At the core, capital has two components. The first component: “to enhance the productivity of other factors of production” (Capital, 2015). The second component: “the reward following from this enhancement” (Capital, 2015).
In this article, Schultz explores how human beings can be considered as a form of capital. Human beings enhance productivity as “the knowledge and skill are in great part combined with other human investment, predominantly account for the productive superiority of the technically advanced countries” (Schultz, 1961, p. 3). The return: “the resulting increase in earnings” (Schultz, 1961, p. 8).
“Economists have long known that people are an important part of the wealth of nations” (Schultz, 1961, p. 2). I agree. The challenge for me consists of a way to meaningfully measure the productivity.
When I received my undergraduate degree in Computer Science in 1982, I could measure the reward portion of the equation in the form of my higher paycheck. However, quantifying my actual productivity has been a struggle throughout my career. How meaningful were my achievements in terms of my organization’s productivity? My employer, at times, stressed the accuracy and quality of my work as more important than filling a “quota.” At times the opposite situation existed. In my experience, enhancing productivity can appear subjective, a metric at the whim of my supervisor or the larger organization. Unfortunately, once subjectivity walks into the front door, it seems to me that measurement walks out the back.
REFERENCES
Schultz, T. W. (1961). Investment in human capital. The American Economic Review, 51(1), 1-17.
Capital. (2015). In A dictionary of business and management. Retrieved from http://www.oxfordreference.com.ezproxy.umuc.edu/view/10.1093/acref/9780199234899.001.0001/acref-9780199234899-e-934?rskey=fm2mwc&result=1