Labor Law and Human Capital Management

Abstract

The report examines the relationship between labor law and human capital management. It also explored many facets of government regulation of human capital management, including equal employment opportunities, health, and safety. Human capital investment is a learning process, and much like schooling or other forms of education; specific human capital investment requires time for its completion. Specific human capital investment will be seen to be motivated by a legal relationship between employer and employee which concerns rewards and punishments based on productivity in an organization.

Table of Contents

Abstractii

Introduction1

Discussion1

Relationships among HCM And Labor Law In An Organization2

Conclusion5

References6

Labor Law and Human Capital Management

Introduction

In an employment environment which allows for and encourages such growth, specific human capital investment is the process of an employee's learning how to be more productive at a specific employment (or a series of successive positions in a firm) (Schultz 2003). As is the case with all (non-trivial) learning, specific human capital investment requires the exertion of directed human effort. For the present it will suffice to view legal rewards as the worker's expectations of wage increases which match his productivity growth, and the employee's dismissal from the firm as the legal punishment for his failure to perform as his employer had anticipated.

Discussion

MacDonald (2005) discusses the fundamental nature of the promised relationship between employer and employee concerns the rate at which productivity and wages are expected to grow. However, the employer cannot violate the expectations of his employees without incurring a cost in the form of reduced employee incentives to be more productive. Thus, random or arbitrary dismissal of employees who would otherwise warrant retention will not serve to induce additional effort from the firm's labor force.

Lerner (2001) explores the productivity gain attributable to specific human capital investment may be a negligible amount in anyone time period chosen for economic analysis. What is observable is the exchange of labor services the employee renders his services to the firm in return for a money wage payment. The essential analytical point is that labor services and nothing but labor services are ever exchanged in the labor market. Moreover, this is not a limitation but the inevitable consequence of the rigorous logic of economic science.

A candidate for employment may present himself in the labor market; and a large amount of information about previous employment, background and education might become known to his potential employers. Of course, individuals possessing characteristics desired by employers will command greater compensation in exchange for their labor services than those who are urged less desirable (Kiker & Cochrane 2001). Many of the characteristics highly regarded in the labor market, e.g., educational attainment, are undoubtedly the result of investment in human capital. Moreover, potential employers may favor 10b candidates who have demonstrated their willingness to strive toward specific human capital investment during their previous employments. Demonstrated ability to learn on the job may be a very desirable individual characteristic in the competition for employment. Nevertheless, it is not specific human capital which is ...