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Investing in People

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Investing in People

Financial Impact of Human Resource Initiatives


15 min read
10 take-aways
Audio & text

What's inside?

You can measure every facet of HR, but the analysis matters only if it leads to using talent better to make more money.

Editorial Rating



  • Innovative
  • Applicable


Human resources managers work hard to create value for their companies. Still, many firms treat HR as a cost center and outsource a number of its processes, such as benefits management, payroll and recruiting. Wayne Cascio and John Boudreau argue that HR managers need to stop trying to sell their functions based on service delivery. Instead, they say, HR should use decision management tools and analytical models to measure and report on its impact as a fiscal and strategic resource. The authors discuss ways to evaluate and manage major areas of HR practice, including absenteeism, hiring, staffing, benefits, work-life balance, training and employee attitude. They also show you how to apply mathematical models by working through real life case studies. Readers could approach this book as a practical guide rather than an academic or statistical treatise. While handling the math might be a bit challenging, HR professionals will gain a great deal by becoming more familiar with these evaluation tools.


Measuring and analyzing human resources (HR) activities is useful only if the information helps managers make talent-related decisions that improve the firm.

People keep saying, “You can’t manage what you don’t measure,” because it is true. Some human resource managers measure the wrong processes simply because those activities are easy to assess. To pick productive programs to measure, first identify the outcomes you want as an HR manager. Then determine which activities lead to those results, so you know what to measure to get the data you need to manage those business engines.

Measuring HR activities and creating reports is useful only if it enables you to make decisions that strengthen and improve your organization. The most crucial HR decisions involve hiring, retaining, developing, encouraging and promoting the best talent available for any given position.

HR should use the analytical tools of decision science to measure the quality of its choices and to assess its fiscal impact on the company.

Most HR measurements track performance, such as how much people learned in training or how their peers rate their work. But that is not all you need...

About the Authors

Wayne F. Cascio teaches at the University of Colorado, Denver and wrote Costing Human Resources, which is considered a classic in its field. John W. Boudreau teaches business at USC, and is recognized as an authority on human capital and competitive advantage.

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