Home > Articles > Business & Management > Human Resources

This chapter is from the book

How a Decision Science Influences HR Measurement

When HR measures are carefully aligned with powerful, logical frameworks, human capital measurement systems not only track the effectiveness of talent policies and practices, they actually teach the logical connections, because organization leaders use the measurement systems to make decisions. This is precisely what occurs in other business disciplines. For example, the power of a consistent, rigorous logic, combined with measures, is what makes financial tools such as economic value added (EVA) and net present value (NPV) so useful. They elegantly combine both numbers and logic, and help business leaders become better at making decisions about financial resources.

Business leaders and employees routinely are expected to understand the logic that explains how decisions about money and customers connect to organization success. Even those outside the finance profession understand principles of cash flow and return on investment. Even those outside the marketing profession understand principles of market segmentation and product life cycle. In the same way, human capital measurement systems can enhance how well users understand the logic that connects organization success to decisions about their own talent, and the talent of those whom they lead or work with.

The greatest opportunity is in improving those decisions that are made outside of the HR function. Just as with decisions about financial and customer resources, talent decisions reside with executives, managers, supervisors, and employees who are making decisions that impact talent, including their own talent, as well as those they are responsible for or interact with. Even in core HR processes, such as succession planning, performance management, staffing, and leadership development, improvements in effectiveness rely much more on improving the competency and engagement of non-HR leaders than on anything that HR typically controls directly.

Why use the term science? Because the most successful professions rely on decision systems that follow scientific principles and that have a strong capacity to incorporate new scientific knowledge quickly into practical applications. Disciplines such as finance, marketing, and operations provide leaders with frameworks that show how those resources affect strategic success, and the frameworks themselves reflect findings from universities, research centers, and scholarly journals. Their decision models and their measurement systems are compatible with the scholarly science that supports them. Yet, with talent and human resources, the frameworks used by leaders in organizations often bear distressingly little similarity to the scholarly research in human resources and human behavior at work. For examples, see the work of Sara Rynes and colleagues.1

For measures to support a true decision science, they must do more than just incorporate facts and numbers. More specifically, a decision science for talent draws upon and informs scientific study related to people in organizations. There is a vast array of research about human behavior at work, labor markets, and how organizations can better compete with and for talent and how it is organized. Disciplines such as psychology, economics, sociology, organization theory, game theory, and even operations management and human physiology all contain potent research frameworks and findings based on the scientific method. A scientific approach reveals how decisions and decision-based measures can bring the insights of these fields to bear on the practical issues confronting organization leaders and employees. You will learn how to use these research findings as you master the HR measurement techniques described in this book.

Boudreau and Ramstad noted five important elements in a mature decision science: a logical decision framework; management systems integration; shared mental models; a focus on optimization; and data, measurement, and analysis. In this book, we focus on two of these: logical decision frameworks and the data, analysis, and measures supporting them. So, let's define what we mean by a decision framework and how measures integrate with it.

Decision Frameworks

A decision framework provides the logical connections between decisions about a resource (for example, financial capital, customers, or talent) and the strategic success of the organization. This is true in HR, as we show in subsequent chapters that describe such connections in various domains of HR. It is also true in other more familiar decision sciences such as finance and marketing. It is instructive to compare HR to these other disciplines. Figure 1-1 shows how a decision framework for talent and HR, which Boudreau and Ramstad called "talentship," has a parallel structure to decision frameworks for finance and marketing.

Figure 1-1

Reprinted by permission of Harvard Business School Press, from Beyond HR: The New Science of Human Capital by John Boudreau and Peter M. Ramstad. Boston, MA, 2007, pp. 31. Copyright © 2007 by the Harvard Business School Publishing Corporation. All rights reserved.

Figure 1-1 Finance, Marketing, and Talentship Decision Frameworks.

Finance is a decision science for the resource of money, marketing is the decision science for the resource of customers, and talentship is the decision science for the resource of talent. In all three decision sciences, the elements combine to show how one factor interacts with others to produce value.

