What is the ROI of your decisions?

Turn to almost any organization in the country and a familiar thread is going to be heard – What is the ROI (Return on Investment) for this project? Human Resources is no different. Through the works of Bersin & Associates, who in their 2011 report “The Best Practices for the High Impact HR Organization” determined that the top challenge for HR Management was the ability to measure HR programs in financial terms and the work of Jac Fit-Enz and Wayne Cascio who each showed us how to measure HR management we have an idea on how to quantify the ROI of HR. The problem is that this view is concentrated in the metrics of hiring our human capital assets.

However regardless of how defining the ROI measurements are for the above efforts, we seem to be missing a whole other metric of HR ROI. I refer to it as the return of decisions. We complain that our human capital assets are no longer engaged with our organizations but then either knowingly or unknowingly allow our organizations to make very dump mistakes in treating those assets as valuable parts of the organization. Consider these recent enforcement activities:

  1. On May 1, a federal district court handed down a judgement in the case of EEOC vs. Hill County Farms a verdict in the case of abuse against human capital assets with intellectual disabilities in the amount of $240 million.
  2. May 10 a federal court handed down a verdict in the case of New Breed Logistics on a charge of Sexual Harassment which resulted in a fine of $1.5 million.
  3. May 1, a travel agency in Florida was found guilty of sexually harassing and retaliating against eight former employees.They were fined $20 million.
  4. Several years ago FedEx tried to convince the State of Massachusetts that their drivers were independent contractors resulting in a $3 million fine form the state.

So here is my question. It is my understanding that an organization is in existence reportedly for perpetuity and in doing so they answer to their stockholders. We know that the management of these organizations and others constantly review their products and services in order to determine whether these products and services are worth the effort to continue in their portfolio.We get that. As an organization we do the same thing with our portfolio of deliverables. But when do we reach the point where HR becomes the voice in the desert and tells management that the decision process on how we treat our human capital assets is bringing great harm to the future of our organization.

I have had some tell me that organizations plan for these fines in the name of running an organization based on their culture. But at what point does the way we have always  run the organization come into conflict with the return on investment into talent management by treating them less than human beings. At what point does our decisions governing behavior within the organization reach the point where we would not tolerate it if it was happening to us?

The ROI is a critical success factor within your organization as you need a profit to ensure continued operations. The way we normally determine that ROI leaves out the impact of our decisions of management.We can’t operate our organizations without the contributions of our human capital assets and we can’t ever expect them to be engaged in our organizations when we tolerate the atmosphere which created these large verdicts. Understand if we continue the decision process as it is, the fines will continue and get larger. Where is your tolerance level when you can tell the stakeholders that you are sorry for the increase drain on the corporate pocketbook because you have either allowed these decisions to continue to exist or tell the stakeholders that as the managers of organizational talent you did not know it was going on.

What is the ROI of your employee related decisions? Are you the next one we are going to read about who suffered the consequences of preventable illogical decisions in the name of your organization?

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This entry was posted in Business, Human Resources, Management, Organizational Process, Productivity. Bookmark the permalink.

One Response to What is the ROI of your decisions?

  1. Very informative & helpful post – my hopes are that many biz owners will read it!

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