Economics of Human Development

Unit: 1-Introduction to Human Development

Chapter: 1 Human Growth and Human Development- Basic needs Approach- Quality of Life Approach-
Capability Approach.

Chapter: 2 – Human Resource Development( HRD), Human Resource Management(HRM).

Chapter 3 : Human Development: Meaning and definition, importance and objectives.

Human Growth and Human Development:

Introduction:

Human development can be defined as the process of

improving people's well-being through increasing their
freedoms and possibilities. Human development focuses
on enhancing people's lives rather than expecting that
increased economic growth will result in increased
happiness for all.

What is Human Development?

Human development means the process of improving
people's choices, such as education, health care,
income, and empowerment.
•Human development covers the complete dimension
of human choices from a healthy physical
environment to economic, social, and political
freedom.

•In other words, human development refers to the

prosperity of human life, independent of the wealth
of the economy in which people live.

•As a result, the most important part of human

progress is expanding people's choices.
•People's choices may include a variety of issues,
but living a long and healthy life, being educated,
and having access to resources necessary for a
decent standard of living, such as political freedom,
guaranteed human rights, and personal self-respect,
are all considered non-negotiable aspects of human
development.
The Four Pillars of Human Development
The four pillars of human development are Productivity, Equity,
Sustainability, and Empowerment.

1. Productivity
Productivity refers to human labour productivity or productivity in terms
of human effort in this context.
People's capacities must be continually enhanced in order to maintain high
levels of production. People are, in the end, a country's most valuable
resource.
As a result, efforts to improve their knowledge or provide better health
facilities result in increased productivity.

2. Equity
Equity refers to ensuring that all people have access to the same
opportunities.
People must have equal access to opportunities regardless of their gender,
ethnicity, income, social position, or, in India's case, caste. However, this
is not always the case, and it occurs in practically every community.
3. Sustainability
•Sustainability refers to the availability of opportunities
remaining constant.
•To achieve long-term human growth, each generation must
have equal access to decision-making possibilities.
•Sustainable development necessitates the utilization of all
environmental, financial, and human resources with the future
in mind.

4. Empowerment
Empowerment means the ability to make decisions. Increased
freedom and capability to select are the sources of such power.
To empower individuals, good governance and people-
centered policies are essential.
Empowerment of socially and economically marginalised
populations is particularly important.
Approaches to Human Development
The four approaches to Human Development are the basic needs approach, income
approach, capacity approach, and welfare approach.

1. Basic Needs Approach

•The International Labour Organization (ILO) was the first to advocate this strategy.
•Six fundamental needs were identified: health, education, food, water supply,
sanitation, and shelter.
•The issue of individual choice is neglected, and the focus is instead on meeting the basic
requirements of specific groups.

2. Income Approach
•This approach is one of the oldest approaches to human development.
•Income is thought to be linked to human growth. The concept is that an individual's
amount of freedom is reflected in his or her income.
•The more one's income, the higher one's level of human development.
3. Capability Approach
•This approach is associated with Prof. Amartya Sen.
•The key to enhancing human development is to improve human
capacities in the areas of health, education, and resource access.

•Core aspects of Capability approach.

a. Not Utility focus
b. Not resource focus
c. Freedom focus
d. Focus on the individual and their agencies
e. Encourages divercity

4. Welfare Approach
•Human beings are seen as beneficiaries or goals of all
developmental efforts in this paradigm, which advocates for more
government spending on education, health, and basic necessities.
•People are merely passive recipients, not active players.
•The government is exclusively accountable for boosting human
development levels through maximising welfare spending.
Measuring Human Development

Human Development Index (HDI)

•Human Development Index (HDI)is a statistical tool used to quantify
a country's overall accomplishment in its social and economic dimensions,
and it is published annually by the United Nations Development Programme
(UNDP).
•The health of people, their level of education, and their style of life determine a
country's social and economic characteristics.
•The economist Mahbub Ul Haq developed a human development method that
is based on Nobel Laureate Amartya Sen's work on human capacities.
•Its goal was to "move development economics away from national income
accounting and toward people-centered policy."
Chapter 2:

Human Resource Management:

Human Resource Management deals with the management functions like planning, organizing, directing and controlling
•It deals with procurement of human resource , training & development and maintenance of human resource.
•It helps to achieve individual, organizational and social objectives

Human Resource Management is a multidisciplinary subject.

•It includes the study of management, psychology, communication, economics and sociology.
•It also deals with building team spirit and team work.
•It is a continuous process.

Why do we call it as Human Resource Management?

