The Investments in Human Capital within the Human Capital Management and the Impact on the Enterprise’s Performance

Abstract

Human capital (HC) is a key factor for enterprises’ performance and competitiveness. The aim of this study was to identify how enterprises in Slovakia perceive the impact of the investments in HC on business performance within the context of the implementation of human capital management (HCM). The content analysis was applied to analyze the different authors’ opinions on the substance of HC. These opinions were compared, and the knowledge obtained was synthesized. The article’s originality stems from the evaluation of the results from a unique questionnaire survey conducted with a specific focus on IT companies. This follows the presumption that these companies approach the application of HCM in an exemplary way, while being considered knowledge intensive. To collect the primary data, a questionnaire survey was performed in 113 Slovak IT enterprises and its results were analyzed using statistical tests of independence. The main findings include the corroboration of a positive effect of investments in the employees’ education and the implementation of HCM on the enterprises’ performance. Despite this, more than a third of the enterprises did not evaluate the effectiveness of investment in HC, and more than half of enterprises did not have the HCM concept implemented. Several solutions are recommended with respect to the HR managers’ training.

1. Introduction

Human elements in an organization are those able to learn, change, innovate, and provide a creative force which, if properly motivated, can ensure the long-term survival of this organization.

In business practice, we often encounter the importance of human capital, or even an emphasis on people and human labor in the company, and many need to learn the difference between these terms. The term human resources management is, in turn, confused with the “more modern” term, human capital management, but even managers and business owners themselves do not understand the true meaning of the “more modern” terms, HC, investment in HC, and HCM. This fact motivated us to devote our research article to clarifying these terms and, at the same time, the relationships between them.

In [1] build upon Davenport’s definition in which it is stated that people possess innate abilities, behaviors, and personal energy, and these components create human capital (HC), which they bring into their work.

A considerable contribution to the human capital theory was conducted by [2]. Other contributors were from [3]. According to them, HC represents the human factor in organizations, combining intelligence, abilities, and competence, which gives the organization its distinctive character. In [4] defines HC in a similar way; that is, as knowledge and skills that the individuals create, maintain, and apply to their work. In [5], in his description of human capital and its value, focuses on the capability of people, consisting of their knowledge, skills, experience, contacts, behavior, and temperament.

According to the [6], human capital is defined as knowledge, skills, competences, and attributes embodied in individuals, which facilitate the creation of personal, social, and economic welfare. In [7] describes HC within the business context as the combination of features that people bring into their work, the ability of people to learn, and the motivation of people to share the pieces of information and knowledge.

There are several perspectives on the value and position of HC in an enterprise and in the whole society. In [8] follow Brown’s concept of HC where this refers specifically to the value which an employee has for his/her employer and which is entrenched in specific knowledge and skills, interpersonal knowledge and skills (the non-technical ones), intelligence, and relationships.

Refs. [9,10,11] consider human capital to be a source of economic growth. In [4,12,13,14,15], understand it as a part of the intellectual capital, which, accompanied by the financial capital, creates the market value of an enterprise. In [16,17] refer to human capital as an intangible asset, which, when put together with the tangible assets, represents the enterprise’s market value. According to the [18], HC represents the capacity of individuals who are able to achieve an economic outcome by joint efforts.

This article fills a gap in the literature, which has not been sufficiently devoted to the investigation of the issue of investments in HC and their subsequent evaluation. The obtained results allow us to propose practical recommendations for managers of IT enterprises.

The article’s aim is to identify how the IT enterprises in Slovakia perceive the impact of the investments in human capital (HC) and their effectiveness on the business performance within the context of the implementation of the human capital management (HCM) concept.

Basic scientific methods were used in the article/analysis: synthesis, induction, deduction, comparison, and content analysis. Within the area studied, the data gained from a questionnaire survey conducted in 113 Slovak IT enterprises were processed. It was revealed that the enterprises consider educational activities to be the most frequent form of investment in HC. A desirable effect of such investment is mainly represented by the increase in individual performance.

In order to increase the performance, enterprises should implement the HCM concept and apply the metrics for the evaluation of the effectiveness of investment in HC within it and managers should be trained in these areas. A positive effect of investments in the employees’ education and the implementation of HCM on the enterprises’ performance was corroborated. Despite this fact, more than a third of enterprises do not evaluate the effectiveness of investment in HC, and more than half of enterprises do not have the HCM concept implemented in any form.

The article is divided into several chapters, including this introduction, which is part of the first chapter. The theoretical backgrounds are included in the second chapter, which also contains defined research hypotheses. The third chapter contains the methodology and describes the materials and methods used. We have included the results of our research in the fourth chapter, which is divided into five subsections containing the results of our efforts to verify the established hypotheses. The fifth chapter consists of a discussion of the researched issue, and, finally, the last chapter presents a conclusion that summarizes the findings together with managerial implications, stating the limits of the research and the future direction.

We used our questionnaire to obtain primary data. We obtained secondary data on the performance of companies from the public Slovak database Finstat and companies’ websites. We chose IT companies for the needs of our research because we consider them to be knowledge-intensive in Slovakia, and we assumed that these IT companies could be an example in the area of work with ĽK for those companies that operate in other areas of the national economy. The originality of this research lies precisely in the targeting of our research on IT companies.

2. Literature Review

2.1. Human Capital and Human Capital Management

Every company wants to maintain, but also increase, its competitiveness in the market, as well as productivity and efficiency, and to avoid the shortage of qualified staff. In order to do so, it is necessary to invest in human capital in one of the possible forms [2,13,19] stated that the investments in education and training of individuals resemble the investments of enterprises in their property and equipment. The investments in HC represent a method and a means for the enterprise to expand its available HC, to increase its value, and to enhance its quality.

