Human Capital and Social Capital Class 22 11 5 Sang Hoon Han PhD Candidate CPA Department of Management and Human Resources Fisher College of Business The Ohio State University Extra Credit Opportunity Lab Experiment 11 12 Tuesday Sign up https osu az1 qualtrics com jfe form SV datLBPmMfBj4dcG E mail Boyuan Ju at ju 189 buckeyemail osu edu if you have any questions or have any problems signing up 2 Key Takeaways from Human Capital Topic Human capital vs Human capital resources o Emergence Firm specificity of human capital o Source of competitive advantage o Source of low employee mobility held up General human capital o Source of employee mobility Tension between organization vs employee Turnover Loss of human capital 3 Human Capital vs Human Capital Resources Human Capital Individual level knowledge skills ability and other characteristics e g experience motivation etc KSAOs that have potential productive capacity Becker 1993 o Individual level Not unit organization level o Potential Not employable unit org resources yet o HRM practices e g selection training compensation shapes the acquisition and formation of human capital e g features quality and quantity 4 Human Capital vs Human Capital Resources Human Capital Resources Unit organizational level resources that can be used to generate value Gerhart 2005 Ployhart 2014 o Unit organizational level not individual level o Employable resources ready to use Need to contribute to revenue increase Molloy Barney 2015 OR Need to contribute to the firm s competitive advantage Ployhart Moliterno 2011 Emergence process is required to convert human capital to human capital resources Ployhart 2012 2015 5 Ployhart Moliterno 2011 6 Firm specificity of Human Capital Firm heterogeneity produces firm specific human capital Coff 1997 o Different norms work process IT systems climate culture how people communicate across different organizations 7 Firm specificity of Human Capital Source of Competitive Advantage Source of competitive advantage Assets that are valuable rare inimitable and supported by the organization VRIO Barney Wright 1998 o Human capital can be a source of competitive advantage if it is valuable rare inimitable and supported by the organization Firm specificity of human capital makes human capital of a firm difficult to imitate VRIO o which allows the firm s competitive advantage Ployhart Moliterno 2011 8 Firm specificity of Human Capital Source of Low Mobility Isolating mechanism However employees become less able to move to another organization as the firm specificity of human capital increases Lippman Rumelt 1982 o Human capital developed in a company oftentimes may not work in other companies Hold up concern Mahony Kor 2015 Tension between organizations and employees Coff Raffie 2015 Organizations want to retain employees by increasing their firm specific human capital e g on the job training Employees want to increase general human capital e g MBA degree that can be applied in other organizations as well 9 Employee Turnover Loss of Human Capital Loss of the mover s human capital Negative influence on firm performance Call et al 2015 10 Test your knowledge True or false Individual level human capital e g KSAOs are readily employable resources for firms X For individual level KSAOs to become employable resources at the unit level emergence process is needed O By having strategically valuable human capital resources firms can enhance their competitive advantage O Firm specific human capital can produce employees concern for being held up by the current firm O Isolating mechanism is a process through which firms can retain valuable human capital O 11 Key Takeaways from Human Capital Topic Human capital vs Human capital resources o Emergence Firm specificity of human capital o Source of competitive advantage o Source of low employee mobility held up General human capital o Source of employee mobility Tension between organization vs employee Turnover Loss of human capital 12 Key Takeaways from Social Capital Topic Positive influence of Social Capital Development Negative influence of Social Capital Development Characteristics of social network and their influences Small tight vs broad weak Employee turnover Social capital disruption of the mover and incumbent employees 13 Social Capital Social capital The goodwill that is engendered by the fabric of social relations Adler Kwon 2002 Phenomena People invest considerable time money and effort in going out for drinks attending conferences or staying in contact with former colleagues Nierenberg 2002 Torres 2005 Welch 1980 Bookshelves in bookstores are inundated with books that counsel on how to network effectively Networking coaching sessions are bustling with people 14 Positive Influence of Social Capital Development Positive influence on the individual Networking is essential to career success Wolff Moser 2009 Networking is positively related to job search success Wanberg et al 2000 performance ratings Thompson 2005 promotions Michael Yukl 1993 pay ascendancy Forret Dougherty 2004 positive self appraisals of achievements Judge et al 1995 Positive influence on the organization network Enhanced knowledge sharing Kehoe Collins 2017 Social network across organizations may facilitate the acquisition of new skills and information Adler Kwon 2002 15 Negative Influence of Social Capital Development Negative impact on the individual Developing and maintaining social network requires consumption of resources such as time money and cognitive resources Baer 2010 o Generally the larger the more consumed network and potentially offset its benefits Mehra et al 2001 These costs may reduce the net value of expanding Negative impact on the organization network Over embeddedness hinders the flow of new ideas into the group e g groupthink less innovation Kern 1998 Damage in highly developed social capital e g turnover may have negative impact on firm performance Shaw et al 2005 16 True or false The negative effects of employee turnover on firm performance can be large if the departing employee has a well developed social network within the organization O Why The more developed the more disrupted upon the person s leave Turnover universally has high negative effects on organizational performance regardless of the level of social capital that has been formed by the employees who leave X Why The more social capital they formed the more disrupted 17 Characteristics of Social Network and Their Influences
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