To illustrate the logic of such a framework, consider marketing as an example. Investments in marketing produce a product, promotion, price, and placement mix, which creates responses in certain customer segments, which in turn creates changes in the lifetime pro fits from those customers. Similarly, with regard to talent decisions, efficiency describes the connection between investments in people and the talent-related programs and practices they produce (such as cost per training hour). Effectiveness describes the connection between the programs/practices and the changes in the talent quality or organizational characteristics (such as whether trainees increase their skill or their interactions with others in the organization). Impact describes the connection between the changes in talent/organization elements and the strategic success of the organization (such as whether increased skill actually enhances the organizational processes or initiatives that are most vital to strategic success). The chapters in this book show how to measure not just HR efficiency, but also elements of effectiveness and impact. In addition, each chapter provides a logical framework for the measures, to enhance decision making and organizational change.

Data, Measurement, and Analysis

In a well-developed decision science, the measures and data are deployed through management systems, they are used by leaders who understand the principles, and they are supported by professionals who add insight and expertise. In stark contrast, HR data, information, and measurement face a paradox today. There is increasing sophistication in technology, data availability, and the capacity to report and disseminate HR information, but investments in HR data systems, scorecards, and integrated enterprise resource systems fail to create the strategic insights needed to drive organizational effectiveness. HR measures exist mostly in areas where the accounting systems require information to control labor costs or to monitor functional activity. Efficiency gets a lot of attention, but effectiveness and impact are often unmeasured. In short, many organizations are "hitting a wall" in HR measurement.

InformIT Promotional Mailings & Special Offers

I would like to receive exclusive offers and hear about products from InformIT and its family of brands. I can unsubscribe at any time.


Pearson Education, Inc., 221 River Street, Hoboken, New Jersey 07030, (Pearson) presents this site to provide information about products and services that can be purchased through this site.

This privacy notice provides an overview of our commitment to privacy and describes how we collect, protect, use and share personal information collected through this site. Please note that other Pearson websites and online products and services have their own separate privacy policies.

Collection and Use of Information

To conduct business and deliver products and services, Pearson collects and uses personal information in several ways in connection with this site, including:

Questions and Inquiries

For inquiries and questions, we collect the inquiry or question, together with name, contact details (email address, phone number and mailing address) and any other additional information voluntarily submitted to us through a Contact Us form or an email. We use this information to address the inquiry and respond to the question.

Online Store

For orders and purchases placed through our online store on this site, we collect order details, name, institution name and address (if applicable), email address, phone number, shipping and billing addresses, credit/debit card information, shipping options and any instructions. We use this information to complete transactions, fulfill orders, communicate with individuals placing orders or visiting the online store, and for related purposes.


Pearson may offer opportunities to provide feedback or participate in surveys, including surveys evaluating Pearson products, services or sites. Participation is voluntary. Pearson collects information requested in the survey questions and uses the information to evaluate, support, maintain and improve products, services or sites, develop new products and services, conduct educational research and for other purposes specified in the survey.

Contests and Drawings

Occasionally, we may sponsor a contest or drawing. Participation is optional. Pearson collects name, contact information and other information specified on the entry form for the contest or drawing to conduct the contest or drawing. Pearson may collect additional personal information from the winners of a contest or drawing in order to award the prize and for tax reporting purposes, as required by law.


If you have elected to receive email newsletters or promotional mailings and special offers but want to unsubscribe, simply email information@informit.com.

Service Announcements

On rare occasions it is necessary to send out a strictly service related announcement. For instance, if our service is temporarily suspended for maintenance we might send users an email. Generally, users may not opt-out of these communications, though they can deactivate their account information. However, these communications are not promotional in nature.

Customer Service

We communicate with users on a regular basis to provide requested services and in regard to issues relating to their account we reply via email or phone in accordance with the users' wishes when a user submits their information through our Contact Us form.

Other Collection and Use of Information

Application and System Logs

Pearson automatically collects log data to help ensure the delivery, availability and security of this site. Log data may include technical information about how a user or visitor connected to this site, such as browser type, type of computer/device, operating system, internet service provider and IP address. We use this information for support purposes and to monitor the health of the site, identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents and appropriately scale computing resources.

