The Bill of Health Index: HR Metrics that Motivate Optimum Productivity for Sustained Growth and Business Continuity
Business has focused on the bottom line, ethics, and environment. But for sustained growth and continuity, the personnel who are responsible for these, ought to be the ones in focus. This requires a precise HR which, given the cost of materials, is able to predict the combination of personnel that can create a pre-determined value, in terms of the bottom line, environment, and ethical uprightness. The radical goal of the bill of health index, BHI therefore, is to make HR precise, like engineering, accounting, and sales & marketing. And the radical way to make our organizations more practical is to create a work culture in which the following two, 2 benefits are derived by the workforce:
- Synergy, in terms of the expertise that the less experienced personnel pick up, because they are part of the system
- ROI, includes all the usual benefits that the domain expert gets from the system
This requires that the conflict is resolved between the following antonyms:
- Segmentation, to distinguish the domain expert from the others
- Integration, to create a team spirit
This is achieved by:
- Adopting the appraisal technique outlined
- Creating the knowledge bank that feeds the appraisal model with the base data
The appraisal technique is a bit complex and cumbersome, but is fully computerised. It requires only four, 4 inputs, which are measured on instruments that are also fully computerised:
- The factor-Pc measures phenomenological compression
- The factor-Rn measures rationality
- The factor-√n measures the performance at task by the standard procedure
- The organisation’s ROI, ROIOrg
And the knowledge bank is derived by working with the domain experts in the organisation.
For starters, the work culture is tested on the bill of health index, BHI. This model is also fully computerised, with only three, 3 inputs; which are listed on the organisation’s financial report:
- Total Sales or Revenue
- Value Added, VA which can also be derived as: VA = Sales – Cost of materials
- Profit before tax
The BHI predicts the input of the workforce, according to how much value they are able to create; which depends on their dispositions to the following three, 3 factors, at once:
- The bottom line
- Ethics and
- The environment
This means that this index actually combines the power of the current three, 3 indices that are used to evaluate organisations for best practice:
- S & P 500: Bottom line
- Most Ethical Companies, WME 100: Ethics
- Most Sustainable Companies, WMS 100: Environment
The score is optimum at BHI = 1.42.
Below this, for BHI < 1.42 the human resource, HR may be underutilised, which signifies waste.
And above it, for BHI > 1.42, this signifies greed, from excessive profiteering; usually as a result of the overly focus on the bottom line, to the neglect of ethical and environmental issues.
Sample data is presented for three, 3 organisations:
- A fortune 500 automobile company, characterised by a high cost of materials
- A fortune 500 service company, which also spends high on materials
- A cement company, which spends minimally on materials
In addition, sales is predicted, given the cost of materials; along with the ROI and the personnel, C that can deliver it, which make target setting a breeze. It is this capacity that puts human resource management, HRM in the league of precision.
Firstly, business has sought to sustain growth as well as continuity. To this effect, businesses have shifted focus, to define the following three, 3 phases:
- The bottom line
- The environment
Each of these phases is represented by an index, against which organisations are compared globally, respectively as follows:
- Standard and Poor, S & P 500 organisations
- World most ethical, WME 100 organisations
- World most sustained, WMS 100 organisations
A forth, 4th phase is in the making however, which ought to have the potential to contain the entire first, 1st three, 3. This phase is expected to focus on the personnel, who are at once responsible for the bottom line, ethics, and environment.
Secondly, the human resource function, HR has evolved from a team of administrators into the current strategic business partners. To fulfil this role sustainably however requires that it is precise like the other members of the partnership including engineering, accountancy, sales and marketing. For instance, engineering is able to specify new products precisely. And accountancy is able to cost the required investment accordingly. So also is marketing and sales able to turn these products into cash. All three, 3 members of the team speak in terms of the bottom line. Moreover, each of them can be predicted, according to their contributions to the business. All the sales or revenue and turnover are attributable to sales and marketing. But the engineer or professional needed to have designed and made the products and services, as the case may be. And the accountant makes the budget, to control the cash flow. To be precise, HR needs to predict the combination of staff that is able to make a certain return on investment, ROI. And the ROI needs to be monetised,
ROI. Additionally, they need to go beyond the bottom line, which can be fluked a few times; to ensure that the desired performance is sustainable. While productivity is determined by domain expertise, according to the energy that is available for the purpose; sustainability is the product of conduct, according to the entropy that is generated in the process of purpose attainment.
