Section Onecommitted to the preservation of the organization’s human
resources can manage the stress associated with major
strategic events, through such measures as dealing with
rumors and providing accurate information, so that mis-
information does not have such a debilitating impact on
employees.^8 How employees are treated following significant
strategic events, such as a merger or acquisition, is a reflection
of these values and communicates whether the organization
views employees from an investment perspective. Those
adopting an investment perspective seek to enhance the value
of their human capital or, at the very least, prevent its
depreciation.
Risk and Return on Investment
Although there are a number of important benefits to
investments in human resources, such investments contain an
element of risk. Investing in human resources is inherently
more risky than investing in physical capital because the
employer does not own the resource. Employees are free to
leave, although contractual arrangements may limit their
mobility. In order for investments in human resources to be
attractive, the returns must be great enough to overcome the
risks. Further, for some investments, such as cash outlays to
maintain no-layoff policies, the benefits are not easily
quantified and there are meaningful costs. Decision makers