Human: refers to the skilled workforce in an organization.
Resource: refers to limited availability or scarce.
Management: refers how to optimize and make best use of such limited or scarce resource so as to meet the organization goals and
objectives.
Therefore, human resource management is meant for proper utilisation of available skilled workforce and also to make efficient use of
existing human resource in the organisation.
Human Resource Management Definitions
Many great scholars had defined human resource management in different ways and with different words,
but the core meaning of the human resource management deals with how to manage people or employees in
the organisation.
Edwin Flippo
Human Resource Management as “planning, organizing, directing, controlling of procurement,
development, compensation, integration , maintenance and separation of human resources to the end that
individual, organizational and social objectives are achieved.”
The National Institute of Personal Management
(NIPM) of India has defined human resources – personal management as “that part of management which
is concerned with people at work and with their relationship within an enterprise. Its aim is to bring
together and develop into an effective organization of the men and women who make up enterprise and
having regard for the well – being of the individuals and of working groups, to enable them to make their
best contribution to its success”.
 Human Resource Development
Human Resource Development is the part of human resource management that specifically deals with
training and development of the employees in the organization.

Human resource development includes training a person after he or she is first hired, providing opportunities to learn new
skills, distributing resources that are beneficial for the employee's tasks, and any other developmental activities.
Development of human resources is essential for any organisation that would like to be dynamic and growth-oriented. Unlike
other resources, human resources have rather unlimited potential capabilities. The potential can be used only by creating a
climate that can continuously identify, bring to surface, nurture and use the capabilities of people. Human Resource
Development (HRD) system aims at creating such a climate. A number of HRD techniques have been developed in recent
years to perform the above task based on certain principles. This unit provides an understanding of the concept of HRD
system, related mechanisms and the changing boundaries of HRD.

HRD concept was first introduced by Leonard Nadler in 1969 in a conference in US. “He defined HRD as those learning
experience which are organized, for a specific time, and designed to bring about the possibility of behavioral change”.
Human Resource Development (HRD) is the framework for helping employees develop their personal and organizational
skills, knowledge, and abilities. Human Resource Development includes such opportunities as employee training, employee
career development, performance management and development, coaching, mentoring, succession planning, key employee
identification, tuition assistance, and organization development. The focus of all aspects of Human Resource Development is
on developing the most superior workforce so that the organization and individual employees can accomplish their work
goals in service to customers.
Definitions of HRD
According to Leonard Nadler, "Human resource development is a series of organised activities,
conducted within a specialised time and designed to produce behavioural changes."

According to M.M. Khan, "Human resource development is the across of increasing knowledge,
capabilities and positive work attitudes of all people working at all levels in a business undertaking.“

Difference between HRD and HRM

Both are very important concepts of management specifically related with human resources of organisation.
Human resource management and human resource development can be differentiated on the following grounds:
• The human resource management is mainly maintenance oriented whereas human resource development is
development oriented.
• Organisation structure in case of human resources management is independent whereas
human resource development creates a structure, which is inter-dependent and inter-related.
• Human resource management mainly aims to improve the efficiency of the employees whereas aims at the development
of the employees as well as organisation as a whole.
• Responsibility of human resource development is given to the personnel/human resource management department
and specifically to personnel manager whereas responsibility of HRD is given to all managers at various levels of the
organisation.
• HRM motivates the employees by giving them monetary incentives or rewards whereas human resource development
stresses on motivating people by satisfying higher-order needs
HRD Functions:

The capabilities of each employee as an individual.

The capabilities of each individual in relation to his or her present role.

The capabilities of each employee in relation to his or her expected future role(s).

The dyadic relationship between each employee and his or her supervisor.

The team spirit and functioning in every organisational unit (department, group, etc.).

Collaboration among different units of the organisation.

The organisation’s overall health and self-renewing capabilities which, in turn, increase the enabling capabilities of
individuals, dyads, teams, and the entire organisation.
• Benefits of Human Resource Development:

HRD (Human Resource Development) makes people more competent. HRD develops new skill, knowledge and attitude
of the people in the concern organisations.

With appropriate HRD programme, people become more committed to their jobs. People are assessed on the basis of
their performance by having a acceptable performance appraisal system.

An environment of trust and respect can be created with the help of human resource development.
Acceptability toward change can be created with the help of HRD. Employees found themselves better equipped with
problem-solving capabilities.

It improves the all round growth of the employees. HRD also improves team spirit in the organisation. They become
more open in their behaviour. Thus, new values can be generated.

It also helps to create the efficiency culture In the organisation. It leads to greater organisational effectiveness.
Resources are properly utilised and goals are achieved in a better way.

It improves the participation of worker in the organisation. This improve the role of worker and workers feel a sense of
pride and achievement while performing their jobs.

It also helps to collect useful and objective data on employees programmes and policies which further facilitate better
human resource planning.
Chapter 3:

What is human development?

