Human Capital Management in the Health Sector

Definition of human capital management

Human capital in an organization can be defined as a planned approach to people management. It focuses on attributes portrayed by an individual that is regarded to be productive in some way to the success of that particular organization. Commonly, human capital is related to formal education achievements in terms of knowledge, acquired skills, creativity, and innovativeness. Education is termed as a source of investment in human capital. Investing in human capital is a very important aspect in the development of economic growth.

Sometimes an employee acquires certain skills while working in the organization, and this is thought to have a positive impact on the organization as it increases an employee’s value in the global market. In most organizations, human capital entails that the skills, abilities, and contributions from the workers serve as an organization’s most valuable assets and that these flourishing organizations will maintain and enhance the value of those assets through providing increased opportunities for training and education to these people. It has been well described by Scarborough and Elias (2002): “the concept of human capital is most usefully viewed as a bridging concept that is, it defines the link between human resources and business performance in terms of assets rather than business processes.”

Issues pertaining importance of human capital in the health sector

The health care industry is constantly changing because of the changes being made in the technical world. Each day there is an invention of the new machine that can be used to improve the health of human beings. Public health is regarded to be among the serious issues a government should look into when they are planning to have strategic measures in ensuring the development and growth of a country. In the United States, the health industry sector is said to employ more than 20 million workers all around the continent. This number represents about 5%of the population that contributes to the economic growth, and they generate about 7%of the gross domestic profit of the entire continent. The health workers today are regarded as the backbone of the health sector most especially in the developing nation because a patient in need of health services is usually tied to all the health personnel to offer him/her the kind of services required for the individual to regain better health. These health workers include doctors, nurses, technicians’ specialists, among other health workers. The performance of the health systems depends on several factors among them is that of human capital/human resource. The workforce provided by health workers should be on par with the demand for the services for them to provide better health services. Health reforms and policies are being introduced in the health industry so that more efficient and better services are provided by the health workers to the public.

An industry that is seen to focus on the management of the workers is said to be advantageous because they can communicate with the workers. But according to Fitzgerald (2002), managing people is one of the most challenging tasks to accomplish in the health industry. It is a challenge that is faced by many health service managers. The health industry has then resulted in having a human resource management sector in the industry to work with other sectors for the success of the health industry and to see its progress in the developing era.

Human resource management is the ability to manage the workers and develop them through working. It can also be defined as a way through which employment relationships are managed within an organization. These associations are usually rather complex as it also involves the government because the public health sector is said to rely on the funds provided by the government most of the time leading to the government making policies that the health sector should follow. The government is known to be the largest and effective employer in the health industry and workers working within the same sector compete to secure job areas that are suitable for them while employers compete to employ workers who are well-skilled knowledgeable and perform their duties adequately. This is the same case in the private sector, where government policies are also influencing the employers in the private sector resulting in competition between the private and the public sector for the same skilled staff.

According to theorists concerned with human resource management Boxall & Purcell, (2003), the core responsibility of managing people within an organization involves the structure of the organization, the culture, management style, and the kind of human resource systems in the organization. According to these theorists, functions to be accomplished by the human resource management like training, hiring, performance evaluation induction, and workers reward should consistently influence the employee and the way management issues are carried out to enable the organization reach its target goals and achieve its strategic plans. These people will then contribute positively to the performance of the organization Schuler & Jackson, (1987). If a company is trying to meet its success goals, its customer satisfaction or growth, then it should incorporate the performance of its worker to be in line with the corporate goal. To do so, these organizations should connect the workforce with business goals and motivate the behavior of the workforce, which will then influence the performance of the organization.

Impact of human capital on health sector industry

Some factors hinder the implementation of good strategic human resource plans. Over the years, reforms on health workers have been neglected, resulting in unsuccessful accomplishments in the health industry. Moreover, due to the government being the main funding source in the health sector, it becomes a norm to follow rules and procedures stipulated rather than focus on the results expected from the organization. The employers also have a difficult time in choosing its employees due to the government policies and the fact that these people are usually under the pressure of powerful people like the stakeholders in trade unions and other professional associations Bach (2000). All these factors amount to having difficulties when trying to implement strategic human resource management within the health industry in the states.

