Human Capital Production Function

Abstract

In many organizations the labor workforce is the
single most important factor for business performance, but also
the most difficult to analyze. Traditional analyzing and
forecasting methods do not explain the phenomenon how human
capital affects business economics, and therefore they are not too
widely used in strategic management. This article introduces
Human Capital Production Function (HCPF) as an analyzing
method that combines the tangible and intangible assets of
human capital with financial scorecards in a way that explains
the meaning of human resources for business performance.
Intangible assets can be measured using tacit signal method
which can be connected to organization system intelligence. The
article studies HCPF validity in longitudinal business case data
and tests the use of HCPF in scenario-analyzing in a statistical
average business services company in the Singapore region.