Human Capital - Roles of People, Organizational Aspects, Valuation

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The terms to describe employees in an organisation have changed from “personal” to “human resources” and of late, “human capital”. Human capital is an acknowledgement that people in an organisation and business are of an important asset who plays a big part in the development and growth of an organisation. It can be said, that the importance of human capital is tantamount to other assets within an organisation such as buildings, financial gains and machineries. It cannot be denied that people’s skills, abilities and knowledge contribute highly and productively to the performance and success of an organisation. Hence, organisations allocate big sums of money and time to offer appropriate trainings to their staffs, treating it as an investment to the organisation in the long run. Inevitably, people in an organisation are required and expected to maintain an organisation’s existence and growth.

In situations where organisations place focus and interest only on competition and financial return, neglecting individuals within the organisation can bring about many challenges. In result, having capable and good people who are always motivated and passionate in an organisation makes a significant difference. In addition, updating staffs with the latest technology and knowledge keeps them to perform better. The value and contribution of people in an organisation must be recognised by organisations. Treat each person in the organistaion importantly. People in an organisation should be valued as an asset than an expense. Every effort of people should be taken and valued formally or informally to further develop their skills and abilities to provide great contribution to the organisation. Organisations that invest in training for their emp...

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...f salaries and wages of each level to arrive at the asset value. Replacement cost method values the human resources based on the cost that would take to replace the organisation’s existing human resources. Lastly, economic value method states that the future revenues of the organisation are directly connected to the human resources. Therefore, the present value of future profit is calculated by applying factor taken to be the value of the human resources assets.

Works Cited

Stockley, D. Human Capital Concept. Retrieved from http://derekstockley.com.au/newsletters-05/018-human-capital.html

Brocaglia, J. Human Capital Risk Managers Specoalizing in Information Security Recruiting. Retrieved from http://www.altaassociates.com/pdf/06-AUG-CC.pdf

Sardhar, M. Valuation of Human Resource. Retrieved from http://www.citehr.com/94178-valuation-human-resources.html

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