The essence of creating and increasing the HC value is spending financial and non-financial resources at present with the aim of acquiring financial or non-financial yields in the future, but not satisfying the present needs. When spending the funds to create HC, this is an investment, not consumption. However, the quantification of these expected yields is problematic [20,21,22,23] adds that the development of human capital at present in a several-year-long proposal, even though it is usually listed in the accounting as a cost within a single period.

Refs. [24,25] add another perspective, focusing on the macroeconomic level. According to the authors, the investments in HC depend on numerous factors, including the level to which the capital markets are functioning, and the level of security in the economy and the political establishment.

The investment in HC as a production input can be conducted in various forms. The enterprise can focus on improving the employees’ health [26], improving the working conditions [27], increase in the working abilities, skills, and knowledge, and the desired change in attitudes, which is being performed via a system of corporate education and development [19,28].

Since human capital is the central resource that needs to be properly utilized by the enterprises during the creation of value for their customers and the whole society, it deserves to be professionally and appropriately managed [29]. Within the theory, science, and practice of management, the concept of human capital management has begun to form. This is being described and applied in the search for solutions to a set of issues emerging in the field of human capital, which often stem from its very definition.

Refs. [20,30] use the definition created by The Accounting for People Task Force which describes human capital management (HCM) as a systematic approach to the analysis, measurement, and evaluation of the effect that the policies and practices focused on the employees have on value creation.

Refs. [31,32], concerning HCM, stated that it recognizes that people are the investors of their personal human capital and that this provides the main source of value for the organization. He uses this wording to emphasize that HC is actually owned by the employees themselves, and they decide to invest it in the enterprise when they use it in their work. Ingham also presents Finn’s opinion, according to whom HCM uses the most precious asset, people, for the improvement of the business’ performance and the increase in competitive advantage. HCM focuses on attracting, motivating, and inspiring the best talent. The definition of HCM is supplemented by [33], who define HCM as a process focused on specific HC practices such as recruitment, selection, training, development, performance appraisal. and employee compensation.

Ref. [34] states that it is possible to measure investment in HC by combining quantified indicators (turnover, cost per employee, average number of years of service) with qualitative indicators (job satisfaction).

Refs. [35,36,37] wrote of HCM that it is about getting the best from the people, and the success of this effort depends on understanding what motivates employees to perform, how organizational systems can act as barriers of performance, and how leadership and processes of human resources management will probably affect results and outputs.

According to [4,20,38], the key characteristic of HCM is the application of metrics that direct how enterprises approach the management of people, perceiving them as assets and fully realizing that competitive advantage is achieved via strategic investment in these assets.

This core of the HC issues is continuously being affected by a whole spectrum of internal as well as external factors. Substantial factors within the internal corporate environment include the overall corporate infrastructure and economic conditions, conditions of the physical working environment related to ergonomics at the workplace, employee motivation [39,40], corporate culture and its manifestations in the enterprise’s everyday operation, the hierarchy within the organizational structure, employees relationships [41,42], corporate social responsibility application [43], ways and routes of communication among employees, but also the connection to the human resources information system [8], collecting and processing the data related to HC, providing the reports and analytical overviews being used in human capital management. The external factors with a direct effect on HC available include anthropometric changes in the population related to the workplace ergonomics, economic policy, the state’s employment policy connected to the increase in qualification [44,45,46,47,48], requalification of unemployed persons [49] with untapped HC [50], demographic changes affecting the number of potential new employees in the labor market, and the trends in the industry [51,52,53,54,55] which require changes in the structure of HC if they shall be captured and reflected in the enterprise’s outputs.

The main part of the HCM process is the identification and evaluation of the effectiveness of HC utilization as well as the effectiveness of the investment in HC. The key is to search for connections between these elements of the HCM process and the enterprise’s performance.

For the assessment of investments in HC the traditional methods for the assessment of investments in physical capital can be used, such as the net present value (NPV) or the internal rate of return (IRR) [56,57,58,59]. They both take time and risk into account during the investment assessment. The time factor represents a separate variable in investment decision making. Time is one of the dimensions in which the economic process is being performed, and within a certain context, it is a distinctive risk factor affecting the economic variables and their relationships in a positive or negative way [10,56,57]. The application of both above-mentioned methods in the context of HC requires an estimation of the expected yields from the investment, which is a relatively difficult task. To make the quantification of the yields less difficult, it is recommended to apply these methods in the business practice rather when realizing non-recurring or short-term educational programs. For the same reasons, it is recommended to apply the indicators of the payback period (PP) in a similar way [57,58].

In addition, the traditional method of return on investment (ROI) has been adjusted in different ways by several authors [59,60,61,62,63]. Another metric designed is the training investment value (TIV) [22,64], or the return on talent [65,66,67,68,69,70].

For a better understanding of the main points gathered via the literature review on the topic of human capital and its management, these were summarized in

Table 1. Summary of literature review of HCM.

