Name: Mehnaz Tabassum Khaleel
Course: Human Capital and Development
Course Code: ECO 422
Course Instructor: Dr. Rubana Ahmed
Date of Submission7/8/2018
The objective behind writing this paper is to evaluate the factors especially those classified as elements of human capital, integral in steering career objectives and ultimately career success. I aspire to be a financial risk analyst with the objective to evaluate the impact of market risks (uncertainties typically caused by economic/political factors) on investment decisions of firms/financial institutions. Keeping in line with my desired career objective I have highlighted the variables which I feel will be essential in helping me attain my professional goals in the literature review followed by recommendations and conclusion. My underlying hypothesis is that these variables positively affect career success- the underlying foundation of which is the contest-mobility model of career success which indicates that those illustrating maximum skills and determination will enjoy prosperous career outcomes in a spirit of competition the nature of which is assumed to be transparent and fair.
An ideal career is likely to be perceived as a succession of work experiences each of which leads to more personal satisfaction than the one prior to it. Having the ideal career and attaining success while we are at it is integral for a multitude of reasons ranging from the sense of self-satisfaction/achievement which can add meaning to our lives and generate a feeling of pride in our loved ones to the ability to enhance our overall standard of living. Nevertheless, in a highly fast paced and competitive world where technological advancements keep trying to supplant human jobs and the smartest minds keeps challenging the mediocrity, attaining success in any profession be it finance, engineering or law has become a complex phenomenon influenced by a range of factors –some to be determined by our own capabilities and efforts and some by external forces beyond our control. It is the variables under the category of human capital which are to a large extent within our own control to work on and hence shape our desired career paths to reach the horizon we aspire to see it in. This is why I have focused solely on the impact of human capital variables keeping aside factors such as organizational sponsorship, socioeconomic/demographic issues and as such in predicting career success.
The Human Capital theory as proposed by Becker (1975) suggests that individuals as employees engage in rational choices pertaining to the degree of their desire to devote more energy, time and money education, training, and experience-integral components of investment in building their own human capital. This theory is based on two integral assumptions with the first one being human capital leads to an augmentation of productive capacity and work skills and secondly productivity is depicted by income earned.
The definition of career success as stated by Judge and Bretz (1994) and Judge et al (1995) could be broadly segmented into objective and subjective dimensions. Objective career success consists of tangible career achievements such as financial incentives and rate of promotion (London and Stumpf) (1982). Subjective career success has been defined as an individual’s own perceptions of accomplishment and satisfaction with regard to his or her career.
Ng and Feldman (2010) in their meta-analytical study affirmed with the theoretical model that human capital accumulation in the form of education and organizational tenure enhanced career success through cognitive ability and conscientiousness, impacting job performance.
Grubb (1993) Heywood (1994), Hungerford and Solon (1987) highlights the existence of a general consensus affirmed by a plethora of studies, pertaining to the notion that graduate degrees raise wages through augmentation of skills. Moreover an empirical analysis by Arkes (1999) discovered that graduate degree holders illustrated better performance in standardized tests, enjoying greater financial rewards relative to those with bachelors’ degrees. MacKenzie (2003) indicates that embarking into a Master’s program helps to gear the interests of the students into a narrower area of their studies which in turn elevates their professional level through skills that bolster resource allocation and maintain the functioning of individuals or groups.
I strongly harbor the notion that quality of education rather than quantity plays an integral role in influencing career success. Quality of education has a direct link with the quality and prestige of the University as well the nature of the courses offered. Useem and Karabel’s (1986) offer suggestions to support my perspective by indicating that high quality institutions provide greater magnitude of teaching to the students while facilitating access to influential networks and credentials that would give them an edge in the selection and promotion process of prospective employers. The estimated earnings advantage that Ivy League graduates enjoy during the course of a 20-year career is likely to exceed $600,000. Judge, Cable, Boudreau, & Bretz, (1995) predict a positive relationship between being an Ivy League graduate and objective career success based on the prestige factor and the cultural and social capital that such Universities provide accessibility to.
