It has been asserted by a New York businessman that brains are cheap. He said that a college professor could easily be hired for USD 5000. But, on the other side of the coin, the value of the college professor can’t be judged in monetary terms and be labelled as cheap or expensive. The father of Economics, Adam Smith had stated these phrases- “value in use”, “value in exchange”, taken into consideration along with Mill’s declaration that “the word ‘value’, when used without adjunct, always means, in political economy, a value in exchange”. Not all human value can be termed as equal. For instance, A may be more intelligent and skilful than B at the same time. All human intuitions are vested in human interests.
The Human Life Value (HLV) is measured in terms of the expected lifetime earnings of an individual. Is it right to define and measure Human Life Value in this manner? Are numbers defining the worth of human skills, intellectuality, and intelligence? It’s not the income that the individual is earning that defines him, in fact, we need to understand that the reason behind profits and turnovers in a company are the humans. They are the creators. Hence, this is the value of human life.
Solomon Huebner, Ph.D, an early expert in insurance economics and risk management, also popularly known as ‘father of insurance education’ defined human value as “the capitalized monetary worth of the earning capacity resulting from the economic forces that are incorporated within our being, namely, our character, health, education, training and experience, personality, industry, creative power, driving force to realize the economic images in mind.” Therefore, the human value has to be assessed in terms of his capabilities, in the corporate world and otherwise. Employers and the companies at large have to value the brains that are behind developing the most intelligent products. Even an unskilled labourer at the biscuit making factory has a major contribution towards transferring the freshly baked biscuits from the conveyor belt to stacking them in rows and sending them for packaging.
Can we value Steve Jobs? Steve Jobs net ‘worth’ at the time of his death in 2011 was estimated to be $10.2 billion. But, this is the net ‘worth’ of Steve Jobs, but what about his value? Is value same as worth? Value is still somewhat subjective and cannot be measured in quantitative terms; it is determining the value of something without selling it. For instance, Steve Jobs intelligence and his ‘brain power’ can’t be sold. Steve Jobs is one of the most important persons in our world. But, there are many other people who strive to be as good as Steve Jobs but their work, skills, and mind is not properly valued and is taken for granted. This is due to the nature of companies and employers focusing more on finances, profits, turnovers, sales volume, the stock market and other quantitative financial aspects of the corporate world that do not credit the brains that are responsible for these 10 digit or higher numbers.
The human value can’t be quantified but it can be embraced and human worth can be encouraged. Employee Stock Option Plans (ESOPs), dividends to shareholders and board of directors, incentives, and other benefits in monetary or non-monetary terms can be given for the work that is put in by the employees. Thereby, the companies are not only receiving good profits for their businesses but also motivating and reinforcing their employees who are an integral part of the profits made by the companies.
In January 2018, Paytm sold shares to a Canada-based venture capital firm, Discovery Capital by valuing the firm at $10 billion. This deal helped 300 former and current employees to become millionaires. It was reported that about 20-25 people made $1 million each i.e., 6-7 crore rupees. Walmart acquired Flipkart at $16 billion, then the past and present employees of Flipkart were benefited by at least 150 million by exercising their ESOP options. ESOPs have become the main options for companies across all sectors from e-commerce to technology-based companies that are struggling to get adequate cash liquidity in business to attract the talent, reduce the labour turnover, retain employees, and receive loyalty from them.
We can’t deny that there are companies which understand that human value is equivalent to or greater than financial value, but the progress has been at a slow rate. “Retention and Reward” has to be kept in mind while assessing the human value for their contributions to the organization’s business.
India’s start-up stories unfold every year, existing billionaire companies are entering in new markets and expanding their business, rags to riches stories of individuals are everywhere, and this is due to the brains that are powerful are drive the finances powering the company to be a success.
The article was written by Harsha Sheelam. Topic idea & name by Prof. M Chandrashekar Goud.