Should Your Organization Attempt to Value Its Human Resources

by Eric Flamholtz



To survive, at minimum, or to grow and develop, all organizations must manage people effectively. The effective management of people means that manpower planning must be a part of overall corporate strategy, for corporate goals determine the tasks which must be performed. Tasks, in turn, identify the organizational roles that must be filled, the recruitment goals that must be established, the types of people and skills required, the compensation and other rewards which must be offered, and the training needed by present and future personnel. But even these functions merely provide management with the inputs, the raw human material, that must be effectively used, developed, and maintained if the organization is going to continue successfully. Despite the obvious interdependence between overall organizational goals and the management of manpower, managers are typically handicapped by a lack of relevant, timely, and reliable information about their human resources. The information provided by measures of human resource value are essential to managers if they are to make sound decisions and monitor their effectiveness in managing people.

California Management Review

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