How could you explain the differences in salaries in terms of human capital and value the employee creates for the business?

Answer

It has created in business the concept of human capital which recognizes that not all labor is equal. Economic value of an employee increases with worker’s experience and skills.

Explanation

Human capital is the economic value of a worker expressed in the view of his/her education, training, punctuality, loyalty, skills, health , intelligence and other things. Employees possessing these items could be considered an assets to the company thus paid good wages. Employers can improve quality of human capital of the workers through investing in employees’ education, experiences and abilities.

Hope this helps!

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