The ROI of Human Capital: Measuring the Economic Value of Employee Performance
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With employees cost often exceeding 40 per cent of corporate expense, measuring the value of this human capital is essential. This reseource reveals how to do it and helps managers determine how to invest most effectively in human productive potential.
- Amazon Sales Rank: #68021 in Books
- Published on: 2009-02-23
- Original language: English
- Number of items: 1
- Dimensions: 1.30" h x 6.10" w x 9.00" l, 1.27 pounds
- Binding: Hardcover
- 336 pages
- ISBN13: 9780814413326
- Condition: New
- Notes: BRAND NEW FROM PUBLISHER! 100% Satisfaction Guarantee. Tracking provided on most orders. Buy with Confidence! Millions of books sold!
"In fact, this is a scholarly tome well worth reading by more than just the HR crowd… Solid business wisdom that allows for humanity and humor."
"Essential reading for professionals, this book culminates years of quantitative and qualitative research, providing a breakthrough methodology for measuring the bottom-line impact of employee performance… This well-written and authoritative guide is highly recommended for university and professional collections."
"The ROI of Human Capital is an ambitious venture into the world of employee performance measurement and improvement in economic value terms… a roadmap for fundamental examination, assessment and strengthening of multi-faceted human performance."
--Canadian HR Reporter
"Fitz-enz brilliantly summarizes the key points of the basic measurement system. These brief comments can only begin to suggest the scope and depth of his eloquent and compelling analysis of an immensely complicated subject."
--American Chamber of Commerce Executives
"An important new business book… The ROI of Human Capital will serve as an excellent reference and guidebook for HR professionals and business leaders, especially CEOs and CFOs, who need to understand how HR contributes to their bottom line. I can serve as a roadmap for HR professionals who want to plan their organizational strategy in a way that will be embraced by the executive team. This work will be invaluable as a framework for executive dialog on HR issues."
"Praise for The 8 Practices of Exceptional Companies:
""Fitz-enz continues his 20-year crusade to demonstrate the need to move from a ""human resources' to a ""human capital' mind set--with a focus on the big-ticket best practices.""--Robert H. Hunter, Managing Partner, Andersen Consulting
""Solid business wisdom that allows for humanity and humor."" --Booklist"
From the Inside Flap
The mission of quantifying the value each employee brings to your organization is a crucial task, and not one to be taken lightly. But how do you accurately determine the contributions of your people and use that knowledge to improve your company's overall performance?
Now in a brand new edition, The ROI of Human Capital provides you with a complete, reliable method for measuring the contributions of your people to corporate profit. Fully updated with new metrics, this long trusted resource offers a rare blend of management expertise and quantitative measurements, showing you how to gauge human costs and productivity at three critical levels:
1. Organizational. Macro-level data is the launching site of any ROI assessment system. Examples and proven formulas illustrate how to combine quantitative and perceptual measures into a corporate human capital scorecard. The book introduces you to the five key indexes of change: cost, time, quantity, quality, and human reactions.
2. Functional. This is the process arena, which typically sprawls across business units and is therefore difficult to manage and measure. A detailed five-point approach shows how to "tame" processes and add value to them, specifically in terms of service, quality, and productivity.
3. Human Capital Management. You'll discover how to build a performance matrix that enhances the fundamental HR activities—planning, acquiring, supporting, developing, and retaining—by connecting them to the five indexes of change.
Written by Jac Fitz-enz, the man widely regarded as the inventor of human performance benchmarking, The ROI of Human Capital, which won the Society for Human Resource Management Book of the Year Award in 2001, brilliantly shows how to integrate these levels into a single, end to end system of human capital valuation reporting. It also helps you weigh the potential effects of such practices as HR restructuring, outsourcing, using contingent workers, and merging with or acquiring another company. And, not least, you will learn to create futures scorecards that can improve your ability to see over the horizon and far beyond your competition. Throughout, Fitz-enz enlivens his wealth of hard data with useful examples and a conversational, easy-to-read style.
The second edition contains new material on topics including corporate outsourcing, developments in behavioral science, and advances in trending and predicting that have dramatically changed the way organizations measure the bottom-line effect of employee performance. Utterly up-to-date, this is the go to resource for organizations performing the essential task of measuring the value of their people.
Jac Fitz-enz, Ph.D., is the acknowledged father of human capital strategy and measurement. He began his breakthrough research in these areas in the 1970s and has since trained more than 85,000 managers in 45 countries. From 1980 to 2002 Dr. Fitz-enz was founder and chairman of Saratoga Institute, renowned for its benchmark data on effective HR practices. Currently, he is the founder and CEO of Human Capital Source, developers of Predictive Management—HCM:21®. His other books include The 8 Practices of Exceptional Companies; How to Measure Human Resource Management; Benchmarking Staff Performance; A New Vision for Human Resources (coauthored with Jack Phillips); and Human Value Management, honored as Book of the Year in 1991 by the Society for Human Resource Management. Dr. Fitz-enz lives in San Jose, California.
