Improving the Return on Human Capital: New Metrics

Old means of measuring employee effectiveness and value are now outdated and incomplete. In contrast with the past, the knowledge worker is now the dominant source of value creation in an organization. Organizations must develop metrics that measure knowledge worker value. This article explains the...

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Bibliographic Details
Published in:Compensation and Benefits Review 2000-01, Vol.32 (1), p.13-20
Main Authors: Le Blanc, Peter V., Rich, Jude T., Mulvey, Paul W.
Format: Article
Language:English
Subjects:
Advantages
Decision making
Employees
Human capital
Human resources
Investments
Knowledge
Labor market
Motivation
Value creation
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Summary:Old means of measuring employee effectiveness and value are now outdated and incomplete. In contrast with the past, the knowledge worker is now the dominant source of value creation in an organization. Organizations must develop metrics that measure knowledge worker value. This article explains the use of the human capital approach, which calculates investments and returns on individuals to measure their impact and justify investments. The human capital approach aligns the human resource function with the business. A case study of one company's successful use of the human capital approach demonstrates the advantages of this perspective.
ISSN:0886-3687
1552-3837
DOI:10.1177/088636870003200103