HUMAN CAPITAL

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HUMAN CAPITAL

An organization, in private or public sector, should have competitive advantages to win the competition. Competitive advantages can be gained by making a unique design of product or service, using a modern technology, implementing an effective organization design, and the most important is having an effective human resource management.

An organization should optimize every employee’s potential to get great work performances, and then can make the organization stand on better position than other organizations. One type of investment in an organization is human development. This kind of investment has a purpose to improve productivity by doing some improvements in health, education, and work training. Healthy, educated, and skilled employees will give positive impacts to organization productivity. An organization with a good human resource management will have a competitive advantage which hard to be copied by other organizations. Invesment in human, which is the most valuable economic resource, provides a sustainable competitive advantage and will overcome workforce ill-equipped which is the biggest threat in economic stability.

In 1960, Theodore W. Schultz’s speech entitled “Investment in Human Capital”, in front of American Economic Association members, is a foundation of human capital theory. According to Schultz, human capital is the acquisition of all useful skills and knowledge that is part of deliberate investment. In this theory knowledge, idea, creativity, skill, and productivity make human can be considered as a capital. Other capitals are only tools, but human capital can invest itself in many forms of human resource investment such as formal and informal education, work experience, and health.

HUMAN C...

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...ethics and hurt anyone else.

 Human with moral intelligence will never have a grudge feeling. He will not avenge to someone who hurt him.

Moral capital becomes more important in developing human resource that has high Intelligence Quotient and controllable emotion. Moral capital will make human do something useful and can give a wholeness feeling.

Health Capital

Health becomes a capital for human to work and being productive because human will not able to give his optimum performance if he is unhealthy. Stephen Covey (1990) in his book entitled “Seven Habits of Highly Effective People” states that health is a part of life that makes human become effective. Because of that health quality should be kept up and enhanced. Unhealthy condition will make intellectual capital hampered, emotional capital unstable, loss of adversity capital, and social capital decreased.

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