Does human capital matter? A meta-analysis of the relationship between human capital and firm performance.

Abstract

Theory at both the micro and macro level predicts that investments in superior human capital generate better firm-level performance. However, human capital takes time and money to develop or acquire, which potentially offsets its positive benefits. Indeed, extant tests appear equivocal regarding its impact. To clarify what is known, we meta-analyzed effects drawn from 66 studies of the human capital-firm performance relationship and investigated 3 moderators suggested by resource-based theory. We found that human capital relates strongly to performance, especially when the human capital in question is not readily tradable in labor markets and when researchers use operational performance measures that are not subject to profit appropriation. Our results suggest that managers should invest in programs that increase and retain firm-specific human capital.

Conceptualising inclusive talent management: potential, possibilities and practicalities

“…However, there is a growing body of research connecting human capital and positive psychology to organizational performance (Crook et al 2011;Harter, Schmidt and Hayes 2002;Newman et al 2014). It is also clear that workers respond more positively to HR practices when they attribute management actions to improving their well-being rather than to improving performance (Nishii, Lepak and Schneider 2008).…”

“To have and have not”: founders’ human capital and university start-up survival

“…industry, technical, marketing, finance, international, and start-up experience) while the latter only includes two dimensions. Indeed, as highlighted in Crook et al (2011), the effect of founders' human capital on firm performance is stronger when measurements capture more specific dimensions of human capital. Nevertheless, we believe that this relationship needs further research.…”

Exploring the relationship between HRM and firm performance: A meta-analysis of longitudinal studies

“…Indeed, researchers in various disciplines, including management and organisational behaviour, have used meta-analysis as a tool to accumulate data and synthesise them into generalisable knowledge (Hunter and Schmidt, 2004). To this end, a group of researchers (Jiang et al, 2012;Crook et al, 2011;Subramony, 2009;Combs et al, 2006) have adopted meta-analyses to examine the relationship between HRM practices or HPWPs and organisational performance. However, the existing body of meta-analyses has rarely differentiated between the research designs used in the pooled studies (see discussion by Rouse and Daellenbach, 1999).…”