Strategic Human Resource Management

Section One

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The conceptual framework for this text begins with an
investment perspective for guiding managerial strategic
decisions regarding human resources. Human resource
management practitioners and management scholars have long
advocated that human resources should be viewed from an
investment perspective. Current practices in many
organizations indicate that employees are viewed as valuable
investments. However, some still view their employees as
variable costs of production, while physical assets are treated
as investments. When employees are viewed as variable costs,
there is little recognition of the firm’s contribution to their
training or the costs of recruiting and training their
replacements. Likewise, there is less incentive to provide
training or make other investments in them. A respected
human resource scholar described the existing state of affairs
as follows:
I am constantly amazed at the contrast between
the concern that strategists show for potential
capital costs and the casual indifference they
tend to display toward potential human resource
costs (until, of course, the latter have gotten
completely out of hand).^1