Book description
A Logical, Proven Framework for Understanding the Economic Value of Human Resources Investments
How to choose Human Resources investments that deliver optimal strategic value—and eliminate those that don’t
Best-practice metrics and analysis techniques for talent management, performance management, health and wellness programs, and much more
Investing in People introduces a breakthrough approach to Human Resources (HR) measurement that systematically aligns HR investments with organizational goals and helps make HR the true strategic partner it needs to be. Wayne F. Cascio and John W. Boudreau show exactly how to choose, implement, and use metrics to improve decision-making, optimize organizational effectiveness, and maximize the value of HR investments.
You’ll master crucial foundational principles such as risk, return, and economies of scale—and use them to evaluate investments objectively in everything from work/life programs to training. Cascio and Boudreau also introduce powerful ways to integrate HR with enterprise strategy and budgeting and for gaining commitment from business leaders outside the HR function.
If you truly want “a seat at the table”—or if you want to keep the one you have—you’ll find this book utterly indispensable.
Free software available online
You don’t need to be a math wizard to get results from Investing in People! Visit www.shrm.org/publications/books to access software that automates virtually all of this book’s key formulas and calculations.
Foreword xi
Acknowledgments xiii
About the Authors xiv
Preface xv
Plan for the Book xvii
Chapter 1: Making HR Measurement Strategic 1
Chapter 2: Analytical Foundations of HR Measurement 21
Chapter 3: The Hidden Costs of Absenteeism 43
Chapter 4: The High Cost of Employee Separations 67
Chapter 5: Employee Health, Wellness, and Welfare 99
Chapter 6: Employee Attitudes and Engagement 125
Chapter 7: Financial Effects of Work-Life Programs 151
Chapter 8: Staffing Utility: The Concept and Its Measurement 171
Chapter 9: The Economic Value of Job Performance 195
Chapter 10: The Payoff from Enhanced Selection 223
Chapter 11: Costs and Benefits of HR Development Programs 245
Chapter 12: Talent-Investment Analysis: Catalyst for Change 271
Appendix A: The Taylor-Russell Tables 285
Appendix B: The Naylor-Shine Table for Determining the Increase in Mean Criterion Score Obtained by Using a Selection Device 297
Index 309
Table of contents
- Copyright
- Foreword
- Acknowledgments
- About the Authors
- Preface
- Plan for the Book
- 1. Making HR Measurement Strategic
-
2. Analytical Foundations of HR Measurement
- Traditional Versus Contemporary HR Measures
- Fundamental Analytical Concepts from Statistics and Research Design
-
Fundamental Analytical Concepts from Economics and Finance
- Fixed, Variable, and Opportunity Costs/Savings
- The Time Value of Money—Compounding, Discounting, and Present Value[25]
- Present Value and Discounting
- Estimating the Value of Employee Time Using Total Pay
- Cost-Benefit and Cost-Effectiveness Analyses
- Utility as a Weighted Sum of Utility Attributes
- Sensitivity and Break-Even Analysis
- Conclusion
- References
-
3. The Hidden Costs of Absenteeism
- What Is Employee Absenteeism?
- The Logic of Absenteeism—How Absenteeism Creates Costs
-
Analytics and Measures for Employee Absenteeism
-
Estimating the Cost of Employee Absenteeism
- Step 1: Total Hours Lost to Absence
- Step 2: Compensation for Absent Employees’ Time
- Step 3: Benefits for Absent Employees’ Time
- Step 4: Total Compensation for Absent Employees’ Time
- Step 5: Total Compensation Cost for All Absent Employees
- Step 6: Supervisory Time Spent on Absence Management
- Step 7: Pay Level for Supervisors
- Step 8: Total Supervisor Paid Time Spent On Absence
- Step 9: Costs of Substitute Employees
- Step 10: Costs of Reduced Quantity or Quality of Work Outputs
- Step 11: Total Absenteeism Costs
- Step 12: Total Costs per Employee per Year
- Total Estimated Cost of Employee Absenteeism (Presto Electric)
- Process—Interpreting Absenteeism Costs
-
Estimating the Cost of Employee Absenteeism
- Case Study: From High Absenteeism Costs to an Actionable Strategy
- Other Ways to Reduce Absence
- Exercises
- References
- 4. The High Cost of Employee Separations
-
5. Employee Health, Wellness, and Welfare
- Health, Wellness, and Worksite Health-Promotion (WHP)—What Are They?
