During the past few decades, the nature of work has undergone remarkable changes. The focus of our activities has evolved from being an industry-based economy to a much broader knowledge-based economy. Knowledge is everything. In the systems-based paradigm, knowledge is seen, deterministically, as the appropriate collection of information. The paradigm goes even further by stating that the successor of knowledge is understanding. Knowledge is bland without the understanding of how and why information has been collected. A child can remember that 2x2=4, but if you ask him the answer to 41x78, he won’t be able to answer you without understanding the concepts underlying this equation.
We are spending a lot of time trying to understand problematic dynamics in our organisations. This is especially true for the things that cost us a lot of money. If we can understand why it is happening, we can do something about it. Our human capital is one of those things. Statistics show that organisations spend an average of sixty percent of their total revenue on their salary bill, not even mentioning the costs of absenteeism, presenteeism, and productivity losses. Different theories, paradigms and hypotheses have been developed and tested to help us understand our human capital. The concept is straightforward: You cannot manage what you cannot measure.
Sir Francis Galton, the father of psychometrics and regression always advised: “Whenever you can, count!” – In order to measure, we have to quantify. This brings us to our next question: How do we quantify the unquantifiable? If human capital was easily quantifiable, we wouldn’t have a speck of the problems we are facing on a daily basis. The challenge in quantifying is to know what to measure, how to measure it and whether the measurements are meaningful. |
Knowing what to measure and how to measure it is a daunting task which requires intricate research of different dimensions and their interactions. Hypotheses are tested and re-tested in order to establish a holistic model that creates synergy by dimensions interacting together as a system. The outcome of the model is greater than the sum of its parts. The South African Health and Wellness Survey (SAEHWS) has been researched for ten years in this particular way.
The second challenge of quantifying is knowing whether the measurements are meaningful. This involves the validity and reliability of measurement. Validity, or more specifically construct validity, deals with the extent to which an instrument exclusively measures the intended psychological dimensions in order to guide consequential decision-making. It involves proving that the instrument conclusions are accurate, adequate and appropriate indicators for the dimensions measured. Validity has to be proved throughout different cultures and demographics. Following ten years of cutting edge research, the developers of the SAEHWS have refined the instrument to be culturally sensitive – thus exhibiting no bias against cultural groups and different demographics in South Africa.
Another dilemma in achieving meaningful measurement relates to the reliability of measurements. Lee J. Cronbach, the father of the alpha coefficient (1951), published his final article in 2004. In this article he quite uniquely described the concept of reliability. He said that if, hypothetically, the instrument could be applied twice on the same individual and on the second occasion the individual remains unchanged, without memory of the first measurement, the consistency of the two measurements would indicate the reliability of the measurement. If the reliability of a measurement is not satisfactory, |
the results of the measurement cannot be trusted, even for a well-validated instrument. Afriforte provides the reliability statistics for each project that is conducted so you can make confident decisions based on the results.
The moral of the story is: Beware of cheap thrills. It is ineffective to make important decisions based on results from an instrument that is not supported by a thoroughly-researched model, or has not been validated for our multi-cultural society in South Africa, even if it does work well abroad.
But most importantly, remember this: If you want to manage your human capital asset effectively, you have to be able to measure the dynamics driving it.
Ian Rothmann - Chief Information Officer, Afriforte |
