Shyamal Majumdar's column "When HR meets economics" (Human Factor, April 26) is a timely reminder to the human resource (HR) professionals to practise the art and science of measuring their activities so as to be seen as adding to the organisation's "economic value".
In fact, they need to redo HR functions in two ways: one, they should align the HR strategy with the company's business strategy by recasting the affected HR jobs (from HR planning and recruitment and selection to performance and reward management) so that these support the business strategy separately and mutually; two, they should translate benefits from HR initiatives in monetary terms.
Economists' tool of cost-benefit analysis and return on investment can be profitably employed in evaluating many HR functions. Another useful tool is controlled experimentation. Organisations like Infosys and SAIL apply the technique of HR accounting in their books of accounts to calculate the worth of their human capital.
Y G Chouksey, Pune
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