Firm Performance as an Outcome of Human Capital: A Review of Literature

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dc.contributor.authorMatsalia, Vincent Alwaka
dc.contributor.authorKinyua, Godfrey Muigai
dc.date.accessioned2023-10-26T09:17:59Z
dc.date.available2023-10-26T09:17:59Z
dc.date.issued2023
dc.descriptionArticleen_US
dc.description.abstractHuman capital, which is grounded in human capital theory, resource-based view, and knowledge management view, is the fulcrum in the acquisition of knowledge, skill, abilities, and other characteristics. Accodingly, human capital has the potential of helping firms to be able to achieve capabilities that translate to competitive advantage. These capabilities assist firms to remain competitive; leading to sustained performance which is modeled using the balanced scorecard, performance prism framework, Malcom Baldrige model and performance pyramid model. The overall objective of the study was to review conceptual, theoretical as well as empirical literature on the relationship between human capital and firm performance so that research gaps could be identified to inform future studies. Reviewed literature on human capital conceptualises the construct based on individual production, societal wellbeing and at the organisational level. At the individual level, human capital determines job seeking behaviours while at the societal level human capital aid the synthesis of both individual and organizational perspectives. The organizational view argue that human capital has the capability of giving a firm competences and competitiveness in an industry. Empirical studies reviewed show that human capital is positively related to firm performance with performance curve depicting curvilinear trait regardless of the type of data used. Reviewed literature brings out a contradiction in that firm specific human capital enhances performance and at the same time increases costs in terms of incentive costs to employees. Literature reviewed demonstrates that management of enterprises are unwilling to commit vast specific human capital notwithstanding the assumption in order to butress competitive advantage. Based on the gaps identified, the study proposes a theoretical framework on the relationship between human capital and firm performance. The study further proposes the need for future research to valiadate the conceptualized link using empirical data.en_US
dc.identifier.citationMatsalia, V. A., & Kinyua, G. M. Firm Performance as an Outcome of Human Capital: A Review of Literature.en_US
dc.identifier.urihttp://www.ijern.com/journal/2023/September-2023/03.pdf
dc.identifier.urihttp://ir-library.ku.ac.ke/handle/123456789/27076
dc.language.isoenen_US
dc.publisherIJERNen_US
dc.subjectHuman Capitalen_US
dc.subjectFirm Performanceen_US
dc.subjectCompetitive Advantageen_US
dc.titleFirm Performance as an Outcome of Human Capital: A Review of Literatureen_US
dc.typeArticleen_US
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