Author (Year)	The Main Findings for the Theoretical Background of the Studied Topic
Davenport and Prusak (1998) Becker (1964) Tokarčíková et al. (2020) Halder (2018) Koziol and Mikos (2020) Stopka et al. (20019) Slottje (2010) Kvet et al. (2020) Ližbetinová et al. (2020) Chrysler-Fox and Roodt (2014)	The investments at the microeconomic level (in enterprises); The investments in education and training of individuals resemble the investments of enterprises in their property and equipment; Combining quantified with qualitative indicators; The overall corporate infrastructure and economic conditions, conditions of the physical working environment, corporate culture, organizational structure, corporate social responsibility, communication, connection to the HR information system.
Goldin (2001) Molina-Azorin et al. (2021) Cahyaningsih et al. (2017) Armstrong (2006) Osipov et al. (2022) Stacho et al. (2019) Dietz and Zwick (2022) Hitka et al. (2018) Zafar et al. (2019) Bosi et al. (2021) Klučka (2017) Lu et al. (2020) Gandrita and Rosado (2019)	The investments at the macroeconomic level; Investments in HC lead to competitive advantage; External factors affect HC; The anthropometric changes in the population, economic policy, the state´s employment policy, requalification of the unemployed person, demographic changes, trends in the industry.
Tumová (2019) Fontana et al. (2019) Sequeira (2017) Tokarčíková et al. (2020) Dissou et al. (2016) Babaei and Jassabi (2022) Barro (2001) Sohl, 2022 Addico et al. (2022) Lorincová et al. (2018) Fareri et al. (2020) Echols (2005) Lorincová et al. (2021) Pirozzi and Ferulano (2016) Dadd and Hinton (2022) Chen et al. (2004) Omotunde and Alegbeleye (2021)	Investments in HC in three forms—improving the employees´ health, improving the work conditions, education, and development; The assessments of investments in HC via traditional methods—NPV, IRR, PP, ROI, TIV, ROT; Time and risk into account during the investments assessment; The estimation of the expected yields from the investment is difficult.
Cahyaningsih et al. (2017) Rahman and Akhter (2021) Echols (2005) Mubarik et al. (2018)	Quantification of HC and its effectiveness is problematic; HC is usually quantified as cost in accounting.
Mustafinand Ignateva (2016) Armstrong and Taylor (2014) Cahyaningsih et al. (2017) Ingham (2007) Yarovaya et al. (2021) Boon et al. (2018) Blackman et al. (2016) Maltseva et al. (2017) Qu (2022) Armstrong (2006) Osipov et al. (2022)	Enterprises must manage HC; Emergence of the HCM concept; Method of analysis, measurement, assessment of HC in enterprises; The essence of HCM is HC; Close connection of HCM with HRM; Metrics for managing HC in an enterprise with all its components; Managers need to know what motivates their employees.

.

The theoretical background summarized this way contributed to the identification and description of the knowledge gap the research was oriented on. This gap was defined as insufficient knowledge on the specifics of investments in HC are the methods that are actually being applied by the managers to evaluate such investments.

2.2. Human Capital Management and Business Performance

Several authors confirm the positive impact of HC, investments in HC, and the implementation of HCM on the performance of companies in various areas of their activity in the economy. These include, for example, [71,72,73,74].

Moreover, [21] wrote that investments in HC can increase the efficiency of employees and companies, as well as the financial performance of companies. This idea is also confirmed by [32], according to which company managers represent HC, and all types of investment in this intangible asset of the company increases the effectiveness of HC, the overall performance of managers, and the performance of the company.

HC as an element of intellectual capital, efficiency of capital employed, and efficiency of human capital positively affects firms’ return on equity (ROE) and business performance [33,75].

According to [75], HC is one of the four key elements of intellectual capital and has an impact on business performance.

HC also increases employee productivity by improving production processes. This increases the readiness of individual economies to adopt and use modern technologies and thus increase their competitiveness [48].

For the specific topic of this article, those questions were selected that are related to the investments in HC, the evaluation of their effectiveness, the implementation of the HCM concept, and its connection to the performance of IT enterprises in Slovakia.

The following hypotheses were tested:

• Hypothesis 1: The most frequent form of investments in HC is represented by educational efforts;
• Hypothesis 2: The majority of enterprises do not perform the evaluation of the effectiveness of investments in HC;
• Hypothesis 3: The majority of enterprises perceive the impact of HC on their overall situation as very intense;
• Hypothesis 4: More than a half of the enterprises do not have the HCM concept implemented in any form;
• Hypothesis 5: The implementation of the HCM concept increases the enterprise’s performance.

Figure 1 captures the logical structure of the individual parts of the studied area with their mutual relationships with regard to the above-listed research hypotheses.

We used our questionnaire to obtain primary data. To test Hypothesis 5, we obtained secondary data on the performance of companies from the public Slovak–English database, Finstat, and companies’ websites. Subsequently, the synthesis of the obtained results was performed, and based on all the previous activities, the recommendations for the evaluation of investments in HC within the HCM implementation were designed.

3. Materials and Methods

The aim of the article was to find out whether IT enterprises in Slovakia carry out the evaluation of the effectiveness of investment in HC and how they perceive the impact of investment in HC on business performance in the context of implementing the concept of HCM. At the same time, we investigated the impact of ownership and size of the enterprises on the identified situation. Based on the results of the questionnaire survey, we proposed recommendations for managers in enterprise in this research area. In the theoretical part of the article, we pay attention to the nature and position of HC, investments in HC, the nature of HCM, and their influencing factors.

During the research presented in this article, the content analysis was applied to analyze the opinions of different authors on the substance and position of HC, and the core and objectives of HCM. These opinions were then compared and the pieces of knowledge obtained were synthesized. To collect the necessary primary data points, a questionnaire survey was performed. The survey was originally designed, conducted, and evaluated. An advantage of questionnaires is represented by their anonymity; thus, the respondents feel safe, and they can express their opinions without being worried about possible sanctions.

