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Human Capital Valuation: Measuring What Matters


In the current economy, organizations may be tempted to decrease or forgo new employee training or other workforce development programs in order to reduce short term expenses.    One of our Kronos colleagues, Dr. Robert P. Yerex, explores quantitative methods for examining those types of decisions in a  new paper titled “Valuation of Human Capital – Measure What Matters”. The challenges of valuing investments in employees have been studied many times over the years by well known experts such as Jac Fitz-enz and John Boudreau.  Dr. Yerex, a chief scientist at Kronos, builds on some of this earlier work, focusing this paper on the development of a model that is useful for the hourly workforce.

He says the value of investing in employee development can be viewed through employee asset-based valuation models.  Creating valuation models to measure human capital requires that organizations take the time to understand the specific direct and indirect costs associated with increasing employee productivity, as well as relevant measures of their value to an organization.  The payoff is more informed decisions concerning the benefits of workforce development investments.

What kinds of ROI models do you use in making informed decisions about investments in your workforce?

What Love Teaches Us About Work

Unemployment in the United States has climbed to 7.6% and most of us have friends and family who have lost jobs in the recent months.  Those of us who are fully employed are likely to be worried about our own job security and how much worse things are likely to get before a recovery begins.  We’re doing more work with fewer resources.  All of this can create stress within the employer-employee relationship that is not only trying for the individuals involved, but also counterproductive to the success of the organizations they work for.

As Valentine’s Day approaches, I’m reflecting on some of the parallels between successful personal and work relationships.  Specifically, in the current rotten economy, what lessons about getting through tough times in  the workplace can be learned from successful romantic partnerships ?

I’ve been happily married to the same man for 23 years.  Here are a few tips I’ve learned about building that long term trust relationship that serve me equally well at work:

Communication is important – but know when to stop

Letting it all hang out when you’re angry or frustrated with your partner can be disastrous, but the love of your life will probably forgive you.  Being emotional in communicating your frustration about extra work and diminished resources with a boss who’s probably similarly stressed probably won’t help your cause.

Impact does not equal intent

Your partner didn’t mean to suggest that his time is more important than yours when he left the dishes in the sink last night.  Your colleague in another department who caused you extra hours of work by waiting until the last minute to involve you in a project probably didn’t do so with the specific goal of making you miserable.  She’s probably doing her best to meet challenging deadlines with limited resources as well.

Be tough on the problems, not on the people

This technique requires a little inner Zen.   When you are consumed with worry about how an issue affects you personally, you will be less effective at resolving conflicts.  Distance yourself from your immediate emotions about the topic and work together with your colleagues to attack the problem, not each other.

Do more than your fair share

There is no perfect 50-50 balance in romance or at work.  Some days you have to give more than you get in order to achieve your long term goals.

Resilience is key

We all know that change is constant and inevitable.  That doesn’t mean we like it.   Those who prevail in the survival of the fittest are those who adapt to changes in their environment and don’t dwell on what used to be.

What lessons from home do you bring to work?