A Quantitative Approach to Human Capital Management

The objective is to provide a quantitative technique to help managers to make decisions by objectively evaluating their Human Capital Management (HCM) and projecting profit increase generated by HCM. This study approach is divided into two steps. In the first step, this study selects and formulates the factors which represent HCM practices by means of principal component and factor analysis. In the second step, personnel adjusted added (PAV) value is defined as the corporate output. Multiple regression model is constructed to identify the HCM factors which influence PAV. This process establishes the model for objectively judging their success of HCM.