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Strategic Human
Resource
Management
Fifth Edition
Australia • Brazil • Mexico • Singapore • United Kingdom • United States
Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
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Contents | vii
READING 6.1: Sexual Harassment Versus Workplace Romance: Social Media Spillover

and Textual Harassment in the Workplace 205
Reading 6.1 Appendix 219
7 Employment Law 221

Employment-at-Will 222
Scope of Laws 223
Federal Antidiscrimination Laws 223
Equal Pay Act 224
Civil Rights Act of 1964 225
Age Discrimination in Employment Act of 1967 226
Rehabilitation Act of 1973 226
Pregnancy Discrimination Act of 1978 226
Americans with Disabilities Act of 1990 227
Civil Rights Act of 1991 228
Family and Medical Leave Act of 1992 228
Genetic Information Nondiscrimination Act of 2008 230
Enforcement of Federal Laws Under the EEOC 231
Executive Orders 234
Affirmative Action 234
Sexual Harassment 235
What Sexual Harassment Is 236
Problems in Managing Sexual Harassment 237
Strategy for Managing Sexual Harassment 239
Complications Abroad 240
Trends in Employment Litigation 240
Conclusion 243 / Critical Thinking 243 / Exercises 244 / Chapter References 244
Reading 7.1: In Defense of Preference 246
Reading 7.2: The Management of Organizational Justice 252
Part two
Implementation of Strategic Human Resource Management
8 Staffing 267
Recruiting 268
Temporary Versus Permanent Employees 268
Internal Versus External Recruiting 269
When and How Extensively to Recruit 271
Methods of Recruiting 272
Selection 278
Interviewing 279
Testing 282
References and Background Checks 286
viii | Contents
International Assignments 287

Documentation of Employment Eligibility 288
New Trends in Staffing 288
READING 8.1: Recruiting Practices in Transition 296
9 Training and Development 303

Benefits of Training and Development 306
Planning and Strategizing Training 307
Needs Assessment 307
Objectives 308
Design and Delivery 309
Evaluation 310
Organizational Development 312
Integrating Training with Performance Management Systems and Compensation 317
Reading 9.1: Strategic Organizational Development Interventions:
A Case of Microsoft Corp. Limited 320
10 Performance Management and Feedback 327

Use of the System 329
Who Evaluates 331
What to Evaluate 334
How to Evaluate 337
Measures of Evaluation 338
Other Considerations 342
Why Performance Management Systems Often Fail 342
Addressing the Shortcomings of Performance Management Systems 343
Reading 10.1: The Performance Management Revolution; The focus is shifting from
accountability to learning 348
11 Compensation 357
Equity 358
Internal Equity 361
External Equity 365
Individual Equity 366
Legal Issues in Compensation 369
Executive Compensation 372
READING 11.1: Exposing Pay Secrecy 376
READING 11.2: The Development of a Pay-for-Performance Appraisal System for
Municipal Agencies: A Case Study 390
Contents | ix
12 Labor Relations 407

Why Employees Unionize 410
The National Labor Relations Act 411
Behavior During Organizing Campaigns 412
Collective Bargaining 413
Failure to Reach Agreement 414
Unions Today 415
READING 12.1: Social Media, Employee Privacy and Concerted Activity: Brave New
World or Big Brother? 420
READING 12.2: The Labor Movement and the Dilemma of Direct Confrontation 427
13 Employee Separation and Retention Management 435

Reductions in Force 436
Turnover 440
Retirement 446
Alumni Relations 447
READING 13.1: Retaining Talent: Replacing Misconceptions with Evidence-Based
Strategies 451
14 Global Human Resource Management 467

How Global HRM Differs from Domestic HRM 469
Assessing Culture 469
Strategic HR Issues in Global Assignments 472
Repatriation 476
The European Union 478
Mexico and Canada 479
China 480
India 481
READING 14.1: In the Eye of the Beholder: Cross Cultural Lessons in Leadership from
Project Globe 484
SUBJECT INDEX 507

NAME INDEX 511
COMPANY INDEX 512
PR EFAC E
Since the publication of the fourth edition of this text, heightened attention continues to be shown
and greater appreciation paid toward the value of strategic human resource management in orga-
nizations. Boards of directors, business owners, stockholders, and senior executives are gaining a
greater understanding of the relationship between HR and organizational, market, and financial
performance as cutting-edge research illustrates the connection between HR practices and firm
performance.
Scholarly HR-related publications continue to thrive, while practitioner-oriented management
publications—traditionally dominated by articles focused on marketing and finance—are publishing
an increasingly significant number of articles on human resource management, particularly strategic
aspects of HR. Within the academy, there continues to be a significant increase in the number of HR-
related articles in journals focused on general management and even those related to strategy. No
longer is HR simply relegated to specialized journals that deal with HR. This significant movement
toward the publication of more HR-focused articles in both the general management academic and
practitioner literatures illustrates clearly that executives are realizing the role HR plays in an orga-
nization’s success as well as the fact that HR is a general management responsibility and its effective
practice a key to successful operating results.
Also since the publication of the fourth edition, the resources that are available to those of us
who teach have greatly expanded. The Society for Human Resource Management, the world’s largest
HR professional association, has continued to develop programs and materials to support HR educa-
tion which include (1) curriculum guidebooks and templates for both undergraduate and graduate
programs; (2) dozens of cases and learning modules to assist with course design and delivery; and
(3) a significant database of the latest research and position papers on critical issues in strategic HR,
which allow instructors to remain very current on trends, best practices, and legislative and court
activity. Much of this material is available to nonmembers at the SHRM Web site, www.shrm.org. In
addition, the Journal of Human Resources Education (JHRE), continues to publish exciting original
work that supports HR education.
Organization and Content

