Ranking of Human Capital Indicators Using Analytic Hierarchy Process

Emphasis on human capital development and a knowledge based economy becomes increasingly important especially in developing countries. This paper aims to propose an analytical pair-wise comparison approach to ranking indicators of human capital in Malaysia. The Analytic Hierarchy Process is employed to integrate the multi-facets preferences of the five criteria of human capital to determine the importance of the four identified indicators. A case study of human capital measurement is presented and the proposed model is applied to facilitate the decision making process. Interviews with three decision makers were administered to collect data over the comparative judgement of human capital measures in Malaysia. The results show that creating result by using knowledge is the most important measurement indicators and employee's skill index is the least important measurement indicator. The overall ranking reflects the importance of measurement indicators in steering Malaysia to become a worthy human capital investment.