A Literature Review on the Impact of Investment in Human Capital on Economic Success: How do Human Resources Practices affect Organisational Performance?

Table of Contents

• Introduction
• Theoretical Background
  • How is Human Capital Conceptualised in the Management Literature?
  • The Human Capital Project
  • The Story so Far: Theoretical Perspectives on Human Resources Management
  • Current State of Research on HR Practices and Firm Performance
  • Four Theoretical Perspectives Explaining why Human Resources Practices matter for Organisational Performance
  • Multi-Level Model Linking HR Systems to Organisational Performance
  • Methodological Issues
  • Research Questions
• Method
• Results
  • Strategic HRM
    • HR Orientation
    • HRM Effectiveness and Business Strategy
    • Best Practice and Strategic Fit Models of HRM
    • High Involvement Work Practices in South Korean Culture
    • Quality Enhancer Strategy: Total Quality Management
    • Total Quality Management and Downsizing
    • Labour Market Flexibility
    • Role of HRM and Perception of Top Management
    • Presence of an HR Executive on the Board and Growth rate
    • HRM Practices and Work Climate
    • Synthesis of Findings on Strategic HRM and Contingency Variables
  • Human Resources Development
    • Training Effectiveness: Horizontal and Vertical Transfer
    • Financial Analysis of HRD
    • Company and Individual Returns to Investment in Education
    • Alignment of Training with Corporate Strategy
    • Alignment of Training with Strategy and Training Transfer
    • Transfer of Training back to the Job
    • Investment in Training
    • Synthesis of Research on Human Resources Development
  • Technology and HR Practices
    • Human Resources Strategy for the ICT-Driven Business Context
    • The Influence of HR Specialist Involvement on Information System Success
    • The Impact of Work Practices and Technology on Productivity
    • The Interrelationship of Technological Change and Human Resources practices on Labour Productivity and Firm Performance
    • Synthesis of Results on Technology and HR practices
  • Diverse Workforces and Flexible Working Conditions
    • Diversity, Business Strategy and Organisational Performance
    • Team Racial Composition, Member Attitudes and Team Performance
    • Quality of Work Life and Business Performance
    • Historical and Theoretical Context of the 'Win-Win' Paradigm of Economic Performance
    • Coverage and Effectiveness of Family-Responsive Workplace Policies
    • Synthesis of Result on Diversity and Flexibility
  • Methodological Issues in the HR-Performance Relationship
    • Reliability of HR Measures: Sources of Measurement Error
    • Single or Multiple Raters and Rater Bias
    • Multiple Raters and Level of Empirical Analysis
    • Reliability Estimates at Lower Levels of Empirical Analysis
    • Measurement Error in Cross-sectional and Longitudinal Data
    • Synthesis of Methodological Issues
• Discussion
  • Interpretation of the Results with Reference to the Research Questions
  • Causational Relationships and Enabling Factors
  • Evaluation of Methodological Issues
  • Limitations of the Current Research and Suggested Future Directions
  • Implications for HR Directors and Corporate Strategy
• Abstract

Objectives and Key Themes

This thesis explores the empirical relationship between investment in human capital and organisational performance. It aims to determine whether investment in human capital has a positive impact on economic indicators of organisational performance, both directly and indirectly.

• The conceptualisation of Human Capital in management literature.
• Theoretical perspectives explaining the relationship between HR practices and firm performance.
• Methodological challenges in measuring and analyzing the impact of human capital on organisational performance.
• The impact of various HR practices, including strategic HRM, human resources development, technology, diversity and flexibility, on key economic indicators of organisational performance.
• The implications of research findings for HR directors and corporate strategy.

Chapter Summaries

• The introduction lays out the research question and highlights the importance of understanding the relationship between human capital and organisational performance.
• The theoretical background chapter reviews existing literature on human capital, including various theoretical perspectives and methodologies used to study the relationship between HR practices and firm performance.
• The results chapter presents a comprehensive analysis of various HR practices, including strategic HRM, human resources development, technology, diversity, and flexible working conditions. This chapter explores the impact of these practices on organisational performance and delves into relevant methodological issues.
• The discussion chapter interprets the results in light of the research questions and explores the causality between investment in human capital and improved organisational performance.

Keywords

This literature review focuses on human capital, organisational performance, human resources management, HR practices, strategic HRM, human resources development, technology, diversity, flexibility, methodological issues, measurement error, empirical research, economic indicators, firm performance, and shareholder value.