Factors Affecting Efficiency of Human Capital
Competence is a combination of knowledge, skills, attitudes, and/or personal traits demonstrated in a person’s behavior that allows them to achieve specific objectives at work. Competences are more than just skills because employees have the power to gain new knowledge and generate new skills with training. Education is the major means of accumulating human capital. For example, a doctor can gain a level of human capital with training and education but develop a greater gain in human capital over time with continuous practice and experience. In addition to formal education, an employee can increase human capital at work through different experiences and training.
Knowledge is another major factor of development in human capital. Knowledge is effective when an individual receives an education that includes the competence and commitment of people. Research is a systematic attempt to search for new ideas, facts that could bring about improvement in all areas of life. For example, a well-trained teacher that is equipped with necessary materials, research, and modern techniques which includes a proper teaching method that caters to the needs of the student is referred to as a teacher that has knowledge of his/her work. Knowledge helps an individual to improve when combined with necessary commitment which can result in Goodwill.
Organizational development is an ongoing process that a company can use to create gains in human capital and positive employee development. It helps employees strive for a goal which creates an environment of collaboration and trust which improves problem–solving techniques. The level of funds available also affects human development. When employees receive the tools, support, structure, knowledge needed they can increase their human capital and adapt better to the changes in their respective industries.
Risks may occur when a company does not meet employee needs or provide the tools necessary to increase productivity. An organization that does not meet the necessary needs of the employees is at the risk of losing the employees and can also result in constant group activities such as strikes, absent employees, etc. All these will hinder productivity and poor working quality.