The Development and Intial Assessment of an Instrument for Human Capital Planning

The shift in The United States economy from a manufacturing powerhouse to a service driven economy has placed a great emphasis on planning within organizations in order to remain competitive in a new global economy. The link between business strategy and successful implementation has been well documented in the literature. These links include human capital, however no empirical based measure for human capital planning has been identified or developed. This study examined the development and validation of an instrument for human capital planning as a strategic human resource managementtechnique.This study provided the preliminary exploratory factor analysis data utilizing a principal components analysis for the development and validation of an instrument for human capital planning from a national survey of 494 respondents. The six major factors identified from the exploratory factor analysis are: Leadership Driven Approach to Planning; Current Organizational Status; Systems for Measurement, Accountability, and Feedback; Organizational Learning and Buy-In; Integrating Organization Competency Models; and Human Resource Capabilities and Capacities. These six factors were expanded from the original five components; however there was a reduction of nine items.The study developed the survey instrument through the utilization of a subject matter expert (SME) panel, assessed the content validity, reliability, factor loadings, and structure of the scale. Preliminary reliability and validity of the scale was determined. The findings reveal a valid and reliable scale can be developed to measure and assess human capital planning as a strategic human resource management technique.Human capital and worker knowledge are essential elements for the success of any organization. The emerging global economy will force businesses and organizations to leverage, develop, and plan for human capital and knowledge as critical functionsnecessary for business survival. These critical functions will require links between business strategy and planning. This first generation instrument will assist in bridging the gap between business strategy and human capital implementation.This study has revealed that an instrument for human capital planning as a strategic human resource management technique can be developed and validated through the utilization of an extensive literature review and the use of a subject matter expert panel. In addition, the usefulness of this instrument for human resource management andhuman resource development practitioners and researchers as a benchmark instrument and management developent tool can be realized.