Conduct creates the enabling environment, to ensure that productivity thrives, sustainably. Recall the fine structure constant, α which physics has confirmed to determine the existence of intelligent life in the universe. Max Born and A.I. Miller have argued that if alpha, the fine-structure constant were bigger than it really is, it would be difficult to distinguish matter from ether, the vacuum or nothingness. Moreover, the task to disentangle the natural laws would be hopelessly difficult. Then the fact that alpha has just its value, for α = 1/137 is certainly not a chance happenstance but itself a law of nature. A business environment, in which more entropy is generated than the business can contain, is inimical to survival, as the business can be occluded or extinguished. Conduct is dascribed as a function of the size of reward, Rw that is acceptable to the players in the industry. And productivity, XTY is a function of the appropriateness of the responses to stimuli, which in this case is the performance at task by the standard procedure, to ensure that specifications are satisfied. It is therefore possible that personnel are productive, for optimum customer satisfaction, CSN but because they lack conduct, due to greed and waste for instance, sustenance is truncated, due to minimised financial security, FSTY.
If the solution to business growth and continuity is personnel, which is the domain of HR, then psychology would hold the key to the success in this arena. But because of the inadequacy of the methodology, the advance in phenomenology has lagged behind behaviourism. And it is this arm of psychology that is concerned with consciousness, thought, and mind; which are the core elements of the human resource. This creates a third, 3rd angle to the problem.
A forth, 4th dimension, which is however related to the third, 3rd one is the philosophical position that determines the desired psychological frame of mind. There is a type of thought that is creative. People who think in this way can be predicted, according to how much value they are able to create. The value creation paradigm is designed to complement the profit and loss paradigm. They are bases to define the value creation index, VCI and business continuity index, BCI respectively. Together, these two, 2 indices define the organization’s bill of health, BH by a third, 3rd index, BHI. The value creation paradigm is founded on the following core principles:
- The natural order, N-O
- The perception model of mind, PMM
- The standard procedure series, SPS
- A model of learning, LNGM
- The relativity model of humans, RMH
- The productivity model, PTYM
The N-O is a function of the following three, 3 principles:
- Duality, and
Relativity defines the problem as the infinite, ∞ number, N of alternatives from which choice has to be made, for N = ∞. Following Einstein’s relativity principle, an event in space can be viewed from an infinite number of positions, each of which defines a possible perspective of the event. But by the normality principle in games theory, a game of infinite moves can be reduced into one, 1 single move that is then iterated several times, from the beginning to the end. The duality series in operations research defines the possible outline of the optimum perspective of phenomena as follows:
Notice that this series defines the normal curve. Notice also that relativity defines the number line. Thirdly, the number line translates into the normal curve via the absolute, when every one of the numbers is squared, to remove the negatives.
This makes the duality series the analogue of the absolute, to make it an acceptable outline of the N-O. The perception model of mind, PMM describes a mind that is able to reconstruct the natural order, N-O formally in the following relationship:
f0 = 4(1 – 1/√z),
z = ½(4 – 1/√f1)
f1 = Perception Index, N = 5
f0 = Sensation Index, N= 1
Thus, a mind that operates optimally would reduce a phenomenon, for N = 1; into the essential five, 5 components, for N = 5. It would surf through the N = ∞ number of items that describe the phenomenon, to derive these few. When the phenomenon that is described is a purpose to be achieved, this becomes the sixth, 6th item on the series that defines the standard procedure for the attainment of the purpose. Serially:
3. L2 F
2. A1 6. A
1. A2 5. L
The first, 1st four, 4 items on the standard procedure series, SPS define the duality series, which makes the SPS the analogue of the N-O. When a phenomenon, F is described, F2 so that the procedure, Fn for making it, according to the specifications that enable it to fulfil its purpose; is at once outlined, for F2 = Fn then the N-O would have been approximated. This capacity is acquired via the learning process. Learning is rooted in desire, which remains dormant until a decision is made to fulfil it. Then all the energy that is required would be given, according to the level of commitment. This is the motive strength, C’. It is expended in the following two, 2 ways:
- To derive the procedure, Fn for desire attainment, CWK
- To overcome the obstacles in the way, according to the person’s limitations, CNd
This defines the following relationship: C’ = CWK + CNd. It also reduces the mind into the following three, 3 components:
- Emotion, L
- Intellect, F and
- Will, A
The procedure is derived by the intellect, F and stored in the emotion, L which also houses the desire. It is in the will, A however that decisions are made, according to the person’s attitude or disposition to the phenomenon.
