Human Capital Study:
Slides
These slides must be accompanied by a PDF document () entitled:
“Human Capital ROI: Written Report”
Dr. Nick Bontis
McMaster University
nbontis@
List of Participating Organizations
ABN AMRO North America Inc.
Allstate Insurance Company
AMP Australia
AMP UK
Andersen Consulting
Aon
AXA Client Solutions
Blue Cross Blue Shield of Florida
Blue Cross Blue Shield of Illinois / Texas
Blue Cross Blue Shield of North Carolina
CNA Commercial Insurance
Equitax
Farmers Insurance Group
Hartford Financial Services
Hewitt Associates, LLC
Intermountain Health Care
International Monetary Fund
Merrill Lynch
National City Corp.
Northwestern Mutual Life
Penn National Insurance
PNC Bank
Savings Bank of Utica
United Health Group
Zurich .
Quantitative Metric Model
Human Capital
Effectiveness
Human Capital
Valuation
Human Capital
Depletion
Human Capital
Investment
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Descriptive Statistics for HCV Sample - Means
Full-time regular employees 13,149 Part-time regular employees 676
Regular employees 13,795 Contingent employees 1,820
Total headcount 16,353 Total Full-time equivalents 21,006
Headcount: Executive % Headcount: Supervisor %
Headcount: Professional % Headcount: Administrative %
Average age: Executive 48 years Average age: Supervisor 42 years
Average age: Professional 38 years Average age: Administrative 38 years
Tenure: Executive 15 years Tenure: Supervisor: 11 years
Tenure: Professional 8 years Tenure: Administrative 7 years
Total compensation cost $ 998,173,818 Average year of incorporation 1902
Total workforce trained 12,823 Total training cost $ 45,582,889
Revenues $ 8,534,652,304 Operating expenses $ 7,510,438,534
Net profit after tax $ 659,560,770 Return on assets %
HC Effectiveness - Revenue Factor
Saratoga Institute HRFR 1998 Sample
HC Effectiveness - Expense Factor
Saratoga Institute HRFR 1998 Sample
HC Effectiveness - Income Factor
Saratoga Institute HRFR 1998 Sample
HC Effectiveness - Human Capital ROI
Saratoga Institute HRFR 1998 Sample
HC Valuation - Compensation Revenue Factor
Saratoga Institute HRFR 1998 Sample
HC Valuation - Compensation Expense Factor
Saratoga Institute HRFR 1998 Sample
HC Valuation - Compensation Factor
Saratoga Institute HRFR 1998 Sample
HC Valuation - Executive Compensation
Saratoga Institute HRFR 1998 Sample
HC Valuation - Supervisory Compensation
Saratoga Institute HRFR 1998 Sample
HC Investment - Development Rate
Saratoga Institute HRFR 1998 Sample
HC Investment - Training Investment
Saratoga Institute HRFR 1998 Sample
HC Investment - Training Cost Factor
Saratoga Institute HRFR 1998 Sample
HC Depletion - Voluntary Turnover
Saratoga Institute HRFR 1998 Sample
HC Depletion - Involuntary Turnover
Saratoga Institute HRFR 1998 Sample
HC Depletion - Total Separation Rate
Saratoga Institute HRFR 1998 Sample
Significant Pearson Correlations
1st measure and 2nd measure Pearson
Human Capital Effectiveness
Revenue Factor Average tenure at company of Supervisors **
Revenue Factor Average tenure at company of Administrative **
Expense Factor Average tenure at company of Executives **
Expense Factor Average tenure at company of Supervisors **
Expense Factor Average tenure at company of Administrative **
Income Factor Average tenure at company of Supervisors **
Human Capital Valuation
Compensation Factor Headcount percentage breakdown of Executives **
Human Capital Investment
Training cost per trained employee Average age of Executives - **
Training cost per trained employee Average age of Professionals - **
Training cost per trained employee Average tenure of Professionals - **
Human Capital Depletion
Voluntary turnover Average tenure at company of Administrative - **
Areas of Concern
Perceptual Means: Lowest and Highest 10
LOWEST 10
P77 Information systems include employee knowledge.
