Rethinking utility analysis: a strategic focus

Elizabeth F. Cabrera and Ángel Cabrera

DEE - Working Papers. Business Economics. WB from Universidad Carlos III de Madrid. Departamento de Economía de la Empresa

Abstract: Utility analysis is a technique which allows for the estimation of the financial impact of human resource (HR) interventions. While utility analysis methods have been available for decades, their application is still not widespread. Some argue that this is because managers do not understand the techniques and suggest that allowing managers to participate in the analysis would increase understanding and, as a results, use and acceptance of utility analysis. The current work posits that translating the value of HR interventions into financial terms may not be necessary. It may be more useful to determine the direct impact of HR programs on employee behaviors and attitudes. The impact of these changes on the bottom line may then be determined. Building upon the recently proposed multi-attribute utility analysis and the strategic perspective offered by the Balanced Scorecard, this paper presents a strategic utility analysis method. Strategic utility analysis requires that multiple outcomes, not only financial, be considered in order to determine the utility of a given HR intervention. It further stipulates that these outcomes should come directly from the company's business strategy. The strategy should imply certain organizational capabilities and strategic utility analysis should measure the contribution of HR interventions towards building these specific capabilities.

Date: 1999-06
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://e-archivo.uc3m.es/rest/api/core/bitstreams ... caba4df4dda8/content (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cte:wbrepe:6511

Access Statistics for this paper

More papers in DEE - Working Papers. Business Economics. WB from Universidad Carlos III de Madrid. Departamento de Economía de la Empresa
Bibliographic data for series maintained by Ana Poveda ().