Each of the three, 3 components of the mind also define memory spaces respectively as follows:
- Subconscious memory
- Conscious memory
- Unconscious memory
The unconscious memory of the will drives the visceral systems, according to procedures that are etched from conception and birth. Thus the circulatory, respiratory, digestive, and reproductive systems for instance run automatically, even if people are not aware. They present a standard against which the procedures that are written via the learning process, and stored in the emotion’s subconscious memory, can be evaluated. This standard would be the same as the standard procedure, which is the analogue of the N-O. Like the visceral, procedures that have been learned do not have to be repeated. They are accessed automatically every other time they are required. Then, the voluntary motivated behaviours approximate the reflex behaviour. This means that the responses to stimuli, RES would always be appropriate, RGT for RES = RGT when the subconscious memory is populated by the standard procedure for the performance at task. Then, all the energy that is required to perform at the task, according to specifications, would be given. The model human would operate at this level of thought and consciousness.
Émile Coué found a relationship between the emotion, L and the intellect, F in which the emotion is a square function of the intellect, for L = F2. This is when all the procedures that a person derives and stores in the emotion, are standardised, for F2 = Fn. Recall that this would depend on the attitude, A according to the person’s disposition toward the phenomenon. Then the model human would be defined by an equation of the form, L = 1/A F2. The factor-L defines love, a positive emotion that assures the appropriate attitude, A to the object of love. Then the intellect would be expected to be at its optimum, which makes the person dependable, F (faith?) being able to deliver, according to specifications.
The model human is a 20%ter. Recall the Pareto Principle, summarised as the 80–20 rule; according to which 80% of the work in most organisations is done by 20% of the personnel. Then the 20%ters would form the strike team of leaders in the organisation. And below the 80%ter, it would be unreasonable to employ. The others would comprise the staffs between these limits. The quality of each person is defined on the productivity model presented below:
When the 20%ters accept the doubling of their investments as the optimum limit, for reward, Rw = 2, they will have also acquired a conduct, in addition to the domain expertise that characterises the highly productive. Growth would therefore be sustained by the migration from the 80%ters to the 20%ters. And business continuity would be assured by a strike team of leaders, who are at once productive, ethical, and sensitive to the environment. They approximate the natural order, N-O to perform at task by the standard procedure. They contribute optimum synergy, and minimum entropy, to ensure continuity. They think in a way that makes them predictable. Predictability makes HR precise like engineering, accountancy, and marketing and sales; which make up the other three, 3 members of the business partnership.
This approach to institutionalising an HR that is precise, and prepared for a partnership that is sustainable; and not merely speaking the language of the bottom line, but going beyond it to ensure sustained optimum productivity; derives from the philosophy of Immanuel Kant. He argued to the effect that nature has a secret plan that is unfolding in a universal history, which is to culminate in the institutionalisation of a culture that is capable of making the model human. This history has been noted in business, and HR; as well as in psychology and philosophy. In a broader context, the industrial and information revolutions actually define two, 2 phases of the evolution of human civilisation. Bottom line, the industrial revolution exposed the human propensity for waste. This became obvious with the advent of the six-sigma, 6σ technique, which also suggested the procedure as the solution. The information revolution sealed this suggestion with the emphasis on data. Data has been defined to include factual information, often in the form of facts or figures; including numbers, text, images, and sounds. The typical standard procedure is actually a system of facts, in series. Ultimately, the solution suggested in this work seeks to institutionalise a work culture, in which 20%ters are made.
The work culture that is suggested includes an appraisal model that evaluates the contribution of the workforce to sustainability as a function of customer satisfaction, CSN and financial security, FSTY formally as follows:
While CSN depends on productivity, XTY and the return on investment, ROI the FSTY derives from reward, Rw and the business environment, EB which are actually reciprocals. Formally:
The fundamental assumption that underlies this relationship is that reward is optimal at duality, for Rw = 2. Then EB would be a measure of the person’s contribution to the business environment. For EB > 1, this would indicate greed, as the person would have taken more than their due share of reward. And for EB < 1, this would be an indication of waste; due to under employment, when the staff are not at their optimum. To motivate the optimum performance at task, the appraisal model operates on the following principles:
- One for all, all for one
- From each according to their ability, to each according to their need
- What gets measured, gets done
- What we reward, we get
The first, 1st principle is typically military. It is operationalised on the model by varying the ROI. In the first, 1st measure, the individual ROI, ROIF is used. The model is run a second, 2nd time with the organisational ROI, ROIOrg. This measures the capacity for sustainability for each personnel, SusF as well as the organisation, SusOrg. The observed appraisal, AppO is the ratio of the individual, on the organisational value. This figure is divided by the expected appraisal, AppE to find the appraised value for each person. This ensures that each one is evaluated uniquely against themselves, as well as against the group.
