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Perception of Employees on Human Capital Valuation with Special Reference to Software Industries

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  • R. Indradevi
  • S. Gomathi

Abstract

As we move forward in a knowledge-driven economy, human capital becomes one of the major building blocks towards sustainable growth. There is a shift in tactics for those who manage Human Resources. The idea is that, contrary to the old HR theory that emphasized people as the most fundamental asset to a company Human Capital Management , or HCM is focused on the right kind of people to get the job done. Indeed, the theory behind Human Capital Management is first and foremost the transformation of a worker into a resource that is competitive. The entire human resources industry is scrambling to keep up with this trend, and the most successful are those who proactively seek to mould new labour into an asset that is potentially profitable to a company. In today's environment, the key lies in understanding the value of people. We have come to realize that there is no management without measurement. Accounting and valuation of vuman vapital empowers companies to realize the power of their people and to leverage them to their full business potential. Human vapital valuation is a unique proposition that gives companies a strategic weapon to combat competition. This article focuses on the perception of employees on human capital valuation, with special reference to software companies in Chennai. The target respondents of the study are the employees in some software companies in Chennai. A questionnaire comprising 25 questions were distributed to the 250 respondents and an analysis was done on their responses to study the perception of employees in valuing the human resources as an asset of the organization. This study enlightens us to understand that the value of human capital towards the accomplishment of organizational goals and strategies. The findings of the study reveal that valuing human capital increases the efficiency of the organization. Human capital valuation leads to the accomplishment of organizational goals. The respondents responded that the expenses made on Human Capital and the revenue earned from human capital need to be accounted, but need not be displayed in the balance sheet of the company as it a very sensitive issue.

Suggested Citation

  • R. Indradevi & S. Gomathi, 2008. "Perception of Employees on Human Capital Valuation with Special Reference to Software Industries," Management and Labour Studies, XLRI Jamshedpur, School of Business Management & Human Resources, vol. 33(3), pages 338-353, August.
    • Handle: RePEc:sae:manlab:v:33:y:2008:i:3:p:338-353
    DOI: 10.1177/0258042X0803300302
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    References listed on IDEAS

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    1. Elias, N, 1972. "Effects Of Human Asset Statements On Investment Decision - Experiment," Journal of Accounting Research, Wiley Blackwell, vol. 10, pages 215-233.
    2. Henry Kaiser, 1974. "An index of factorial simplicity," Psychometrika, Springer;The Psychometric Society, vol. 39(1), pages 31-36, March.
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