Human capital scenario analysis as an organizational intelligence tool for performance management

Marko Kesti, Antti Syväjärvi, Jari Stenvall, Mario Rivera

Research output: Contribution to journalArticleScientificpeer-review

2 Citations (Scopus)

Abstract

This article describes a method for human capital scenario analysis, one that may be used as an organizational intelligence (OI) tool capable of supporting management decision-making. Here, scenario analysis supports a knowledge management based (KM-based) decisional method for integrating human resource (HR) and fiscal data in performance measurement. This OI scenario analysis tool may be used in strategic management, organizational development, performance measurement, and HR-related risk mitigation. The aim is to strengthen decisional capacity with regard to the management of human capital and in general with regard to the advancement of organizational performance and productivity goals. The approach taken is that of human capital scenario analysis using system dynamics methods. Scenario analysis equations are developed on the basis of empirically-grounded research that has been conducted for several years at private companies and municipal organizations in Finland. The scenario analysis (SA) tool successfully integrates organization-level human resource knowledge management with business scorecards, thereby assisting management decision-making. Through their use of the SA tool, managers can advance organizational learning and improve strategic decision-making. Human resource and organizational competencies are considered together, so that managers may consider key factors affecting future performance comprehensively, in their long-range decision-making. The SA model was developed during a period of steady economic growth in Finland. While the model was created using the most germane literature and empirically grounded research, contextual factors such as relative economic prosperity may limit generalizability to other contexts. The article describes how human resource metrics and competencies may inform performance measures, in particular business scorecards. The development of key competencies improves organizational performance and performance outcomes. As suggested by game theory, and by models of tacit communications, organizational competencies can be developed and performance outcomes enhanced by using "tacit signals" that are conducive to the realization of desired scenarios.

Original languageEnglish
Pages (from-to)46-58
Number of pages13
JournalProblems and Perspectives in Management
Volume9
Issue number1
Publication statusPublished - 2011
MoEC publication typeA1 Journal article-refereed

Keywords

  • Human capital
  • KM
  • Organizational intelligence
  • Scenario analysis

Field of science

  • Administrative science

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