The statistical population for the survey represented 17,377 business entities operating in the telecommunications, IT, and other information services in Slovakia. These are considered knowledge-intensive enterprises.

For this size population, the fully representative sample size is 376 enterprises (confidence level of 95%, margin of error of 5%). Therefore, 410 enterprises from the selected industries were included in the survey. Based on the responses collected, the actual sample size was 113 enterprises (responses from 113 managers). This put the rate of return to 28%. The actual sample size pushed the margin of error to 9.19%. The Likert scale was applied in the questions. The collection of the responses was performed in 2021.

The data collected predetermined the statistical tests that are suitable for their analysis. These included the tests of independence (Chi-square test and the z-score calculation) and the correlation tests (using the Spearman’s correlation coefficient), which are applicable to the categorical data. Application of such a mathematical–statistical procedure in the data analysis is supported, e.g., by the study conducted by [76].

The survey included questions related to the following areas: HC components, investments in HC, methods and metrics for the evaluation of the effectiveness of HC utilization, methods and metrics for the evaluation of the effectiveness of investments in HC, specific forms of investments in HC, motivational tools being applied, support for HCM in the enterprise’s information system, and criteria for the evaluation of the enterprise’s performance and competitiveness.

The data gathered from the answers in the questionnaire survey were at first processed by specific procedures of descriptive analysis to obtain a description of the research sample, on which the methods and procedures of statistical analysis were applied. These included the tools of correlation analysis used for the identification of statistically significant relationships of dependence between the individual variables. In the following step, the tools of exploratory analysis were used to suitably visualize the results, enabling us to draw logical conclusions from the results. These conclusions were connected with the findings from the analysis of the theoretical background.

The description of the research sample consists of the structure of the set of enterprises whose HR managers were the respondents in the survey. This structure (

Table 2. Structure of the research sample based on the size and majority ownership.

Size	Majority Ownership	Number of Enterprises	Percentage within the Size Category
micro-enterprise	domestic owner	45	97.83%
	foreign owner	1	2.17%
small enterprise	domestic owner	18	75.00%
	foreign owner	6	25.00%
medium-sized enterprise	domestic owner	20	86.96%
	foreign owner	3	13.04%
large enterprise	domestic owner	2	10.00%
	foreign owner	18	90.00%

) follows the division based on the size of an enterprise according to the number of employees. The second criterion is the majority ownership (domestic or foreign).

4. Results

The survey was focused on the identification of the level at which the activities related to the realization and evaluation of investments in HC are being performed within the implementation of the HCM process in enterprises in Slovakia. The narrower focus on the IT industry was selected because these enterprises represent an important part of the Slovak economy, and they represent the type of enterprises in which HC plays an irreplaceable role. As the following step, the impact of the investments in HC on the enterprises’ performance was studied.

4.1. Frequency of Performing Individual Forms of Investments in HC

The corresponding question in the survey was focused on revealing the most frequently performed forms of investments in HC in enterprises. There were 111 completed answers processed. Based on the responses, a 5-point scale was created in which 5 points represented the most frequently performed investment in HC, and 1 point represented the least frequently performed form of investments in HC. The value of 1 served for the cases when the frequency was not assigned, which enabled the inclusion of the results for the “other focus of investments in HC” category filled by some of the respondents. The overall results for the question in the survey are listed in

Table 3. Frequency of performing individual forms of investment in HC.

Form of Investment in HC	Number of Cases of Assigning a Particular Value					Total Score	Mode	Median	Average	Variance
	Individual Values
	5	4	3	2	1
Investment in education	60	29	16	6	0	476	5	5	4.29	0.83
Improvement of working conditions	34	46	23	7	1	438	4	4	3.95	0.85
Healthcare	8	35	46	21	1	361	3	3	3.25	0.77

.

Based on the aggregate results, the investment in education and development of employees was identified to be the most frequently performed form of investment in HC. This was followed by the investment in the improvement of working conditions, and the lowest score was reached by the additional investment in the employees’ health. As another form of investment in HC, the respondents mainly listed the teambuilding activities.

Hypothesis 1—the most frequent form of investments in HC is represented by educational efforts—was confirmed.

Within the frequency of performing the individual forms of investment in HC in the enterprises, no statistically significant difference was detected in relation to the size of enterprises or the majority ownership. This conclusion was drawn based on the χ² test of independence, at the significance level of α = 0.05.

4.2. The Methods for the Evaluation of the Effectiveness of Investments in HC Being Used

The question examining the methods for the evaluation of the effectiveness of investments in HC in the survey was a closed question with the possibility of adding a name and description for other methods used for the evaluation of effectiveness in this area. For this question, 113 responses were processed, and the respondents were able to pick multiple choices. This means that the situation could be recorded when an enterprise uses several methods at once while evaluating the effectiveness of investments in HC. The aggregate results are listed in

Table 4. The methods for the evaluation of the effectiveness of investments in HC being used.

	Net Present Value	Payback Period	Internal Rate of Return	HC ROI	Return on Talent	Other	None
Number of enterprises	12	25	10	25	17	10	36
%	11	22	9	22	15	9	32

.

Based on the results, it was revealed that among the individual options, the greatest number of enterprises chose the option of not using any methods for the evaluation of the effectiveness of investments in HC (almost 32% of the enterprises in the sample).

