Strategic Human Resource Management

Section Six

superior means of evaluating human resource activities, the
process is quite difficult for some applications. As a result of
these difficulties and the amount of resources and effort
required for analysis, its use has been limited to only selected
applications. (An example of an application of utility analysis to
a selection problem is provided later in this section.) Human
resource practices such as succession planning and career
development, which may have greater strategic impact, often
defy quantitative measurement.^16

Quantitative and Qualitative Measures

Other evaluation issues are whether to use quantitative or
qualitative measures. A number of quantitative and qualitative
measures can be constructed to measure the effectiveness of a
company’s human resources or the human resource function.
Quantitative measures can sometimes be combined in the form
of composite indices, and, as indicated earlier, weighting
schemes necessary for such indices can be developed through
policy capturing approaches. Further, the human resource
function can also be evaluated as a cost center. Additionally,
the benefits resulting from human resource management
programs, such as reduced turnover or improved percentages
of good hires, can sometimes be determined in dollar values. In
such cases, the effectiveness of the function can be measured
as a profit center. It is worth noting that an inordinate