The Cost of Downsizing in an Enterprise with Job Security

Mabon, Hunter

doi:10.1108/eb029022

Cited by 13 publications

(7 citation statements)

References 24 publications

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“…The HRCA literature is replete with models for estimating the currency-valued payoff from HRM investments (e.g., Boudreau, 1991;Mabon, 1996;Klaas & McClendon, 1996), which begin with HRM programs such as compensation, staffing, training, turnover control, etc.…”

Section: The Purpose: Enhancing Key Stakeholder Reactions and Decisionsmentioning

confidence: 99%

“…It is suggested that the significant and increasing difference between the financial book value and market capitalization value of corporations is due to the growing importance of things not measured by the financial book value, requiring new statements reflecting intellectual capital or intangibles. Leading organizations such as DuPont and Skandia have implemented such systems, adding even more new measures to a field already struggling to apply systems such as human resource accounting, behavioral costing, human resource costing, competencybased inventories, and a host of other measurement systems.The HRCA literature is replete with models for estimating the currency-valued payoff from HRM investments (e.g., Boudreau, 1991;Mabon, 1996; Klaas & McClendon, 1996), which begin with HRM programs such as compensation, staffing, training, turnover control, etc. , 1994;Carson, Becker & Henderson, 1998).…”

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confidence: 99%

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Strategic Human Resource Management Measures: Key Linkages and the PeopleVantage Model

Boudreau

1998

Journal of Human Resource Costing &Amp; Accounting

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The field of human resource management faces a significant dilemma. While emerging evidence, theory and practical demands are increasing the visibility and credibility of human capital as a key to organizational success, the measures used to articulate the impact of human resource management decisions remain misunderstood, unwanted by key constituents, or even counter-productive. This article proposes that the key to creating meaningful HR metrics is to embed them within a model that shows the links between HR investments and organizational success. The PeopleVantage model is proposed as a framework, the application of the model is illustrated, and the potential of the model for guiding research and practical advances in effective HR measures is discussed. This paper has not undergone formal review or approval of the faculty of the ILR School. It is intended to make results of Center research available to others interested in preliminary form to encourage discussion and suggestions. Strategic HR Metrics and PeopleVantage WP 98-28 Copyright © 1998 John W. Boudreau and PeopleCOM. Please do not quote or cite without permissionPage 2 ABSTRACTThe field of human resource management faces a significant dilemma. While emerging evidence, theory and practical demands are increasing the visibility and credibility of human capital as a key to organizational success, the measures used to articulate the impact of human resource management decisions remain misunderstood, unwanted by key constituents, or even counter-productive. This article proposes that the key to creating meaningful HR metrics is to embed them within a model that shows the links between HR investments and organizational success. The PeopleVantage model is proposed as a framework, the application of the model is illustrated, and the potential of the model for guiding research and practical advances in effective HR measures is discussed. The field of human resource management (HRM) faces a significant dilemma. The idea that HRM must focus on outcomes, rather than solely on programs, activities and costs is becoming well established (e.g., Boudreau, 1991;Milkovich & Boudreau, 1997;Ulrich, 1998).Moreover, there is a rapidly-growing body of books and articles suggesting that the key to competitive advantage lies with the organization's human resources. Leading management scholars admonish top managers to link the human element of the organization directly into the balanced scorecards, or other overall strategic guidance systems (e.g., Kaplan & Norton, 1996; Treacy & Weirsema, 1997). Intellectual capital is widely suggested as an emerging key to organizational success, that is not effectively reflected in standard accounting and financial reports (Roos & von Krogh, 1996;Petrash, 1996;Sveiby, 1997), and the diminishing correlation between future financial performance and standard accounting measures of value seems to attest to the importance of more intangible factors (Economist, 1998). Leading organizations routinely point to their people as "our most impo...

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Section: The Purpose: Enhancing Key Stakeholder Reactions and Decisionsmentioning

confidence: 99%

mentioning

confidence: 99%

Strategic Human Resource Management Measures: Key Linkages and the PeopleVantage Model

Boudreau

1998

Journal of Human Resource Costing &Amp; Accounting

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“…Review 28,1/2 92 1986; Hunter and Schmidt, 1982;Mabon, 1996;Martin and Raju, 1992). Most of the literature has dealt with personnel selection problems.…”

Section: Personnelmentioning

confidence: 99%

Why the concept of human resource costing and accounting does not work

Johanson

1999

Personnel Review

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Despite a promising outlook in the 1970s, it has been claimed that human resource costing and accounting have progressed at something less than snail’s pace over the past two decades. This is largely due to difficulties in the application of the concept. In this article several extant studies regarding the application of HRCA are classified and exemplified. The idea is to increase our knowledge of how implementation of the concept could be achieved from a management control perspective. Most managers in the majority of studies hold very positive attitudes towards HRCA, but the integration of HRCA in the management control process has never been really attained. In seven Swedish case studies, the inhibiting factors in the implementation process of HRCA are compared. The lesson is that training, information, reward, target setting and cultural systems have to be worked actively to overcome inhibiting factors when trying to implement HRCA. Efforts should focus on: (1) knowledge of human resource costs, values and outcomes as well as how to calculate these; (2) top management demand as well as other elements in the reward system; (3) HRCA target setting; and (4) openness for change.

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“…If an organization adopts programs only if they enhance the return on capital invested, however, the return on other resources (e.g., land, transportation assets, human capital) may not be optimized. For example, capital-based returns may be maximized by large layoffs because of significant labor cost savings, perhaps enhancing short-run return on capital; however, if the actual constraint is on human capital, layoffs designed merely to cut costs may exacerbate the unseen human capital constraint, causing long-term performance problems (Mabon, 1996;Milkovich & Boudreau, 1997).…”

Section: How Capital Became Keymentioning

confidence: 99%

Measuring intellectual capital: Learning from financial history

Boudreau

Ramstad²

1997

Hum. Resour. Manage.

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Emerging evidence from scientific studies and specific organizations suggests that how people are managed significantly affects organizational success, and that certain patterns of human resource activities are associated with financial performance. Most human resource (HR) and line managers, however, find existing measures of human and intellectual capital woefully inadequate. In this article, we suggest that designers of HR measurement systems can learn from the success of well-accepted measurement models in the financial and marketing arenas. We show that the historical development of these measurement systems suggests several lessons for the HR measures of the future. These lessons include articulating the links in the value chain, focusing on key organizational constraints, and using data to make "soft" intangible factors more tangible. © 1997 John Wiley & Sons, Inc. s In this article we propose that today's paradox regarding human resource and intellectual capital measurement parallels prior historical periods when measurement systems were about to change fundamentally.

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The Cost of Downsizing in an Enterprise with Job Security

Cited by 13 publications

References 24 publications

Strategic Human Resource Management Measures: Key Linkages and the PeopleVantage Model

Strategic Human Resource Management Measures: Key Linkages and the PeopleVantage Model

Why the concept of human resource costing and accounting does not work

Measuring intellectual capital: Learning from financial history

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