The pre-defined options included traditional methods of investment evaluation, such as the net present value, payback period, or internal rate of return, together with the methods that were specifically adjusted by several authors for the evaluation of investments in HC (HC ROI, ROT) (Table 3). Traditional methods for investment evaluation are used in enterprises when evaluating investments in fixed assets. In general, they are divided into the static and dynamic ones, based on whether they take into account the time value of money and the effect of the risk influencing the investment’s result. The respondents could also add their own way of evaluating the effectiveness of investments in HC.

Among the enterprises using some of the methods for the evaluation of the effectiveness of investments in HC, the greatest share was reached by the payback period (being a traditional, static method) and the HC ROI metric (being a metric specifically created for the conditions of HC investments). This means that when the enterprises perform the evaluation of HC investments effectiveness, they most often use the basic perspective of the period necessary for the costs of the investment to be paid back. In relation to the specific metrics, HC ROI calculates the ratio of the yields of the investment and the costs of this investment, or with the costs of remuneration. The return on talent metric is being used less, probably due to the complicated appraisal of the knowledge being generated and applied in the work tasks. Overall, the metrics and methods represent a purely economic perspective being considered during the evaluation.

In the enterprises that expressed that they use other ways of evaluating the effectiveness of investments in HC, these investments are being evaluated individually, based on the assessment of the impacts being manifested in the performance of particular employees.

When the respondents stated that there are no methods being used for the evaluation of the effectiveness of investments in HC, they could add the perceived reason for this situation. It was the case of smaller enterprises, and the reasons the respondents gave included the fact that the enterprises are too small and thus they do not have the capacities needed, the evaluation is complicated, and the return of such investments is not separately calculated since it is considered to be a part of the work performance and development within the IT industry.

Hypothesis 2—the majority of enterprises do not perform the evaluation of the effectiveness of investments in HC—was confirmed.

The usage of individual methods for the evaluation of the effectiveness of investments in HC, or the lack of it, in enterprises was subsequently subjected to statistical testing with the aim to identify the statistically significant differences based on the size and majority ownership of these enterprises. A difference was confirmed only for the utilization of the net present value method in relation to the enterprises’ size (test result: χ²(3) = 12.482; at the critical value of C = 7.815; the confidence level of α = 0.05).

The detailed results then showed that the net present value method for the evaluation of the effectiveness of investments in HC is more often used by medium-sized enterprises (more than 30% of such enterprises in the research sample).

A statistically significant difference in the application of the individual methods for the evaluation of the effectiveness of investments in HC based on the majority ownership of the enterprise was not detected (using the z-score calculation, at the standard confidence level of α = 0.05).

4.3. The Perceived Intensity of the HC Impact on Individual Attributes Describing the Overall Situation of the Enterprise

Another question in the survey was focused on revealing whether the respondents perceive the impact of HC on various attributes describing its overall situation and the results being achieved. The perception and realization of this impact by the managers is a prerequisite for their interest in the HCM concept and a reason to look for new ways of identifying and evaluating the connection of HC, investments in HC, and the business outcomes.

For this question, the responses from 108 respondents were processed. The impact of HC on individual attributes of the enterprise’s situation could be expressed on a 7-point scale, in which 1 point represented the lowest perceived impact, and 7 points represented the highest impact of HC on a particular attribute. The individual attributes of the enterprise’s situation were defined in the options. The respondents could also add other attributes if they felt like some important aspect was missing. The aggregate results accompanied by the relevant statistical calculations are listed in

Table 5. The intensity of the HC impact on the attributes of the enterprise’s situation.

Attributes of the Enterprise’s Situation	Number of Cases of Assigning a Particular Value							Total Score	Mode	Median	Average	Variance
	Individual Values
	7	6	5	4	3	2	1
revenues	27	23	26	9	8	10	5	542	7	5	5.02	3.20
costs	21	21	11	19	26	8	2	500	3	4	4.63	2.96
efficiency	43	29	15	7	2	6	6	602	7	6	5.56	3.10
performance	44	29	18	3	3	6	5	610	7	6	5.65	2.88
competitiveness	34	22	21	11	11	4	5	565	7	6	5.23	3.02

.

Overall, the results showed that the mode for all the options except for “costs” was 7 (the greatest value in the scale). The median for all the options except for “costs” was 5 or greater. When looking at the distribution of the individual responses, the total number for the three highest values (7, 6, and 5) represented the majority of all the responses, except for “costs”, where these values together were assigned in 49% of all the cases. (For other options, the results were as follows: revenues–70%; efficiency–81%; performance–84%; competitiveness–71% of the total number of enterprises in the research sample as a sum for the assignment of values 7, 6, and 5).

Three attributes of the enterprise’s overall situation on which HC has the greatest impact according to the respondents are enterprise’s performance, the total efficiency of the enterprise’s operation, and enterprise’s competitiveness in the market. This conclusion is consistent according to the total score, the highest number of points assigned, as well as according to the calculation of statistical variables. Thus, the conclusion is a precondition for the managers to be interested in the HCM concept and to look for connections between HC, its development, increases in its efficiency, and the business outcomes.

A perceived impact on other attributes was expressed only by a few respondents. They were from smaller enterprises with domestic majority ownership. Among other attributes of the enterprise’s situation affected by HC, they listed the following: the customers’ satisfaction (with the intensity of the impact of 5 points), the loyalty of the employees (intensity of 5 points), overall enterprise’s marketing (intensity of 6 points), and the enterprise’s goodwill (intensity of 1 point). These responses could not be used to draw additional conclusions because of their low frequency, but their logic is sound, showing that the managers perceive numerous effects of HC on the enterprises’ situation and business results being achieved.

Hypothesis 3—the majority of enterprises perceive the impact of HC on their overall situation as very intense—was confirmed.