Strategic Human Resource Management, 5e is designed for: (1) graduate students enrolled in survey
courses in human resource management who would benefit from a general management approach
to strategic HR; (2) working professionals enrolled in specialized HR and executive programs as a
capstone offering; and (3) undergraduate students enrolled in a capstone course in an HR degree
program or those seeking an advanced-level HR course to complement their strategy course.
The text is organized into two sections. The first section, Chapters 1–7, examines the context
of strategic HR and develops a framework and conceptual model for the practice of strategic HR.
The chapters in this section examine employees as “investments”; explore trends that affect human
resource management practice; describe what strategic HR is, particularly in contrast to more tradi-
tional approaches to HR; and look at how both the design of work systems and relevant employment
laws influence the practice of managing people in organizations. The second section, Chapters 8–14,
examines the actual practice and implementation of strategic HR through a discussion of strategic
issues that need to be addressed while developing specific programs and policies related to the tradi-
tional functional areas of HR. Covered within this section are strategic issues related to staffing, train-
ing, performance management, compensation, labor relations, employee separation, and managing
a global workforce. Both the integrative framework that requires linkage between and consistency
among these functional HR activities and the approach toward writing about these traditional func-
tional areas from a strategic perspective distinguish the text from what is currently on the market.
x Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Preface | xi
Chapter Features
All chapters contain the following:
• an opening “in practice” vignette featuring a well-known organization to introduce the chap-
ter topic as well as numerous additional vignettes within each chapter that illustrate pertinent
chapter concepts
• carefully selected readings that are integrated within the text discussion
• end-of-chapter discussion questions and exercises designed to apply chapter content and facili-
tate discussion of issues
New to the Fifth Edition

As the field of strategic human resource management has evolved since the fourth edition, this text
has similarly done so in response. Many of the end-of chapter readings are new to this edition. The
retained readings are those that have become “classics” and are presented alongside those that rep-
resent the latest in thinking and practice in human resource management. There are also numerous
new original exhibits that explain chapter concepts; 17 new “in practice” vignettes that describe stra-
tegic HR practices in a wide variety of organizations; and 73 new references.
There is also significant new content in each of the 14 chapters. This includes, but is not limited
to, new or greatly expanded coverage of HR analytics; sexual orientation, gender identity, and related
legislation; religious expression; employee engagement; alternative dispute resolution; medical mari-
juana; independent contractor status; transparency in compensation; and union recruiting strategies
as well as legal and legislative updates with the latest court rulings on existing laws.
Instructor’s Resources
Also available are an Instructor’s Manual and PowerPoint slides to accompany the book which were
prepared by the author. They can be accessed by visiting www.cengage.com/login. The Instructor’s
Manual includes chapter outlines, answers to end-of-chapter content, and suggested topics for stu-
dent papers, while the PowerPoint slides offer all main text concepts to encourage classroom discus-
sion and classroom engagement.
MindTap: Empower Your Students

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control of your course, so you can provide engaging content, challenge every learner, and build stu-
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ciently with interactive multimedia, assignments, quizzes, and more. Give your students the power to
read, listen, and study on their phones, so they can learn on their terms.
xii | Preface
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track their scores to stay motivated toward their goals. Together, you can be unstoppable.
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ABO U T T HE AU T H O R
Jeffrey A. Mello
Rhode Island College
Jeffrey A. Mello is Dean of the School of Business and Professor of Management at Rhode Island
C ollege. He previously held faculty and administrative positions at Barry University, Towson
University, the George Washington University, the University of California at Berkeley, Golden Gate
University, and Northeastern University, from where he received his Ph.D. He has been a recipient
of the David L. Bradford Outstanding Educator Award, presented by the Organizational Behavior
Teaching Society, and has received international, national, and institutional awards for his research,
teaching, and service. He has authored six books and published more than 100 book chapters, jour-
nal articles, and conference papers in journals such as the JOURNAL OF BUSINESS ETHICS, BUSI-
NESS HORIZONS, INTERNATIONAL JOURNAL OF PUBLIC ADMINISTRATION, BUSINESS
& SOCIETY REVIEW, JOURNAL OF EMPLOYMENT DISCRIMINATION LAW, SETON HALL
LEGISLATIVE JOURNAL, JOURNAL OF INDIVIDUAL EMPLOYMENT RIGHTS, PUBLIC PER-
SONNEL MANAGEMENT, EMPLOYEE RESPONSIBILITIES AND RIGHTS JOURNAL, LABOR
LAW JOURNAL, JOURNAL OF LAW AND BUSINESS, and the JOURNAL OF MANAGEMENT
EDUCATION. He has served as an editor for the JOURNAL OF MANAGEMENT EDUCATION,
JOURNAL OF LEGAL STUDIES EDUCATION, and EMPLOYEE RESPONSIBILITIES AND
RIGHTS JOURNAL as well as on numerous editorial boards. He is a member of the Academy of
Legal Studies in Business, Organizational Behavior Teaching Society, Society for Human Resource
Management, and Academy of Management.
xiii
The Context of Strategic Human
Resource Management
PA R
T 1
Chapter 1
An Investment Perspective of Human Resource
Management
Chapter 2
Social Responsibility and Human Resource
Management
Chapter 3
Strategic Management
Chapter 4
The Evolving/Strategic Role of Human Resource
Management
Chapter 5
Strategic Workforce Planning
Chapter 6
Design and Redesign of Work Systems
Chapter 7
Employment Law
C hapter 1
An Investment Perspective of
Human Resource Management
LEARNING
OBJECTIVES Human Resources at Nordstrom
• Understand the sources of How can a retailer gain a competitive advantage in a cut-throat marketplace?
employee value Middle- and high-end retailers generally locate in close proximity to each other
• Gain an appreciation of the and often carry similar—but not identical—merchandise. Consequently, their
importance of human capital sales and profit margins are usually in tandem. Nordstrom, however, has consis-
and how it can be measured tently produced above-industry-average profits and continues to be profitable
and analyzed when its competitors’ profits are falling or flat.
• Understand how competitive The key to Nordstrom’s success lies with the different way it manages its
advantage can be achieved employees. Sales employees are known as “associates” and considered the orga-
through investment in nization’s most valuable asset. The company’s success is rooted in its strategy
employees of providing superlative customer service. Associates are encouraged to act as
entrepreneurs and build strong personal relationships with customers, or “clients.”
• Gain an appreciation of
In fact, many clients shop only with a particular Nordstrom associate and call in
metrics, their measures, and
advance to determine the associates’ schedules or to make appointments.
their usefulness
Nordstrom’s strategy involves a heavy investment in the organization’s sales
• Understand how metrics force. Nordstrom provides associates with extensive training on merchandising
relate to analytics and how and product lines and offers high compensation. Its commitment to its employees
HR analytics are used in is evident from the fact that the company’s organization chart is depicted inverse
organizations from that of a traditional retailer. Associates are at the highest level on the chart,
• Understand the obstacles that followed by department and merchandise managers and, finally, executives. This
prevent organizations from depiction cements the organization’s philosophy that the customer is king. All
investing in their employees efforts of senior-, middle-, and lower-level managers should support the efforts of
the sales force.
4 Part 1 The Context of Strategic Human Resource Management
E
ffective organizations are increasingly realizing that of the varied factors that contribute to per-
formance, the human element is clearly the most critical. Regardless of the size or nature of an
organization, the activities it undertakes, and the environment in which it operates, its success
is determined by the decisions its employees make and the behaviors in which they engage. Manag-
ers at all levels in organizations are becoming increasingly aware that a critical source of competi-
tive advantage often comes not from having the most ingenious product design or service, the best
marketing strategy, state-of-the-art technology, or the most savvy financial management but from
having the appropriate systems for attracting, motivating, and managing the organizations’ human
resources (HR).
Adopting a strategic view of HR, in large part, involves considering employees as human
“assets” and developing appropriate policies and programs as investments in these assets to increase
their value to the organization and the marketplace. The characterization of employees as human
assets can have a chilling effect on those who find the term derogatory because of its connotation
that employees are to be considered “property.” However, the characterization of employees as assets
is fitting, considering what an asset actually is: something of value and worth. Effective organizations
realize that their employees do have value, much as the organization’s physical and capital assets have
value. Exhibit 1.1 illustrates some of the value employees bring to an organization.
EXHIBIT 1.1
Sources of Employee Value
Technical Knowledge
• Markets • Customers
• Processes • Environment
Ability to Learn and Grow

