The Performance Rewards of Human Capital Development in the Federal Government

Abstract

Human capital is one of the most vital assets an organization possesses. Research has demonstrated that human capital is directly related to performance. Thus, there is a clear incentive for organizations to grow their human capital levels. Not surprisingly, then, organizations have created and employed a wide variety of managerial practices focused on further developing human capital within their employees. Yet even as the U.S. government faces forthcoming human capital shortages due to the ongoing retirements of a large segment of its workforce, empirical research investigating the impact of commonly used human capital development practices on performance in the public sector is scarce. Therefore, to gain a deeper understanding of this dynamic relationship, using U.S. federal personnel data, this study analyzes the impact of human capital development practices on agency performance. The results of longitudinal econometric analyses suggest that human capital development practices have positive effects on agency performance.