London N1 9JN United Kingdom www.kogan-page.co.uk 525 South 4th Street, #241 Philadelphia PA 19147 USA © Angela Baron and Michael Armstrong, 2007 The right of Angela Baron and Michael Armstrong to be identified as the authors of this work has been asserted by them in accordance with the Copyright, Designs and Patents Act 1988 ISBN-10 7494 4938 ISBN-13 978 7494 4938 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Armstrong, Michael, 1928– Human capital management : achieving added value through people / Michael Armstrong and Angela Baron p cm Includes bibliographical references and index ISBN-13: 978–0–7494–4938–4 ISBN-10: 0–7494–4938–1 Personnel management Human capital I Baron, Angela II Title HF5549.A89776 2007 658.3'01—dc22 2006039736 Typeset by JS Typese�ing Ltd, Porthcawl, Mid Glamorgan Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall Contents Foreword Acknowledgements ix xi Introduction Part The essence of HCM The concept of human capital Intellectual capital 6; Human capital 7; Social capital 13; Organizational capital 14; Practical implications of intellectual capital theory 15; Conclusions 18 The concept of HCM HCM defined 20; Aims of HCM 21; Rationale for HCM 22; HCM and HRM 23; The concept of human capital advantage and resource-based strategy 26; Conclusions 27 20 The process of HCM HCM drivers 29; The HCM journey 30; Human capital measurement 31; Human capital reporting 34; Drawing conclusions 36; Ge�ing into action 37; Pu�ing it all together 38; Developing HCM 40 28 vi ❚ Contents Part The practice of HCM 43 Human capital data Overall considerations 45; Types of data 47; Problems with data collection 53; A guide to data management 54; Conclusions 55 45 Measuring human capital Measurement issues 59; Classification of measures 62; Developing measures 62; Approaches to analysis 66; Analytical models 67; Examples of approaches to measurement 78; Conclusions 80 59 Human capital reporting Internal reporting 82; External reporting 88; Conclusions 97 81 Applications of HCM The link between HCM and strategic HRM 98; HCM and talent management 101; HCM and learning and development 104; Knowledge management 108; Performance management as a source of human capital data 110; Reward management 114; Supporting and developing line managers 116 98 Part The role and future of HCM 119 The role of HR in HCM The business partner concept and HCM 122; HR’s role in developing, analysing and using human capital data 125; The role of HR in enhancing job engagement and commitment 131; The strategist role 135; Making the business case 135; Working with the other functions 138 121 The skills HR specialists need for HCM Closing the skills gap 142; Developing a new template for HR 143; HR versus line manager skills 147; Conclusions 149 140 10 The future of HCM The virtues of HCM 150; Question marks about HCM 151; The link between HCM and business strategy 153; 150 Contents ❚ vii Establishing the link between HR practice and business performance 154; Information on intangible value for the investment community 157; Convincing senior management 157; Enlisting the interest and involvement of line management 158; Convincing HR specialists 160; Staged development of HCM 160; Developing the HCM skills of HR specialists 162; The meaning of added value 163; What is meant by regarding people as assets 164; Selecting the measures 165; Analysing and evaluating the data 166; The future of external reporting 166; Conclusions 169 Appendix: The HCM toolkit Purpose of the toolkit 170; What is an HCM approach? 170; Do we need to adopt an HCM approach? 172; How we adopt an HCM approach? 174; Introducing HCM 177; Decide HCM goals 178; Decide areas to be covered by HCM 180; Identify measures required and available 180; Develop internal reports 197; Develop external reports 198; How we operate HCM? 201 170 References Index 207 215 Foreword So what is human capital? The term has probably set off more emotions in the HR world than any other On the one hand its proponents hail it as a revolutionary way of managing people, treating them as assets rather than costs On the other, detractors see is as just another HR fad Some practitioners are embracing the challenge with enthusiasm while others feel daunted and confused by the array of tools and techniques and the need to have at least a passing acquaintance with numbers Even the very phrase ’human capital’ leads to heated debate with on the one side those who believe it dehumanizes the people element of the enterprise