Academic journal article Business: Theory and Practice

Human Capital Factors and Remuneration: Analysis of Relations, Modelling of Influence

Academic journal article Business: Theory and Practice

Human Capital Factors and Remuneration: Analysis of Relations, Modelling of Influence

Article excerpt

Introduction

The theory of human capital despite its relative novelty in scientific discourse is gaining increasing popularity which can be particularly visible through a large number of scientific publications on relevant topics. For instance, the "human capital" keyword search in a single scientific search engine (Google Scholar) gives more than 3.68 million results in English only. Considering the content of modern scientific research, the papers do become more practical and mostly move away from traditional models of investment feasibility assessment of human capital (hereinafter--HC). Nowadays human capital is not just an abstract set of employee's abilities. The approach, in which HC is analysed in terms of the allocation of its key elements, is certainly dominant. However, these elements are given a certain content to be assessed, and it is not limited to the identification of HC with employment or other characteristics of workforce use, as it used to be typical, for example, for economic growth models (Solow 1957, Romer 1986). Nevertheless, current trends of economic relations' socialization require considering the impact of human capital components on the formation of interest for its use to a greater extend. By applying the capital theory methodology to the human capital analysis as one of its forms, one can equate wages or salaries with the interest on human capital. Thus, the authors have designed this study to identify the impact of human capital factors that determine the appropriate salary level for the use of the identified relationships in wages modelling depending on the characteristics of the available human capital.

1. Literature review

A continuous trend in the debate regarding the human capital factors, starting from the major fundamental scientific research in this field (Becker 1962, Mincer 1958, Schultz 1962) is to explore the possibilities of its development for its effective use. Given that the foremost way to ensure the emergence of new qualities or improvements of human capital are HC investments, the study of their impact, especially at the enterprise level, is always an urgent matter as entrepreneurs persistently want to optimize their costs.

The cost approach to the human capital assessment and respective return on investment has led numerous scholars, in particular (Zakharova and Kratt 2014, Unger et al. 2011), to support similar ideas. In general, Table 1 contains the most typical examples of recent studies evaluating HC and which can be used in the regulation of relations arising in various stages of HC reproduction.

Empirical work has become more sophisticated and its peculiarity includes testing methodological principles of capital theory and the theory of value. In particular, the use of "market value method" (Bechtel 2007) provides one of the most comparable assessments of the human and physical or financial capital. This approach, in addition to the objectives stated by the author opens up opportunities not only for acceptable HC value assessment: the continuation of its use leads to reducing the owners' conflicts of interest in the field of determining their rightful share of added value (as a percentage of the corresponding type of capital). The contemporary research is also remarkable for the application of modern mathematical tools to determine the connection of various macro- or microeconomic performance indicators and HC components: health (Jakubowska 2016); education, knowledge, skills, and other components of human intellectual capital (Cadil et al. 2014, Marvel and Lumpkin 2007). The studies which aim to identify the level of human capital and the ability to attract reserves, such as (Balcerzak 2016, Jeremic et al. 2012), suggest methodological principles of integrated parameter "HC / Quality of Human Capital" estimation. This approach allows a researcher to get an idea of the benefits or shortcomings in human capital management strategy. …

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