This model actually measures the person’s actual contribution of the ROI to the organisation. This means that the ROI that is used in the sustainability measurement, ROIPC is a predicted value, from the following relationship:
The factor-C is actually a measure of the character of consistency or conduct. It is evaluated from the measure of phenomenological compression, Pc which is the capacity to reduce the infinite number of items that describe phenomena, for N = ∞ into the essential five, 5 for N = 5. This is operationalised in the approximation of the natural order, N-O by the personal order, P-O when the standard procedure is derived. This makes the standard procedure the analogue of the N-O. Then a person’s ability to perform at task would be determined by the capacity to approximate the standard procedure. And need would imply the deviance from this standard. In this case, skill is described as the capacity to perform at task by the standard procedure. This provides the basis to operationalise the second, 2nd principle. Then, the synergy, SGY that the person derives from the organisation is evaluated as the ratio of the appraised ROI, ROIApp on the predicted ROI, ROIPc. This measure distinguishes between the leaders and the others in the organisation, according to the following two, 2 conditions:
- In general for the leadership, individual synergy, SGYF would be less than the organisation’s SGYOrg for SGYF < SGYOrg
- It is sufficient however that individual synergy, SGYF is less than duality, for SGYF < 2
It is usually necessary to fulfil both conditions because of the unpredictability that characterises people who are not 20%ters. It confuses the data, as indicated on the tables presented below.
Thus, the typical organisation gives two, 2 kinds of reward as follows:
- ROI, for the 20%ters and
- Synergy, for the others, whose abilities or expertise are improved upon
When the ROI is monetised,
ROI then the monetary reward is apportioned according to the ROI that each person contributes. This would be larger for the 20%ters than for the others, but the latter would have been compensated by their enhanced abilities. The ROI is monetised according to the following relationships: ROI = Profit / ROI
Profit = Sales – Costs
ROI = Sales / Costs
This levels the playground, so that every staff is evaluated and rewarded according their contribution of ROIApp to the organisation. It does not matter whether they are engineers, accountants, sales and marketing, or HR; whether they are line or subsidiary staff.
For the establishment of this model, the ROIApp is related to the ROIPc by a factor of ten, 10 for ROIApp = 1/10 ROIPc, as indicated on the above tables. This relationship is repeated between the ROI derived by accountants, ROIAcct and the ROI derived from the perspective of HR, ROIHR for ROIHR = 1/10 ROIAcct as on the chart and data presented below:
These two, 2 relationships are bases to establish the measure of ROI, as well as its monetisation,
ROI presented in this work. The underlying arguments are presented below:
Given the following two, 2 relationships, from accountancy:
Sales = Profit + Costs: Profit = Sales - Costs
Sales = VA + CM: Value Added, VA = Sales – Cost of Materials, CM
The desire would be to establish a third, 3rd relationship, which predicts VA:
VA’ = 2Profit –
ROI: ROI = CM
With the assumption that profit is optimum at twice the investment, the following two, 2 relationships would hold:
Profit = ½ Sales: Which values profit at two, 2 units, for profit = 2
Profit = Costs: Sales is valued at four, 4 units, for Sales = 4; from Sales = Profit + Costs
But Profit = Sales – Costs; from which the following two, 2 relationships are derived:
ROI = Sales / Costs: ROI = 2; the ROI is actually the index equivalent of profit
ROI = Profit / ROI: ROI = 1; which reverts the index into its monetary equivalent
Then, the following hierarch would hold:
- Sales would have an index of four, 4 for Sales = 4
- The value added, VA would have an index of three, 3 for VA = ¾ of Sales
- Profit would have an index of two, 2 for Profit = ½ of Sales
ROIwould have an index of one, 1 for ROI= ¼ of Sales
And, the quantity of entropy, ENT generated in the organisation, FENT would be evaluated as the ratio of the predicted value added, VA’ on the actual value, for FENT = VA’/VA. This is the sustainability index. It is optimum within the following limits: 0.7 ≤ FENT ≤ 1.43
The business continuity index, BCI is also evaluated by predicting the profit factor or bottom line, by the following relationships:
%VA = Value Added / Sales
ROI = ROI / Sales
%Pr = Profit / Sales
%Profit’ = √ (%VA x %
When this factor is evaluated over a certain period of time, it is correlated with the actual measure for the period, to find the BCI as 2 – r, for r = the correlation coefficient. Recall the assumption that reward is optimum at duality. Then the BCI would be best at a unity, for BCI = 1.
