Abstract
Human resource refers to the stock of productive skills and technical knowledge embodied in labor. It is tangible in nature. Many early economic theories refer to it simply as labor, one of the three factors of production, and consider it to be a fungible resource -- homogeneous and easily interchangeable. The goal of human resource management is to help an organization to meet strategic goals by attracting, and retaining employees and also to manage them effectively so that they deliver productive outputs. The key word here perhaps is "fit", i.e. a HRM approach seeks to ensure a fit between the management of an organization’s employees, and the overall strategic direction of the company. Human capital instead, refers to the intangible aspect of human resources. It enhances the value of employees by striking a win-win goal for employers and employees. It focuses on the intrinsic value of each employee, where any expenditure on employees is regarded as an investment rather than an expense. The varying talents and motivations of employees are given cognizance so that incentives and working arrangements can be created to enhance each employee's contributions to organizational performance. This paper distinguishes human capital from human resources and how human resource may be transformed into human capital.
Highlights
Since the industrial revolution in the early l8th century, the processes of industrialization were immense with the emphasis on production for the market
The relationship between the workers and the owner was on the basis of exploitation where the owner of the capital pressured the workers to work longer hours with minimal wages, and severe working condition in return for higher profits. In many of his arguments, argued that capitalism is a historical specific mode of production, where each mode of production contained in general a pair of opposed classes, a class of direct producers and a non producing class which exploits them (Edwards, 1985)
The discussion here is not on Marx theory or on the effect of capitalism but on one of the factors of production which determines the success of modern day organizations
Summary
Since the industrial revolution in the early l8th century, the processes of industrialization were immense with the emphasis on production for the market. This was the beginning of what we called the birth of the capitalist system which focuses on maximizing profit and minimizing cost (Wallerstein, 1980). The focus is predominantly on the contribution of human resources in the knowledge economy. The main objective of this study is to assess and evaluate how organizations treat and make sense the role and contributions of their human resources
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