Human Capital: Article Review Brief Overview Human Resource Management (HRM) was established by organizations to ensure human talent is implemented effectively and efficiently to enhance organizational goals (Mathis & Jackson, 2011). The strength of an organization is developed through the foundation of the core competencies of the organization (Mathis & Jackson, 2011). Core competencies “creates high value and differentiates an organization from its competition” (Mathis & Jackson, 2011. p. 4). One specific core competency is Human capital. Human capital is not the individual employees of the organization; rather, human capital is what those employees bring to the organization through their knowledge, skills, life experiences and motivation (Mathis & Jackson, 2011). This paper compares two articles regarding human capital.
How do the Articles Relate to Human Resources Human capital or sometimes-referred to as intellectual capital reflects knowledge, thinking, creativity and skills of employees in the workforce (Mathis & Jackson, 2011). Noble prizewinner, Economist, Gary Becker, elaborated the concept of human capital and its significance to HRM and economic results (Mathis & Jackson, 2011). Becker states “there is an essential similarity between human and physical investment” (as cited in Benewitz & Zucker, 1968. p. 406). Through a model developed of occupational choice centered on the preferences of individuals, Benewitz & Zucker (1968) determine whether or not the distribution of total investments vary among different occupations.
What Was Learned from the Articles Both articles support one another in terms of human capital as a financial asset to an organization. With statistical equations, Benewitz & Zucker (1968) validate and support Becker’s conclusion that human capital is an investment to an organization through elements such as employee education and the employee’s type of work they like to perform within the organization. Grable (2015) also uses statistical equations to validate and support his conclusion that human capital is a financial asset to an organization. Where Benewitz & Zucker (1968) uses human capital as an investment through occupational choice, Grable (2015) uses human capital as an investment through stocks and bonds.
What is Especially Valuable to our Study of Human Resources Human capital is valuable to the study of HRM because it can give financial advisors a variable to measure the income associated with