Human Capital

Introduction The organisations can no longer try and convince themselves that change is an option. It is inevitable and, to survive, organisations must accept it and move forward. On that note, there is a definite shift in priorities and values in the corporate world. There is a growing interest in people as the corporate asset is part of this shift in values. Human Capital Theory Human Capital is the most valuable asset an organisation can …

…under the current business environment. Based on a study conducted by Becker in 1997 on a sample of 293 profitable US organisations, he highlighted that "HRM activities had a significant impact on firm performance whereas technical, or traditional and operational activities did not" (Knight et al, 2004). In conclusion, the above arguments and empirical evidence suggest that organisation performance will be higher for organisations that adopt the contemporary HR approach than those organisations using the traditional HR approach.