to the other who believe it finally puts people on the right side of the balance sheet Whether we like it or love it the term ‘human capital’ is here to stay and is now accepted as a common definition of the all important people element of intangible value Intangible value is constantly increasing in importance as the very existence of most of our organizations depends on our ability to innovate, to capture the support of customers, to establish our brand and to respond to an ever-changing marketplace All of this depends on people and ge�ing the best from people depends on understanding what motivates them to perform, to give outstanding service to customers, to run that extra mile when it counts Without this information, managers have to make decisions largely in ignorance of the impact these decisions might have on the performance of people x ❚ Foreword What this book tries to is demystify some of the lo�ier claims for human capital management and demonstrate that any practitioner in any organization can get be�er at providing the information that will help them understand just what it is that their people contribute This in turn will improve management decision making and help them move towards developing strategic measures to help identify the drivers of success in their business Human capital management is a journey Where you start will largely depend on the information available Where you go will depend on what you with that information and how you are able to grow and communicate it The kind of practical guidance, tools and analysis of the literature contained in this book will help managers to build themselves a route map to continue that journey whatever their starting point The use of quality people data is the key to good human capital management Analyse and link this data with business performance metrics (such as sales, customer service and financial performance) and you begin to get deep organizational insight into how effective your people strategy is and its impact on business performance and the bo�om line Human capital is o�en represented as both a challenge and an opportunity A challenge to identify relevant measures and provide meaningful information which can be acted on, and an opportunity to both evaluate and maximize the value of people Neil Roden Group Director, Human Resources The Royal Bank of Scotland Group 212 ❚ References Scarborough, H and Elias, J (2002) Evaluating Human Capital, CIPD, London Scarborough, H, Swan, J and Preston, J (1999) Knowledge Management: A literature review, IPD, London Schein, E H (1969) Process Consultation: Its role in organizational development, Addison-Wesley, Reading, MA Schuller, T (2000) Social and human capital; the search for appropriate technomethodology, Policy Studies, 21 (1), pp 25–35 Schultz, T W (1961) Investment in human capital, American Economic Review, 51, March, pp 1–17 Schultz, T W (1981) Investing in People: The economics of population quality, University of California, CA Sco�-Jackson, W, Cook, P and Tajer, R (July 2006) Measures of workforce capability for future performance, Chartered Management Institute, London Smethurst, S (2005) The long and winding road, People Management, 28 July, pp 25–29 Smilansky, J (2005) The Systematic Management of Executive Talent, Hydrogen, London Smith, A (1776) The Wealth of Nations, Clarendon, Oxford Suff, R (2005) Building human capital investment at Nationwide, IRS Employment Review 819, 11 March, pp 15–17 Syre�, M (2006) Four reflections on developing a human capital measurement capability, What’s the Future for Human Capital?, CIPD, London Tan, J (2000) Knowledge management – just more buzzwords? British Journal of Administrative Management, March–April, pp 10–11 Thomas, D (2005) Where would you rate on new HCM league table?, Personnel Today, June, p Thompson, P (2002) Total Reward, CIPD, London Tsui, A S and Gomez-Mejia, L R (1988) Evaluating human resource effectiveness, in Human Resource Management: Evolving roles and responsibilities, ed L Dyer, Bureau of National Affairs, Washington, DC Tyson, S and Witcher, M (1994) Ge�ing in gear: post-recession HR management, Personnel Management, August, pp 20–23 Ulrich, D (1998) A new mandate for human resources, Harvard Business Review, January–February, pp 124–34 Ulrich, D and Brockbank, W (2005a) The HR Value Proposition, Harvard Press, Cambridge, MA Ulrich, D and Brockbank, W (2005b) Role call, People Management, 16 June, pp 24–28 Ulrich, D and Lake, D (1991) Organizational capability: creating competitive advantage, Academy of Management Executive, (1), pp 77–92 Walker, J W (1992) Human Resource Strategy, McGraw-Hill, New York Walters, M (2006) What is the role of HR process? What’s the Future for Human Capital?, CIPD, London References ❚ 213 Watkins, K and Marsick, V (1993) Sculpting the Learning Organization, Falmer Press, London Watson Wya� Worldwide, (2002) Human Capital Index®: Human capital as a lead indicator of shareholder value, Watson Wya� Worldwide, Washington, DC World Bank (2000) website: worldbank.org Youndt, M A (2000) Human resource considerations and value creation: the mediating role of intellectual capital, paper delivered at National Conference of US Academy of Management, Toronto, August Subject index absence rates, analysis of 66–67 Accounting for People Task Force 1, 21, 22, 64, 81, 82, 153, 167 Accounting Standards Board 12, 157, 167 activity measures 62 added value per employee 65, 168 intangible 11 measures 62 meaning of 163–64 metric (Human Capital ROI) 164 through people 2, 3, 13, 34 analysis of business drivers 203 analysis of business strategy 202 analysis of data approach to 66–67 and evaluation 166 purpose 66 requirements 204–06 analytical models balanced score card 67–68 Bath people and performance model 64–75 engagement (people management and business performance) model 73–74 Human Capital Index 72–73 human capital monitor 69–70 Human Capital Report 77 Newbury Index Rating 76–77 organizational performance model 70–72 applications of HCM knowledge management 108–10 learning and development 104–08 line managers – support and development 116–17 performance management 110–14 strategic HRM 98–01 reward management 114–16 talent management 101–04 Asda 74 assets employees/people as 10–11, 18 hard human 216 ❚ Subject Index intangible intellectual people as 10–11, 20 a�itude surveys, see employee opinion surveys balanced score card 67–68, 193 benchmarking 35 business case, making of 135–38, 157–58 business case for HCM 176 business drivers, analysis of 155, 203 business impact modelling 156, 197 business partner concept 122–25 business performance analysis of business strategy and drivers 155, 202–03 data 47, 193 link with HR practices 154, 156 links with human capital 196–97 business review headings 168 initiation 82 issues 90 requirements 89–90, 167–68 business strategy analysis of 155, 202 content 155 and HCM data 36 and human capital management link with HR strategy and resourcing strategy 15 Cameron McKenna 66 causal links between human capital and business performance 196–97 causality 46 causation 116, 156–57 Centrica 63–64, 66, 100 CFO Research Studies 33 Chartered Institute of Management 59, 65, 84, 90 Chartered Institute of Personnel and Development (CIPD) 1, 23, 54, 74, 83, 84, 90–92, 108, 110, 112, 144, 168 CIPD Human Capital Panel 141, 145, 147 commitment 131 company reporting 81 competencies 10 competitive advantage 5, 11, 26 contingent pay 163 contribution 163 contribution-related pay 163 core competence 11 corporate social responsibility data 47–48 cost/benefit analysis 137 critical evaluation 38 customer data 48 customer service strategies, use of metrics 158 dashboards, use of 86, 112, 117, 129 data analysis of requirements 204–06 business performance 193 defined 32 drawing conclusions 36 collection 55–56 employee performance 194 management 54–55 and measures 32, 61 and measurement 61 people ix use of 98 see also human capital data data analysis analytical models 67–77 approach to 66–67 purpose 66 Subject Index ❚ 217 data collection cycle 57, 84–85 levels 56 data management 54–55 databases 14 demographic data 48–49 development data 49–50 discretionary behaviour 132–33 discretionary effort 51 diversity data 50 drivers of HCM 29, 127, 179 drivers of performance 127, 155 employee–customer–profit chain 73, 156, 197 employee opinion data 50–51 employee opinion surveys engagement and commitment survey 190 general opinion survey 188–89 leadership survey 191 performance management survey 193 reward survey 192 use of 187–88 employee performance data 194 employee retention data 52 employee turnover data 52 employees as assets 24, 84, 164–65 employees as costs 24 employability 19 employer of choice 131 employment relationship 9, 164 engagement 20, 131 engagement (people management and business performance) analytical model 73–74 EU Accounts Modernisation Directive 82, 89, 167 evaluation of human capital and analysis 166 approaches to 196 critical evaluation 