Cost-value threshold: Difference between revisions

From The Jolly Contrarian
Jump to navigation Jump to search
No edit summary
No edit summary
 
(One intermediate revision by the same user not shown)
Line 1: Line 1:
{{a|hr|{{image|Competence phase transition|png|The cost value threshold, yesterday}}}}{{d|{{PAGENAME}}|(“'''CVT'''”) /kɒst-ˈvæljuː ˈθrɛʃˌhəʊld/|n|}}
{{a|hr|{{image|Competence phase transition|png|The cost value threshold, yesterday}}}}{{d|{{PAGENAME}}|(“'''CVT'''”) /kɒst-ˈvæljuː ˈθrɛʃˌhəʊld/|n|}}


''Human resources science'': The point in an organisation where the ''value'' an employee, or capital item, provides, exactly equals its ''cost''. Quality being relative to cost, good staff sit above this line; poor ones below it.
The ''cost-value threshold'' is the point where an employee’s ''value'' exactly equals her ''cost''. Quality being relative to cost, ''good'' staff sit above this line; ''bad'' ones below it.


The “CVT” isn’t scientific. It is very, very hard to quantify the “[[Legal value|value]]” of non-revenue-generating staff. In this day and age, that is most of us. I mean ''them''.
The “CVT” isn’t scientific. It is hard to quantify the “[[Legal value|value]]” of non-revenue-generating staff, nor is that value stable through time. Some of us get better, some get worse. Contributions wax and wane. It is hard to know why.


And nor is one’s value over time necessarily stable. Some of us get better, some get worse. Contributions wax and wane. It is hard to know why.  
[[High modernism|Modernist]] ideology recommends keeping all staff as close to the CVT as possible. Reward those who over-contribute ''more'' to bring them into line; pay ''less'' to those who come up short.  


[[High modernism|Modernist]] ideology suggests one should keep all staff as close to the CVT as one can. To those who over-contribute, one should pay more to bring them into line; to those who come up short, one should pay less.  
But practically  — given difficulty understanding what these people actually do, let alone how valuable it is, human frailties, mortal weakness, market convention, labour laws and so on — this isn’t possible.  


But practical challenges (namely, understanding what these people actually do, let alone how valuable it is), human frailty, market conventions, labour laws and so on means this won’t happen.  
You ''can’t'' just pay crappy employees less. Getting rid of them is expensive and risky. Coaching dullards towards 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 the basic principal of modern [[Human resources|human capital management]] that the reward for loyalty is a ''discount'', not a premium.


You ''can’t'' just pay employees less. Getting rid of them is expensive and risky. Coaching or managing dull workers to better performance requires talent your [[human resources]] department, being comprised of exactly that kind of worker, 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]].  
So few employees sit exactly at the cost-value threshold.


There is, therefore, a penumbra: a warm “safe zone” ''above'' the CVT, where over-delivering employees can sit happily until their worth has drifted so far into the ionosphere that they are finally bid away, and a cooler, larger “[[competence phase transition]]” space ''below'' it where marginally net-negative staff can sit, for years, safely plodding along, not really helping, but also without great risk of prejudice, even when a [[reduction in force]] comes along.  
Most occupy a penumbra either side: a warm “safe zone” ''above'' the CVT, where ''somewhat'' over-delivering employees can sit happily until their worth has drifted so far into the ionosphere that they are finally bid away, and a cooler, larger “[[competence phase transition]]” space ''below'' the threshold where marginally net-negative staff can sit, for years, safely plodding along, not really helping, but also without great risk of prejudice, even when a [[reduction in force]] comes along.


Such inaction, however well intended, creates [[mediocrity drift]].
The different means of exit from this safe zone: voluntary departures from the top, and reductions in force to clear out at the bottom, generates an odd [[Mediocrity drift|drift towards mediocrity]].


{{sa}}
{{sa}}

Latest revision as of 19:32, 7 January 2023

The Human Resources military-industrial complex
Competence phase transition.png
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.
Index: Click ᐅ to expand:
HR

Comments? Questions? Suggestions? Requests? Insults? We’d love to 📧 hear from you.
Sign up for our newsletter.

Cost-value threshold
(“CVT”) /kɒst-ˈvæljuː ˈθrɛʃˌhəʊld/ (n.)

The cost-value threshold is the point where an employee’s value exactly equals her cost. Quality being relative to cost, good staff sit above this line; bad ones below it.

The “CVT” isn’t scientific. It is hard to quantify the “value” of non-revenue-generating staff, nor is that value stable through time. Some of us get better, some get worse. Contributions wax and wane. It is hard to know why.

Modernist ideology recommends keeping all staff as close to the CVT as possible. Reward those who over-contribute more to bring them into line; pay less to those who come up short.

But practically — given difficulty understanding what these people actually do, let alone how valuable it is, human frailties, mortal weakness, market convention, labour laws and so on — this isn’t possible.

You can’t just pay crappy employees less. Getting rid of them is expensive and risky. Coaching dullards towards 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 the basic principal of modern human capital management that the reward for loyalty is a discount, not a premium.

So few employees sit exactly at the cost-value threshold.

Most occupy a penumbra either side: a warm “safe zone” above the CVT, where somewhat over-delivering employees can sit happily until their worth has drifted so far into the ionosphere that they are finally bid away, and a cooler, larger “competence phase transition” space below the threshold where marginally net-negative staff can sit, for years, safely plodding along, not really helping, but also without great risk of prejudice, even when a reduction in force comes along.

The different means of exit from this safe zone: voluntary departures from the top, and reductions in force to clear out at the bottom, generates an odd drift towards mediocrity.

See also

Retrieved from "https://jollycontrarian.com/index.php?title=Cost-value_threshold&oldid=70561"