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Memo from HR: We Do Too Create Value

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For his part, Beatty argues that the old and new approaches really are getting at the same thing. "We started years ago looking at job satisfaction, commitment, and involvement," he said. "But 'engagement' may be this generation's satisfaction and commitment. Some have called it old wine in new bottles."

The problem, he continued, is that definitions of "engagement" vary widely from study to study and company to company, so "who knows what you're measuring? We don't have a uniform definition, let alone a uniform understanding of what its drivers are, let alone knowledge of what impact engagement may have on value creation."

The Value of Numbers 
His broader assertion that HR is weak on providing data analysis that drives economic value frustrated many of those who commented on the article; they claimed, in one way or another, that human resources does provide useful data analysis.

One, though, said that, "We are not supposed to be good at data analytics. We are supposed to be good at helping craft the decisions [management wants] to make ... so that they stay within the law and the policies and procedures the company has in place."

Indeed, ZipCar's Goldfinger said he doesn't look to human resources to provide financial analysis. He wants HR to understand the impact that employees have on the bottom line, how the business works, and what decisions make sense for the business. "Are they as financial minded as finance people? No. Neither are marketers or engineers," he said.

While Eve is a human resources professional himself, he took Beatty's side on the issue. There are many HR people who don't spend enough time understanding the business or creating metrics for the value employees deliver, he said — though many metrics are easy to fashion, such as employee impact on budget, productivity per employee, and even differential economic value between high performers and others. "HR doesn't have full control over those things, but finance analyzes numbers that it doesn't control, and HR should be doing that too," he said.

Beatty said HR departments should focus their efforts on measuring the value created by the company's strategic talent and by its culture, and on metrics identifying employees as either "top talent," "emerging talent," "career level," or "not a fit with the role requirements anymore."

The Value of Branding
Beatty's suggestion that many human resources departments are ill-advised in their focus on branding their companies as "the employer of choice" also drew heat.

Typical of comments posted to the article were, "Who in their right mind would not want to be an employer of choice, especially in today's economy?" and "If you are not an employer of choice, then why would excited, enthused people want to work for your firm in the first place?"

Beatty said the employer-of-choice position generates an overabundance of candidates, which wastes time and money. Estimates for the cost of processing a job applicant range from a few hundred dollars to thousands of dollars, depending on how far the person gets in the evaluation process, he noted.

Instead, according to Beatty, companies should make clear that they are looking only for the cream of the crop.

But, wondered Erickson, how much cream can you find if your crop is small? "By having fewer candidates to choose from, their quality is going to improve? Really?" she said.


LinkedIn Company Connections:
  • Rutgers University |
  • Questar |
  • ZipCar |
  • National Register

Reader CommentsDisplaying 1 of 1

  • Alan Walsh

    Apr 11, 2009 6:06 PM ET

    Response to HR Criticism

    It's been my experience that companies with ineffective HR Departments do not understand how HR can add value, and do … more

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