< back

Purpose of Course: This course is designed for students majoring in Management and Organizations who have already taken upper level courses required for this major. A fundamental decision each organization must make is how and where it will allocate its capital. Measurements are proffered and the investment proposal with the best return is, in most instances, funded. Moreover, the measurement process should continue and be used for attaining accountability through improvements in performance.

The primary focus of this course is to evaluate the impact of human capital on the success of the organization. Students will learn how organizations can invest in human capital as well as measure the return on this strategic investment. The course will cover the rationale for this process and the methodologies for measurement, and then apply these tools to a variety of people management policies and programs to assess their impact on the success of the enterprise and to evaluate continual improvement. Upon completion of the course, students should be able to quantitatively and reliably evaluate the effects of human capital decisions and policies on sustained organizational performance.

Course Format: Lecture, Mini Cases, and discussion. Some classes will be devoted to work on the Applied Research Project that is discussed below. Students must be prepared to discuss the reading assignments, including any and all chapters, outside readings, and websites. In addition, when requested, they must prepare and submit written responses to designated exercises or Mini Case problems written by the Instructor. Most materials for the course including homework can be found on Blackboard. There will also be several guest speakers, who are practicing experts; students will be responsible to attend these sessions since the topics covered can be included in the exams. Students will also have the opportunity to work in a computer lab with an on-line Human Resource Information System. They will learn how to enter and retrieve data on the system, and design report requests. Management Information Systems can be key to developing data in assessing the effectiveness of various HRM practices.

Writing Requirement: When instructed by the Professor, students will be required to complete typed, two-to-four page analyses of certain homework exercises, including Mgt. 474 Mini Cases that can be found on Blackboard.

Applied Research Paper
The Instructor has been working with several Cincinnati companies to identify special applied research topics that will be assigned to Human Capital Metrics (MGT. 474) students. Accordingly, student teams will be required to complete an Applied Research Project involving a human capital metrics issue that will provide a significant educational experience for the students and a practical research deliverable for the company. Details concerning the topic and the student's relationship with the company have already been identified and are discussed in Blackboard. Students will be expected to timely submit an Applied Research Project Memo. The Memo must be comprehensive, practical, and responsive to the agreed upon Project Statement. The Memo will also be evaluated based upon the clarity and organization of the writing, the depth and quality of the research, and the strength of the analysis and recommendation(s). This research will be supervised by the Instructor and represent a significant part of your writing requirement

Tentative Sequence of Topics
The following paragraphs indicate the "probable" sequence of topics and estimated number of sessions devoted to each. The Instructor has identified reading assignments and specific texts, articles, and pages for each class on Blackboard. Additionally, the instructor has assigned specific exercises and written responses to Mini Cases.

Segment 1:
Why Measurement is Necessary: A fundamental decision that an organization must make is how to allocate its capital. What are the decision-making and analytical processes used to allocate capital? What are intangible versus tangible assets? How do organizations gain and maintain the commitment of the organization to invest in human capital by using demonstrable, value-added management practices? How can such practices create accountability by and continuous improvement among workers and result in sustained business success?

Segment 2:
What are Some Relevant and Basic Measurement Tools? What are NPV, ROI, Payback Period, IRR, Average Accounting Return, and Contribution to Margin, Economic Value Added, Market Capitalization Ratios, and Total Shareholder Return? How do you calculate labor productivity? What is the utility of correlation and how can it be used to evaluate management practices? How are surveys used and how do you establish their validity, reliability, and practicality? What are pilot programs and how do you establish causal connection? When do you use SWOT analysis, benchmarking, and comparative market capitalization or stock price ratios? How do we "mine" existing data within the enterprise to establish baseline measures, assess problems, identify operational and human capital solutions, apply quantifiable performance results, and seek continual improvements?

