Practicing Success
Why does a firm spend on the "Training" of their worker? |
Source of human capital formation Pressure of the corporate culture Both 1 and 2 To show reduced profits to save tax |
Source of human capital formation |
Expenditure regarding on-the-job training is a source of human capital formation as the return of such expenditure in the form of enhanced labor productivity is more than the cost of it i.e., the amount of money incurred by the company for the training of the employee will eventually turn out to be less than the return the employee would provide to the organization in the long run. |