ERIC Number: ED407611
Record Type: RIE
Publication Date: 1997-Apr
Accounting for People: Can Business Measure Human Value?
Workforce Economics, v3 n1 p3-5 Apr 1997
Traditional business practice undervalues human capital, and most conventional accounting models reflect this inclination. The argument for more explicit measurements of human resources is simple: Improved measurement of human resources will lead to more rational and productive choices about managing human resources. The business community is investing more time, money, and effort in education and training than ever before. Data from the "1997 Economic Report of the President" show increased education and training account for a larger share of productivity growth and represent a larger absolute amount. In a 1995 study, Margaret Blair reports businesses' capacity for generating wealth increasingly is based on workers' skills and knowledge. Hansen and Wernerfelt's research shows human resource factors are more important in determining firm performance than traditional economic indicators. These studies demonstrate the importance of creating a strategy to measure contributions of human resource assets when measuring overall performance. Companies are struggling with how to measure the return on investment of training and education. Walgreen has successfully compared sales of technicians trained on the job versus those who received formal training. Units have been established within training departments to evaluate and measure the impact of training in such companies as AT&T, Motorola, Arthur Andersen, and Intel. The challenge is to find innovative ways to measure and report the value of human resource assets. (YLB)
Publication Type: Information Analyses; Journal Articles
Education Level: N/A
Authoring Institution: National Alliance of Business, Inc., Washington, DC.