Most helpful customer reviews
63 of 66 people found the following review helpful.
The Human Dimension of ROI
By Robert Morris
Perhaps you have already read The 8 Practices of Exceptional Companies. Fitz-enz adds substantially to his international renown with this more recent book in which he suggests all manner of ways to measure the economic value of human capital. In the Preface, he suggests that (in business terms) human capital be described as a combination of factors such as these:
* The traits one brings to the job: intelligence, energy, a generally positive attitude, reliability, commitment
* One's ability to learn: aptitude, imagination, creativity, and what is often called street smarts", savvy (for how to get things done)
* One's motivation to share information and knowledge: team spirit and goal orientation
As Fitz-enz then explains, Chapter 1 takes the first steps toward a methodology for measuring the return on investment (ROI) of human capital. Chapter 2 launches the process of finding the ROI of human capital from an unusual "starting point": rather than begin with process improvement at the lower organizational levels, focus at the highest possible levels on "the goals of the enterprise." Chapter 3 is the "bridge" between the enterprise and the human capital management levels. Chapter 4 brings us to "the drivers of all enterprise success": people." Chapter 5 integrates the three levels (enterprise, process or function, and people), combining them "in one end-to-end system of human capital valuation reporting." Chapter 6 moves to the next level: trending and predicting. Chapter 7 dissects five of the most common human resources and human capital initiatives, demonstrating HOW to find economic value in the workings of each. Chapter 8 reports on two of the longest-term, largest-scale studies of human capital management. Chapter 9 explains what is required for an organization to take a quantum leap" over its competition. Chapter 10 provides a "compilation" of eleven "guiding principles" which serve as "The Foundation Stones of the Human Capital Measurement Pathway." And then in the final chapter, Fitz-enz brilliantly sums up the basic measurement system. Note in particular Figure 11-1 ("Composite human capital scoreboard") which provides an excellent model to guide and inform the efforts of any organization, regardless of its size or nature.
With very few exceptions, an organization's greatest assets do indeed "walk out the door" at the end of each business day. For those who are eager to measure human capital more accurately, who then wish to create for their organization a much greater return on investments in its human resources, this is an absolutely indispensable resource to help achieve those objectives.
11 of 11 people found the following review helpful.
Worth every penny
By Venkatesh Pillai
This book is a must reading for all human resource professionals and a must in all libraries. I found this book very interesting and being a human resource professional myself, this told me methods and introduced me to many tools in which the human resource can be quantified and accountability can be broughtinto this department, especially HR department. Wonderful book and it makes Human capital accounting sounds practical, feasible and logical. Worth every penny
44 of 55 people found the following review helpful.
If we don't know how to measure, we can't manage.
By Turgay BUGDACIGIL
"In the closing years of the twentieth century, management has come to accept that people, not cash, buildings, or equipment, are the critical differentiators of a business enterprise. As we move into the new millennium and find ourselves in a knowledge economy, it is undeniable that people are the profit lever. All assets of an organization, other than people, are inert. They are passive resources that require human application to generate value. The key to sustaining a profitable company or a healty economy is the productivity of the workforce, our human capital...Drucker claims that the greatest challenge for organizations today and for the next decade at least is to respond to the shift from an industrial to a knowledge economy...This shift toward knowledge as the differentiator affects all aspects of organizational management, including operating efficiency, marketing, organizational structure, and human capital investment...Since employee costs today can exceed 40 percent of corporate expense, measuring of the ROI in human capital is essential. Management needs a system of metrics that describe and predict the cost and productivity curves of its workforce" (pp.1-3).
Within this general framework, Jac Fitz-Enz argues that without measurement we cannot:
* communicate specific performance expectations.
* know what is going on inside the organization.
* identify performance gaps that should be analyzed and eliminated.
* provide feedback comparing performance to a standard or a benchmark.
* recognize performance that should be rewarded.
* support decisions regarding resource allocation, projections, and schedules.
In short, he argues that "if we don't know how to measure our primary value-producing assets, we can't manage it".
On the other hand, in Chapter 1, he displays many of the management panaceas that have hit the market in the past fifty years as follows:
** 2000 ? ? ? ? ?
-Intellectual Capital-Learning Organization
** 1990 -TQM-Reenginering-7 Habits-Delayering
** 1980 -Corporate Culture-Change Management-MBWA
** 1970 -Quality Circles-Diversification-One Minute Managing
- Work Simplification-Needs Hieracchy-Statistical Process Control
- Organizational Renewal-Value Chain-Portfolio Management
** 1960 -Managerial Grid-Matrix-Hygienes and Motivators-Theory Z
-Theory X&Y-Plan-Organize-Direct-Control-Human Relations
** 1950 -Management by Objectives-Management Science-Decision Tree
I highly recommend this 'must' reading study to all executives and HR practitioners.