A third, 3rd index, the value creation index, VCI is also evaluated as the ratio of the
ROI on the cost of materials, CM. Recall that the ROI actually predicts the CM. Like the FENT, this is an annual measure. And like the BCI it is also evaluated all time, over a certain period, by taking the correlation, r of ROI and CM. Then VCI = 2 – r. Notice that the BCI and VCI are evaluated on the same scale of measurement. Notice also that they are inverses. The relativity average of these factors is therefore taken, to measure the bill of health index, BHI for BHI = √ BCI x VCI). A sample data of these indices is presented for two, 2 organisations below:
These two, 2 organisations are radically different. The first, 1st creates stupendous value, for VCI = 176.4386. Apparently, its expenditure on materials is minimal. But it is lower than the second, 2nd on profit and bottom line, which’s expenditure on production materials, is enormous. When both the value creation and profitability scores are combined however, the second company turns out better, with BHI scores of 14.86 and 2.14 respectively. The first, 1st organisation is closer to being occluded by its environment. It needs to check the pricing of its products, to make it commensurate with the cost of materials. The first, 1st organisation manufactures cement, and is located at the source of materials; the second, 2nd makes cars.
A third, 3rd sample data is also presented below, for a service company. The value creation and profit indices are closer to the optimum, and this gives the organisation a better bill of health than the other two, 2. While the data on profit are related 98% of the times, the data on value creation are related merely 21% of the times.
The methodology employed in these analyses is founded on the following three, 3 principles:
- When the P-O is evaluated against the N-O a gap is observed, which defines Entropy
- This creates work, for which energy is required, to minimise gap and reduce entropy
- If greater entropy is not to be created, then work must be according to specifications
The entropy contribution is evaluated by measuring the observed gap, which is done on the f-scale, f0 and the correlation coefficient, r. Both of these are keyed to the normal curve, and therefore operate on the same scale of measurement. The energy component is evaluated as a slope, against the relativity principle, which is reduced to the number line. But it also anchors on the normal curve, which is achieved when the absolute of the number line is taken. The anchor is operationalised on the duality series, which has been assumed to outline the N-O. And the circle closes!!!
This defines self-containment, in which all the energy that is required within a system is given; so that it runs in circles, with no apparent beginning or end. This positions the intellect to resolve the paradoxes that characterise nature. It also defines the human potential, which the organisations participate to mould, when they create the opportunity for work. This paradox is embedded in the three, 3 assumptions that underlie this work:
- Reward is optimum at twice the investment, for sales = 2 profit and ROI = 2
The cost of materials, CM predicts the monetised ROI,
ROIfor ROI= f CM
- The duality series outlines the natural order, N-O
The first, 1st assumption feeds on the human propensity for greed, which is hardly fulfilled; and creates entropy when it is attained, as exemplified in the cement industry sampled above. While the aim would be to maximise profit infinitely, this only creates the potential for chaos, which people desire to avoid. In the second, 2nd assumption,
ROI and CM cannot be equal in reality. The ROI only increases when CM drops. These paradoxes are accounted for by the function, f that links sales and profit, as well as the ROI and CM. This would be defined as dual, for f = 2; which is the basis for the first, 1st and third, 3rd assumptions. In mathematical parlance, relativity, duality, and normality are represented by the following relationships, respectively:
- L = 1/A2 F2: F = √ (LA); ROI = Sales / Costs: an index
- L = 2F ± 1: F = (L ± 1) / 2); Profit = Sales – Costs: a monetary value
A2 = 1:
ROI= Profit / ROI : the monetary value is retained
The second, 2nd relationship is the differential of the first, 1st; as the third, 3rd becomes. In other words, relativity or the paradox is resolved by duality only when the latter corresponds with normality. Duality is a differential and defines a vector quantity. The duality model therefore at once represents growth, +1 and depreciation, -1. Normality is a scalar, with no definite direction or sign. And relativity is actually an acceleration quantity, which defines the rate, F at which normality changes, in either direction. As a fraction, the factor-F depicts depreciation. And as an integer, it is growth that is depicted. This allows both scores to remain positive, albeit that they define antonyms. In terms of the specific quantity that defines value, the paradox is resolved by the following relationship:
Z = 1 / (1 – 1 / X)
This converts a positive integer, X that is best at a unity, for X = 1 and depreciates as the value of X increases; into another positive integer, Z that is best at infinity, for Z = ∞ and depreciates as the value of Z decreases. Later in this work, the equality of unity and infinity is demonstrated, for 1 = ∞. These relationships recur through out the analyses.