Segment 3:
What does Human Resource Management do and how do we link it to the business strategy? What external factors affect the development of a business strategy and how do we create human resource strategies that generate a measurable competitive advantage? What is the process an organization uses to develop its organizational strategy? How does HRM fit horizontally and vertically into this strategy? What is the process? What are the fundamental human resource dimensions: Designing the organization - what are the alternatives? Designing work - how do we evaluate the best approach? What is business process reengineering? How do we measure it? Forecasting - how do we effectively determine future human resource needs? Recruiting - do we have effective and efficient recruiting processes? Selection - are we hiring the right people? Training - what is a learning organization? Is there a process to evaluate its real value? Development - what are the ways we develop people and what is the value of performance evaluations? Reward - how do we know if our reward system affects employee behaviors? Which employee communications and relations practices have impact? How does HRM "advocate and lead change"? How do we implement a global performance system and measure it? What is the decision process in designing and adopting an HRIS system?

Segment 4:
How do we establish the value of various administrative systems and strategies? What is the value of a new HRIS? How do we use it to obtain data on the "gaps" in our organization, possible solutions, new HR Capital strategies, and evaluative measures? What is the concept of "employee self -service"? How does technology "remove labor" from customer transactions? What are the analytical steps for evaluating such interventions?

Segment 5:
What is the trade off between hiring highly skilled and unskilled labor? Is there a measurable return on "screening" and "self-screening" of workers? What is the effectiveness of probationary periods? Who is Gary Becker and what is the Theory of Human Capital? What are "sorting and signaling"? What are "output versus time based" pay schemes? What is the economic impact of "selective layoffs," "buyouts," and "early retirement windows"? Is there a return on promoting from within versus from outside? What are these theories: Tournament, Behavioral, Agency, Reinforcement, Maximizing Value, Efficiency Wage, Expectancy, Reservation Wage, and the Pay Model? What is the difference between absolute performance and comparative performance? How do you "cost" a labor agreement? Should we measure cost efficiency of management practices or review the underlying assumptions upon which the practices are based? How do we measure productivity and what is its contribution to margin? What are the economics of teams? How do we establish "Vision and Measurable Goals"; develop supporting strategies and integrate them with HRM practices; create accountability; and continually evaluate performance and pursue improvements? What are the economics of institutional politics and organizational design - tasks, departments, and authority? What is the relevance of industry, size of company, location, maturation of company and the overall business environment? How do we evaluate seniority versus ability based systems? How does the organization change and embrace the concept of human capital investment and value accumulation? How do we measure Global Performance?

Segment 6:
What are the leading "drivers" and measurable indicators of a particular business? How do we connect them to management practices? Moreover, why is "balance" important and how do we use it in the design, measurement, and evaluation of our business drivers and our management practices? Let's examine the evolution from the Balanced Scorecard to the HR Scorecard. What are high performance work systems? How do we measure them? How do we create a HR Scorecard? What are some of the perils of measurement?

Segment 7:
How do we develop a Metrics and Data-Driven Approach to Human Capital Decision Making? What is a cost benefit analysis? What about benchmarks? How do we establish a causal link between the practice and the results? What are some principles of valid measurement and how do measure HR alignment with the business strategy? How do we measure turnover? What are its costs? How should we evaluate proposals to reduce it? What about absenteeism? What are the real costs of conflict and litigation? How do we formulate proposals to mitigate them? How do we use metrics to evaluate employee selection, training, and human resource development programs? Do they work? Are they having an impact on sales and profits? How do we measure the efficiency of certain HRM practices? How do we use benchmarks and set goals with respect to efficiency? How do we measure the value of having employee assistance programs, child care, and other benefits? What is the financial impact and linkage to business results of employee attitudes?

Segment 8:
Can we evaluate compensation and benefit plans with metrics? How? What are the employee behavioral changes that can be measured with various schemes of pay? What is the ROI on a bonus plan? What about equity ownership? What is the value of offering health care and other benefits? Do employees value certain benefits? Do they positively affect employee performance? How do we know? What are employee attitude surveys and how can we use them to evaluate our practices? How do we make sure surveys are relevant and accurate?