World_Report_on_HR_Challenges_2010

Planning sources proprietary web survey with 5561

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Unformatted text preview: yee. Algebra is used to factor in the number of people employed (P): R – MC – D PC P = – P P People Value added Average per person cost per employed 1 (P) (VAP) person (ACP) The equation determines an average personnel cost per person employed (ACP) and the value added per person (VAP). What exactly does VAP reveal? To answer this question, consider the following simple graphic: MC R D Employees generate revenues (R) from their customers, so the simplest productivity metric is revenues per person (R/P). Many companies use this metric. But to generate Workonomics (continued) A More Useful Way to Calculate Profit revenues, employees need materials, which are represented by MC (material costs), and they use machines and other assets that are accounted for through depreciation (D). They add value by leveraging these inputs. So a more sophisticated productivity metric recognizes material costs and depreciation through the following equation: ductivity per employee and the average personnel cost per employee, multiplied by the number of employees. This equation links the control of HR performance with the key financial metric. If a company uses a financial metric other than EBIT (such as economic profit), the equation could be readily adjusted. (R – MC – D) / P These new HR metrics are easy to calculate for companies or business units. Value added per person can be the starting point for understanding the productivity of business units and for adequately compensating value-added performance, as well as for controlling personnel costs and head counts. The resulting insights into people performance will enable companies to make smarter and better-balanced decisions, especially if their goal is to cut costs wisely in times of crisis. This term in the second equation is referred to as value added per person. Therefore, EBIT can be written as: = (VAP – ACP) P In this restated version, EBIT is expressed through three people-oriented metrics as the difference between pro- Total Workforce Management at Deutsche Telekom Deutsche Telekom, the global telecommunications group, rolled out a successful implementation of strategic workforce planning in two-thirds of its German business units in 2008 and 2009. By 2010, the company was ready to widen the scope of the program to launch Total Workforce Management (TWM). Alongside the existing quantity and cost dimensions, Deutsche Telekom added skill, demographic, and quality dimensions, and then rolled out the new program internationally. Concurrently, HR integrated itself not only in the planning process but also throughout the entire management cycle, including strategic and financial planning, monitoring, and controlling processes. The program has three goals: ◊ To develop a systematic approach that will optimize medium-term internal and external capacities ◊ To derive strategic HR initiatives from a comprehensive and detailed view of all relevant workforce dimensions ◊ To enable HR business part...
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This document was uploaded on 09/30/2013.

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