Intelligent impact assessment of HRM to the shareholder value

Despite the extensive research in human capital management and performance measurement, intelligent treasoning mechanisms, which integrate human resource (HR) practices into strategic-level shareholder decisions, are still emerging. This paper discusses a novel approach of designing a decision-modeling tool, which assesses the impact of contemporary human resource management (HRM) practices to the shareholder value and satisfaction. The underlying research addresses the problem of establishing HRM interrelationships in order to drive the overall business performance from the shareholder value perspective. The proposed methodology tool utilizes the fuzzy causal characteristics of fuzzy cognitive maps (FCMs) to generate a hierarchical and dynamic network of interconnected HR performance drivers. The intelligent computing characteristics of FCMs are also employed to establish a dynamic feedback and bi-directional alignment of HRM practices and strategic improvement. Finally, this research provides a practical insight on the applicability of soft approaches in capturing and illustrating the effect of HRM practices. 2007 Elsevier Ltd. All rights reserved.