Talent Retaintion
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Talent Retaintion
Valuation of Human Capital
Valuation of Human Capital
Research By Navin Bhutoria
"Our employees are our greatest assets, and the ability to attract and retain them is the key driver
of our future success."
Sound familiar? This is now a routine sentence for any company reporting on its health and its
future. But for many of those companies, its meaning and implications are limited to that
sentence. Let's step back to quantify more precisely what it means to have human capital, to
attract and retain it.
The human capital can be defined as "the knowledge that individuals acquire during their life and
use to produce goods services or ideas in market or non-market circumstances."
Good managers know that measurement is a prerequisite for good management: We've heard the
axiom that, "What gets measured gets managed." This suggests then that the fundamental source
of wealth creationhuman capitalis seriously under managed in most organizations. That is
because most organizations' systems of measurement, shaped in part by accounting and reporting
requirements, are still unduly influenced by measurement concepts dating back to the industrial
era when physical capital was the primary source of wealth creation. Using these out-of-date
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Valuation of Human Capital JBIMS
measurement systems to manage today is roughly analogous to steering a car with the rear view
mirror.
There have been only three eras in all of economic history: the agrarian era, the industrial era, and
the knowledge era. Each era has been defined by the factor of production that has served as the
foundation for wealth creation. Not surprisingly, in...
- Submitted by: neeraj_iitk
- Date Submitted: 11/21/2005 12:32 PM
- Category: Technology
- Words: 11407
- Pages: 46
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