Among all the factors of production, HR of late has acquired a cutting edge status. It is this human resource, without which neither the so-called structural or customer capital can be created nor optimally utilized. HR plays a crucial role in the economic development of any country. This article discusses the importance of HR, its contribution to the economy and critically analyzes what needs to be done to fully harness the potential of human resources, if India as a country has not only to survive but prosper as well.

A lot of water has flown under the bridge since Frederick Taylor proposed his Scientific Management Principles, where the emphasis was on productivity rather than people. While these principles were considered to be valuable and gained a considerable attention by the industrial world at that time, the Hawthorne experiments of the late 1920s shifted focus from productivity to people. Gone are the days when managers used to sit in an ivory tower and issue directives from a distance.

The traditional authority structure is giving way to employee involvement, work teams, participative decision-making, etc. High productivity and high quality of work life are going hand-in-hand. Further, the management is becoming more and more aware that an organization has no life but for the Human Resources (HR) in it. When we talk of HR specifically we refer to the productive power in human beings. The distinguishing feature of this resource is that unlike the material resources, they are the participants as also the beneficiaries of economic development process.

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