Cost-value threshold: Difference between revisions

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Created page with "{{a|hr|{{image|Competence phase transition|png|The cost value threshold, yesterday}}}}{{d|{{PAGENAME}}|/kɒst-ˈvæljuː ˈθrɛʃˌhəʊld/|n|}}''Human resources science'': T..."
 
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{{a|hr|{{image|Competence phase transition|png|The cost value threshold, yesterday}}}}{{d|{{PAGENAME}}|/kɒst-ˈvæljuː ˈθrɛʃˌhəʊld/|n|}}''Human resources science'': The point in an organisation where the ''value'' provided by a given member of staff, or item of capital, plant or machinery exactly equals its ''cost''.
{{a|hr|{{image|Competence phase transition|png|The cost value threshold, yesterday}}}}{{d|{{PAGENAME}}|/kɒst-ˈvæljuː ˈθrɛʃˌhəʊld/|n|}}''Human resources science'': The point in an organisation where the ''value'' provided by a given member of staff, or item of capital, plant or machinery exactly equals its ''cost''.


The line isn’t scientific. It is very, very hard to quantify the “value” of those staff not in revenue generating roles, which in this day in age is most of us I mean them. And nor is an employee’s value necessarily stable. Some get better, some get worse. It is hard to know why.
The line isn’t scientific. It is very, very hard to quantify the “value” of staff not in revenue-generating roles. In this day in age, that is most of us. I mean ''them''.


Pure ideology suggests one should keep all staff as close to the cost-value threshold as you can. To those who over-contribute, you should pay more; those who under-contribute you should pay less.  
And nor is an one’s value over time necessarily stable. Some of us get better, some get worse. It is hard to know why.  


Practical reality (the difficulty with assessing what these people actually do, how valuable they are and what would happen if they left), human frailty and so on means this is never possible. You ''can’t'' just pay employees less, getting rid of them is expensive and coaching or managing them to better performance requires talent your [[human resources]] department is certain not to have. Paying good performers more just because they are, well, worth it, strikes against the heart of modern employee management. There is therefore a warm “safe zone” penumbra above the cost-value threshold where over-delivering employees can sit happily until bid away, and a cooler, and larger, “[[competence phase transition]]” ''below'' the line where net-negative staff can sit fairly safely plodding along without great risk of prejudice, even when a [[reduction in force]] comes along.
Pure [[High modernism|modernist]] ideology suggests the firm should keep all staff as close to the cost-value threshold as it can. Those who over-contribute, it should pay more; those who under-contribute it should pay less.
 
But practical challenges (namely, understanding what these people actually do, let alone how valuable it is), human frailty and so on means this won’t happen.  
 
You ''can’t'' just pay employees less, getting rid of them is expensive and coaching or managing them to better performance requires talent your [[human resources]] department is certain not to have. And paying good performers more just because they deserve it strikes against basic tenets of modern [[Human resources|human capital management]].  
 
There is therefore a warm “safe zone” penumbra above the cost-value threshold, where over-delivering employees can sit happily until finally bid away, and a cooler, larger “[[competence phase transition]]” space ''below'' the line where net-negative staff can sit, for years, safely plodding along without really helping, but also without great risk of prejudice, even when a [[reduction in force]] comes along.


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Revision as of 21:06, 22 November 2022

The Human Resources military-industrial complex
The cost value threshold, yesterday
The instrument (the “telescreen”, it was called) could be dimmed, but there was no way of shutting it off completely.
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Cost-value threshold
/kɒst-ˈvæljuː ˈθrɛʃˌhəʊld/ (n.)
Human resources science: The point in an organisation where the value provided by a given member of staff, or item of capital, plant or machinery exactly equals its cost.

The line isn’t scientific. It is very, very hard to quantify the “value” of staff not in revenue-generating roles. In this day in age, that is most of us. I mean them.

And nor is an one’s value over time necessarily stable. Some of us get better, some get worse. It is hard to know why.

Pure modernist ideology suggests the firm should keep all staff as close to the cost-value threshold as it can. Those who over-contribute, it should pay more; those who under-contribute it should pay less.

But practical challenges (namely, understanding what these people actually do, let alone how valuable it is), human frailty and so on means this won’t happen.

You can’t just pay employees less, getting rid of them is expensive and coaching or managing them to better performance requires talent your human resources department is certain not to have. And paying good performers more just because they deserve it strikes against basic tenets of modern human capital management.

There is therefore a warm “safe zone” penumbra above the cost-value threshold, where over-delivering employees can sit happily until finally bid away, and a cooler, larger “competence phase transition” space below the line where net-negative staff can sit, for years, safely plodding along without really helping, but also without great risk of prejudice, even when a reduction in force comes along.

See also

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