Human Business Theory: The Integration Of The Human Capital Theory

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Human Capital Theory Integration Human capital theory is rooted in the idea that if persons invest in themselves to acquire education and skills then they will be attractive and marketable to employers. Human capital theory developed over time and different theorists from Schultz (1961) and Becker (1964) to Coleman (1988), Armstrong (2001) built on the concept. The main theme in the theory is that the knowledge and skills possessed by persons are critical to ensuring the success of an organisation. The skills coupled with productivity could make an organisation competitive and reach its maximum potential. It is paramount that employers recognise that employees are an invaluable part of an organisation and they should be respected and appreciated. …show more content…
According to Peers (2015), “From this perspective, human capital is little more than a historically specific modification to vocabulary about the labour market. Treating individual humans as a source for generating wealth, as a resource to be exploited, and from which to yield surplus” (p.57). The move away from the industrialised society into the 21st century knowledge based society, makes human capital theory even more relevant today. The organisation needs persons who have a strong knowledge base, have the technical capabilities to leverage technology for the benefit of the organisation. Therefore, a tenet of the human capital theory rests in the ongoing education of employees. Buta (2015) states that included in the concept of human capital theory is, “education and professional training (educational capital) - the set of knowledge, skills, economic, socio-cultural, civic behaviors, obtained through the investment in initial training and in the continuous training -ie the integrated system of skills (theoretical, practical, behavioral participatory)” (p.156). Human Capital Theory guides the Human Resource Department (HRD) in carrying out its functions. “All organizations depend on its employees to succeed. Through human capital development interest and commitment to duty is enhanced and hence the stress on investment in education and training in the workplace” (Alika & Aibieyi, 2014, p.58). The HRD for the Ministry of Education must be an example of the validity of the Human Capital Theory. It should be able to prove that educating persons truly makes them into productive and skilled persons who are capable to making their company

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