The importance of human capital measurement in the organization development

It is now commonly accepted that the value of organizations is expressed by a mixture of tangible assets in the form of equipment, money or land or other physical objects and intangible assets in the form of brand, reputation, knowledge and or course people. In other words, there are many forms of capital that make up the real value of a business and in an increasingly knowledge-based economy, human capital is fast becoming the most important. However, despite a number of academic models and theories the evaluation of human capital is still difficult for most companies. There are a number of reasons for this. The contribution of people is difficult to isolate from other factors such as the economic situation, market forces and fashion. The value of people is expressed in qualitative rather than quantitative terms which make it difficult to represent in traditional accountancy models. HR data is more often collected for administrative rather than evaluation purposes. HR managers do not always have the skills to interpret data to evaluate the contribution of people to business performance. These difficulties have been further compounded by the numerous definitions of human capital over the years. In fact the term is still hotly debated as to whether it is appropriate to equat