IDEAS home Printed from
   My bibliography  Save this article

The Theory of Real Options as Theoretical Foundation for the Assessment of Human Capital in Organizations


  • Isabell Welpe
  • Stephan Lutz
  • Erich Barthel


The human capital represented by corporate employees involved in the information and knowledge economy is becoming an increasingly central value-creating factor in global competition. However, in contrast to other value-creating factors, human capi-tal is more difficult to measure, evaluate and manage. Due to human capital’s great importance for economic value creation, a series of studies on human capital evalua-tion have been published during the last few years. This paper discusses why so many traditional evaluation methods are only partly appropriate for categorizing, analyzing and evaluating human capital’s special characteristics. In particular, it is difficult for many traditional approaches to integrate notions of flexibility and options with regard to the human capital of companies. Our result shows that the real options theory provides a theoretical framework for the evaluation of human capital and allows a differentiated analysis that, on a qualitative basis, enables investments in uncertainties that are associated with human capital. This theory thus forms the foundation for the quantification of human capital’s inherent opportunities and risks. Consequently, this paper provides approaches for the future evaluation of human capital and a conceptual context for empirical studies.

Suggested Citation

  • Isabell Welpe & Stephan Lutz & Erich Barthel, 2007. "The Theory of Real Options as Theoretical Foundation for the Assessment of Human Capital in Organizations," Zeitschrift fuer Personalforschung. German Journal of Research in Human Resource Management, Rainer Hampp Verlag, vol. 21(3), pages 274-294.
  • Handle: RePEc:rai:zfpers:doi_10.1688/1862-0000_zfp_2007_03_welpe

    Download full text from publisher

    File URL:
    Download Restriction: no


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Cornelia Serena, PASCA, 2016. "The Human Capital - A Long Term Investment," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 1(4), pages 51-62.
    2. Knauer, Thorsten, 2010. "Relevanz, Qualität und Determinanten der externen Unternehmenspublizität zum Humankapital: Eine empirische Bestandsaufnahme der HDAX-Unternehmen," Arbeitspapiere des Lehrstuhls für Betriebswirtschaftslehre, insbesondere Controlling 13-1, University of Münster, Chair of Management Accounting.

    More about this item


    Human Capital; Real Options; Company Evaluation; Immaterial Assets; Company Value; Investment;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rai:zfpers:doi_10.1688/1862-0000_zfp_2007_03_welpe. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Rainer Hampp). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.