ATTRIBUTES EFFECT OF HUMAN RESOURCES VALUATION ON CORPORATE PERFORMANCE

Abstract

The Study determined the attributes effect of human resources valuation on corporate performance. The specific objectives were to examine the effect of human resource cost (HRC) on return on equity (ROE) of listed oil and gas companies in Nigeria and evaluate the effect of human capital efficiency (HCE) on return on equity (ROE) of listed oil and gas companies in Nigeria. The independent variable as human resources valuation proxied by human resource cost (HRC) and human capital efficiency (HCE) while dependent variable as corporate performance proxied by return on equity (ROE). The ex-post facto research design which made use of secondary data drawn from the annual report and accounts of four (4) firms in listed oil and gas sectors in Nigerian economy covering a period of ten (10) years from 2010 to 2019 both years inclusive. The study was anchored on both human capital theory and resource-based theory. The E-views version 10.0 software statistical package was used to run the Panel ordinary least square (OLS) for the study. The multiple regression model was applied in determining the extent of the effect of the independent variable (human resource valuation) on dependent variable (corporate performance) of companies under investigation. The result of the regression analysis indicated that human resource cost (HRC) has negative and insignificant effect on return on equity (ROE) of listed oil and gas companies in Nigeria while human capital efficiency (HCE) has positive and insignificant effect on return on equity (ROE) of listed oil and gas companies in Nigeria. The implication of this finding is that a percentage increase in human resource valuation (human resource cost and human capital efficiency) will also result to a decrease and an increase of the profit made by the companies under consideration. Based on the findings, the researcher recommended among others that the Firms should invest in employees’ education and relevant programmes that can help increase in their work by harnessing information technology and reduce in the money spending in hiring expert from outside for the same work. Furthermore, management should ensure that payments of salaries and allowances are made on time in order to help improve the financial performance of the organizations because human capital efficiency is the key driver of value creation especially in financial performance, efforts should be made in recruiting very competent staff, train, retrain and motivate them.