The Significance of Human Capital in Organizational Success

Human resource is considered the ultimate resource as it turns natural elements into useful resources. People differ in their educational levels, age, and sex, and their distribution is not uniform across the world.

Human resources play a crucial role in the success and functioning of an organization by ensuring that the right people are in the right positions, equipped with the necessary skills and resources to contribute effectively to the company’s objectives. 

Human Resource Perspectives: Growth vs. Development

Table: Comparison between Growth and Development

From Economic Growth to Human Resource Centric Perspectives

• Historical Context: For several decades, the primary metric for a country’s development level was its economic growth.
  • A country with a bigger economy was perceived as more developed.
• Modern Understanding: Quality of life, opportunities, and freedoms are essential aspects of development.
  • Emphasis on these factors gained traction in the late 1980s-90s, thanks to pioneering economists.

Concept of Human Development:

• Concept: It was introduced by Dr. Mahbub-ul-Haq. People are at the core of this concept.
  •  It focuses on improving overall quality of life by enlarging people’s choices.
• Objective: It aims to create conditions for a meaningful life, encompassing health, talent development, societal participation, and freedom to achieve personal goals, all guided by the strategic utilization of human resources. 
• Example: Pradhan Mantri Kaushal Vikas Yojna (PKVY) was launched in 2015 with the aim to train one crore Indian youth between 2016 to 2020. 
  • It focuses on providing quality training to potential and existing wage earners to enhance employable skills.

Key Contributions from Economists

Table: The Contributions from Dr. Mahbub-ul-Haq and Prof. Amartya Sen

Barriers to Choices and Capabilities:

• Challenges: Many face difficulties in making basic choices due to:
  • Lack of knowledge.
  • Material poverty.
  • Social discrimination.
  • Inefficient institutions.

• Significance: Building capabilities in health, education, and resources is essential for broadening choices.
  • Without these capabilities, people’s choices remain restricted. 
  • Example: a lack of education or resources limits career and healthcare choices, respectively.

The Four Pillars of Human Development: Fostering Equity, Sustainability, Productivity, and Empowerment through Human Resources

Table: The four pillars of Human Development

Human Resource-Centric Approaches to Human Development: Exploring Income, Welfare, Basic Needs, and Capability Perspectives

Table: The four pillars of Human Development

Also Read: HUMAN DEVELOPMENT

Conclusion
Strategic human resource management is central to diverse approaches in human development. Whether focusing on income, welfare, basic needs, or capabilities, the common thread is the recognition that the true wealth of nations lies in nurturing and leveraging human resources. Building capabilities through effective human resource initiatives stands as the linchpin for fostering sustainable, equitable, and empowered societies.