• Openness to new ideas
• Acquisition of knowledge/skills
Decision Making Capabilities

• Analytical skills
• Problem-solving skills
• Change-management and
implementation skills
Motivation
• Job satisfaction
• Challenging work
• Perceived “fit” with organization
Commitment
• Belief in mission • Engagement
Teamwork
• Interpersonal skills
• Leadership ability
Chapter 1 An Investment Perspective of Human Resource Management 5
Adopting an Investment Perspective

The characterization of employees as human assets has important implications for the strategic
management of HR in that it allows us to consider HR from an investment perspective. Physi-
cal and capital assets in organizations, such as plant, property, machinery, and technology, are
acquired and subsequently managed most effectively by treating them as investments; the organi-
zation determines the optimal mix of high-performance, high-return assets to its strategic objec-
tives. Analyses are made of the costs and benefits of certain expenditures, with judgments made
concerning the riskiness and potential returns of such expenditures. Viewing HR from an invest-
ment perspective, much as physical assets are viewed, rather than as variable costs of production,
allows an organization to determine how to best invest in its people. Furthermore, considering
the risk and return on possible expenditures related to acquiring or developing human assets
allows an organization to consider how current expenditures can be best allocated to meet long-
term performance goals.
In considering whether to undertake the expense of a new training program, for example, an
organization needs to consider not only the out-of-pocket costs for the training but also the related
opportunity costs, such as lost time on the job, and weigh these costs against the potential benefits of
the training, such as enhanced performance, potential increased loyalty, and motivation. The train-
ing also needs to be assessed relative to risk because the enhanced marketability of employees makes
them more desirable to competitors. Similarly, in considering compensation programs as an invest-
ment, an organization needs to consider what it is “investing” in when it pays someone (knowledge,
commitment, new ideas, retention of employees from competitors). The potential return on the
organization’s financial outlay in compensation will determine whether its compensation system is a
viable investment strategy.
Taking an investment perspective toward HR/assets is critical considering that other physical
assets, such as facilities, products and services, technologies, and markets, can be readily cloned or
imitated by competitors.1 Human assets cannot be duplicated and therefore become the competitive
advantage that an organization enjoys in its market(s). This is becoming increasingly important as
the skills required for most jobs become less manual and more cerebral and knowledge-based in
nature.2 Rapid and ongoing advances in technology have created a workplace where laborers are
being replaced by knowledge workers. An organization’s “technology” is becoming more invested in
people than in capital. Thought and decision-making processes as well as skills in analyzing complex
data are not “owned” by an organization but by individual employees. This is in stark contrast to
traditional manufacturing organizations where the employer usually owns or leases the machinery
and production processes, and duplication of the organization’s “capital” is restricted primarily by
cost considerations.
Managing Employees at United Parcel Service

Although taking a strategic approach to HR management usually involves looking at employees
as assets and considering them as investments, this does not always mean that an organization
will adopt a “human relations” approach to HR. A few successful organizations still utilize prin-
ciples of scientific management, where worker needs and interests are subordinate to efficiency.
United Parcel Service (UPS) is a prime example of this. At UPS, all jobs from truck loaders to
drivers to customer service representatives are designed around measures of efficiency. Wages
are relatively high, but performance expectations are also high. This approach toward manag-
ing people is still “strategic” in nature because the systems for managing people are designed
around the company’s strategic objectives of efficiency. Consequently, all employee training,
performance management, compensation, and work design systems are developed to promote
this strategic objective of efficiency.
Managing an organization’s employees as investments mandates the development of an appro-

