Human Capital Resource Pipelines

by

Anthony Nyberg, Ingo Weller, Dhuha Abdulsalam

• LAST REVIEWED: 27 November 2023
• LAST MODIFIED: 27 November 2023
• DOI: 10.1093/obo/9780199846740-0111

Introduction

The “Human Capital Resource (HCR) pipeline” is an organizational capacity that involves the internal, external, horizontal, and vertical flow of human capital resources in and out of an organization. The goal of an HCR pipeline is to ensure that the appropriate quality and quantity of HCRs are in place for the ongoing functioning of organizations. In turn, managing the HCR pipeline is the organizational capability to acquire, develop, and align individual or unit-level capacities to match unit-relevant purposes as they arise. It is necessary for organizations to think of managing the HCR pipeline as an ongoing process that involves the horizontal alignment, or congruence, of several human resources (HR) functions. This includes Staffing, through attraction, Selection, and Attrition. Once talent is in place, then it must be developed through Performance Appraisal, Succession Planning, and Training. It is also essential to align that talent with the organization’s objectives. This involves continuously matching talent with the appropriate role, including focusing on Internal Mobility, Fit, and Flexibility. Compensation also affects the HCR pipeline through Sorting (e.g., who is attracted to the pipeline) and its effects on how the HCR pipeline coordinates; however, heretofore, compensation has not been explicitly tied to the HCR pipeline. The HCR pipeline may also need to focus extra and different attention on star employees and executives or other employees who disproportionately contribute to organizational performance. The general idea of considering the HCR pipeline has been growing in importance, including the creation of a special interest group at the Strategic Management Society, and two journal special issues dedicated to the topic. Therefore, the concept of the HCR pipeline is an extension of this literature that highlights the dynamic nature of HCR that has thus far been looked at in a static lens.

Human Capital and the Human Capital Resource

The human capital resource (HCR) is defined as the “individual or unit-level capacities based on individual KSAOs [knowledge, skills, abilities, and other characteristics] that are accessible for unit-relevant purposes” (Ployhart, et al. 2014, p. 374). To understand the human capital resource pipelines, it is necessary to begin with understanding individual-level human capital, which is an attribute of individuals (see Becker 1964), composed of a person’s KSAOs. Without referring to the HCR, Hitt, et al. 2001 examines the HCR influence on law firm effectiveness. Although the evidence that the HCR can lead to organizational performance differentiation has continued to accumulate (see Crook, et al. 2011; Nyberg, et al. 2013; Ray, et al. 2023a), the actual term “HCR” is relatively new (see Ployhart, et al. 2014) and flows from the recognition that the aggregation of talent (i.e., the emergence of KSAOs in a collective construct) is rarely a simple sum of individual human capital (Ployhart and Moliterno 2011). An increasingly important consideration of how human capital becomes HCR involves the role of social capital (Ray, et al. 2023b). By attending to what is organizationally relevant and understanding how human capital emerges into HCR, rather than exclusively focusing on the individual, this research draws attention to the role of humans as a competitive asset in a variety of factor and product markets, such as the labor market (a factor market) and the consumer goods market (a product market) as a mechanism for explaining how organizations compete through their most valuable resource (Ployhart 2021). Choudhury 2023 conducts a brief review discussing the term “human capital pipelines” and discusses relevant studies.

• Becker, Gary S. Human Capital. New York: Columbia University Press, 1964.

  Many iterations of this book have followed this seminal work on human capital. Becker lays out arguments for how individuals can invest (e.g., increased education) to make themselves more valuable.

• Choudhury, Muntakim. “Human Capital Pipelines—Antecedents and Consequences.” Strategic HR Review 22.2 (2023): 38–41.

  DOI: 10.1108/SHR-01-2023-0003

  A brief review of the topic “human capital pipelines” discussing the concept, antecedents (homosocial reproduction and employee referrals), and consequences (turnover intent and costs).

• Crook, T. Russell, Samuel Y. Todd, James G. Combs, David J. Woehr, and David J. Ketchen Jr. “Does Human Capital Matter? A Meta-analysis of the Relationship between Human Capital and Firm Performance.” Journal of Applied Psychology 96.3 (2011): 443–456.