Web Analytics

Pearson may use third party web trend analytical services, including Google Analytics, to collect visitor information, such as IP addresses, browser types, referring pages, pages visited and time spent on a particular site. While these analytical services collect and report information on an anonymous basis, they may use cookies to gather web trend information. The information gathered may enable Pearson (but not the third party web trend services) to link information with application and system log data. Pearson uses this information for system administration and to identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents, appropriately scale computing resources and otherwise support and deliver this site and its services.

Cookies and Related Technologies

This site uses cookies and similar technologies to personalize content, measure traffic patterns, control security, track use and access of information on this site, and provide interest-based messages and advertising. Users can manage and block the use of cookies through their browser. Disabling or blocking certain cookies may limit the functionality of this site.

Do Not Track

This site currently does not respond to Do Not Track signals.


Pearson uses appropriate physical, administrative and technical security measures to protect personal information from unauthorized access, use and disclosure.


This site is not directed to children under the age of 13.


Pearson may send or direct marketing communications to users, provided that

  • Pearson will not use personal information collected or processed as a K-12 school service provider for the purpose of directed or targeted advertising.
  • Such marketing is consistent with applicable law and Pearson's legal obligations.
  • Pearson will not knowingly direct or send marketing communications to an individual who has expressed a preference not to receive marketing.
  • Where required by applicable law, express or implied consent to marketing exists and has not been withdrawn.

Pearson may provide personal information to a third party service provider on a restricted basis to provide marketing solely on behalf of Pearson or an affiliate or customer for whom Pearson is a service provider. Marketing preferences may be changed at any time.

Correcting/Updating Personal Information

If a user's personally identifiable information changes (such as your postal address or email address), we provide a way to correct or update that user's personal data provided to us. This can be done on the Account page. If a user no longer desires our service and desires to delete his or her account, please contact us at customer-service@informit.com and we will process the deletion of a user's account.


Users can always make an informed choice as to whether they should proceed with certain services offered by InformIT. If you choose to remove yourself from our mailing list(s) simply visit the following page and uncheck any communication you no longer want to receive: www.informit.com/u.aspx.

Sale of Personal Information

Pearson does not rent or sell personal information in exchange for any payment of money.

While Pearson does not sell personal information, as defined in Nevada law, Nevada residents may email a request for no sale of their personal information to NevadaDesignatedRequest@pearson.com.

Supplemental Privacy Statement for California Residents

California residents should read our Supplemental privacy statement for California residents in conjunction with this Privacy Notice. The Supplemental privacy statement for California residents explains Pearson's commitment to comply with California law and applies to personal information of California residents collected in connection with this site and the Services.

Sharing and Disclosure

Pearson may disclose personal information, as follows:

  • As required by law.
  • With the consent of the individual (or their parent, if the individual is a minor)
  • In response to a subpoena, court order or legal process, to the extent permitted or required by law
  • To protect the security and safety of individuals, data, assets and systems, consistent with applicable law
  • In connection the sale, joint venture or other transfer of some or all of its company or assets, subject to the provisions of this Privacy Notice
  • To investigate or address actual or suspected fraud or other illegal activities
  • To exercise its legal rights, including enforcement of the Terms of Use for this site or another contract
  • To affiliated Pearson companies and other companies and organizations who perform work for Pearson and are obligated to protect the privacy of personal information consistent with this Privacy Notice
  • To a school, organization, company or government agency, where Pearson collects or processes the personal information in a school setting or on behalf of such organization, company or government agency.


This web site contains links to other sites. Please be aware that we are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of each and every web site that collects Personal Information. This privacy statement applies solely to information collected by this web site.

Requests and Contact

Please contact us about this Privacy Notice or if you have any requests or questions relating to the privacy of your personal information.

Changes to this Privacy Notice

We may revise this Privacy Notice through an updated posting. We will identify the effective date of the revision in the posting. Often, updates are made to provide greater clarity or to comply with changes in regulatory requirements. If the updates involve material changes to the collection, protection, use or disclosure of Personal Information, Pearson will provide notice of the change through a conspicuous notice on this site or other appropriate way. Continued use of the site after the effective date of a posted revision evidences acceptance. Please contact us if you have questions or concerns about the Privacy Notice or any objection to any revisions.

Last Update: November 17, 2020