Effective human capital performance in an organization enables its success and ensures shareholders' profit maximization. Organizations that have installed systems for human capital management and measurement have an excellent workforce performance and Return on Investment (ROI) in a consistent manner and gain a distinctive competitive business advantage in the global marketplace. In a nutshell, the underlying principle behind the success of any global organization is effective management and measurement of its human capital, which leads to productivity, innovation and profit maximization.

The ever-changing business scenario of globalization and privatization has changed the working nature of an organization. This is more so with organizations in the knowledge industry where the employees, the "human capital", are the revenue generators of a company. This makes Human Capital (HC) management an important function of the HR department. Its measurement plays a major role in the effective management of HC that is likely to impact upon the organizational performance in the marketplace. HC is defined as individual value in an economic sense, and the way it is transformed into the company's collective competence. A company's HC asset is the collective sum of the attributes, life experiences, knowledge, inventiveness, energy and enthusiasm that its people choose to invest in their work.

Effective measurement of HC emphasizes the way an organization manages its employees and engenders a vital contribution to its bottom line. There is an increasing shareholders' demand to know about a company's strategy and business as they find an explicit relation between a company's HC activities and long-term shareholder value. This demands a measurement system to facilitate the optimization of their return on people. HC measurement provides information to diagnose an organization's present HR situation and enables it to take better decisions that are of strategic importance.

HRM Review Magazine, Human Capital Measurement, Global Organizations, Human Capital Management, Globalization, Privatization, Employee Engagement, Workplace Innovations, Stock Option Plans, Business Strategy, HC Development Frameworks, Global Companies.