38 defined 194 of human capital 83 of performance management 112–14 problems with 194–95 reasons for 194–95 of training 105–08 external reporting on acquisition, retention, development and management 94 arguments for and against 199–200 business review 89–90 content 200 data 95 described 35 development of 198–99 financial statements and HCM 81 framework for (CIPD) 91, 92–93, 95–96 future of 166–68 on human capital strategy 93–94 indicators 95–96 issues 90–91 on performance 94 principles 91, 93 fit 36 frontline managers enlisting interest and involvement 158–59 HCM information to 117 and internal reports 83 measures of effectiveness 129 role of 116–17 and self-service 159 Genome I model (Nationwide) 156 Genome II model (Nationwide) 86, 128–29, 156, 197 hard assets hard model of HRM 24 218 ❚ Subject Index HCM, see human capital management high-performance work system 33, 100–01 HR competence in HCM practice 201–02 HR data 51–53 HR development strategies 16 HR effectiveness 130 HR effort, organization of 37 HR performance, establishing the link between HR practice and business performance 154–55 measurement of 130–31 HR planning 16 HR professionals as business partners 122–25 HR, role of in HCM and the business partner concept 122–25 developing, analysing and using human capital data 125–30 gaining support and commitment 138 making the business case 135–38 measurement of HR performance, 130–31 performance measurements 126–28 skills required in HCM 140–49 strategist role 135 supporting the achievement business strategy and business drivers 155 workforce measurements 126 working with other functions 138–39 HR scorecard 130–31 HR skills required in HCM appreciating how HR strategy interacts with business strategy 145 closing the skills gap 142–43 competence requirements 201–02 developing a new template 143–44 developing skills 162 knowledge of data 145–46 knowledge of how to collect and analyse data 145 and line manager skills 147–49 in presenting data and reporting on outcomes 145–47 specialist skills 141 tools required 140 understanding the business 144–45 understanding what line managers need 146 in working as part of a management team 147 in working with the finance function 147 HR specialists developing HCM skills 162 gaining commitment to HCM 160 HR strategy 36 HR team 24 HR value models 12 human asset accounting 11, 12, 165 human assets human capital assessment of 92 categories of human capital strategy 92 characteristics of 5–6 concept of defined 5, 6, 8, 21 evaluation 83, 84–85, 166, 196, 194–95 forms of 109 investment in 8, link between HR and business performance 2, 154, 156 and market worth 11–12, 195 meaning of 171 Subject Index ❚ 219 measurement 91 measures 92 origin of term 7–8 ownership of and people 84 principles 91 questions 18 reporting 90–91 strategy 36, 71, 92 theory 2, 10, 18–19 value of 33 human capital advantage 11, 26, 37 human capital cycle 85 human capital data analysis of requirements 204–06 defined 31–32 and measures 32 types of 47–53 use of 98 see also data human capital evaluation and analysis 166 approaches to 196 defined 194 of human capital 83 process 84, 85 problems with 194–95 reasons for 194–95 Human Capital Index 72–73 human capital information CIPD framework for 91–92, 95–96 indicators 95–97 requirements 85 human capital management (HCM) aims of 21–22 applications of 98–117 approach to 171, 174 as an a�itude of mind 38 business case for 176 as a business-orientated activity 121 concerns 98 core principles 83–84 deciding need 172–74 defined viii, 1, 20, 21, 82 development of 39–41, 160–62, 178, 201 drivers 29, 127, 179 establishing the link between HR practice and business performance 154–55 focus of 29 ge�ing into action 37–39 goals 178–79 and the HR function 122 and human resource management (HRM) 23–26 importance of 171 integrated model of 39 introduction of 160–62, 177–78 as a journey ix, 30–31 and knowledge management 108–10 and learning and development 104–08 and line managers 158–59 link with business strategy 153 and measurement 1, 20–21, 31–34, 63–66, 78–79 operation of 201 and people data ix and performance 169 and performance management 110–14 principles 91 priorities 180 process of 28, 171 question marks about 151–52 rationale for 22–23 and reporting 34–36 and resource–based strategy 20, 26–27 and reward management 114–16 staged development of 160–62 and strategic HRM 98–101 and talent management 20, 101–03 220 ❚ Subject Index use of 175 as a value-added approach to people management 163 