Discussion and conclusion
To provide documentary evidence, Marimuthu et al. (2009) started by drawing on literature which defines human capital as a combination of knowledge, skills, used to meet the diverse needs of individuals and society as a whole. Marimuthu et al. (2009) also contend that human capital plays a key role in ensuring the competitiveness of businesses today. In this case, people act as a link that provides the most efficient use of company resources, which can be used to enhance higher performance. In their view, quick update technology, the accumulation of information and new knowledge require continuous training and upgrading skills of personnel. The authors go further and suggest that clear definition of firm performance should be adopted in human capital context.
Marimuthu et al. (2009) made a good point that there is a need to be explicit about exactly what is meant by firm performance. Secondly, they posit that human capital have a positive relationship with firm performance, which is covered by most studies describing the significant role of human capital in firms’ market value (Huselid,1995, Schuler & Jackson,1987). Finally, they concluded how important it is for firms to invest in human capital not only in the expectation of higher performance but also for long-term outlook.
However, even though the relationship between human capital and firm performance was recognised by Marimuthu et al. (2009) which is quite in line with study Nguyen (2004), some researchers (Pinto and Prescott, 1988; Belout and Gauvreau, 2004) conclude that human capital is not an important determinant of project success. Perhaps, taking these facts into consideration, it remains to be clarified whether personnel affects the project effectiveness (Belout, 1998)
Another questionable aspect of this article is that it shows the importance of training while the main author of Human capital theory, Gary Becker, points out that firms are reluctant to invest in training because employers do not have an absolute confidence that workers will remain at the same job for a long time. Therefore, investment in human capital through trainings is the responsibility of workers themselves.
Despite these criticisms, Marimuthu et al. (2009) article brings valuable discussion of human capital impact on businesses performance based on current literature exploration. The findings of this study have a number of important implications for future practice. The issue of how human capital affects firm performance is still open and further research to investigate the relationship between them is recommended.
REFERENCES
Becker G. (1993), Human capital: a theoretical and empirical analysis, with special reference to education, University of Chicago Press
Belout A. (1998), Effects of human resource management on project effectiveness and success: toward a new conceptual framework, International Journal of Project Management, vol. 16, No.1, pp 21-26
Belout A. and Gauvreau C. (2004), Factors influencing project success: the impact of human resource management, International Journal of Project Management, vol. 22, pp 1-11
Huselid M.A. (1995), The impact of human resource management practices on turnover, productivity and corporate financial performance, Academy of Management Journal, vol.38, No.3, pp 635-672
Marimuthu M., Arokiasamy L., and Ismail M. (2009), Human capital development and its impact on firm performance: evidence from developmental economics, Journal of International Social Research, Volume 2/8
Nguyen L.D, Ogunlana S.O, Do Thi Xuan Lan (2004), A study on project success factors in large construction projects in Vietnam, Engineering, Construction and Architectural Management, vol. 11, No.6, pp 404-413
Pinto J.K, Prescott JE (1988), Variations in critical success factors over the stages in the project life cycle, Journal of Management, vol. 14, No.1, pp 5-18
Schuler R.S and Jackson S.E. (1987), Linking competitive strategies with human resource management practices, the Academy of Management EXECUTIVE, vol.1, No.3, pp 207-219
