Society For Human Resource Management (SHRM) Certified Professional Practice Exam

How can a person's general knowledge and skills for work be interpreted?

1. Return on investment

2. Human capital

3. Economic functionality

4. Stress response

The correct answer is: Human capital

The correct choice, human capital, refers to the collective skills, knowledge, and experience possessed by an individual or a workforce that can be leveraged to create economic value. In the context of work, human capital encompasses not just the technical skills required for specific jobs, but also the broader competencies that contribute to a person's effectiveness in their role, such as problem-solving abilities, communication skills, and adaptability. Investing in human capital is essential for organizations as it directly impacts productivity, innovation, and overall business performance. This concept underlines the importance of employee development, training programs, and continuous learning, which enhance the skills and knowledge base of employees. The other options, while they touch on relevant concepts, do not specifically capture the essence of interpreting an individual's general work knowledge and skills. Return on investment is a financial metric to assess the profitability of investments rather than a descriptor of personal or employee capabilities. Economic functionality refers more to the role of economic systems and policies rather than individual skills. Stress response deals with how individuals handle stress, which is not directly related to overall knowledge and skills in the workplace. Thus, human capital is the most accurate interpretation in this context.