priate and integrated approach to managing HR that is consistent with the organization’s strategy.
As an example, consider an organization whose primary strategic objective involves innovation. An
organization pursuing an innovation strategy cannot afford high levels of turnover within its ranks.
It needs to retain employees and transfer among employees the new knowledge being developed in-
house. It cannot afford to have its employees develop innovative products, services, and processes and
then take this knowledge to a competitor for implementation. The significant investment in research
and development ends up having no return. Because the outcome of this expenditure (research and
development) is knowledge that employees have developed, it is critical as part of the organization’s
overall strategy for the organization to devise strategies to retain its employees and their knowledge
bases until the “new knowledge” becomes “owned” by the organization itself (through diffusion
throughout the organization) rather than by the employee.
This leads to a dilemma involving investing in human assets. An organization that does not
invest in its employees may be less attractive to prospective employees and may have a more difficult
time retaining current employees; this causes inefficiency (downtime to recruit, hire, and train new
employees) and a weakening of the organization’s competitive position. However, an organization
that does invest in its people needs to ensure that these investments are not lost. Well-trained employ-
ees, for example, become more attractive in the marketplace, particularly to competitors who may be
able to pay the employee more because they have not had to invest in the training that the employee
has already received. Although an organization’s physical assets cannot “walk,” its human assets can,
making the latter a much more risky investment. An organization can certainly buy or sell its physi-
cal assets because it has “ownership” of them, but it does not own its human assets. Consequently,
organizations need to develop strategies to ensure that employees stay on long enough for the orga-
nization to realize an acceptable return on its investment relative to the employees’ acquired skills
and knowledge, particularly when the organization has subsidized the acquisition. This requires the
organization to determine the actual “value” of each employee. Valuation of human assets has impli-
cations for compensation, advancement opportunities, and retention strategies as well as how much
should be invested in each area for each employee.
Valuation of Assets
Five major kinds of assets or capital that organizations can leverage to aid in performance and
add value to operations are financial assets/capital, physical assets/capital, market assets/capital,
operational assets/capital, and human assets/capital, as shown in Exhibit 1.2. Financial assets/
capital include equity, securities and investments, and accounts receivable. Physical assets/capital
include plant, land, equipment, and raw materials. Market assets/capital include goodwill, brand-
ing, customer loyalty, distribution networks, product lines and patents, trademarks, and copyrights.
Operational assets/capital include management practices, the structure of work, and the use of tech-
nology. Human assets/capital include employee education levels, knowledge, skills, competencies,
work habits and motivation, and relationships with coworkers, customers, suppliers, regulators,
and lenders.
Financial and physical assets/capital are relatively easy to measure via accounting practices.
Most of these assets are tangible and have some clear market value. Market and operational assets/
capital are a bit more challenging to measure, but accounting practices have been developed that
can place a general subjective value on such assets. Human assets/capital, however, are very diffi-
cult to measure; attempts to do so are at the forefront of current research being conducted in HR
management.
A direct result of this difficulty in measuring human assets is that the valuation of current and
future human assets is often ignored from consideration when organizations are facing economic
and financial challenges. The media and financial markets usually respond favorably when decision
makers announce restructurings or right-sizing initiatives, which reduce the size of the organization’s
workforce, allowing it to reduce short-term costs. Such actions, however, involve the loss of human
assets, which have value to the organization, often without consideration of the long-term impact of
such losses on the organization’s ability to regain its position in the marketplace. Effective manage-
ment recognizes that the organization’s survival and renewal require the right size and mix of human
capital and balances short-term needs to reduce or restructure costs with a clear strategy for the
future. The key issue organizations face here is how to leverage the value of the organization’s human
assets for the good of the organization in the immediate, short, and long term.
EXHIBIT 1.2
Types of Organizational Assests/Capital
Ease of
measurement
Easier Examples
• Financial • equity
• securities and investments
• accounts receivable
• Physical • plant
• land
• equipment
• raw materials
• Market • goodwill
• branding
• customer loyalty
• product line
• distribution networks
• patents, trademarks, copyrights
• Operational • management practices

• structure of work
• technology
• Human • education
• knowledge
• skills
• competencies
• work habits and motivation
• personal relationships
More difficult
Understanding and Measuring Human Capital

Given that employees and their collective skills, knowledge, and abilities represent a signifi-
cant asset for organizations, a critical issue for organizations becomes measuring this value as
well as its contribution to the organization’s bottom line. One of the first studies that success-
fully demonstrated this relationship was conducted by Huselid in the mid-1990s. This study
identified what were called “high performance work systems” (HPWS) and demonstrated that
integrated, strategically focused HR practices were directly related to profitability and market
value.3 A recent study by Watson Wyatt Worldwide found that the primary reason for organiza-
tional profitability is the effective management of human capital. This involves, in part, provid-
ing employees with rewards that are commensurate with their contributions and ensuring that
investments in employees are not lost to competitors by actively managing employee retention.4
Another study found that effective, integrated management of human capital can result in up
to a 47 percent increase in market value.5 A landmark study conducted by Becker, Huselid, and
Ulrich that examined a variety of HR management quality indices found that the top 10 percent
of organizations studied enjoyed a 391 percent return on investment (ROI) in the management of
their human capital.6
Extending these findings, Dyer and Reeves attempted to define what can be called the HR
“value chain.”7 They argued that performance could be measured via four different sets of out-
comes: employee, operational, financial and accounting, and market-based. More importantly, they
proposed that these sets of outcomes had a sequential cause-and-effect relationship, as indicated in
Exhibit 1.3. Each outcome fueled success in a subsequent outcome, establishing a causal link between
HR practices and an organization’s market value.
Given this proven link between integrated and strategic HR practices and bottom-line per-
formance, HR practitioners have been faced with the task of developing appropriate HR met-
rics, which specifically illustrate the value of HR practices and activities, particularly relative
to accounting profits and market valuation of the organization. This task has proven to be far
more complex than anticipated, given the difficulties of measuring human assets/capital. One
study concluded that 90 percent of Fortune 500 organizations in the United States, Canada, and
Europe evaluate their HR operations on the basis of three rather limited metrics: employee reten-
tion and turnover, corporate morale and employee satisfaction, and HR expense as a percentage of
operational expenses.8 Such “staffing metrics” simply document the extent to which HR performs
traditional job functions without necessarily illustrating how HR impacts company profits and
shareholder value. Moreover, a focus on such staffing metrics involves a demonstration of how
employees can be treated as expenses rather than as assets that can be managed, invested in, and
leveraged for profit.
EXHIBIT 1.3
HR Value Chain
Employee Operational Financial/ Market-

Outcomes Outcomes Accounting based
Outcomes Outcomes
• attitudes • productivity
• behavior • quality • expenses • stock price
• commitment • customer • revenues • valuation/
• engagement satisfaction • profitability capitalization
and loyalty
Senior HR executives in these organizations stressed that they lacked accurate and meaningful
methods that measured performance, despite the fact that human assets/capital can account for as
much as 80 percent of the value of an organization.9 One reason is that most accounting valuation
methods stress the past and current value of assets. Much of the value of human assets/capital rests
with the value of an organization and its ability to proactively meet challenges that lie ahead, rela-
tive to responsiveness to changing economic, political, and market conditions. As a result, valuation
of human assets/capital and analysis of human capital investments can be value-laden, subjective,
expensive—and, hence, ignored.
Measuring Human Assets/Capital at Dow Chemical

