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Dear Workforce Which Employees Provide The Most Value

The key issue is not how much value is created, but how much value would change if there were improvements a change in the talent pool.
June 10, 2001
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QDear Workforce:

Since our company consists of several departments, how can we determine whichemployees provide the most "worth" or value to the bottom line? Howcan we evaluate who is contributing the most to the company's revenue?

- Training officer, paper industry,Indonesia

A Dear Training Officer:

The question of how to value employees is one that is of interest to manymanagers and researchers alike. Working with my research partner, John Boudreauof Cornell University, we have discovered that the key issue is not how muchvalue is created, but how much value would change if there were a change in thetalent pool.

One question to consider is: how would the organization benefit if our bottom25 percent of workers performed as well as our top 25 percent? In many "lowvalue" jobs, there could be a significant change in value to theorganization if performance improved.

For example, using this concept the impact of improving pilot performancewould be far less than improving courier performance for FedEx (in Asia). Butthat does not imply that pilots are any less valuable. It does indicate whereincremental investments would likely yield the greatest value.

Ask the following questions to identify critical talent pools:

  • Is this talent associated with a strategic resource (customers, brands,patents, etc.)?

  • Is this talent pool linked to a constrained business process?

  • Are these people highly sought after by key competition?

If the answer is yes, investing in them to improve their performance willcreate value.

 

SOURCE: Pete Ramstad, executive vice president for strategy and finance,Personnel Decisions International, March 2, 2001.

LEARN MORE: Read the article "What Employees AreWorth"

The information contained in this article is intended to provide usefulinformation on the topic covered, but should not be construed as legal advice ora legal opinion. Also remember that state laws may differ from the federal law.

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 The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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