ABSTRACT
This chapter briefly reviews the available macro and micro approaches to measuring human capital. A thorough review of the literature on human capital measurement methodologies reveals that various indices, methods, and approaches have been devised to gauge the levels of human capital both at micro and macro levels. The problem with the traditional human capital techniques is that they either focus on the qualitative aspects of human capital such as attitude and satisfaction, or quantitative aspects like training expenses, labour costs, or revenues. Few of the approaches take both quantitative and qualitative aspects of human capital into account; however, these approaches are either so broad or so complex that their practical execution is difficult. Likewise, while analyzing the HC-performance relationship, studies consider that all the dimensions of human capital equally affect firm performance, which may not be true in reality, it implies that HC measure must comprehensively consider both aspects, qualitative and quantitative. Such measures can help develop the industry and firm-specific human capital that could be more inimitable, according to RBV. The availability of such approaches can allow the comparison of human capital contribution across firms, industries, or sectors
