Human capital refers to the
production factors, coming from human beings, we use to create goods and
services. Our knowledge, skills, habits, and social and personality attribute
all form part of the human capital that contributes to the creation of goods
and services. The concept of human capital recognizes that not all labor is
equal and that the quality of employees can be improved by investing in them;
the education, experience and abilities of employees have economic value for
employers and for the economy as a whole.
Factors that determine human capital
- · Skills and qualifications
- · Education levels
- · Work experience
- · Social skills – communication
- · Intelligence
- · Emotional intelligence
- · Judgment
- · Personality – hard working, harmonious in an office
- · Habits and personality traits
- · Creativity. Ability to innovate new working practices/products.
- · Fame and brand image of an individual. e.g. celebrities paid to endorse a product.
- · Geography – Social peer pressure of local environment can affect expectations and attitudes
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Managing Human Capital
management of human capital is diffused throughout an organization. All
management decisions and actions that affect the nature of the relationship
between the organization and its employees are seen as important. As a result,
all management actions can positively or negatively affect the potential of
human capital to influence organization performance. In this view, although the
organization may contribute to the development of human capital, its ownership
rests with each individual. Collectively, all the knowledge, skills, and
abilities within an organization and available at any given time in a human capital pool. Although
this talent is available to achieve positive performance, the totality of
management practices needs to consistently tap this human capital pool in such
ways as to influence individual and group attitudes and behavior toward the
desired organizational goals.
Improving Human Capital
The
great thing is, you can actually improve your human capital at any time. No
matter your age, financial situation, or future plans, there are things you can
do to bump this value significantly.
- Get more education
- Get more experience
- Be versatile
- Explore beyond your industry
- Get involved
- Improve your public speaking and presenting skills
- Cultivate your human network
- Publish your thought
