Human Capital Measures, Strategy, and Performance : HR Managers’ Perceptions

Purpose – The purpose of this paper is to report the results of a survey and interviews with HR professionals to identify and better understand their perceptions and expectations of Human capital (HC) measures’ content, links to strategy, and impact on performance. Design/methodology/approach – This study relies on a quantitative analysis of survey questionnaires collected from 104 HR executives, as well as on a qualitative investigation using six interviews. Two types of HC measures were derived using principal component analysis. One factor measures employees' work efficiency and cost-consciousness (Efficiency indicators), whereas the second factor measures employees' entrepreneurial and innovative capabilities (Innovation indicators). Findings – Our results confirm the following hypotheses: 1/ according to HR managers, the more advanced a company is in the development of HC measures, the higher the company’s performance; 2/ in companies following a differentiation strategy, HR managers are interested in innovation indicators, while in those following a cost reduction strategy, HR managers are interested in efficiency indicators. Research limitations/implications – Results are based on a cross-sectional study of HR professionals’ perceptions. However, it underscores the critical role that HC measures play in delivering performance in HR managers’ opinion. It also shows that HR managers are conscious that HC measures should be aligned with strategy. Practical implications – Based on HR managers’ perceptions, the paper suggests that HR professionals might invest more effort in creating and implementing their HC measures to deliver higher levels of performance. It also implies that HR managers and MACS experts have a common interest to collaborate when implementing HC measures. Originality/value – The paper demonstrates the importance of implementing HC metrics into a strategic performance management system to deliver performance from a company’s human capital. It contributes to a cross-disciplinary (human resources, management control and strategy) perspective on human capital strategy