“Human development is a process of enlarging the range of people’s choices, increasing their
opportunities for education, health care, income and empowerment and covering the full range of
human choices from a sound physical environment to economic, social and political freedom.”

Meaning of Human Development:

The term ‘human development’ may be defined as an expansion of human capabilities, a widening of
choices, ‘an enhancement of freedom, and a fulfilment of human rights.
Objectives of Human Development:

Long and healthy life

Enhancing knowledge of people

Creating a decent standard of living

Creating conditions for participating in political and community life.

Environmental sustainability

Human security and rights

Gender equality
What Is the Human Development Index (HDI)?

The Human Development Index (HDI) is a statistic developed and compiled by the United Nations
since 1990 to measure various countries’ levels of social and economic development. It is composed
of four principal areas of interest: mean years of schooling, expected years of schooling,
life expectancy at birth, and gross national income (GNI) per capita.
•HDI is broken down into four tiers–
• Very high human development
• High human development
• Medium human development
• Low human development
•HDI measures the average success of a country in three
basic dimensions of human development:
• A long and healthy life
• Access to knowledge
• A decent standard of living
The seven basic principles of HR:

When we talk about human resource management, there are several elements that are considered cornerstones for
effective HRM policies.

Recruitment and selection:

The request for new hires usually starts when a new position is created or an existing position becomes available.
The line manager then sends the job description to HR and HR starts recruiting candidates. In this process, HR
can use different selection tools to find the best person to do the job. These include interviews, different
assessments, reference checks and other recruitment methods.

Performance management
In general, employees have a defined set of responsibilities that they have to take care of. Performance
management is a structure that allows employees to get feedback on their performance - to achieve their best
performance.
Examples include formal one-to-one performance reviews, 360-degree feedback instruments that also take into
account the evaluation of peers, customers and other relationships, and more informal feedback.

Learning and development

Learning and development helps employees to retrain and improve their skills. Learning and development (L&D)
is driven by HR and good policies can be very helpful in moving the organisation towards its long-term goals.
Compensation and benefits:
Another fundamental element of HR is pay and benefits. Fair compensation is essential to motivate and retain
employees. One of the fundamental principles of HR management in relation to compensation is to ensure equity and
fairness.

Human resources information systems:

The last two fundamental HR elements are not HR practices, but tools for improving HR. The first is the human
resources information system, or HRIS. An HRIS supports all of the cornerstones discussed above. For example, for
recruitment and selection, HR professionals often use an applicant tracking system, or ATS, to track applicants and
hires.
For performance management, a performance management system is used to track individual objectives and
implement performance reviews.
In the area of training and development, a learning management system (LMS) is used for internal content
distribution, and other HR systems are used to track training budgets and approvals.
Payroll specialists often use a payroll system, and there are also digital tools that enable effective
succession planning.
All of this functionality can often be achieved in one system - the HRIS. Sometimes, however, the
management of these functionalities is split between different HR systems.

HR data and analysis:

The last of the HR fundamentals revolves around data and analytics. The HR information systems
we have just discussed are essentially data capture systems. The data in these systems can be used to
make better and more informed decisions.
Unit II:Human Security ,SDGs and
approaches to Human Development

Chapter 4:Human Security:Economic

security-Food Security-Health security-
environmental security-personal security-
community security-political security
HUMAN SECURITY:

Introduction: The concept of human security represents a powerful, but controversial, attempt by
sections of the academic and policy community to redefine and broaden the meaning of security.
Traditionally, security meant protection of the sovereignty and territorial integrity of states from
external military threats. This concept of national security dominated security analysis and policy
making up to 1990. However from 1970’s onwards world began to think of security in broader, non-
military terms. Yet the state remained the object of security, or the entity that is to be protected. The
concept of human security by focusing on the individual as the main referent of security challenged
the traditional state centric notion of security. In its broadest sense human security is the security of
individuals rather than of states. As such, it contrasts with ‘national security’, which is invariably
linked to states and military power, the main threats to security deriving from the aggressive
behavior of other states. The notion of human security was an attempt to broaden and deepen the
concept of threat, influenced by ideas such as human development.
What is human security?

The origin of the concept of human security can be traced to the publication of Human Development Report of
1994, issued by the United Nations Development Programme ( UNDP 1994 ).

The human security is often seen as having a variety of dimensions:

1. Economic security__ That includes an assured basic income

2. Food security___ It includes physical and economic access to basic food.

3. Health security -This includes protection from disease and unhealthy lifestyles.

4. Environmental security__ This involves protection from human induced environmental degradation.

5. Personal security It is about protection from all forms of physical violence.

6. Community security___ It talks about protection for traditional identities and values.

7. Political security___ It is about the existence of rights and freedoms to protect people from tyranny or
government abuse.