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THE EFFECT OF HUMAN CAPITAL DEVELOPMENT ON ORGANIZATIONAL PRODUCTIVITY IN THE PUBLIC SECTOR

ABSTRACT

This study examines the effect of human capital development on organizational productivity in a single local government, future studies can be carried out with broad scope and specifications. In addition; there are several factors that determine the efficiency of the human capital apart from training, it is therefore suggested that future studies can look at the role of the remuneration system vis-a-vis human capital development and organizational productivity. It capital represents the knowledge, skills and abilities that make it possible for people to do their jobs. Human capital development is about recruiting, supporting and investing in people, using a variety of means, including education, training, coaching, mentoring, internships, organizational development and human resource management. Theproblem of low productivity and less competent work force has immensely cost the public sector in terms of loss of profit and wasted time coupled with unsatisfied customers who failto patronize the public sector again either as· a result of poor communication or unsatisfied business on the part of the organization.

CHAPTER ONE

INTRODUCTION

1.1    BACKGROUND TO THE STUDY

The world today is very different from the one which experienced the two world wars. During the second half twentieth century, considerable advancements in science and technology, along with the establishment of broadly-based governments and strengthening of institutions, have led to significant socio-economic progress and improvement in the lives of a large number of people in many countries. However, there are still many others among us who are lagging behind. Given the vastly divergent economic development among the groupsof countries, it would be a common myth to presume that the discrepancy in development is somehow inherited by the respective groups of countries.  Contrary to this general perception, it is quite an enigma to note that, this had not been the case in the past (Hassan, 2000).

Human capital represents the knowledge, skills and abilities that make it possible for people to do their jobs. Human capital development is about recruiting, supporting and investing in people, using a variety of means, including education, training, coaching, mentoring, internships, organizational development and human resource management, Strengthening the human capital of organization and the larger community development field should be an important goal of any organization that deserves higher productivity. According to Corporate District Quarters (2007) organization will remain effective and keep their edge only as long as they have competent and committed individuals working for them.  As thepublic sector grows, attracting new talent and passing along the experience arid wisdom of the more seasoned professionals arecritical challenges. Some of the human capital development initiatives that can lead to the increased productivity of organization includes coaching to elevate employee skills and position them to advance to higher level positions within their career or elsewhere in the field as well as assistance in mapping out a career development plan, in­-service training to build .specialized skills; mentoring etc. After the globalization and World Trade Organization regime, the whole dimension of economy has changed. Productivity, quality, delivery and customer satisfaction are the four words havebecome key words to sustain the shocks given by the globalized competition. Focus of production has been changed towards market and customer. Instead of speaking about only profit, people are speaking about world class manufacturing processes. The globalization has widened the area of competition and given the opportunities to many companies.

The resource like material, machinery will not only contribute in the success. Stronger human capital management is required to run the systems have provided significant economic benefits to organizations that have embraced them as ongoing process instead of on-time events. For becoming world class, public sectors need to increase revenue, improve fund flow, increase returns of investment, improve quality, increase productivity, reduce cost, reduce cycle time, and increase market capitalization (Aina, 2005). Aina (2005) stated further that the participation of human capital development is not only necessary but all encompassing. Thus aligning the human resource towards business goal is the prime need for success. Competencies and the competitive edge showed the when an organization identifies and communicates the core competencies that strategy to achieve goals. The role the competences can play in an organization include-articulation what the organization's values are, providing a common language for employers and managers to describe value creation. The competitive workforce creation is necessary. Talent management has to be practiced, learning organizations and the organization which will adopt the change very rapidly will only survive. Given the importance of human capital development in the success and productivity of any organization, this study intends to look at its role in the management of the public sector.

1.2   STATEMENT OF PROBLEM

The problem of low productivity and less competent work force has immensely cost the public sector in terms of loss of profit and wasted time coupled with unsatisfied customers who fail to patronize the public sector again either as a result of poor communication or unsatisfied business on the part of the organization. The business world is a dynamic and changing platform especially with globalization, it is therefore imperative for organization to consider its work force as the biggest asset of the organization. But the recent happening in many public organizations has put a question mark on that The desire for profit has overshadowed the organization to the extent of parading unqualified and unmotivated staff, which lack regular training, coaching and empowerment leading to low or reduced productivity. Organizations should adopt the view that contributions are role related and not position related. Specialized skills and competencies have to be developed and stress is to be given on the development aspect (Falade, 2001).

