Topic: Organizational Performance, Talent Management, Strategic HR
Publication: Journal of Applied Psychology (MAY 2011)
Article: Does human capital matter? A meta-analysis of the relationship between human capital and firm performance
Authors: Crook, T. R., Todd, S. Y., Combs, J. G., Woehr, D. J., & Ketchen, D. J.
Reviewed by: Alexandra Rechlin
It is often assumed that human capital is related to organizational performance, but the research literature provides mixed support for that assumption. In this article, the authors conducted a meta-analysis of 66 studies to clarify the seemingly contradictory research on the relationship between human capital and firm performance.
The authors found that human capital was positively related to firm performance, but that the relationship was moderated by the type of measure used and the type of human capital. The relationship was stronger when performance was measured with operational performance measures (e.g., customer service satisfaction or innovation), as opposed to global performance measures (e.g., returns on assets or returns on sales). The relationship between human capital and performance was also stronger when the human capital was firm-specific as opposed to being general human capital.