Operationalizing the strategic net benefit (SNB) of HR
Journal of Human Resource Costing & Accounting
ISSN: 1401-338X
Article publication date: 1 January 2005
Abstract
Purpose
A pressing research question in human resources (HR) is how to determine the value HR adds to a firm. This article seeks to address this issue
Design/methodology/approach
As summarized here, benchmarking techniques, ROI tools, behavioral analyses and other types of quantitative efforts have attempted to provide answers, but such methods also have downsides. In the present paper, the long‐established finance concept of net present value (NPV) is applied in order to determine the value that HR activities provide to an organization's business strategy.
Findings
A specific example is used to illustrate how NPV can be used to value the HR activities in a firm pursuing an innovation business strategy. An explanation is also given of how NPV can be used in making decisions related to HR outsourcing.
Practical implications
NPV is used to operationalize the strategic net benefit (SNB) of HR's costs and contributions to a firm's business strategy.
Originality/value
The long‐established finance concept of net present value (NPV) is applied in order to determine the value that HR activities provide to an organization's business strategy.
Keywords
Citation
Burke, L.A. and Hsieh, C. (2005), "Operationalizing the strategic net benefit (SNB) of HR", Journal of Human Resource Costing & Accounting, Vol. 9 No. 1, pp. 26-39. https://doi.org/10.1108/14013380510636685
Publisher
:Emerald Group Publishing Limited
Copyright © 2005, Emerald Group Publishing Limited