What Value HR?

Most organisations champion that people are their greatest asset. But how do they really view their investment in HR activities? In many cases, they simply budget for these activities as an expenditure item. Today, managers need to value these activities and their potential return on investment to the business. This management report will help managers: - describe the relevant components of financial statements - prepare financial tools for measuring return on investment - create a template for measurement to use in their own organisation - identify the steps involved in implementing ROI techniques. One reason that measuring the value of HR has not been a standard business practice to date is because it has been seen as simply too difficult. Traditional definitions of capital do not adequately value an organisations true wealth. While organisations continue to spend large sums of money upgrading plant, equipment and infrastructure, there is still a prevailing paradigm that people are viewed as an overhead rather than as an asset. The notion of the 'intellectual capital' that is brought to an enterprise is largely not quantified. Financial statements such as