Section Sixmay be individuals or units within the organization. There also
may be external stake-holders, such as unions, community
organizations, or suppliers. An example of a stakeholder
approach to evaluation is provided by Honeywell’s Aerospace
and Defense Division, which has used the process to clarify the
human resource department’s role in the company.^15
Analytical Approaches
The second approach is analytical and involves either (1)
experimental designs, such as the pretest–posttest control
group design, which will be described later in the discussion of
evaluation of training; or (2) cost–benefit analysis, such as
utility theory, which was discussed earlier and will be
considered in more detail in this section. Although the cost–
benefit analytical approach has been used with success, the
valuation of benefits poses a major problem for human
resource applications. Utility analysis is a specific type of cost–
benefit analysis, which has applicability to human resource
evaluation. It has the advantage of expressing evaluations in
economic terms, which are probably more understandable by
decision makers from other functional areas. Several human
resource activities have been evaluated with utility analysis,
including appraisal systems, equal employment policies,
recruiting, selection, training, and turnover. Although utility
analysis has broad applicability and represents a quantitatively