Question

The leaders of a health-care organization ascribe to human capital theory and are planning the budget for the next year. What activity should the team prioritize in the budget to promote goals of this theory?

1) Investing in employee training and development
2) Increasing salaries and benefits for employees
3) Expanding the organization's physical infrastructure
4) Implementing new technology and software systems

Answer 1

The health-care organization's budget should prioritize investing in employee training and development, as this directly enhances human capital, leading to increased productivity and economic growth.

Step-by-step explanation:

If leaders of a health-care organization aspire to follow human capital theory, their budget should prioritize investing in employee training and development. This activity aligns closely with the concept of human capital theory, which emphasizes the importance of enhancing the workforce's skills, knowledge, and health. Addressing these areas through continuous training and development leads to increased productivity and growth. Furthermore, studies have shown that such investments in human capital often result in better economic outcomes, as a more skilled and educated workforce can more effectively implement and utilize new technologies and innovate more efficiently.

While increasing salaries and benefits, expanding the organization's physical infrastructure, and implementing new technology and software systems are important, they must complement efforts to build human capital. A skilled workforce is crucial to take full advantage of these measures effectively. Therefore, investment in human capital should take precedence in the budgetary planning of a health-care organization subscribing to human capital theory.