Not understanding the way people work interact in an organization results in usually an expensive failure, with employee reactions ranging from simple misunderstandings (resultingin lost productivity or damage) to outright sabotage and organized labour actions. Because of this, the best way to bring about change and productivity is to develop the people who will be affected by it, and the people whose support you need to implement it.

1.3    OBJECTIVES OF THE STUDY

The main objective of this study is to examine the effect of human capital development on organizational productivity in the public sector.

Other specific objectives include:

1. To assess the role of human capital development in organizational efficiency.

2. To determine the impact of efficient human capital development on the productive capacity of organization.

3. To determine the role of training in improving human capital development for increased organizational productivity.

1.4   RESEARCH QUESTIONS

In this study attempt was made beam search light on the following questions.

1. Is there any relationship between human capital development and organizational efficiency?

2. Does efficient human capital development lead to higher to higher productivity in the organization?

3. Does regular training lead to improved human capital development in the public sector?

1.5    RESEARCH HYPOTHESES

Thin study is geared towards testing the following hypotheses

1. There is a relationship between human capital development and organizational efficiency?

2. Efficient human capital development will lead to higher productivity in the organization.

3. Regular training will lead to improved human capital development in the public sector.

1.6    SIGNIFICANCE OF THE STUDY

This study hopes to be significant in so many ways. It will serve a compendium of knowledge for industry leaders in formulating training plan for their organizations. Furthermore, it will induce the work force for better motivation given the fact that considerable time is invested in boosting their morale. The study will equip students of human resource management en the importance of human element of management and production. It can also induce the government to invest more into human capital because of its dire importance.

The industry, government and the society stand to benefit immensely from the outcome of this study. It will also assist the government in cushioning the effects of the global financial crisis because of the importance and challenges of the human element of the meltdown. The study is also significant in the sense that its findings will assist policy makers in formulating policies that can enhance human capital development in Nigeria. Finally, the study will be useful to scholars and students of Human Resource Management in particular and Public Administration who may wish to conduct research on related subject areas.

1.7    SCOPE AND DELIMITATION OF THE STUDY

This study will be limited to the selected case study for the study. Instrument of the study will used on the selected group of people, and their opinions will form the core the outcome of this study. The study will be carried out of the staff of Ojo Local Government Area of Lagos State. Generalizations would be based on the findings of the study. In addition, the result of the study will be based on the opinions of the respondents.

1.8     DEFINITION OF TERMS

In this section, attempt is made to clarify some important concepts relevant to this study.

PRODUCTIVITY: Productivity may be calculated as net sales per employee using Gross Rate of Return of Assets (GRATE) or input output ration case or production personnel. It can also mean prudent use of resources, customer satisfaction, cost effective, service, delivery and general output of the organization. Productivity has been interpreted as a measure of how efficiently an organization manipulates its resources / factors of production (human, capital, materials, energy, knowledge etc.) within the production of goods and services. However, productivity is not only related to the fostering of maximum efficiency by doing things right but also involves the attainment of maximum efficiency by doing things right but also involves the attainment of maximum (ie. reaching organizational goals) by doing right things.

HUMAN CAPITAL: is a combination of employee competencies (i.e, knowledge, skills abilities and experience), and the motivation or commitment of the individual to apply these competencies. Broader definitions suggest that while the competence / commitment description is useful, there is also a need to include the work environment design a factor in human capital. A well developed human capital base of a nation played an important role in economic development.

TRAINING: This refers to the acquisition of skills and job knowledge required for better and improved performance of workers in the organization.

DEVELOPMENT: This is the gradual growth of something so that it becomes more advanced stronger, etc. in the manufacturing sector, it means the process of producing or creating something new or more advanced, that is, a new or advanced product.

SERVICE DELIVERY: This is the means and method with which organization gives out their services. It also includes the efficiency of rendering these services.

PUBLIC SECTOR: The area of business and economy that is wholly owned managed and controlled by the government.

1.9    PLAN OF THE STUDY

The study comprised five different chapters with each of the chapter discussing different part of work. Chapter one will contain the introductory part of the work with other headings like the general background to the study, statement of the problem, objectives, research questions, hypotheses, its significance and scope of the study. Chapter two discusses the review of related literature and theoretical framework. Chapter three focuses on the research methods adopted for the study. Amongst other things, it discussed research design, population, sampling technique, instrument an others. Chapter four contains the data analysis, presentation and test of hypotheses, and finally, chapter five treats summary, the conclusion and recommendations.

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