For this appraisal model to be implemented however, following which the relevant indices can be derived, a knowledge bank needs to be created. This involves the systematic reduction of jobs into duties, activities, and subsequently, tasks; and then to standardise the procedure for the performance at each of the tasks. The jobs are derived from a consideration of the organisation’s vision, mission, objectives, and values. The bank creates a data base for the following analyses:
- Performance Appraisal
- Skill Gaps
For the skill gaps, skill, f0 is defined as the capacity to perform at task by the standard procedure. The score is best at a unity, for f0 = 1. This is when the standard is approximated exactly. It is optimum at f0 = 0.7, when only one, 1 of the four, 4 items on the scale is missed. And at f0 = 0.4, the staff would require to be trained on the particular skill, for missing out on two, 2 items. At f0 = 0.1, three, 3 items would have been misplaced and a change of departments, jobs, or profession might be advised. And at f0 = -0.2, which is the worst score when all four, 4 items are misplaced, a lay-off might be advised.
When the knowledge bank is created for organisations, it is the organisational kit, Org-K. It can also be prepared for professional institutes, as the kit for the particular institute. In these cases, the subjects are scored on the standard procedure, √n and core values, Vc respectively. This is based on the assumption that it is a person’s core value that determines their choice of professions. The goal is to ensure that job, profession, and talent are aligned. Talent is evaluated on the Pc-Kit and the Rn-Kit at once. While Pc defines phenomenological compression, Rn defines rationality as the capacity to reduce phenomena into the essentials. Talent is important because of another assumption that when it is found, work becomes a play. This is more so when the alignment is fully made. Then the effort that is involved in the learning process is made, willingly with minimum grumbles. Effort is a function of the following two, 2 factors:
- Attention, which is required at a 100%, for the period of …..
- Time, that is needed for the learning to be accomplished
This is different for individuals, according to their rates of absorption. Recall however that at play, this becomes a non-issue. It is at work that effort becomes a fuse, when the recommended alignment is out. This is manifested on the C-Score, which betrays both domain expertise and conduct, at once. Recall that this score predicts how much ROI that the person is able to make. Recall also that it is derived from the factor-Pc. And thirdly, apart from the 20%ters, for the others who may not be aligned, their appraised ROIAPP at work is not predicted by this score of the ROIPc. Note from the data however that the gap between the scores decrease as the factor-C improves and approaches unity, for C → 1 and Pc → 1. Fourthly, recall that the synergy, Sgy that is derived from the organisation is less for the 20%ter leadership who give, than for the others, who benefit expertise. It would therefore not make sense to employ a candidate who’s C-Score or ROI-Score is less than the organisation’s! This would only dilute the established culture.
In the same way as the factor-f0 is evaluated for each task uniquely, it is also evaluated all time, from the factors Rn and Pc. In both cases however, objectivity, f0 is evaluated as the approximation of the N-O. The following relationships hold in the latter derivation:
The factor-Fc is a measure of focus, which is the same as the measure of the factor-C, for C = (3Pc - 3) / 4. Moreover, focus actually derives from effort. The unit value of objectivity, f0 is measured on the F-Scale presented below:
Note the recurrence of ten, 10 as the index that connects sensation, Sn to objectivity, f0. As demonstrated on sales, 4 value added, 3 profit, 2 and the monetised
ROI, 1 the first, 1st second, 2nd third, 3rd and forth, 4th items on the f-scale are indexed 4, 3, 2, and 1 respectively. When these values are summed, as required by the scale, it gives ten, 10.
What is advocated here is a precision that enables HR to excel in the following activities:
- Put a value on people and organisations, uniquely according to their abilities to create value
- Institutionalise a work culture and environment in which this value is optimised, for sustained growth, as well as business continuity
The precision is achieved from first, 1st principles. Given the appropriate philosophical position therefore, the desired psychological frame of mind is derived; which translates into a sociological harmony that balances communities, organisations, and the environment. The organisations have the responsibility to motivate this harmony, being the hub of productivity. And HR has the responsibility to lead the change, as the function that controls the human resource. As the bit to the horse, so is the pocket to the person.
The reward model distinguishes the monkey from the baboon. But it also notes that every baboon was once a monkey. Provision is made for the leadership and domain expert to take away what their abilities have earned, according to the ROI that is contributed. The others are at once encouraged to take advantage of the opportunity to enhance their abilities, in the hope to become baboons.
