Human Earning Power^® >

Rationale

Human Earning Power^® creates a workforce competitive advantage by changing the human resource paradigm from a “cost of business” to a “source of business value”. A cost versus value focus for a human resource program is a choice – a fundamental human resource choice!

Two concepts form the foundation of Human Earning Power^®:  Value and Earning Power.

The Value Rationale

Value is a relationship. Two variables comprise the relationship which can be expressed as a formula.
This formula graphically frames human resource decisions.

Value is “intrinsic” if it relates to the essential nature of a thing – its inherent value. We want to understand the “intrinsic value” of an organization’s human resource. Intrinsic value is not a subjective human resource judgment. It is a reasoned conclusion derived from several objective factors.

Value is positive. Which statement makes you feel better about yourself?
      "What I do brings value to my company." or "I’m a cost of doing business."

Value is a multi-dimensional criterion. Value increases if:

• X increases and Y remains constant
• X remains constant and Y decreases
• X increases and Y decreases

Cost is a single dimension human resource management criterion.

Feeling valuable and believing their work makes a difference creates high employee morale, a positive work attitude and better work results. Understanding that building employee value is a core human resource mission will enhance loyalty, reduce turnover and turnover related costs.

The Earning Power Rationale

Earning power is about sales, profits, resources available for producing them and the value created by those resources. Earning power applies to business and determines what business value is. Earning power also applies to people because people are the primary value creation resource. Because no asset or resource used in business is productive until somebody does something with it, the earning power of a business is only potential until converted into reality by people. In this sense the human resource represents conversion capacity – human earning power.

A business and people are interdependent as one cannot survive without the other, and earning power is the common denominator that binds the two together for whatever results are produced. The challenge is to apply human earning power capacity to business earning power potential in a way that creates the most value.