  DOI: 10.1037/a0022147

  Meta-analysis of sixty-six studies that estimated the relationship between human capital and firm performance. Estimates a correlation between human capital measures and firm performance of 0.17, and explains that the relationship is strongest when the human capital is firm specific and when operational (rather than financial) firm performance measures are used.

• Hitt, Michael A., Leonard Bierman, Katsuhiko Shimizu, and Rahul Kochhar. “Direct and Moderating Effects of Human Capital on Strategy and Performance in Professional Service Firms: A Resource-Based Perspective.” Academy of Management Journal 44.1 (2001): 13–28.

  DOI: 10.2307/3069334

  Uses law firms to show that aggregated human capital (i.e., HCR) can affect firm performance in terms of both outcomes and costs.

• Lazear, Edward P. “Firm-Specific Human Capital: A Skill-Weights Approach.” Journal of Political Economy 117.5 (2009): 914–940.

  DOI: 10.1086/648671

  Argues that all human capital is general, but that combinations (or bundles) of particular human capital components and their use in heterogeneous firms are firm specific. Generalizes the classical dichotomy of general and firm-specific human capital and aligns human capital theory with matching and Talent Management approaches.

• Nyberg, Anthony J., Thomas P. Moliterno, Donald Hale Jr., and David P. Lepak. “Resource-Based Perspectives on Unit-Level Human Capital: A Review and Integration.” Journal of Management 40.1 (2013): 316–346.

  DOI: 10.1177/0149206312458703

  Reviews 156 articles that attempt to use human capital as a mechanism for identifying unit-level performance advantages in a resource-based theoretical framework. It shows the similarities between strategy research, particularly regarding micro-foundations, and strategic human resources research, and provides suggestions for how these two fields can move the HCR field ahead.

• Ployhart, Robert E. “Resources for What? Understanding Performance in the Resource-Based View and Strategic Human Capital Resource Literatures.” Journal of Management 47.7 (2021): 1771–1786.

  DOI: 10.1177/01492063211003137

  While the resource-based view focuses on resources and competitive advantage, this paper advances this view by emphasizing the importance of studying intervening mechanisms at different levels, such as performance behaviors and outcomes, that enable human capital resources to turn into competitive advantage. More precision in research is called for to understand what specific types of human capital resources most contribute to specific types of performance, and the temporal effects.

• Ployhart, Robert E., and Thomas P. Moliterno. “Emergence of the Human Capital Resource: A Multilevel Model.” Academy of Management Review 36.1 (2011): 127–150.

  DOI: 10.5465/amr.2009.0318

  Combines research and conceptual consideration from psychology and strategy to argue that the use of the term “human capital” at both individual and collective levels leads to ambiguity and confusion across research domains. It coins the term “human capital resources” and argues that this is the emergence of an individual’s knowledge, skills, abilities, and other characteristics.

• Ployhart, Robert E., Anthony J. Nyberg, Greg Reilly, and Mark A. Maltarich. “Human Capital Is Dead; Long Live Human Capital Resources!” Journal of Management 40.2 (2014): 371–398.

  DOI: 10.1177/0149206313512152

  A multidisciplinary framework that clarifies the HCR construct (structure, function, level, and combinations) in an attempt to create a common language among disciplines. The article also clarifies the difference among individual differences, KSAOs, human capital, human capital resources, and strategic human capital resources.

• Ray, Caitlin, Spenser Essman, Anthony J. Nyberg, Robert E. Ployhart, and Donnie Hale. “Human Capital Resources: Reviewing the First Decade and Establishing a Foundation for Future Research.” Journal of Management 49.1 (2023a): 280–324.

  DOI: 10.1177/01492063221085912

  Reviews 194 conceptual and empirical articles published between 2011 and 2020 to understand the current state of the human capital resources research field. The theoretical progress in the field is first discussed, then three themes are used to organize the review: creation, conceptualizations and measurement, and outcomes.

• Ray, Caitlin, Anthony J. Nyberg, and Mark A. Maltarich. “Human Capital Resources Emergence Theory: The Role of Social Capital.” Academy of Management Review 48.2 (2023b): 313–335.

  DOI: 10.5465/amr.2020.0186

  A theory that explains how social capital can facilitate human capital resources emergence. This work suggests that emergence is dependent on the structure and content of social interactions within units that may develop. Specifically, the theory examines the role of three dimensions of social capital (structural, relational, and cognitive) in the emergence process.