Human capital reporting: Should it be industry specific?

O’Donnell, Loretta; Kramar, Robin; Dyball, Maria Fe Caridad

doi:10.1177/1038411108099293

Cited by 13 publications

(6 citation statements)

References 36 publications

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“…These firms therefore cannot invest substantially in their employees. The varying human capital levels among different industries reflect the capital drivers of value that vary across industry groups (O'Donnell et al, 2009).…”

mentioning

confidence: 99%

HC and financial performance with two HRM strategies

Rompho

2017

IJPPM

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Purpose The purpose of this paper is to examine the relationship between levels of human capital and financial performance of firms that use two distinct human resource management (HRM) strategies. Design/methodology/approach A survey of 128 HRM managers was conducted to assess differences in human capital between firms using different HRM strategies. A multiple regression analysis was used to investigate the relationship between firms’ human capital and financial performance. Findings The results show that companies employing a make-organic strategy have a higher level of human capital than companies employing a buy-bureaucratic strategy. There was no relationship between the level of human capital and long term financial performance of firms with both make-organic and buy-bureaucratic strategies. Research limitations/implications This research contributes toward understanding the effect of HRM strategy and facilitates an optimal strategy choice depending on the organization. However, this study did not consider the lead time between changes in human capital and the effect on financial performance. Practical implications The research encourages firm managers to understand the value of human capital, preparing them for changes in the future. Originality/value This study is among the first to investigate the relationship between human capital and financial performance considering different HRM strategies.

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confidence: 99%

HC and financial performance with two HRM strategies

Rompho

2017

IJPPM

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“…Literature survey confirmed that HCD is gaining prominence (Adams et al, 2013;Huang et al, 2013;Motokawa, 2015;O'Donnell et al, 2012), especially since the adoption of integrated reporting that encourages the voluntary disclosure of information pertaining to HC. The three HCD sub-dimensions included HR planning and recruitment (7 items), remuneration, benefits and performance (6 items) and training and development (5 items).…”

Section: Human Capital Disclosure Constructmentioning

confidence: 99%

“…HCD regarding plans to maximise the value of people's embodied assets is useful for predicting future business returns (Magau, Roodt, & Van Zyl, 2021). Disclosed information on the implementation of key human resource (HR) practices such as workforce planning, recruitment, selection, development, performance and rewards can signal the companies' utilisation of HC for creating shareholder value (Adams et al, 2013;Motokawa, 2015;O'Donnell, Kramar, & Dyball, 2012). Huang, Luther, Tayles and Haniffa (2013) confirmed that when information about HR planning and recruitment is disclosed in the annual reports, it conveys the company's potential to create value, whereas the disclosure of information about remuneration practices is required in terms of King IV on corporate governance, IFRS and as part of the Johannesburg Stock Exchange (JSE) listing requirements (Cassim & Madlela, 2017;Kim & Taylor, 2011).…”

Section: Intellectual Capital Disclosurementioning

confidence: 99%

“…Human capital disclosure measuring disclosed information about the implementation of key HR practices (Adams et al, 2013;Cassim & Madlela, 2017;Kim & Taylor, 2011;Motokawa, 2015;O'Donnell et al, 2012;Sürdü et al, 2020) generated an overall reliability of 0.806 Cronbach's alpha coefficient consistent with 0.60 (Urquiza et al, 2009) and 0.70 (Biscotti & D'Amico, 2016;Milne & Adler, 1999) baselines. Item reliabilities ranged between 0.777 and 0.817 confirming that these measures assessed the same underlying construct.…”

Section: Human Capital Disclosure Measurementmentioning

confidence: 99%

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A measurement scale for assessing intellectual capital disclosure

Magau

Roodt

Zyl

2021

SA Journal of Human Resource Management

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Orientation: Intellectual capital disclosure (ICD) including structural capital (SC), human capital (HC), and relational capital (RC) of non-financial information creates a shareholder value. Conflicting evidence on this voluntary disclosure suggests the need to develop an ICD measurement scale for reducing information asymmetry in the annual financial reporting.Research purpose: The main aim of this study was to develop a multi-dimensional measurement scale consisting of groups of items for critically examining the extent of ICD in the corporate annual reports or integrated reports to build investor confidence.Motivation for the study: The lack of voluntary disclosure on intellectual capital (IC) increases information asymmetry and negatively affects investor decision-making. An ICD measurement scale is expected to facilitate the reliable extraction of non-financial information from the annual reports or integrated reports.Research approach/design and method: A quantitative cross-sectional study was used with an ICD measurement scale for extracting information from 150 annual reports of the Johannesburg Stock Exchange (JSE) listed companies. The measurement scale was subjected to exploratory factor analysis (EFA).Main findings: The ICD measurement scale yielded one factor structures across all three dimensions with internal reliability statistics (Cronbach alphas) of SC (0.849), HC (0.806) and RC (0.749), after the second level factor analysis.Practical/managerial implications: The ICD measurement scale will enable the market participants to understand how non-financial information can be extracted reliably from the annual reports and use to assess the value of intangible assets.Contribution/value-add: The novel contribution of the study is the construction of a measurement scale for assessing ICD.

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“…However, these new rules are applied to the companies with more than 500 employees, including listed companies as well as other public-interest entities, such as banks, insurance companies etc., including approximately 6 000 large companies and groups across the EU (European Commission, 2015). Therefore, for most companies the disclosure of non-Þ nancial information remains voluntary as there are only a few obligatory requirements for such disclosures, which is also conÞ rmed by the studies of Wyatt and Frick (2010) and O'Donnell et al (2009), stating that across various industries, human capital is not reported in a standardized way. It should also be noted that still many companies Þ nd CSR and HC reporting too costly and time-consuming with no immediate beneÞ ts to the company.…”

Section: Introductionmentioning

confidence: 99%

Human Capital Reporting and its Linkage with Key Performance Indicators of Companies: Evidence from Estonian Companies Listed on Nasdax OMX Baltic

Startseva¹,

Gurvitš²,

Sidorova³

2015

CEBR

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Today the subject of non-nancial accounting and reporting has become very popular. Human Capital Reporting (HCR) has become a vital part of everyday business activities of companies across the world. Most companies declare that human capital is the most important factor of their competiveness, which is also re ected in their CSR reports by incorporated social disclosures. The subject of the present research is human capital reporting and its linkage with the performance indicators of companies. The aim of this research is to establish whether there is a linkage between HCR and nancial performance indicators of Estonian companies listed on the Nasdaq OMX Baltic (Tallinn market). The authors calculated various ratios and carried out HCR scoring to examine the presence of linkage between HCR reporting and companies' nancial performance. The results demonstrate that there is no direct relationship between the level of HCR and the nancial performance of selected companies.

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Human capital reporting: Should it be industry specific?

Cited by 13 publications

References 36 publications

HC and financial performance with two HRM strategies

HC and financial performance with two HRM strategies

A measurement scale for assessing intellectual capital disclosure

Human Capital Reporting and its Linkage with Key Performance Indicators of Companies: Evidence from Estonian Companies Listed on Nasdax OMX Baltic

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