Importance Of Human Capital

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The term human capital is recognition that people in organisations and businesses are an important and essential asset who contributes to development and growth, in a similar way as physical assets such as machines and money. The collective attitudes, skills and abilities of people contribute to organisational performance and productivity. Any expenditure in training, development, health and support is an investment, not just an expense. Human capital is getting wider attention with increasing globalization and also the saturation of the job market due to the recent downturn in the various economies of the world. Developed and developing countries put emphases on a more human capital development towards accelerating the economic growth by devoting…show more content…
In fact, it takes human capital to create some other forms of capital. While a machine may eliminate the need to have hundreds of production workers make stuff, it still took human capital to design and build the machine. And as we move deeper and deeper into a knowledge-based economy that depends on information, knowledge and high-level skills, human capital will become increasingly important. Dave's smartphone company is an example of a knowledge-based business where information, data and knowledge is paramount for…show more content…
To know how various units are functioning and how they have been able to implement the personnel policies, and d. To review the personnel system in comparison with organisations and modify them to meet the challenges of HRD management. Scope of HRD audit Every time a human resource development audit is to be taken up; the scope is decided. The audit need not be exhaustive but may focus on particular function of human resource development management such as training and development, compensation, performance appraisal, etc. Nevertheless, the objective and approach of HRA-more or less- remains the same, regardless of scope. The Scope of Human Resource Audits • Audit of Corporate Strategy The organization is going to gain competitive advantage. • Audit of the Human Resource Function Human Resource Information System, Staffing and Development, and Organization Control and Evaluation. • Audit of Managerial Compliance Human resource policies and procedures. • Audit of Employee Satisfaction To learn how well employee needs are met. Approaches to human resource Audit: There are five approaches for the purpose of evaluation of HR in any organization. These include Comparative approach, outside authority, Statistical, Compliance approach and Management By Objectives

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