The results obtained from the processing of individual responses were then subjected to statistical testing with the aim to identify possible significant differences based on the enterprise’s size or majority ownership. After calculating the χ² test (at the significance level of α = 0.05), no statistically significant differences were detected either for the enterprise’s size or the majority ownership. Thus, the aggregate results of all the IT enterprises in the sample reflect unanimous opinion within the studied industry.

4.4. Currently Implemented HCM

The implementation of the HCM concept was explicitly being examined in the survey among the IT enterprises.

For the corresponding question, 110 answers from the managers of IT enterprises were collected and evaluated. Within the sample, there were 54 (49%) enterprises declaring to have the HCM implemented, and 56 (51%) enterprises declaring not to have the HCM concept implemented. Thus, the aggregate results for the whole set of IT enterprises imply a future need to focus the research on the situation when the enterprise has no experience with the implementation of HCM, as well as on the case when the concept has already been implemented in a certain form and it can be further developed.

Subsequently, the statistically significant differences were examined in the state when the HCM concept has been implemented/has not been implemented based on the enterprise’s size and majority ownership. To identify such differences, in relation to the enterprise’s size, the χ² test was applied. The result of this statistical test was as follows: χ²(3) = 42.064; with the critical value of C = 7.815; at the confidence level of α = 0.05. Thus, a significant difference among the enterprises based on their size was confirmed. The detailed results showed an increasing tendency to have the HCM implemented in larger enterprises. Therefore, the future solutions specifically created for initial implementation of the HCM principles into practice should be oriented towards smaller enterprises, respecting their capacity limitations as well as the characteristics of their operation.

The identification of statistically significant differences in relation to the majority ownership was performed via the calculation of the z-score within the group of χ² test methods. The test result was as follows: z = 4.762; with the critical value of C = 1.96; at the significance level of α = 0.05. The effect of the result in the frequency within the corresponding group of enterprises was that the HCM concept has been implemented in 30 enterprises with a domestic majority owner (36.14% of these enterprises), and it has been implemented in 24 enterprises with foreign majority owner (88.89% of these enterprises). Thus, the results point to a considerably higher level of implementation of the HCM concept in enterprises with foreign majority ownership.

In the cases when the respondents stated that they do not have the HCM concept implemented, they could add a reason. These reasons were collected from 23 enterprises. Among the enterprises that added the reason, there were mainly smaller types of enterprises with domestic majority owners. In summary, the results included the following: the enterprise is too small; it is not necessary, i.e., a special kind of management is not required if the HC values are a part of the work life; insufficient capacities and time; the concept is not known; the concept is not specifically implemented in a form of a manual or a set of rules, but HC is being dealt with on a daily basis.

Hypothesis 4—more than a half of the enterprises do not have the HCM concept implemented in any form—was confirmed (but the results were very tight).

4.5. The Impact of Having the HCM Implemented on the Enterprise’s Performance

The testing of this hypothesis is underlaid by the synthesis of the theoretical foundations combined with the approaches that can be used for the evaluation of the business performance itself. The key performance indicators (KPIs) are important here. In relation to these, Ref. [28] stated that even though they are being specifically adjusted for the concrete conditions within individual enterprises, the four basic categories include the revenues, customers, operations, and innovations.

To identify the impact of having the HCM implemented on the enterprises’ performance, the revenues had to be calculated per one employee, which is a representation of the labor productivity in the enterprises. Subsequently, the impact of having the HCM implemented can be analyzed in relation to the revenues from the operations per employee.

Based on the intersection of the enterprises’ responses in the survey, financial data available from the register of financial statements in Slovakia, and the data on the number of employees in enterprises available, a research sample consisting of 82 IT enterprises was created for the testing of Hypothesis 5. The structure of this sample included 36 micro-enterprises, 18 small enterprises, 17 medium-sized enterprises, and 11 large enterprises.

Based on the data types, the application of the statistical analysis included the calculation of the Spearman’s correlation coefficient. The result was as follows: ρ(80) = 0.249; critical value C = 0.217; p-value = 0.024; significance level α = 0.05. Therefore, the test’s result corroborates the existence of a relationship between the implementation of HCM and the revenues being achieved per one employee. The particular manifestation of the result in a connection to the labor productivity is then displayed in

Table 6. The relationship between the state of HCM implementation and the enterprise’s revenues.

HCM Implemented	Interval of Revenues from Operations per Employee (v) in EUR	Percentage of Enterprises within the Sample
no	167,728.00 ≤ v ≤ 2,168,255.40	5%
	11,914.00 ≤ v < 167,728.00	9%
	82,310.00 ≤ v < 119,145.00	7%
	59,300.77 ≤ v < 82,310.00	12%
	39,894.00 ≤ v < 59,300.77	11%
	5632.00 ≤ v < 39,894.00	10%
yes	167,728.00 ≤ v ≤ 2,168,255.40	12%
	119,145.00 ≤ v < 167,728.00	9%
	82,310.00 ≤ v < 119,145.00	9%
	59,300.77 ≤ v < 82,310.00	5%
	39,894.00 ≤ v < 59,300.77	6%
	5632.00 ≤ v < 39,894.00	6%

. The results for the enterprises with the HCM concept implemented show that there is also a higher proportion of those with higher revenues per employee among them.

The set consisting of 83 enterprises was then available for other tests related to the same hypothesis. This set included an additional large enterprise where the data were accessible. The results for other questions from the survey add a more precise description of the state in which the HCM concept is actually implemented.

