Types of Human Assets

            Human assets are in intangible form and are within the inside of human resources. Therefore, there may be different ways in which these can be classified. For example, Sumantra Ghoshal has classified these into three categories- intellectual capital, social capital and emotional capital¹⁵.  Besides, there is recent emphasis on spiritual capital. Let us briefly discuss these to identify how these contribute to individual effectiveness.

Intellectual Capital:

The first element of the human capital is intellectual capital which can be defined at individual level as well as at organizational level. At the level of individual, it refers to his knowledge, skills and expertise. It may be in the form of specialized knowledge, tacit knowledge and skills, cognitive complexity and learning capacity. At the organizational level, intellectual capital consists of both the stock of knowledge, skills and expertise that members of the organization collectively possess, and the knowledge and expertise that may be embedded in or owned by the organization including patents, information technology based knowledge systems, or specialized processes of work. Ghoshal observes that, ‘in the recent past, much management attention has been paid to this issue of intellectual capital, and rightly so knowledge rather than money is increasingly becoming the key competitive differentiator- certainly in service industries like consulting, investment banking, IT services, and so on, but also in manufacturing based businesses like pharmaceuticals, consumer electronics and electrical machinery¹⁶.  

Social Capital:

Social capital is the second element of human capital. It is derived from the network of relationships, both internally and externally. From organizations point of view, social capital relates to the structure, quality, and flexibility of the human networks which can be created through cohorts, joint training in which people get to know each other, job rotation through different departments and functions, long -term employment and internal culture. The other aspect of social capital is external built on the relationships with external forces like customers, suppliers, government agencies, etc. However, building external relationships and working on these does not involve taking undue advantages for furthering the interest of the organization.  It is used in the context of trustworthiness.  

Emotional Capital:

Emotional capital involves self confidence, ambition, courage, risk taking ability and resilience. It is reflected in what is described as a ‘can do’ spirit.  Individuals need self confidence based on self esteem, courage, and resilience to convert their knowledge and relationships into effective actions. Organizations require high internal energy and an environment of pride, trust, and openness to create a bias for speed and action in rapidly changing environment. In today’s context, more companies are involved in developing emotional quotient (EQ) as the individuals in an organization depend more on their emotional capital for effectiveness than their intelligence and technical skills. Emotional capital helps in controlling such emotions as anger, hatred, frustration, confusion, sadness, etc., which affect the job performance adversely. Further, it helps in reducing stress, a major problem of the modern organizations.

Spiritual Capital:

Spiritual capital is the recent development in the practice of human resource management. First, it was intelligent quotient (IQ) followed by emotional quotient (EQ) and now has come spiritual quotient (SQ).  Ullhas pagey, Director (HR & OD) Aptech Limited, views that “Whereas with a high IQ, you many get hired; with a high EQ, you get promoted. But this is a short term perspective and long term growth is linked to SQ.¹⁷” Spiritual capital is assuming increasing importance throughout the world. Spiritual capital is multi-directional and includes values, ego and approach to work. Most growing organizations are of the opinion that people can be made to learn; their skills can be developed; but when it comes to values, ego and approach to work, these cannot be changed. Therefore, it is desirable to hire those whose values, ego, and approach to work match those of the organization. 

All these forms of human capital are not isolated rather these are interrelated. Therefore, while measuring human capital, all these must be taken together. Human resource accounting makes attempt to measure this capital¹⁸.