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Investing in human capital
There is a growing realization that talented, dedicated people may be the organization’s most valuable asset. To describe this asset, the term "human capital" is becoming popular. The unique capabilities of an organization’s members are an important source of core competencies. Human resources and relations include member knowledge and technical expertise, member motivation and commitment to the organization and its mission, and the mutual trust and respect necessary to do collective work effectively. There is growing evidence that the development and motivation of an organization’s human capital has a tangible impact on business results. A study of three thousand companies conducted by the University of Pennsylvania found that spending 10% of revenue on capital improvements boosted productivity by 3.9%; a similar investment in human capital increased productivity by 8.5%, which is more than twice as much.
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