The core contribution of the leadership to this process is the knowledge bank. Moreover, this is able to ensure 100% workforce retention. It is the knowledge, and not the physical person that is the resource. Additionally, the assurance that drives the hope of becoming baboons has the potential to create optimum workforce engagement. This hope is greased when succession planning is based on the data that is generated from the following four, 4 kits that form the kernel of this strategy:
- The Rn-Kit, and
- The Pc-Kit, both of which measure talent recognition and development
- The Vc-Kit, which measures the choice of professions against core values
- The √n-Kit that measures the performance at task by the standard procedure, as the evidence of the alignment of job, profession, and talent.
All these are expected to at once translate into the creation of value, VCI as well as the bottom line, BCI; both of which give the organisation a clean bill of health, BHI. Then, HR would have earned a place, uniquely, as the forth, 4th partner that sustains the organisation, serially as follows:
3. Accountancy Business Partnership
2. Sales / Marketing 6. CEO
1. Engineering / Professional 5. Management
The engineer or professional is the minimum requirement in the partnership that needs to be nurtured, without whom there would be no products or services. Sales and marketing are the nature component of this union, who convert the products or services into the cash that the organisation seeks. This defines the work that the union needs to accomplish as the transition from the minima to the maxima; the nurture component to the nature item, respectively. Accountancy and HR contribute the energy that is required for the work to be done according to specification. The former controls the budget, to determine impulse as the rate at which the transition is to be achieved; while the latter controls the workforce, to sustain the transition. Serially:
The greatest known challenge to change would appear to be the sentiments, L that people attach to what they currently have. This expression of irrationality has been sensibly estimated to be three, 3 times the original value of the object, F for L = 3F. The observed sensibility is based on the relationship expressed on the growth model as L = 2F ± 1. The additional one, 1 from 2F to 3F is sufficient to tilt the scale in favour of the irrational. Especially as a unity can be shown to equal infinity, for 1 = ∞ as follows:
0 / 0 = 1: A number divided by itself, equals a unity
0 / 0 = ∞: A number divided by zero, equals infinity
Then, 1 = ∞; Qed
To remove this from the domain of mathematical fallacies, zero is established as both real and imaginary, as follows:
a + bi = c + di: The equality of complex numbers
a – c = (d – c) i: When like terms are grouped
Then, 0 = 0i; Qed
But rationality is able to match, and even surpass irrationality. Recall that when the natural order, N-O is approximated exactly, this gives a score of ten, 10 for Sn = 10 and f0 = 1. This gives the rational, an advantage of a unity over the irrational that is peaked at nine, 9. To disarm the challenges of change therefore, it would be sufficient to present a case that is rational. This is when the five, 5 essential components of the desired change are derived, as presented below, for the perspective that this work expresses:
3. BCI The Work Culture
2. Appraisal Model 6. Precise HR
1. Knowledge Bank 5. BHI
- If organisations are to accept to pay for the knowledge bank, as the minimum requirement for institutionalising the work culture,
- And then to make the effort that is required to nurture and translate the bank into a product that makes the appraisal model a second nature of the organisation;
- Then it is sufficient that the required energy is provided by the business continuity index, BCI which would determine the impulse, or rate of adoption,
- And the value creation index, VCI which motivates, to sustain the process.
- If these factors have been adequately presented, in a way that makes them understood, then this would be evident in the observed response to the bill of health index, BHI as a sufficient factor that establishes the HR function as precise.
Else, this paper needs to be revised!!!
The bill of health index, BHI is a forth, 4th index that is proposed, to complement the existing three, 3 that include the Standard and Poor, S & P 500, the world most ethical, WME 100, and the world most sustainable, WMS 100 organisations. It is derived from only three, 3 pieces of data that are already available in the organisation’s books as follows:
- The turnover, sales, or income
- The value added, which can also be evaluated from the cost of materials and
- The profit before tax
The instrument for evaluation is available for download as the bill of health index that is user friendly and can be interacted with intuitively. What is required include these pieces of data for up to fifteen, 15 years. For start ups, the data that is available would be sufficient.
For interpretation, the following three, 3 items are noted:
- The BCI and VCI are inverses, according to the direction in which growth is observed. The BCI is best at a unity for BCI = 1. But the VCI is best at infinity for VCI = ∞. This factor is however optimum at duality, for VCI = 2.