Dow Chemical has been a leader in forging the frontiers of measuring human capital. Dow
has attempted to develop a reliable measure to help calculate each employee’s current and
anticipated future contribution to the financial goals of the business. A pilot project is cur-
rently being tested in a single business unit; it examines employee performance on proj-
ect assignments by using two specific metrics: expected human capital return (EHCR) and
actual human capital return (AHCR). EHCR involves a calculation of the break-even point
of investment in an employee, above salary and additional outlays, such as recruiting and
training expenses. AHCR involves a calculation of the “value created” by the employee based
on the projects he or she worked on. This metric considers the skills and knowledge of each
employee relative to the net present value of a specific project. The desired outcomes of these
measures are assisting managers with matching employee talents and project needs, identify-
ing employee development opportunities, and creating a more efficient and effective means
for project team staffing. Although the program is still in the pilot stage, with validation stud-
ies in progress, Dow anticipates rolling out the metrics to other business units in the very
near future.10
Given the complex nature of measuring human assets/capital and return on such investments,
where does an organization begin in assuming such an undertaking? One helpful model has been
developed by Mercer, which can allow those concerned with measuring HR performance and docu-
menting the value added by specific initiatives to demonstrate to senior management the value added
and bottom-line impact.11 This model involves six steps: (1) identify a specific business problem that
HR can impact; (2) calculate the actual cost of the problem to the organization; (3) choose a HR solu-
tion that addresses all or part of the problem; (4) calculate the cost of the solution; (5) 6 to 24 months
after implementation, calculate the value of the improvement for the organization; and (6) calculate
the specific ROI metric.
One caveat should be obvious from not only Mercer’s approach but also that currently being
employed at Dow Chemical. Unlike the returns on other types of assets/capital, the ROI in human
assets/capital are often not realized until some point in the future. Key decision makers need to be
patient in waiting for these results, and HR also needs to subsequently take interim measures and
provide status reports to senior management that illustrate preliminary beneficial results. HR needs
to move away from mere data collection, however, and perform more comprehensive analysis of per-
formance measures that relate to the critical metrics for which operating divisions are held account-
able. Toward this end, HR needs to partner with chief financial officers to understand the language of
investment and asset management. If HR continues to be seen as a cost center, it will be the primary
target during cost-cutting operations, given that labor is the primary cost incurred in the service-
and information-intensive sectors, which are fueling the growth in our economy. One study places
the relative expenses for human capital as high as 70 percent of overall expenditures.12 Hence, the
challenge for HR is to provide senior management with value-added human capital investments
backed by solid and meaningful financial metrics.
Moneyball and the Oakland Athletics

The 2003 best-selling book, Moneyball, later made into a motion picture in 2011, chronicled the
real-life application of HR metrics in major league baseball and their impact on performance.
Starting with his appointment in 1998 as Oakland Athletics general manager, Billy Beane was
forced to rethink how he selected players given the fact that his small-market team could not
compete financially with big-market teams, such as those in New York and Boston, which con-
sistently ended up signing the biggest name free-agent players at hefty salaries. Beane looked
beyond traditional statistical measures of player “value” (such as batting average and home runs
for position players and games won, earned run average and strikeouts for pitchers) to seek out
players who were generally undervalued. Beane and his statistician instead considered alterna-
tive metrics, such as on-base percentage and average number of pitches required to complete
an at-bat, and discovered that such metrics had a higher correlation with games won by a team.
Applying these new metrics as part of an ongoing staffing plan, Beane’s cash-poor team quali-
fied for the post-season from 2000 to 2003 with an average of 98 victories per season despite
having one of the lowest payrolls in baseball. Soon, other teams were copying Beane’s approach
and the Athletics lost their competitive advantage. Beane’s approach illustrates that the use of
staffing metrics can translate into significant success for an organization. The key is selecting the
appropriate metrics and analytical techniques, which may be different from those currently in
use by the organization or standard within the industry.
HR Metrics and Analytics

Many CEOs openly acknowledge the importance of effective and strategic HR management in their
organization’s success. Jack Welch noted in one of his last General Electric annual reports: “Develop-
ing and motivating people is the most important part of my job. I spent one-third of my time on
people. We invest $1 billion annually in training to make them better. I spend most of my time on
the top 600 leaders in the company. This is how you create a culture.”13. One recent study of Fortune
100 annual reports found that 14 percent of such reports contained at least one quantitative measure
of HR management, such as turnover rate, investment in training, percentage of pay that is variable,
or results from an employee attitude survey.14 Despite this, Wall Street analysts still generally fail to
acknowledge human capital in their assessment of the potential worth of a company’s stock or the
effects that human capital measures can have on a company’s stock price.
Perhaps one reason for this lack of reporting of and respect for metrics related to human capital
rests with the fact that there are no universally accepted metrics for the valuation of human cap-
ital or a standard format for measuring and reporting such data. Indeed, the Society for Human
Resource Management has identified a number of common metrics for measuring the performance
and value of human capital, a number of which are presented in Exhibit 1.4. These are measures that
can easily be translated into bottom-line measures of performance as well as compared to industry
benchmarks. Exhibit 1.5 provides examples of how five of these metrics that are often regarded as the
most prominent measures of human capital management can be calculated and utilized. Nonethe-
less, stock analysts are more concerned with talking with operations, accounting, and finance heads
rather than those in HR, as analysts usually have their training in, understand, and are most familiar
and comfortable with these areas.
There are no “perfect” metrics, however, the appropriate human capital metrics would depend
on the organization or business unit’s strategy. Organizations concerned about minimizing costs
might be most concerned with metrics related to turnover and revenue per employee. Organizations
pursuing a strategy of aggressive growth might rely on metrics such as time to fill, while those con-
cerned with innovation might closely monitor training costs per employee. Divisions or subsidiaries
within the same organization might use totally different metrics, dependent on their unit’s goals
and strategies.
Labor Supply Chain Management at Valero Energy

