Investing in People: Financial Impact of Human Resource Initiatives [Paperback]

Wayne F. Cascio (Author), John W. Boudreau (Author)

Book Description

Publication Date: February 23, 2008 | ISBN-10: 0137025726 | ISBN-13: 978-0137025725 | Edition: 1

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

Editorial Reviews

Amazon.com Review

Susan R. Meisinger on Investing in People: Financial Impact of Human Resource Initiatives

"If you can't measure it, you can't manage it."

It's a lesson I learned more than twenty-five years ago, as a young manager, from one of the most effective executives I've ever worked with. More importantly, I also learned that "measuring it" wasn't enough. What's measured, why it's measured, and how the measurement is used to drive outcomes are what really matters.

As the human resource (HR) profession has continued to evolve beyond transactional responsibilities, many HR professionals have embraced the fact that technology enables them to collect and analyze data efficiently and in ways never before possible. They've discovered that the ability to analyze, measure and articulate HR's contributions to organizational success allow them to make even greater contributions within their organizations. They're using measurement to invest in people.

But many HR professionals aren't agile in the use of measurements to move their businesses forward. Some simply don't know where to begin or are still looking for the "one true way" to measure—or are asking, "just tell me what to measure and what the number should be." They are thirsty for an analytic framework that underlies the whole issue of measurement.

The mission of the Society for Human Resource Management (SHRM) is to serve the HR professional and to advance the HR profession. As you read this book, I think you'll find that Investing in People shares this mission. The profession will be well-served by the tools and analytic frameworks for the use of measurement provided by Wayne Cascio and John Boudreau. The observations offered by the authors on how best to "get started" in using measurements to inform and motivate strategic partners to think more clearly about the implications of decisions about talent will also serve the HR profession well. By basing their work on a foundation of solid scholarship and practice gained through their academic and consulting experiences, Wayne and John help to advance HR as a profession that is recognized as a decision science requiring special knowledge and expertise.

—Susan R.Meisinger, SPHR
President and Chief Executive Officer of the Society for Human Resource Management

--This text refers to an out of print or unavailable edition of this title.

From the Back Cover

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

 

 

--This text refers to an out of print or unavailable edition of this title.

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Product Details

• Paperback: 360 pages
• Publisher: FT Press; 1 edition (February 23, 2008)
• Language: English
• ISBN-10: 0137025726
• ISBN-13: 978-0137025725
• Product Dimensions: 9.1 x 7.1 x 1 inches
• Shipping Weight: 1.5 pounds (View shipping rates and policies)
• Average Customer Review: 3.8 out of 5 stars  See all reviews (4 customer reviews)
• Amazon Best Sellers Rank: #268,916 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

6 of 6 people found the following review helpful:

5.0 out of 5 stars A solid approach to strategic HRM, January 13, 2009

By 

Craig Matteson (Saline, MI) - See all my reviews
(TOP 500 REVIEWER)    (HALL OF FAME REVIEWER)    (REAL NAME)   

This review is from: Investing in People: Financial Impact of Human Resource Initiatives (Hardcover)

I think this is an important book for HR management. The authors show the way of moving from the odd notions of how well HR delivers its services to demonstrating hard number measurements of HR value added to the performance of the company. After presenting their argument for making HR Management as strategic as Finance and Marketing, they show you how to become more analytical in your approach to HRM.

They then go through ten subjects showing you how to analyze the financial impact of that topic and then offer you a case study to work through using the tools you were given in that chapter. Then ten topics are:

1) The Hidden Costs of Absenteeism
2) The High Cost of Employee Separations
3) Employee Health, Wellness, and Welfare
4) Employee Attitudes and Engagement
5) Financial Effects of Work-Life Programs
6) Staffing Utility - Concept and Measurement
7) The Economic Value of Job Performance
8) The Payoff from Enhanced Selection (hiring better people using tools)
9) Costs and Benefits of HR Development Programs
10) Talent-Investment Analysis: Catalyst for Change

I found this book to be smart, on point, easy to understand, and think it will be of real use to anyone serious about becoming more analytical about the HR Management function.

Reviewed by Craig Matteson, Ann Arbor, MI

2 of 2 people found the following review helpful:

4.0 out of 5 stars Valuable for HR in large corporations, May 5, 2010

By 

Robin (Bethesda, Moldova, Republic of) - See all my reviews
(REAL NAME)   

This review is from: Investing in People: Financial Impact of Human Resource Initiatives (Paperback)

Investing in People is a valuable, technical resource that is probably most useful to Human Resource professionals in large corporations or labor intensive organizations. The title is a bit misleading in the sense that Investing in People doesn't really tell the average business owner or department head, or HR manager how to invest in people.

What this book does do, quite well, is to explain how the results of specific tactical HR iniatives can be measured. Given the soft, less than practical reputation of some work-life programs, this is a good thing. Its a proactive tool for the Human Resource Executive to use to measure the impact of something like a healthy eating program, a quit smoking, or stress reduction program. With this information the HR Executive can measure the impact of a given initiative, and decide rationally whether such a program should be continued or changed. Some of the areas examined are absenteism, health, turnover and work-life programs such as childcare.

This is a fairly technical book. Most HR execs who read it will end up assigning at one or more professionals to the task of applying the information. The work involved is not the kind of thing someone does during an odd slow period. To use this book an HR department has to be focused and determined to measure results. The population studied should be significant. For this reason Investing in People will be most useful to an HR exec who needs to study the effects of a program on a large population of employees.

4.0 out of 5 stars How to measure HR effectiveness, September 29, 2011

By 

John Gibbs (Melbourne, Australia) - See all my reviews
(TOP 1000 REVIEWER)    (REAL NAME)   

Amazon Verified Purchase

This review is from: Investing in People: Financial Impact of Human Resource Initiatives (Kindle Edition)

A key responsibility of human resource leaders and consultants is to articulate the logical connections between progressive HR practices and firm performance, and they need to demonstrate those connections with data, according to Wayne Cascio and John Boudreau in this book. The book suggests a number of analytical techniques which can be used to provide the necessary data to answer such questions as:

* What is the actual cost to the business of employee absenteeism?
* How much do employee separations cost the business in terms of lost productivity?
* What is the cost-benefit ratio of an employee health and wellness initiative?
* How can a business measure the financial impact of employee attitudes?
* How can the outcomes of a work-life program be analysed and measured?
* What are the costs and benefits of employee recruitment and selection efforts?
* What are the costs and benefits of training and development programs?

In my view the authors make a convincing case for the importance of gathering data to provide a quantitative estimate of the effects of various HR initiatives. However many of the recommended analyses involve complex statistical calculations based on highly subjective (and therefore imprecise) data, and the results are likely to be unreliable if the underlying data is unreliable. This does not mean that measurements should not be attempted, but it does mean that simple analysis may be sufficient and the degree of data reliability should always be kept in mind. The particular analytical techniques recommended by the authors are probably more useful for very large organisations (with large sample sizes) than for smaller ones.

Exercises are provided at the end of each chapter, enabling the reader to try out the calculations recommended by the authors. The book refers to a website which is said to contain software for calculating the answers; I was unable to find any such software at the URL given. In my opinion the book is most useful for the ideas which it provides about the sorts of things HR professionals should be attempting to measure and calculate.