- The distinction is made between the investments on materials, and the workforce. The traditional measure of the value added, VA = Sales – Cost of Materials, CM actually makes this distinction precise. When the CM is deducted from the turnover, what is left is indeed a measure of the HR contribution to production.
- The distinction enables organisations that invest highly on materials, to be compared with those that do not have to invest so much, on level ground. The relativity average, F = √ (LA) gives the bottom line an advantage over value creation; the former being best at a unity, and the latter at infinity.
Recall that beyond a double of the investment, at a value creation of duality for VCI = 2, this would be an indication of greed. And a bottom line that does not equal the investment, for BCI = 1, would indicate waste, by which the HR is under utilised.
The style of thought that makes a person predictable culminates in the creation of value.
- It is rooted in a void that is formless; a scalar quantity, without direction; a random distribution with a correlation coefficient, r that tends to zero, by statistical parlance.
- Then a purpose is imposed, to define a vector that specifies a direction.
- Following this, a procedure is outlined for purpose attainment, which is equivalent to the acceleration quantity.
After the purpose is achieved, normalcy is restored. This is exemplified in the normal curve, which could have fitted the random distribution, at the beginning. Thus creativity starts out as a scalar, defines a vector, and accelerates towards the specified destination; following which normalcy returns, with deceleration.
In the case presented in this work, the void is defined by the observed random relation between the costs of materials, CM and the monetised
ROI. The vector is, the choice to double investments. This may not necessarily be achieved at the end. Like the hypothesis to research however, it is a working tool that enables the precise definition of an objective process. Acceleration is done when targets are set for sales, and therefore production, marketing, budgets, and personnel. At the end, it is the clean bill of health that matters, rather than the actual doubling of investments. This would be associated with a scattered plot of ROI on CM. And the cycle is complete.
In addition to the workforce retention, workforce engagement, and succession planning presented above as off shoots of this model, target setting and capacity assessment would become more objective and meaningful.
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- A Clean Bill of Health for Organisations: http://posts.fanbox.com/nzq16
- Agape Consultants: Business Continuity via HpRQ Optimisation and Sustained Growth, Tracked with a minimum of Metrics: http://posts.fanbox.com/6p91
- Self-Containment, The Fundament for Sustainability: http://posts.fanbox.com/f8816
- Sustainability Index: Monetisation of the ROI to Find HR in the Books: http://www.slideshare.net/peteranyebe/sustainability-index-monetisation-of-the-roi-to-find-hr-in-the-books-23495466
- Metrics that Measure Business Continuity: http://posts.fanbox.com/sxq16
- Performance Appraisal, a Talent Management Platform for Sustainability and a Stable Society: http://www.scribd.com/doc/121637311/Performance-Appraisal-A-Talent-Management-Platform-for-Sustainability-and-a-Stable-Society
- The Natural Order: Globalisation of HR Metrics to Optimise People Value for Sustained Organisational Growth and a Liquefied Business Environment: http://slidesha.re/QqXnFX
- The Perception Model Of Mind: http://www.slideshare.net/peteranyebe/the-perception-model-of-mind
- The Productivity Model: Toward an HRM that is at once a People Protector and Driver of Business Results: http://www.scribd.com/doc/135760780/The-Productivity-Model-Toward-an-HRM-That-is-at-Once-a-People-Protector-and-Driver-of-Business-Results
- The Identity Kit, Toward a Cultural Revolution, Driven by a Precise HR: http://www.scribd.com/doc/136268540/The-Identity-Kit-Toward-a-Cultural-Revolution-Driven-by-a-Precise-HR
- Philosophy in the 3rd Millennium, The Meeting Point of Physics and Psychology: http://www.scribd.com/doc/112290274/Philosophy-in-the-3rd-Millennium,-The-Meeting-Point-of-Physics-and-Psychology
- Precision, Making the Best of the Information Revolution: http://www.scribd.com/doc/112290816/Precision,-Making-the-Best-of-the-Information-Revolution
- God: The Breath that Fires the Equations that Describe the Universe: http://www.scribd.com/doc/112289323/God,-The-Breath-that-Fires-the-Equations-that-Describe-the-Universe
- Bill of Health Index: https://app.box.com/s/l38n15t4e6y8tru6xawe
- Business Continuity Index: https://www.box.com/s/ej6rt39x7jx58rx9trru
- The Sustainability Index: https://www.box.com/s/w2ffgf9v5jqhkwe4wrdc
- The Leadership Model: https://www.box.com/s/dxed1uuoahv4ys2odyir
- The Productivity Model: https://www.box.com/s/iqquybwot9otknabzfa9