virtues of 151–52 human capital management applications knowledge management 108–10 learning and development 104–08 line managers – support and development 116–17 performance management 110–14 strategic HRM 98–101 reward management 114–16 talent management 101–04 human capital measurement defined 31 issues 34 need for 33 and strategic HRM 24–25 Human Capital Monitor 69–70, 196 Human Capital Report 77, 196 human capital reporting dashboard 86 defined 35–36 external reporting 35, 88–97 internal reporting 35–36, 82–87 human capital ROI 164 human capital strategy categories of 92 development of 36 factors 71 report on 94–96 statement 93–94 human process advantage 37 human resource accounting 12–13 human resource management (HRM) and human capital theory 10 and human capital management (HCM) 23–26 theory 18 IDS 31, 39 information technology 14 Institute of Employment Studies 34 intangible assets intangible resources 6, intangible value and the investment community 157 importance of viii information on 27 intellectual capital defined elements of 6–7 implications of 15–18 significance of internal reporting benefits of 82 content of 198 dashboards 86, 87 described 35–36 developing internal reports 197–98 Genome II model 86 guide to 83 and line managers 83 investing in human capital 9, 11 in skills investment community 157 IRS 156 ISR Global Financial Services Norm 51 ISR Global High Performance Norm 51 key performance indicators (KPIs) 127–28 knowledge embedded 14 institutionalized 14 and intellectual capital and organizational effectiveness Subject Index ❚ 221 and social capital 6, 11, 14 stocks and flows knowledge management defined 108 and HCM 108–10 and intellectual capital 7, 108 and organizational capital 15, 18 and social capital 14 learning and development business case for 137–38 and HCM 104 nature of 104–105 line managers enlisting interest and involvement 158–59 HCM information to 117 and internal reports 83 measures of effectiveness 129 role of 116–17 and self-service 159 skills in use of HCM data 147–49 use of dashboards 117 use of HCM 37 Lloyds TSB 101 make or buy decisions 16 management reports 83 management through measurement 25 market worth 11 Marks & Spencer 74 materiality of data 34, 58, 90 measurement approaches to 63–66, 78–79 defined 61 difficulties 60 and data 61 and human capital management 20–21, 25 indicators 95–96 issues 59 process of 62 purposeful 20 reasons for interest in 33–34 measures activity 62 added value 62 analysis of requirements (HR function effectiveness) 185–86 analysis of requirements (people data) 181–84 classification of 62 criteria for 165–66 customer service 128 and data 32 of effectiveness of line managers 129 of engagement and commitment 134–35 factors affecting selection 180–81 financial 127 of human capital 12, 103 identification of 12 impact of HR on performance 128–29 indicators 95–97 key measures 63, 64 key questions at Centrica 63–64 list of possible measures 181–86 and management 84 and metrics 32 operational impact 128 performance 62 popular measures 65 productivity 127 purpose of 62 and reporting 84 selection of 165–66 three-tier approach to 65 measuring performance 126–28 the value of human capital 11–12 Mercer HR Consulting 70–72 222 ❚ Subject Index metrics defined 32 employee 152 in human capital management 20, 21, 91 informing customer service strategies 158 and measures 32 use of 117 workforce 90 Ministry of Defence 49 multiple causation 116 Nationwide Building Society 31, 46–47, 51, 65–66, 78, 128–29, 156, 162, 197 Newbury Index Rating 76–77, 196 Norwich Union Insurance 78, 111–12 NSPCC 100 OECD 12 OFR (Operating and Financial Review) 81–82, 88–89, 167 opportunity costs ORC International 156 organizational capital defined 6–7, 14, 109 embedded knowledge 14, 15 and human capital theory 11 and knowledge management 15, 18 implications of 18 and social capital 15 organizational commitment 131 organizational development 17 organizational effectiveness Organizational Performance Model 70–72, 196 output criteria 129 Penna Consulting 150 people as assets 10–11, 20, 164–65 people management, aims of 165 performance drivers 127 establishing the link between HR practice and business performance 154–55 and HCM 169 measures 62 measuring the impact of HR 126–28 measuring success 127–28 performance indicators 127–28 performance management evaluation of 112–14 as a provider of information on human capital 110 use of data 110–12 physical capital 6, 10 process criteria 129 consulting 17 defined 