Human Capital - ROI LO13712

Vana Prewitt (
Fri, 23 May 1997 17:12:52 -0700

Replying to LO13692 --


Clearly, the challenge to match an ROI measure to performance is easier
when we are cranking out widgets, or even if we are passing time in a
communications process (aka: soft skills). The issue you raise is a
thorny one, and not easily solved.

The method I have been taught to use is holistic. In other words, ALL
time invested in creating the output is balanced against its value. The
challenge then becomes measuring the total time invested in any given
creative process. No doubt there are studies out there, especially in
organizational psychology that attempt to measure the effectiveness and
efficiency of individual creative performance versus team skills applied
to the same task. In the case of problem solving, I would venture to say
that the research would weigh in on the side of team skills over
individual skills for e&e. In designing a horse (or art), the individual
may be better equipped (otherwise you end up with a donkey!).

The human contributions can be measured, albeit somewhat less reliably
than widgets. In the case of employee morale, for example, I use a 360
feedback mechanism to determine what contributing factors most affect
positive morale, a sense of belonging, and eagerness to come to work, do a
good job, etc. This is the measure I use for determining the value of the
"contributors," such as my walk-about time, departmental social
activities, etc. The investment is the human resource capital of all
their outputs, and this is significant.

Hope this helps. Let me know if you want more exaples. I've got tons of


Richard C. Holloway wrote:
> I appreciate your approach, Vana. But could you explain how you measure
> intellectual or creative performance (the time needed to reflect or create
> an idea or solution to a problem)? I had trouble applying your method to
> these human activities. (thanks in advance).


Vana Prewitt <>

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