Most organizations create e-learning as a means to improve employee performance. Courses are supposed to deliver knowledge and skills that make workers better at their jobs. So if e-learning ...
Published 11 years ago
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Hi Dan,
I like where you're going with that, but I see two problems.
1: In many roles, and in many organizations, it's difficult to quantify the value an employee delivers (particularly since it can vary greatly from one employee to the next). Unless you're talking about a project with a multi-million dollar budget, it may not be worth the time and effort to calculate with that level of detail.
2: Your math is off. In your example, the working employee produces a net value of $100/hour, while the non-working one generates a cost of $50. That's a difference of $150/hour, not $200. In other words, the employees are being paid the same, regardless of activity. The only difference is the output.
Cheers,
Simon
I like where you're going with that, but I see two problems.
1: In many roles, and in many organizations, it's difficult to quantify the value an employee delivers (particularly since it can vary greatly from one employee to the next). Unless you're talking about a project with a multi-million dollar budget, it may not be worth the time and effort to calculate with that level of detail.
2: Your math is off. In your example, the working employee produces a net value of $100/hour, while the non-working one generates a cost of $50. That's a difference of $150/hour, not $200. In other words, the employees are being paid the same, regardless of activity. The only difference is the output.
Cheers,
Simon
- Hi Simon,
As to the first point, I know I'm in the minority on this, but I believe every organization can develop a value stream map.
We already do that, but it seems we're just guessing or using market rates.
Even rough numbers can be incredibly useful. Read Moneyball, if you haven't already (the movie's pretty good too).
What people thought was valuable in a baseball player turns out to have no significance whatsoever to whether teams won or lost. There was no meaningful way to assess value in organizations where people were being paid millions of dollars.
As to the math: let's see. (Accounting can be very creative, I'm finding, and it's obviously arguable.)
- The organization pays a person $50/hour.
- That person isn't adding the $150 value to the organization while being trained. The organization is taking a hit.
- Seems like we're out $200? Unless the training is so valuable that it will more than make up for the cost.
- Conversely, he works for $50/hour and adds $150, for a net gain of $100.
- So I can either lose $200 or make $100.
- I guess my real point is that math is hard and it makes my head hurt.
Thanks for getting me to think more deeply about that.
Dan
