Investment Consideration02/09/2022 0 By indiafreenotes
Human Resources Investment Considerations
- Management values
- Risk and return on HR investment
- Economic rationale for investment in training
- Utility theory
An Investment Prospective of Human Resource Management
- HRM practitioners & Scholars have long advocated that HR should be viewed from investment prospective.
- Current practices indicate employees as valuable investment but still some organizations view employees as variable cost and there is little recognition about employees training & development, recruitment & replacement cost.
- Investment only in physical resources does not give organizations a competitive edge as systems, processes can be duplicated, cloned or reversed engineered.
- Maintainable edge / advantage drives from the level of skills of employees, their knowledge and capabilities.
- Management scholar Edward Lawler described investment in Human Resources as:
- “to be competitive, organizations in many industries must have highly skilled and knowledgeable workforce. They must also have a relatively stable labour force since employee turnover works directly against obtaining the kind of coordination and organizational learning that leads to fast response and high quality products and services.”
- Due to forecast of shifts in skills need from manual to cerebral (intellectual), investment for enhancing employee’s knowledge & skills become more important.