San Antonio-based Valero Energy is a $70 billion energy-refining and marketing company that
has reinvented its staffing function through the application of principles of supply chain man-
agement. Conceptualizing the acquisition and management of talent as a supply chain, Valero
scrapped its traditional staffing processes by which managers would request specific numbers of
employees from HR who, in turn, would solicit referrals from employees and contact recruiters.
After an analysis of data related to hiring sources, how long new employees remained employed,
performance and productivity of new hires, and “fit” with the company culture, Valero gained a
sense of how to recruit the best talent at the lowest cost.
Valero’s new staffing process involves forecasting three years in advance the demand for
talent by both division and title. Five years of data were mined into a database, and a series
of mathematical algorithms was developed for turnover trend analysis by location, position
type, salary, tenure, and division. Another series of algorithms projected those trends forward
for three years in line with anticipated workforce needs for future capital projects, updated
systems, and anticipated new services. The result is the development of talent “pipelines,”
which address specific future talent needs relative to the organization’s strategy and business
model, allowing the development of related training and development programs and succes-
sion plans.15
EXHIBIT 1.4
Common HR Metrics
Absence Rate
Cost per Hire
Health Care Costs per Employee
HR Expense Factor
Human Capital Return on Investment (ROI)
Human Capital Value Added
Labor Costs as a Percentage of Sales or Revenues
Profit per Employee
Revenue per Employee
Time to Fill
Training Investment Factor
Training Return on Investment (ROI)
Turnover Costs
Turnover Rate (Monthly/Annually)
Vacancy Costs
Vacancy Rate
Workers’ Compensation Cost per Employee
Workers’ Compensation Incident Rate
Workers’ Compensation Severity Rate
Yield Ratio
EXHIBIT 1.5
Calculation of Human Capital Measures
Measure Formula Value/Use
Human Capital ROI Revenue − (operating expenses − Allows determination of return on human investments
compensation + benefits costs) / relative to productivity and profitability; represents pre-tax
compensation + benefits costs profit for amounts invested in employee pay and benefits
after removal of capital expenses
Profit per Employee Revenue − operating expenses Illustrates the value created by employees; provides a
/ number of full-time equivalent means of productivity and expense analysis
(FTE) employees
HR Expense Factor Total HR expense / total operating Illustrates the degree of leverage of human capital; provides
expenses a benchmark for overall expense analysis relative to targets
or budgets
Human Capital Revenue − (operating expenses − Shows the value of employee knowledge, skills, and
Value Added compensation + benefits costs) / performance and how human capital adds value to an
total number of FTE employees organization
Turnover Rate Number of employee separations Provides a measure of workplace retention efforts, which
(during a given time period) / can impact direct costs, stability, profitability morale, and
number of employees productivity; can be used as a measure of success for
retention and reward programs
Sources: For a more complete list of metrics, formulas, and uses, see Society for Human Resource Management, HR Metrics Toolkit, pub-
lished Nov. 15, 2007. Available at http://moss07.shrm.org/hrdisciplines/Pages/CMS_005910.aspx
The metrics noted above are specific calculations that relate to a larger process of analytics.
Analytics is the systematic collection, reporting, and analysis of various metrics that are critical to
effective performance. Analytics often involves the process of benchmarking where the organization
compares actual performance to goals and/or to performance on similar metrics by competing orga-
nizations. HR analytics has been defined as “the application of a methodology and integrated process
for improving the quality of people-related decisions for the purpose of improving individual and/or
organizational performance.”16
The use of analytics directly supports an investment approach to human resource manage-
ment. In many organizations, employee costs can consume in excess of 80 percent of annual operat-
ing expenses, so failure to measure and attempt to optimize these expenditures directly impacts the
organization’s overall financial performance. In addition, high-turnover, especially in labor-intensive
service industries, not only impacts day-to-day operations and customer service but also greatly
increases out-of-pocket expenses related to recruiting, training, and onboarding.
Analytics involves taking measures of actual performance as part of an evidence-based
approach to managing an organization and its people. A challenge in developing and utilizing ana-
lytics is that the process of collecting and interpreting the data produced is often outside of the areas
of expertise of most HR professionals. Ideally, this process involves collaboration with information
technology, accounting, and finance functions within the organization; however, it is critical that
HR initiate and own the process that comes from such internal partnerships. HR executives need
to understand the power of analytics in delivering improved organizational performance as well as
enhancing the value and credibility of the HR function with senior managers by accurately dem-
onstrating how people-related metrics directly impact the organization’s overall performance and
Measuring Employee Impact and Financial Performance at Lowe’s

Home-improvement retailer Lowe’s was one of the early adopters of a comprehensive HR ana-
lytics program. Sensing a need to determine the direct impact of its employees and employ-
ment practices on financial performance, Lowe’s created a model which depicted the linkages
between employee measures and key operational metrics such as inventory shrinkage or loss
rate, revenue, and customer satisfaction. One of the most compelling findings of its analysis
showed the strong relationship between employee engagement and customer satisfaction and its
ultimate impact on revenue. Traditionally, Lowe’s had only examined factors such as foot traffic,
advertising, and inventory to measure revenue, ignoring employees simply because they found
the relationship difficult to measure and correlate with sales. Measures of employee engage-
ment showed a direct impact on sales with the differential between high and low engagement
that accounted for a sales differential of more than $1 million per year in individual stores.
Lowe’s used this data to develop various programs, such as leadership training, which increased
employee engagement and has shown a direct correlation with higher sales volume.17
specific outcomes. This is particularly important in light of a recent study that showed 84 percent
of C-suite executives had little to no understanding of human-capital measures and their poten-
tial use.18 Hence, there is an opportunity and obligation for HR professionals to have a significant
impact on their organizations.
A good deal of analytics involves providing direct evidence of specific cause–effect relation-
ships, which can be attributed to an organization’s specific management practices and policies. In
doing this, data is collected and analyzed relative to specific outcomes. In measuring and collecting
data, it is critical to choose the appropriate measures as well as to ensure that data collected is accu-
rate, timely, relevant, and complete.
Exhibit 1.6 shows some examples of the types of relationships that HR analytics can document
and analyze.
EXHIBIT 1.6
Using Analytics to Understand Relationships
• Does satisfaction with pay impact retention or, conversely, turnover?
• Do flexible work schedules impact efficiency or productivity?
• Do training expenditures impact profitability?
• What hiring criteria best predicts high-performing employees?
• How does a given performance-management system impact communication and
teamwork?
• Do specific benefits programs impact employee productivity and retention?
• Do diversity initiatives produce a diverse workforce at all levels of the organization?
Reading 1.1, “Using Targeted Analytics to Improve Talent Decisions,” illustrates what human
capital analytics are and how they can be used to improve organizational performance. It also pro-
vides case studies from PricewaterhouseCoopers and Frito-Lay which illustrate the actual use
of analytics.
People Analytics at Google