The first case shows the analysis of the relationship between the fact that the manager recognizes a strong effect of investments in the employees’ education on the increase of the internal motivation of employees to perform well at work and the annual change in the revenues from operations per employee. Via the statistical test using the Spearman’s correlation coefficient, a statistically significant difference was detected between the variables (the test result: ρ(81) = 0.249; critical value C = 0.216; p-value = 0.024; significance level of α = 0.05). The effect of this positive test result in the relative frequencies of enterprises in individual intervals on the change in the revenues per employee is listed in

Table 7. Relationship between the motivational effect of investments in education and the change in labor productivity.

Increased Motivation as a Recognized Effect of Educational Activities	Interval of the Change in the Revenues from Operations per Employee (z) in EUR	Percentage of Enterprises within the Sample
no	24,794.50 ≤ z ≤ 500,692.40	10%
	12,545.47 ≤ z < 24,794.50	8%
	7214.00 ≤ z < 12,545.47	10%
	1569.56 ≤ z < 7214.00	10%
	−6741.00 ≤ z < 1569.56	12%
	−191,779.50 ≤ z < −6741.00	14%
yes	24,794.50 ≤ z ≤ 500,692.40	7%
	12,545.47 ≤ z < 24,794.50	8%
	7214.00 ≤ z < 12,545.47	7%
	1569.56 ≤ z < 7214.00	7%
	−6741.00 ≤ z < 1569.56	5%
	−191,779.50 ≤ z < −6741.00	1 %

. Among the enterprises in which the motivational effect of the education performed is not being recognized, there is a higher portion of those with the negative annual change in the revenues per employee.

While testing the hypothesis, the financial performance was also specified via the monitoring of the increase in the revenues from operations in comparison with the previous accounting period. In this way, a logical variable was created to be used in the statistical analysis and to be analyzed in relation to individual elements of the HCM concept implementation.

A statistically significant difference was detected for the increase in the revenues from operations and the application of the career development option as a motivational tool. This was supported by the corresponding test result: z-score = 2.929; critical value C = 1.96; p-value = 0.003; significance level α = 0.05. This test results in the relative frequencies of enterprises as captured in

Table 8. Relationship between the motivational effect of career development and an increase in the enterprise’s revenues.

Career Development Being Used as a Motivational Tool	Increase in the Revenues from Operations in Comparison with the Previous Period	Percentage of Enterprises within the Sample
no	no	27%
	yes	35%
yes	no	5%
	yes	34%

. The displayed structure shows that among the enterprises in which the career development is being used as a motivational tool (as a part of the HCM concept), there was a considerably lower portion of those enterprises that did not report an annual increase in their revenues.

Based on connecting all the above-listed arguments, Hypothesis 5—the implementation of the HCM concepts increases the enterprise’s performance—was confirmed.

Based on a survey conducted among HR managers of IT companies, we discovered several important facts. The main findings gained by the processing and evaluation of the responses of HR managers of IT enterprises in Slovakia in the survey included the following:

• The most frequently performed form of investments in HC is the one represented by investments in education and development of employees (Hypothesis 1–was confirmed);
• A considerable group of IT enterprises which do not use any methods for the evaluation of the effectiveness of investments in HC focused instead on all the kinds of investments that could also be used for the ex ante analysis of investment variants of concrete investment situations (Hypothesis 2 was confirmed);
• If the enterprises perform the evaluation of the effectiveness of investment in education, then the net present value method is most often used in medium-sized IT enterprises (more than 30% of such enterprises in the research sample);
• That the majority of enterprises perceive the impact of HC on their overall situation as very intense was confirmed (Hypothesis 3 was confirmed);
• HR managers recognize an increase in the individual performance of employees as a desired effect of investments in HC;
• More than a half the IT enterprises do not have the HCM concept implemented (Hypothesis 4 was confirmed);
• The HCM concept is implemented in up to 88.89% of IT enterprises with foreign majority owners;
• When implementing the HCM concept, including the area of evaluation of the effectiveness of investments in HC, the enterprises achieve better economic outcomes, (Hypothesis 5 was confirmed);
• In relation to business ownership, differences were identified in the use of the net present value method to assess the effectiveness of investments in LK and in the introduction of the concept of HCM. In relation to business ownership, differences were identified in the implementation of the HCM concept.

The results obtained based on the conducted research in confrontation with the analysis and subsequent synthesis of scientific knowledge in the investigated issue contributed to the expansion of the knowledge base in the area of investments in HC and the implementation of HCM in business practice, with an impact on business performance. At the end of the article, we have also supplemented these theoretical implications with practical and managerial implications.

5. Discussion

The investments in HC can have many specific forms. The basic ones include the investments in employees’ education [58,77], being performed the most often. Managers should not forget that other examples are investments in the improvement of working conditions [78] and in the employees’ health [79]. However, the specific forms can be performed as mentoring of subordinates and colleagues, the time dedicated to self-study, and the participation in various modern forms of learning. It should be noted that a company can invest more effectively in human capital if managers understand and perceive the strategic value of human capital [11].

Evaluation of the effectiveness of all forms of investment in HC is part of HCM. HCM is a process that is based on the enterprise’s strategy and is linked to the enterprise’s results. For this reason, managers should be aware that since all these types of investment require funds to be spent, it is important to reveal the connections between human capital utilized, investments in its development, and the outcomes the enterprise obtains that are being created over a long period of time [80,81]. These outcomes include effects expressed via financial situation and overall performance of the enterprise, but they can even by connected to its ecological footprint in specific cases [21,32,48]. The concept of HCM is focused on this, and its particular implementation should be supported by the information system being used in the enterprise—especially now, in connection to Industry 4.0 [12,59,82,83]. The strategic nature of the individual elements of the human capital topic is entrenched in the fact that if an enterprise strives for the attainment of the goals set, it has to be able to assess its current capabilities (represented by the human capital available) [24]. An HR manager needs to be able to assess how these capabilities are being utilized (the aspect of effectiveness) as well as what further investments are necessary [84]. The effectiveness of the utilization of HC—and thus, also of the investments in it—is then affected by numerous factors, including the employees’ satisfaction [34,85].

