Measuring intellectual capital: Learning from financial history

Abstract

Emerging evidence from scientific studies and specific organizations suggests that how people are managed significantly affects organizational success, and that certain patterns of human resource activities are associated with financial performance. Most human resource (HR) and line managers, however, find existing measures of human and intellectual capital woefully inadequate. In this article, we suggest that designers of HR measurement systems can learn from the success of well‐accepted measurement models in the financial and marketing arenas. We show that the historical development of these measurement systems suggests several lessons for the HR measures of the future. These lessons include articulating the links in the value chain, focusing on key organizational constraints, and using data to make “soft” intangible factors more tangible. © 1997 John Wiley & Sons, Inc.

A human resource accounting transmission: shifting from failure to a future

“…This paper calls for a change in perspective. Unlike some (Pfeffer, 1997;Becker et al, 2001;Boudreau and Ramstad, 1997), who would suggest moving away from costing and reporting HR in financial terms, we suggest a new accounting and reporting approach that is compatible with current accounting methods. This new approach will require a change in the way practitioners and scholars perceive their activities and processes.…”

An operational conceptualization of human resource analytics: implications for in human resource development

“…The co-citation network map helps to identify the core of earlier literature regarding the HRA topic and visualize the development over time (Small, 1973) The minimum number of citations of an included reference is set to 10 to filter academic articles that are less accepted in academia. Our network analysis as illustrated in Figure 2 revealed that Boudreau and Ramstad (1997, 2006) are at the center of this network.…”

“…Similarly, Boudreau and Ramstad (1997) suggested that HR should learn from the successful measurement models in the finance and marketing fields, such as building the value chain of intellectual capital and forming a coherent model of value linkage from HR activities to HR measurements and eventually to business success. Although HR measurements were used to enhance HR outcomes such as increasing the efficiency of HR functions, reducing HR-related costs and improving customer satisfaction in the early stages of HRA implementation, it failed to reach the level of influencing organization strategy (Boudreau and Ramstad, 2006).…”

Strategic Human Resource Management Measures: Key Linkages and the PeopleVantage Model

“…Nonetheless, the increasing attention to such evidence from organizations and consulting firms illustrates the popularity of the idea that human resource attributes may associate with organizational profits or other key strategic outcomes. Boudreau & Ramstad (1997) review other studies showing similar results. Thus, emerging evidence from samples of many organizations seems to support the assertion that human resources, and the activities associated with managing human resources, do indeed associate with tangible investment returns.…”