Google’s success as one of the most sought-after places to work has been fueled by its leadership in
utilizing a completely data-driven HR function. This approach has resulted in productivity levels of
$1 million in revenue and $200,000 in profit per employee per year. Google manages its workforce
utilizing the same level or rigor and analysis that it uses in its engineering functions. This data-
driven approach utilizes both quantitative and qualitative data that is based on objective and sub-
jective data points. As an example, data collected and analyzed showed that the best leaders were
those who receive direct one-on-one coaching and personalized feedback. Google also developed
a mathematical algorithm that successfully determined which employees might present a retention
challenge, allowing the organization to customize its solutions to retaining individual employees.
Analytics have been used to address and improve weak outcomes associated with the recruiting
and retention of diverse candidates, especially women engineers. Time-to-hire during the recruit-
ing process was shortened by measuring the value added of each stage of the interviewing process.19
Factors Influencing How “Investment-Oriented”

an Organization Is
Not all organizations realize that human assets can be strategically managed from an investment
perspective. As shown in Exhibit 1.7, five major factors affect how “investment-oriented” a com-
pany is in its management of HR. The first of these is management values.20 Management may or
may not have an appreciation of the value of its human assets relative to other capital assets, such as
brand names, distribution channels, real estate, facilities and equipment, and information systems.
The extent to which an organization can be characterized as investment-oriented may be revealed
through answers to the following questions:
• Does the organization see its people as being central to its mission/strategy?
• Do the company’s mission statement and strategic objectives, both company-wide and within
individual business units, espouse the value of or even mention human assets and their roles in
achieving goals?
• More importantly, does the management philosophy of the organization encourage the develop-
ment of any strategy to prevent the depreciation of its human assets or are they considered repli-
cable and amortizable, like physical assets?
EXHIBIT 1.7
Factors Influencing an Organization’s Investment
Orientation
Management Values Utilitarianism
Attitude Toward Risk Availability of Outsourcing
Nature of Employee Skills
Senior management values and actions determine organizational investment in assets. It

is critical to understand how the organization’s strategy mandates the investment in particular
assets relative to others. Whether management values its people is a critical factor in its will-
ingness to invest in them. This can be seen by contrasting workforce management strategies at
Costco and Wal-Mart. Wal-Mart pays low wages to its employees and factors in high turnover of
its associates as a cost of doing business. Costco invests more in its employees via higher wages,
better benefits, recognition programs, and promotion opportunities. Despite Costco’s higher
wages, it has significantly lower labor costs than Wal-Mart due to higher employee productivity
and lower turnover.21
The second factor is attitude toward risk. The most fundamental lesson in financial management
is that a trade-off exists between risk and return. Higher-risk investments are generally expected to
have a greater potential return; lower-risk, safer investments are generally expected to have a more
modest return. For example, in financial markets, bonds are considered less-risky investments than
stocks but have a limited, fixed return. Stocks, on the other hand, are considered higher-risk invest-
ments but have no limit as to their potential return.
Both personal and institutional investment strategies can be highly conservative (risk averse)
or pursue unlimited returns with reckless abandon. Investments in human assets are generally
far more risky for an organization than investments in physical assets: Unlike physical assets,
human assets are not owned by the organization. An organization with risk-averse management
philosophies is far less likely to make significant investments in people. Other organizations see
investments in employees as necessary for their success and develop strategies to minimize the
potential risk of losing their investments. An organization can attempt to gain some “ownership”
of employee services through long-term employment contracts or by offering employees finan-
cial incentives, such as stock-ownership programs, as well as additional professional development
opportunities.
The third factor is the nature of the skills needed by employees. Certain organizations require
employees to develop and utilize very specialized skills that might not be applicable in another orga-
nization; another employer might have employees utilize and develop skills that are highly market-
able. For example, if an employer has a custom-made information system to handle administrative
HR functions, employees using that system might not transfer those skills to another employer. How-
ever, if an employer uses a popular software program for which there is high demand for skilled
employees among competitors, the investment in employees becomes more risky.
As a result, an organization that decides to provide its employees with specialized training
in skills that can be utilized by others in the marketplace has a much stronger need to develop
a strong retention strategy than an organization that teaches employees skills that are less mar-
ketable. Employees with skills demanded in the marketplace become more valuable and sought-
after assets by companies that choose not to make expenditures or invest in training and skill
development.
The fourth factor affecting the investment orientation is the “utilitarian” mentality of the orga-
nization. Organizations that take a utilitarian, or “bottom-line,” perspective evaluate investments
by using utility analysis, also known as cost-benefit analysis. Here, the costs of any investment are
weighted against its benefits to determine whether the prospective investment is either profitable
or, more commonly, achieves the target rate of return the organization has set for its investments.
A highly utilitarian approach attempts to quantify all costs and benefits. For example, rather than
just considering direct cash expenditures, this approach would also consider the cost for the time
involved to develop and administer an innovative performance measurement system (by consider-
ing how much people are being paid for the time involved in the process), the cost of having larger
applicant pools (by considering how much longer it would take to screen applicants), and the cost of
employing more extensive employee selection procedures (again, by considering time and its mon-
etary value).
The distinct problem many utilitarian organizations run into regarding investments in
people involves the fact that many benefits of HR programs and policies are extremely difficult
to quantify. If these programs and policies can be assessed quantitatively, subjectivity as to the
actual value of the benefit may make consensus on the overall value difficult. This is especially
true for programs that attempt to enhance performance in service organizations. As an exam-
ple, consider the customer service division of your local Internet service provider. Measures of
effective service are not only difficult to assess objectively, but the organization may not be able
to determine how much service is necessary to prevent customers from jumping to competitors
and maintain their loyalty instead. Additional investments in service may not have any direct
financial benefit.
Similarly, a government organization or public utility that attempts to develop a program
to enhance efficiency may have a difficult time finding the cost justifiable. Given that no mar-
ket mechanisms exist for government agencies or legal monopolies, customers have no choice
among competitors. Customers may complain to regulators or officials, but there may be no
incentive or benefit for the organization to enhance its efficiency from an investment perspec-
tive. On a more basic level, a program that is designed to improve employee morale can have
benefits that may be very difficult to measure and quantify. A utilitarian organization is likely to
reject such “soft” programs that have no quantifiable return. Hence, the more utilitarian an orga-
nization, the more likely it is to see HR programs as investments, creating a challenge for those
advocating for such HR programs to find a means to show their impact on the bottom line. Some
very recent studies have begun to address this issue by attempting to establish a link between HR
strategies and systems and an organization’s financial performance. Initial results have shown
a significant impact of HR systems on both market-based and accounting-based measures of
performance.22
The final factor impacting an organization’s willingness to invest in its people is the availability
of cost-effective outsourcing. An investment-oriented approach to managing an organization will
attempt to determine whether its investments produce a sustainable competitive advantage over time.
When specialists who may perform certain functions much more efficiently exist outside an organi-
zation, any internal programs will be challenged and have to be evaluated relative to such a standard.
This is true for virtually any organizational function, including customer service, accounting, manu-
facturing, and HR management functions.
The organization is further likely to invest its resources where key decision makers perceive they
will have the greatest potential return. This may result in few investments in people at the expense
of investment in market and product development, physical expansion, or acquisition of new tech-
nology. As an example, employers in the fast-food industry, such as at McDonald’s, invest little in
their people; they require minimal experience, provide little training, pay low wages, and expect
high turnover because the supply of workers is excessive relative to demand. Organizations in this
industry tend to invest much more in new product development, physical expansion, and marketing
through competitive advertising.
Conclusion
Developing an effective strategy to manage an organization’s human assets requires considering
employees as investments. Such an approach helps to ensure that HR practices and principles
are clearly in sync with the organization’s overall strategy, forces the organization to invest in its
best opportunities, and ensures that performance standards are met. As an example, employee
stock-ownership programs attempt to strategically invest in the organization and its people by
making employees owners of the company. Instead of having a conflict as to how profits should
be allocated—namely, bonuses to employees or reinvested in the business, both can be achieved
simultaneously. In turn, this has the goal of gaining more commitment from employees and
encouraging them to adopt a long-term focus toward the organization; this is often a short-
coming or deficiency of American organizations that are concerned with short-run indicators
of p erformance. Employees who now intend to stay with the organization longer, given their
vested ownership rights, provide organizations with an incentive to incur the short-term costs
involved with investing in human assets for the long-term financial gains that can result from
such investments.
An investment perspective of HR is often not adopted because it involves making a

