What determines the individual’s value? Discuss the Models of determinants of Human Value.
Human beings are not the commodity which can be sold or purchased. They are free to serve as per their own choice. From an organizations viewpoint an individuals value is either the amount that organization could realize from his or her services if the employee stays in the organization or the amount actually expected to be derived, looking into account of the person’s likelihood of turnover. There are two models of the determinants of human value which are Flamholtz and Likert and Bowers. These explain the determinants of group value.
Eric Flamholtz has focused on two fundamental questions: What does it take to continue to build successful organizations over the long-term? and What is required for managers to continue to be successful throughout their careers? Answering these questions led Dr. Flamholtz to develop a series of frameworks and management tools that enable organizations and individuals to transition successfully from one stage of development to the next.
His ultimate aim is to develop a holistic approach to managing growth successfully over the long-term, According to Flamholtz, the value of an individual is the present worth of the services that he is likely to render to the organization in future. Typically, this value is uncertain and has two dimensions. The first is the expected conditional value of the individual. This is the amount that the organization could potentially realize from the services of an individual during his/her productive service life in the organization. It is composed of three factors: promotability, productivity and transfer-ability.
These three factors depend to a great extent, on individual determinants like activation level of the individual (his motivation and energy level) and organizational determinants like opportunity to use these skills or roles and the reward system. The second dimension of an individual value is the expected realizable value, which is a function of the expected conditional value, and the probability that the individual will remain in the organization for the duration of his/her productive service life. Since individuals are not owned by the organization and are free to leave, ascertaining the probability of their turnover becomes important.
The Likert and Bowers Model.
Causal, intervening and end-result variables. Likert and Bowers propose causal, intervening, and end-result variables, which determine the group’s value to an organization. Causal variables are those which can be controlled by the organisation. These variables include managerial behaviour and organizational structure. Intervening variables reflect organizational capabilities and involve group processes, peer leadership, organization climate, and the subordinates satisfaction. Both, the causal and the intervening variables determine the end-result variables of the intellectual capital organization.