HUMAN CAPITAL

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. The human capital theory is based on one’s ability to increase their net worth in the future. It is determined by measuring a person’s skill set, education, collective skills, knowledge, or other intangible assets. These can be used to calculate an expected economic value for the individual across their lifetime

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