17 psychological costs relational capital 109 reporting on human capital dashboard 86 defined 35–36 external reporting 35, 88–97 internal reporting 35–36, 82–87 resource-based firm 10 resource-based strategy 12, 20, 26–27, 36, 99–100 resource capability 99 resourcing strategies defined 15 and human capital theory 15–16 return on capital employed 62 return on investment (ROI) and making a business case 137 calculation of 106 for evaluation of learning and development programmes 103, 106 Subject Index ❚ 223 and human capital management 21, 23 for individuals 9, 19 for linking HR and business performance 156 as a measure 62 as a means of linking human capital and business performance 197 in skills skills required to calculate 162 reward management analysis of impact 116 defined 114–15 HCM approach to 115 measurements 115–16 reward strategies 16–17 Royal Bank of Scotland 31, 39, 51, 52, 54, 74, 78–79 Saratoga 39, 101, 164 Sears Roebuck 73 Self-service 159 Selfridges 100 social capital defined 6, 13–14, 109 and human capital 14 and intellectual capital 7, 11, 14 practical implications of social capital theory 17 and value creation 17 social costs Standard Chartered Bank 50, 51, 52, 64, 74, 79 strategic capability 99–100 strategic HCM defined 99, 100 and HCM 24–25, 98–101 resource-based approach to 99–100 strategic HRM measures 65 strategic integration 24 structural capital 7, 109 survey feedback 17 talent management aim of 101 defined 165 elements of 102 and human capital management 20, 101 ingredients of 101 measures 103 tangible resources 360-degree feedback 77, 110 total reward 133–34 Towers Perrin total reward model 134 utility analysis 129–30 value and human capital management 20 people as value creating assets 84 value-added 163 value adding HR policies 73 value creation by individuals and social capital 17 value drivers 195 Watson Wya� Worldwide 72–73 workers as assets 10 workforce measurements 126 workforce metrics 90 World Bank 13 Names index Aitken, G 143–44 Armstrong, M 110, 113, 114, 163 Barney, J 10, 26, 99, 100 Baron, A 110, 113, 114 Bartle�, C A 17 Bea�y, R W 130–31 Becker, B E 31, 100, 165 Becker, G S 10 Beer, M 24 Blake, P 108 Bontis, N 6, 7, 8, 12, 13 Boudreau, J W 129–130 Boxall, P 11, 26, 37 Brockbank, W 123–24 Brown, D 1, 90, 138–39, 163 Chatzkel, J L 5, 7, 21 Da�, R L Davenport, T H 15 Davenport, T O 9, 10–11, 165 deLong, T 102 Donkin, R 1–2, 62, 151, 153, 154, 164 Dyer, L 24–25 Edvinson, L 6, Ehrenberg, R G 5, Elias, J 1, 5, 10, 31, 62, 151–52, 153 Elliot, R F 8, Fitz-enj, J Fombrun, C J 24 Galbraith, J R 17 Ghoshal, S 17 Gillen, S 157 GomezMejia, L R 129 Grant, R M 26–27 Guest, D 24 Hamel, G 99 Hendry, C 135 Holder, G W 24–25 Huselid, M A 130 Hutchinson, S 116–17 Kaplan, R S 67 Kearns, P 20, 21, 22, 24, 25, 76–77, 98, 101, 106-107, 137, 150, 156, 164 226 ❚ Names Index Kinnie, N 14, 108–09, 144 Kirkpatrick, D L 105–06 Roden, N viii–ix, 159 Rucci, A J 73, 156 Lake, D 37 Lawler, E E 110 Lees, H 77 Legge, K 24 Lepak, D P 9–10 Lewin, K 17 Lickierman, A 130 Likert, R 12 Longbotham, D 152 Sackmann, S 12 Scarborough, H 1, 5, 10, 31, 62, 108, 151–52, 153 Schein, E H 17 Sco�-Jackson, W 25 Schuller, T 11, 12 Schultz,T W 7–8 Smethurst, S 124 Smilansky, J 102 Smith, Adam, Smith, R S 5, Snell, S A 9–10 Suff, R 156 Sunderland, J 21 Syre�, M 124, 142, 149, 151, 162 Malone, M S 6, Manocha, R 153 Marsick, V 104 Ma�hewman, J 23, 156 Mayo, A 13, 23, 24, 69–70, 107, 129, 140, 160, 163, 164 Miller, T 106–07, 137 Murlis, H 131 Nalbantian, R 21, 83 Norton, D P 67 Outram, R 12 Penrose, E 99 Pe�igrew, A 135 Pickard, J 124 Prahalad, C K 99 Prisack, L 15 Purcell, J 51, 60, 74–76, 99, 116–17, 131, 132–33, 158–59 Putnam, R 13 Tan, J 110 Thomas, D 76–77 Thompson, P 134 Tsui, A S 129 Tyson, S 36 Ulrich, D 10, 37, 108, 122–23, 123–24 Vijayaraghavan, V Walker, J W Walters, M Watkins, K Weick, K E Witcher, M 102 99 23, 122, 154 104 36 Youndt, M A 7, 14, 17 ... concept of human capital The concept of human capital is concerned with the added value people provide for organizations It has been well said by Chatzkel (2004) that ‘it is human capital that... essence of HCM The concept of human capital Intellectual capital 6; Human capital 7; Social capital 13; Organizational capital 14; Practical implications of intellectual capital theory 15; Conclusions... the organization The concept of human capital ❚ Human capital is not owned by the organization but secured through the employment relationship People bring human capital to the organization although