Explain the Human Organizational Dimensions Method.
Human Organizational Dimensions Method is based on Likert Bowers model of group values to an organization which is based on the premise that employee attitude is the most important factor that governs the productive behaviour of employees on the job, it has been considered that the employee attitude index multiplied by the wages payable should reflect the likely benefits as against wages payable as the cost and the gap between the benefits and the cost should reflect an individual’s value. Attitude though important, may not be the only influencing factor. In the final analysis it is the interplay of various other factors that propels performance.
For computing a monetary estimate of the expected change in the value of human organization, the following steps are suggested:
- Measure the key dimensions of human organization, using a Likert scale at specified time periods. These are in non-monetary measurements.
- The scaled responses to questionnaire items called ‘scores’ are then standardized by statistical methods to take into account the degree of variability of the set of responses. This is done for responses in each time period.
- The difference between two standardized scores from one period to the next is then calculated. This difference (called delta) represents the change in an index of specified dimensions of the human organization.
- There is an estimation of expected future change in end-result variables from present changes in dimensions of the human organization. Specifically, for a given variable the delta is multiplied by coefficient or .correlation between that variable intellectual capital and the end-result variable. This provides an estimate in standard scores of the accounting anticipated change in the end-result variable attributable to a change in the human organizational dimension believed to cause that change.
- Lastly, the standard scores are converted into the measuring monetary units for the end-result variables.
The model needs to be firmly established. In absence of an acceptable measure of benefits against the cost of wages, the gain concept as hypothesized may not reflect HR value. There is some controversy about the validity and reliability of this method.
According to Flamholtz, future research on this method is necessary because its validity and feasibility have not yet been established. In the absence of a valid relationship between the variables, the condition of the human organization may not be accepted as a reflector of HR performance and hence its amortization. Likert, however, maintains that the method is feasible where reliable and valid measurements of the coefficients are available.