Speaking of nature of courses, the Masters of Public Administration (MPA) program at West Virginia University as indicated by Leary, Williams, Plein and Lilly (1998) allow students to build up their individual professional skills by giving them the opportunity to evaluate their aptitude in six areas and choose activities to develop those areas which in turn lets them channel their effort into skill development rather than ticking off a sequence of courses. Programs such as these provide professional preparation acting as a connecting link between course structure and career development.
Evans and Gordon McCloskey (1973) advocates for the incorporation of career education into the schooling system with the rationale being that career education yields a channel for all students to learn about the importance of work; realizing a person’s work ethic transcends beyond hedonism and the social relevance of school taught knowledge to socially relevant careers.
A study suggests that while training shares a significantly positive relationship with career satisfaction, the association between this human capital variable and promotion was found to be not significant. The rationale underlying such an outcome is that while training provides one with the self- induced satisfaction of harboring enhanced marketability in the job market, mere participation in a training program does not necessarily guarantee effective learning, or the application of learning by the employee to the work setting (Baldwin and Ford, 1988). The CFA Program functions as an integral training platform for prospective financial analysts which if attained is likely to enhance their market value and career outcomes. In an empirical study investigating whether recommendation performance and career outcomes of analysts is impacted by the CFA Program Kang, Li, and Su (2018) discovered that participation in the CFA Program leads to an improvement in these analysts’ recommendation performance by approximately 4.7% a year .Moreover the probability of an analyst making it to the Institutional Investor’s annual All-America Research Team increases by about 19% consequently. The knowledge obtained from the CFA Program curriculum is likely to generate such economically significant results.
Tenure is one of the most widely used proxies of work experience according to McDaniel, Schmidt and Hunter (1988) Quinones, Ford, ; Teachout (1995) and Sturman (2003).Organizational tenure allows you to obtain more hands on skills and practical knowledge which are quite often beyond the confines of formal education. The greater the number of years an individual spends within a firm the more acclimatized, they become with its broad set of operations and organizational environment as well as skilled at multitasking, the accumulated effect of which is a crucial driver of career success in a knowledge-driven economy according to Bird (1996),Eby, Butts, ; Lockwood( 2003). Organizational tenure has been found to have a positive correlation with core task performance, contextual performance, salary, and promotions (with coefficients being 0.09, 0.07, 0.20, and 0.22, respectively). An indirect relationship between organizational tenure and job performance through psychological mechanisms of conscientiousness has been discovered. This is because employees with greater years of organizational service show more conscientiousness towards their job responsibilities which is translated into improved job performance. The direct relationship prevails from strengthening of skills and knowledge resulting over years of service.
Recommendations and Conclusion
Career education programs should be designed to integrate the learning material given in the curriculum with the students’ career interests so that they can be motivated to engage in effective rather than tentative decision making regarding their career trajectory at an early stage of their learning phase instead of continuously deferring it till a much later stage. Furthermore there needs to be an increasing role of career counselors in every field of specialization to enlighten individuals about educational and occupational opportunities. Government and donor communities should allocate more funds to finance prospective students who stumble to access Masters Programs at high quality universities. In light of the aforementioned literature, I believe that obtaining a Masters in Finance from an Institution of high repute which will not only provide me with high quality education but also a networking system that will help me connect with financial institutions for prospective employment. Training is something individuals must undergo before applying to their desired job positions. While the nature of the training can be specific to one’s area of specialization it could also done to develop a general set of soft skills such as reflectiveness, responsibility and resourcefulness to name a few, a scarcity of which creates obstacles towards career growth on the basis of a Policy Voice Survey from which it was found that 68 per cent of employers were concerned about poor communication skills, 35 per cent listed team-working, 36 per cent stated resourcefulness as an issue. Hence I think that devoting my time and effort into a training post completion of my Undergraduate Studies will give me an edge in the job market.
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