" (1998) Stated as well by Boudreau is the fact that a body of research exists that is growing rapidly suggesting that "the key to competitive advantage lie with the organization's human resources. (Boudreau, 1998) p. 3 Widely suggested as an emerging key to the success of the organization is "intellectual capital." (Boudreau, 1998; p.3) This element is sated to not be: "...effectively reflected in standard accounting and the financial report, and the diminishing correlation between future financial performance and standard accounting measures of value seems to attest the importance of more intangible factors." (Boudreau, 1998; p.3) HR measurement that is effective will be a system that is capable of providing guidance in "rapid and appropriate decisions affecting employees, in language that is understood by all constituents." (Boudreau, 1998) p.4 the work of Boudreau explores "four necessary elements of enhanced HR measurement" as well as making the provision of a framework "for understanding and developing better future measures." (Boudreau, 1998; p.4) Boudreau states that the four components spoken of are:
1) Evidence;
2) Explanation;
3) Purpose; and 4) Method." (Boudreau 1998) p.4
Evidence is necessary in establishing the significance of the effects of human resources for"... meriting intensive measurement and study." (Boudreau, 1998; p.4) 'Explanation' makes the provision of a reasoning of a logical nature in making suggestions in relation to 'why' ad 'how' human resources "creative their significant affects on organizations." (Boudreau, 1998) p.4 Boudreau states that 'purpose' speaks of the 'goals of measurement systems, which extend beyond simply developing and applying new measurement systems, and must consider the effects of measures on key stakeholders within and outside the organization." (Ibid; p.5) Method makes reference to a mode and framework in making provision of development of support for better measures in HR." (Boudreau, 1998; p.5) HR measurement typically takes an approach that is the exact opposite in which "the search for better measurement methods is the first, and often the only step. The work of Boudreau related the 'PeopleVantage Model', which is stated to integrate human resource metrics and strategic human resources management. The following chart labeled Figure 1 illustrates the 'PeopleVantage Model' and how this model integrates HR metrics and Strategic Human Resource.
The PeopleVantage Model
Source: John W. Boudreau and PeopleCOM (1998)
The two arrows in the figure represent the synergy existing between the areas of strategic planning, measurement and execution. According to the work of Boudreau (1998) the development of metrics in planning proceeds downward "from the value proposition to the bundles yet when strategy is executed the causal direction is in an upward direction. Boudreau recalls the example set by Sears, a U.S. retailer whose analysis model "was based on a top-down concept of becoming an attractive investment for shareholders, supported by customers whose behaviors delight the customers...The metrics that Sears developed began with employee attributes and worked upward to measure employee behaviors toward customers, customer reactions, and the impact on revenue." (1998) the work of Kaplan & Norton (1996) drew upon the work of Porter (1985) and as cited in Boudreau (1998) define the value proposition as 'the attributes that supplying companies provide, through their products and services, to create loyalty and satisfaction in targeted customer segments." (Boudreau, 1998 p.5)
Boudreau relates that a problem exists in that goals that are 'company-wide' in nature "are simply too generic and vague to guide specific HR decisions" and simultaneously value is defined too narrowly and the initiative to measure gains in knowledge increases as to products or services without having measured the effects on the organization in terms of the value-creating capacity does not provide enough useful knowledge. Boudreau states that "The PeopleVantage' model may suggest a diagnostic approach to identifying the right level of detail for actionable value proposition." (1998) p.5
Boudreau relates as well that: "Typical HRM measures frequently focus only on HR activities" and give rise to suggestions that these activities "represent the key business processes of HR." (1998) Training metrics are inclusive of the effect of training upon the quality of product, cycle time, cost reduction, and speed of execution." (Boudreau, 1998) p. 5 Typical dependent variables in research of business and economics are value propositions and business processes but the 'moments of truth' have "received relatively less attention." (Boudreau, 1998) the work of Gronroos (1998) and Carolzon (1987) have documents that the 'moments of truth' are representative of "pivotal contact points between employees and customers, whether in providing a service, selling a product, or providing assistance......
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