P39 Our systems (., files and databases) contain knowledge that is easily accessible.
P61 Our "time to market" for new products and services is better than our competitors.
P42 Our organization has methods for capturing and retaining the knowledge of its workforce.
P40 We have a system for continually refreshing our knowledge base.
P58 Our organization exploits new business opportunities quickly.
P76 Our organization has effective mechanisms for capturing individual employee knowledge an
packaging so that it can be shared with others.
P44 Our organization captures and utilizes information from suppliers.
P75 Employees systematically document and pass on their knowledge.
P46 Our organization captures and utilizes information from trade associations.
HIGHEST 10
P36 Our employees generally have the intelligence and aptitude to succeed.
P47 We nourish our corporate relationship with the community.
P7 Employees commit to their assigned tasks to completion.
P33 Competitors target our key personnel for recruitment.
P80 Our company's reputation in the marketplace is favorable.
P38 Our systems (., files and databases) contain useful knowledge.
P32 Recruits perceive that our employees are well respected within the industry.
P35 Employees have the necessary knowledge, skills, and competencies to succeed.
P81 We provide adequate value to our shareholders.
P11 Employees are highly qualified for their positions.
NOTE: Items based on Likert-type scales from 1 (strongly disagree) to 7 (strongly agree).
Sample Item Statistics - Satisfaction, Commitment and Education
EMPLOYEE SATISFACTION (Alpha = )
P1 Employees are satisfied working here.
P2 The workplace environment/climate would be described as satisfactory.
P3 Employees are generally satisfied with their roles and responsibilities.
P4 Employees are satisfied with working conditions.
P5 Employees are satisfied with their opportunities for advancement.
EMPLOYEE COMMITMENT (Alpha = )
P6 Employees demonstrate commitment to the organization through high
performance.
P7 Employees commit to their assigned tasks to completion.
P8 Employees are dedicated to achieving the overall strategy.
P9 Employees feel a sense of belonging to the organization.
P10 Employees would say they feel a sense of ownership regarding
organization success/results.
EDUCATION (Alpha = )
P11 Employees are highly qualified for their positions.
P12 The general level of education in the organization is relatively high when
compared to the industry.
P13 Employees receive the appropriate training for their jobs.
P14 Training and development is available to anyone who needs it.
P15 The company has established the mindset and systems necessary to
support employees' continuing education needs.
Mean Std. Loading Item to Alpha if
Dev. Construct deleted
Correlation Matrix of Constructs - Part 1
1 2 3 4 5 6 7
1 Employee Satisfaction
2 Employee Commitment
3 Education
4 Employee Motivation
5 Value Alignment
6 Retention of Key People
7 Human Capital
8 Structural Capital
9 Relational Capital
10 Management Leadership
11 Process Execution
12 Knowledge Generation
13 Knowledge Sharing
14 Knowledge Integration
15 Business Performance
NOTE: > correlation is significant at the level (2 tailed)
> correlation is significant at the level (2 tailed)
Correlation Matrix of Constructs - Part 2
8 9 10 11 12 13 14
1 Employee Satisfaction
2 Employee Commitment
3 Education
4 Employee Motivation
5 Value Alignment
6 Retention of Key People
7 Human Capital
8 Structural Capital
9 Relational Capital
10 Management Leadership
11 Process Execution
12 Knowledge Generation
13 Knowledge Sharing
14 Knowledge Integration
15 Business Performance
NOTE: > correlation is significant at the level (2 tailed)
> correlation is significant at the level (2 tailed)
HC Conceptual Model
Managerial Leadership
Value Alignment
Retention of Key People
Human Capital Depletion
Business Performance
Employee
Satisfaction
Employee
Commitment
Employee
Motivation
Education
Human
Capital
Relational
Capital
Human Capital
Effectiveness
Structural
Capital
Process
Execution
Knowledge
Integration
Knowledge
Generation
Knowledge
Sharing
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R2 = %
R2 = %
R2 = %
R2 = %