According to Bartram & Cregan (2001), for an organization to attain its target goal, practices involving the management of people should be incorporated into the organization’s set policies. After carrying out several case studies involving the high-ranking performance organization, they all pointed out the fact that if human management is a factor that is treated as a serious issue within an organization then chances are that the organization will enjoy its success and will most effectively record a high-performance mark. An organization that records high-performance practice is said to attract workers with high-performance characteristics. It also is seen as a factor that motivates workers to use their skills and apply the knowledge they have fully for the benefit of the organization. In the health sector, getting people who are qualified to perform or carry out services about health is usually a challenge especially due to the shortage of workers e. g nurses, radiographers this is so especially in the rural areas around the states.

Creating a healthy working environment for health workers is seen as a challenge by many but according to studies conducted by Townsend and Allen (2005) of the Queensland hospital, they found out that having stipulated policies governing recruitment exercises is not enough to ensure the re-trainmen of workers in the hospital. Other ways such as awarding promotions to most deserving persons and letting these individuals enroll in programs that would ensure they gain more knowledge in their field of work are going to enhance their working motivation that would reciprocate to the positive achievements of the organization. When a comparison is made between an organization that values its staff and considers them as important assets who need to be natured and be incorporated during the formation of organization policies to an organization that consider its workers as cost and that they are there to be exploited rather than assets then the organization with a better view of its workers will always have a low turnover of workers as compared to the high turn over of workers being experienced by the organization that considers its workers as costs.

To be able to provide healthy working environments, all the systems in the organizations should be transparent where people’s performance and recruitments among other elements should be done on merit instead of discrimination. Discrimination can be conducted due to age, gender, race, physical appearance religious belief, political achievements or beliefs, and also the marital status of an individual. The above attributes should not at any given time be the basis of why a person would be offered employment or given the termination of employment. Measures to ensure equal working opportunities should be implemented to benefit all workers including those who are aspiring to work in the health care industry. Some of these measures may include drafting a code of conduct to be followed by the staff, having ways through which workers can relay their complaints, which an organization has to make sure they look into thoroughly, and also grievances procedures. Policies that are implemented with an equal opportunity for all staff are regarded as a key factor to the ensuring of maintaining quality working staff because they are the same people who will ensure there are no discrimination experiences among themselves, and instead they will promote a culture of fairness and a free working environment among them.

Provision of good working conditions and safety in working areas will also be a factor to consider if the health industry wants to retain its workers and reduce the migration movements from one job to another by its staff in search of better working conditions. For example, the nurses are subjected to heavy lifting of patients resulting in many of them having back injuries other health workers are victims of some kind of violence especially in the outreach areas like the ghettos. These people undergo traumatic experiences because even though they are doctors, nurses, or other health workers they are still human beings. At times they are stressed by their patients leading to the workers feeling overworked, and this may be expressed aggressively by the workers. The results of a study conducted by Allan (1998) from Queensland hospital, showed that a decline in staff motivation and self-drive to work was caused by an increase in workload. The good health and safety of workers should be the priority of the management of an organization as well as each individual.


Today the industries and companies in the market are very competitive the advantage is if an industry can invest in its human capital then they are most likely going to enjoy the fruits of their success, and they will witness a positive growth trend in their organization. The medical market is one of the most competitive markets in today’s world, for this reason, the health workers need to have diverse knowledge in health care, must have good diagnostics skills, and provide the best patient care possible. To be able to this, the management in the health industry should adopt strategies that would ensure the quality of health care being provided is the best. This means that the management of the industry should have strategic measures that would help in identifying an employee’s competence, skills, and willingness to work especially when hiring these workers.

Human resource managers in the health industry have to find ways of strategizing the workforce and find ways of retaining the workers to avoid a shortage of nurses and hospital staff. The healthcare organizations are competing for talented individuals, and they are ready to do anything to ensure the human resource available is there to stay, and they are providing more opportunities to those who are qualified to work in the sector. The organizations are ready to provide extras that may include; free transport to and from work, some hospitals are said to have put nurses into universities and colleges to increase their knowledge on health matters even some ensure that their nurses are instructors in the educational institutions so that they can recruit the best new graduates to work in their hospitals and other health organizations.

Human resource managers should put in mind that, the products produced by the industry can easily be duplicated, and the services provided can be cheaply imitated by other organizations but an individual’s talent, knowledge, or skills are not easily imitated or duplicated. An industry that can put together the talents of different people and ensure corporation at work is viewed as a prime source for competition and success.


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