- Skyrocketing Health-Care Costs Brought Attention to Employee Health
- Two Broad Strategies to Control Health Care Costs
- Logic: How Changes in Employee Health Affect Financial Outcomes
- The Typical Logic of Workplace Health Programs
- Legal Considerations and Incentives to Modify Lifestyles
- Analytics for Decisions about WHP Programs
- Measures: Cost Effectiveness, Cost-Benefit, and Return-on-Investment Analysis
- Solving the Analysis and Measurement Dilemmas to Improve Decisions about WHP Programs
- Improving Employee Welfare at Work: Employee Assistance Programs (EAPs)
- Future of Lifestyle Modification, WHP, and EAPs
- Exercises
- References
-
6. Employee Attitudes and Engagement
- Attitudes Include Satisfaction, Commitment, and Engagement
- The Logic Connecting Employee Attitudes, Behaviors, and Financial Outcomes
- Employee Engagement and Service Climate
- Measures of Employee Attitudes
- Analytical Principles: Time Lags, Levels of Analysis, and Causal Ordering
- Estimating the Financial Impact of Employee Attitudes: The Behavior-Costing Approach
- A Final Word
- Exercises
- References
- 7. Financial Effects of Work-Life Programs
-
8. Staffing Utility: The Concept and Its Measurement
- A Decision-Based Framework for Staffing Measurement
- Framing Human Capital Decisions Through the Lens of Utility Analysis
- Overview—The Logic of Utility Analysis
- Utility Models and Staffing Decisions
- Conclusion
- Exercises
- References
-
9. The Economic Value of Job Performance
- Pivotal Talent at Disney Theme Parks
- Logic: Why Does Performance Vary Across Jobs?
- Analytics: The Role of SDy in Selection-Utility Analysis
-
Measures: Estimating the Monetary Value of Variations in Job Performance (SDy)
- Cost-Accounting Approach
- The 40 Percent Rule
- Global Estimation
- An Example of Global SDy Estimates for Computer Programmers
- The Cascio-Ramos Estimate of Performance in Dollars (CREPID)
- Average Salary as a Proxy for the Economic Value of Output
- System-Effectiveness Technique
- Superior-Equivalents Technique
- Process: How Accurate Are SDy Estimates, and How Much Does It Matter?
- Exercises
- References
-
10. The Payoff from Enhanced Selection
- The Logic of Investment Value from Utility Analysis
- Analyzing “Compound Interest” Through Talent: Effects of Employee Flows on Utility Estimates
- Logic: The Effects of a Probationary Period
- Logic: The Effect of Multiple Selection Devices
- Logic: Effects of Job-Offer Rejections
- Process: It Matters How Staffing Processes Are Used
- Dealing with Risk and Uncertainty in Utility Analysis
- Process: Communicating the Impact of Utility Analyses to Decision Makers
- Exercises
- References
-
11. Costs and Benefits of HR Development Programs
- The Value of Structured Versus Unstructured Training in Basic Skills
- Utility-Analysis Approach to Decisions about HRD Programs
- Break-Even Analysis Applied to Proposed HRD Programs
- Costs: Off-Site Versus Web-Based Meetings
- Process: Enhancing Acceptance of Training Cost and Benefit Analyses
- Conclusion
- Exercises
- References
-
12. Talent-Investment Analysis: Catalyst for Change
- Introduction
-
Better Answers to Fundamental Questions
- Absence Means More Than Just Getting the Work Done
- Layoffs Cut More Than Costs, and Turnover Is Not Always a Bad Thing
- When Everyone Is Reducing Employee-Health Investments, Is It Smart to Invest More?
- Why Positive Employee Attitudes Are Not Simply “Soft” and Nice to Have
- Work-Life Balance Is Not Just a “Generational” Thing
- The Staffing Supply Chain Can Be as Powerful as the Traditional Supply Chain
- Taking HR Development Beyond Training to Learning and Work Force Enhancement
- Intangible Does Not Mean “Unmeasurable”
- Lighting the LAMP of Organization Change
- References
-
A. The Taylor-Russell Tables
- Proportion of Employees Considered Satisfactory = 0.05
- Proportion of Employees Considered Satisfactory = 0.10
- Proportion of Employees Considered Satisfactory = 0.20
- Proportion of Employees Considered Satisfactory = 0.30
- Proportion of Employees Considered Satisfactory = 0.40
- Proportion of Employees Considered Satisfactory = 0.50
- Proportion of Employees Considered Satisfactory = 0.60
- Proportion of Employees Considered Satisfactory = 0.70
- Proportion of Employees Considered Satisfactory = 0.80
- Proportion of Employees Considered Satisfactory = 0.90
- B. The Naylor-Shine Table for Determining the Increase in Mean Criterion Score Obtained by Using a Selection Device
- Financial Times Press
Product information
- Title: Investing in People: Financial Impact of Human Resource Initiatives
- Author(s):
- Release date: February 2008
- Publisher(s): Pearson
- ISBN: 9780768681901
You might also like
book
Talent, Transformation, and the Triple Bottom Line: How Companies Can Leverage Human Resources to Achieve Sustainable Growth
HR Professional's guide to creating a strategically sustainable organization Employees are central to creating sustainable organizations, …
book
How To Apply HR Financial Strategies (Collection)
In , Bashker D. Biswas shows exactly how to bring financial rigor to the crucial "people" …
book
The ROI of Human Capital: Measuring the Economic Value of Employee Performance, Second Edition
How do you quantify the value of employees? Very carefully.
book
Making Human Capital Analytics Work: Measuring the ROI of Human Capital Processes and Outcomes
PROVE THE VALUE OF YOUR HR PROGRAM WITH HARD DATA While corporate leaders may well know …