The research results point to a need to prepare and education of HR managers about the essence of HCM and a suitable form of implementation of this concept for smaller enterprises, respecting their capacities and specific characteristics [6,9,86,87,88]. The opinion of those managers stating that dealing with the topic of HC and its effectiveness is unnecessary can be changed only by delivering new pieces of scientific and empiric evidence [33,89,90,91,92]. Therefore, these issues need to be examined by collecting new data, analyzing accessible information sources, and designing practical approaches and metrics, using which the enterprises will be able to better monitor and evaluate the state and development of their HC [93,94,95].

6. Conclusions

Based on the questionnaire survey results, we proposed several practical and managerial implications in this area. Managers must take into account that when applying a complex perspective regarding the investments in human capital, they need to consider that many such activities do not have an immediate, direct financial nature [96]. A characteristic feature, representing a certain disadvantage of investments in HC, is the difficulty of the quantification of their yields and benefits, as well as the fact that these benefits are not immediate, but are manifesting over a longer period of time.

Moreover, HR managers and other specialists also need a sufficient level of knowledge and skills related to the HC and HCM theory and to the analytical methods and tools with the possibilities of their application [79,97,98]. For an enterprise to be able to effectively utilize its human capital, it needs to acquire and develop a concrete set of knowledge and skills connected to the concepts, activities, and analytical nature of human capital management as a whole [99,100,101,102,103]. In this context, companies can adopt strategies to mitigate managers’ behavior in hiding knowledge [3] and to facilitate the transfer of knowledge [104]. This includes analytical skills and skills in using statistical software and information system [105], but also the understanding of, and open-mindedness with respect to, the identification of connections between HC and business performance [7,15,106,107,108,109].

Numerous metrics have been designed for the evaluation of the effectiveness of HC and investments in it [21,110,111]. However, HR managers need to consider several facts. These metrics were designed for overall evaluation at the corporate level. Therefore, they must be rather general, which means that substantial components of human capital in particular enterprises are not included in a sufficient manner. Following this, the components are not being managed appropriately within human capital management, and the enterprise cannot evaluate whether they are being sufficiently developed to help achieve the goals planned in the strategy. The corporate-level metrics can be used for the monitoring of the overall trend regarding the employees and their performance [112,113,114]. The result can then be compared with the enterprise’s main competitors [32] since these indicators can usually be calculated using the data found in public financial statements [115]. However, to acquire a detailed understanding of HC utilization and the effectiveness of investments in it, more specific metrics are needed. These metrics need to be designed by HR managers, taking into account the particular conditions in the enterprise [67,116,117,118,119]. To do so, they need to consider the relevant components of human capital and connect them to the performance indicators [31,120,121,122]. Reducing the performance achieved to the financial variables listed in financial statements is only one possible approach [123]. To create a complex evaluation, other ways need to be added, including those accepting the individuality of the employee [35] and considering the impact on the employees’ satisfaction, motivation [87], turnover rate, or absences due to illness, in relation to all three forms of HC investments.

For the future, it needs to be realized that the topic of HC is closely connected to a wide and frequently researched field of innovations, where human capital is the true originator of all the innovations [124,125]. For an enterprise to be able to launch entirely new products or processes, it needs to have a considerable level of very specific components of human capital [126,127]. This is also a way to look for tangible connections of HC to the enterprise’s operation. Acknowledging that the intangible nature of HC complicates its quantification [128], innovations can be the connecting element that is used for the evaluation of human capital and its effectiveness. The position of HC in the environment being called the innovation economy is studied by [29,129], too.

These are all suggestions and recommendations for managers in enterprises when implementing the HCM concept and evaluating the effectiveness of investments in HC, which will help the enterprise increase its performance.

Theoretical implications stemming from the research results are mainly related to the quite low current utilization of specific methods that were designed by other authors to evaluate investments in HC and their effectiveness. Thus, there is space for the creation of new approaches, indicators, and procedures. These could focus more on the individual characteristics of the specific forms of investments in HC. In addition, the practical application of these indicators and methods should be captured in the newly created theoretical materials (books, chapters, articles) in such a way that practitioners in the enterprises will be able to follow it conveniently.

The limitations of this research include the fact that it was only carried out on a sample of enterprises from the IT sector; as the IT sector is knowledge-intensive and rapidly developing, working with people with high value HC, we focused on enterprises in this area. We consider the obtained results to be a starting point from which to obtain a basic insight into the situation in the area of HCM implementation and the evaluation of the effectiveness of investments in HC in Slovak enterprises. Future research should expand the topic, using a sample of enterprises from all sectors of the economy. The topic is also suitable for other international studies comparing the situation with respect to the application of the HCM and the effectiveness of investments in HC in other countries.

Another perspective related to the HC component is that if an enterprise wants to implement innovations represented by new technologies available in the market, it needs to broaden the knowledge of the employees or help them acquire new knowledge and skills. For this reason, the authors’ ambition for future research is to examine the link between the HCM process and selected elements of Industry 4.0.