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Human Capital - Essay Example

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Date: 14th April 2013 Relationship among Variables “Discuss the relationship among following variables. Firm strategy, human capital, human resource practices, human resource behaviors, firm performance and overlapping tenure” Introduction to Variables Firm Strategy, also known as Business Strategy or Corporate Strategy, is a long term plan of action of a firm…
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Human Capital
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Download file to see previous pages The qualification, skills and experience of an employee has an economic value for his employer as well as for the economy as a whole. Human Resource Practices are defined as those methods, processes, rules and procedures used in the field of HR. Examples include recruiting, hiring, firing, training, monitoring, reviewing performance, performance appraisals etc. Human Resource Behavior refers to interdependence of individuals in co-coordinating their activities in order to perform at a higher level. Firm Performance is usually measured in terms of financial health of a firm. There are numerous contributing factors which effect firm’s performance. Some of the prior mentioned variables are also leading factors which influence firm’s performance. Finally, Overlapping Tenure is the amount of time employees have worked together in order to achieve common performance outcomes. Relationship among prior mentioned variables Extensive researches have been performed in order to examine the relationship among these variables. Aldehayyat & Twaissi (2011) examined a strong positive relationship between Financial Performance and Strategic Planning. The empirical results of this research also supported the practice of firms’ strategic planning in small and medium sized business firms. Leana & Van Buren, (1999) studied the relationship between Overlapping Tenure and Firm’s Performance. In this study, Leana & Van Buren, (1999) focused on the overlapping tenure that is the amount of time employees have spent in working with each other as well as with their manager. The authors stated that it may take time for individuals to form relationships with their-co-workers and allows them to work for common goals. Leana & Van Buren, (1999) stated that some studies found positive long term relationship between the two while other found negative relation between overlapping tenure and firm’s performance. Research conducted by Carmeli & Schaubroeck, (2005), Takeuchi, Lepak, Wang, and Takeuchi, (2007) and Lopez-Cabrales, Valle & Herrero, (2006) found positive relationship between firm performance and human capital. These studies employed industry accepted measures of human capital in order to investigate the relationship between performance and human capital. Leana & Van Buren, (1999) conducted a study to determine overlapping tenure and its relation with firm’s performance. In this study, the main area of focus was the amount of time employees have worked with each other and the amount of time they have worked with their manager. Leana & Van Buren, (1999) concluded that human capital is influenced by stability of employees’ relations. By having flexibility and promoting stability among employees, organizations may enhance their social capital. Study of Huselid (1995) stated that firm performance and high performance work reduces employee turnover and increase employee performance. Also, high performance work by employees leads to greater organizational performance (financial and productivity) (Huselid, 1995). The behavioral perspective of human resource behavior facilitates relation between organization performance and human resource practices. Human resource practices are utilized to improve and control the behaviors and attitudes of human resource. Behavioral perspect ...Download file to see next pagesRead More
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