longer-term commitment to employees. Because employees can “walk” and because American
o
rganizations are so infused with short-term measures of performance, investments in human
assets, which tend to be longer-term investments, are often ignored. Organizations performing
well financially may feel no need to change their investment strategies. Those not doing well
usually need a quick fix to turn things around and therefore ignore longer-term investments
in people.
However, while investments in HR are longer term, once an organization gains a competi-
tive advantage through its employees, the outcomes associated with the strategy are likely to be
enduring and difficult to duplicate by competitors as such programs and values become more
firmly entrenched in the organization’s culture. The commitment that an organization makes to its
employees through its investments in them is often rewarded with the return of employees mak-
ing a longer-term commitment to the organization. Although investments in human assets may be
risky and the return may take a long time to materialize, investment in people continues to be the
main source of sustainable competitive advantage for organizations. HR professionals can be strong
catalysts in influencing the extent to which an organization’s leaders truly understand the inherent
value of its people.
Critical Thinking
1. Why do senior managers often fail to realize the value 5. Why is a competitive advantage based on a heavy
of human assets vis-ä-vis other assets? investment in human assets more sustainable than
investments in other types of assets?
2. Why do line managers often fail to realize the value of
human assets vis-ä-vis other assets? 6. Why can some organizations that fail to invest heavily
in human assets still be financially successful? Why can
3. Why and how might a line or an operating manager
some organizations that do invest heavily in human
value specific metrics and analytics related to the unit’s
assets still be financially unsuccessful?
employees?
7. What challenges exist relative to the valuation of
4. What can HR do to make senior and line managers
human assets and measuring human capital?
take more of an investment approach to human assets?
Exercises
1. Obtain the annual report for a Fortune 500 com- 3. How might different HR metrics and analytics be best
pany of your choice. Review the material presented employed in (1) a nonprofit organization, (2) a profes-
and the language used in the text. Write a one- sional sports organization, (3) a health-care facility,
page memo that assesses how investment-oriented (4) a small technology-based startup, and (5) a large
the organization appears to be toward its human Fortune 500 company?
assets.
4. Consider your current or most recent employer. Does
2. Arrange yourselves in small groups of four or five the organization employ any human capital metrics,
students and compare and contrast the similarities analytics, or key performance indicators? If so, which
and differences among the organizations you investi- ones, how are they used, and are they appropriate given
gated. Can you isolate any factors that appear to influ- the organization’s strategy? If not, suggest some appro-
ence how an organization perceives the value of its priate human capital metrics, analytics, or key perfor-
employees? mance indicators given the organization’s strategy.
Chapter References
1. Quinn, J. B., Doorley, T. L. and Paquette, P. C. “Beyond 12. Mercer, M. Turning Your Human Resources Department
Products: Services-Based Strategy,” Harvard Business into a Profit Center. New York: AMACOM, 1989.
Review, 90, (2), pp. 59–67. 13. Weatherly, L. A. “Human Capital—The Elusive Assets,”
2. Lawler, E. III. The Ultimate Advantage: Creating the Society for Human Resource Management, Research
High Involvement Organization, San Francisco, CA: Quarterly, 2003.
Jossey-Bass, 1992, p. 21. 14. General Electric Annual Report (2005)
3. Huselid, M. A. “The Impact of Human Resource 15. Krell, E. “Notable By Its Absence,” HR Magazine,
Management Practices on Turnover, Productivity, December, 2006, pp. 51–56.
Corporate Financial Performance,” Academy of 16. Schneider, C. “The New Human-Capital Metrics,” CFO
Management Journal, 38, (3), pp. 635–672. Magazine, February 15, 2006. Available at http://www
4. Bates, S. “Study Links HR Practices with the Bottom .cro.com/printable/article.cfm/5491043
Line,” HR Magazine, December 2001, 46, (12), p. 14. 17. Bassi, L. Carpenter, R. & McMurrer, D., HR Analytics
5. Gachman, I. and Luss, R. “Building the Business Case Handbook: Report of the State of Knowledge. Reed
for HR in Today’s Climate,” Strategic HR Review,1, (4), Business, Amsterdam, November 2010.
pp. 26–29. 18. Wright, A. “Finding the C-Suite Spot,” HR Magazine,
6. Becker, B. E., Huselid, M. A. and Ulrich, D. The HR 59, (11), November 2014, p. 13.
Scorecard: Linking People, Strategy and Performance. 19. Cascio, W. “The High Cost of Low Wages,” Harvard
Boston, MA: Harvard Business School Press, 2001. Business Review, December 2006.
7. Dyer, L. and Reeves, T. “HR Strategies and Firm 20. Sullivan, J. “How Google Is Using People Analytics to
Performance: What Do We Know and Where Do We Completely Reinvent HR,” Talent Management and HR,
Need to Go?” International Journal of Human Resource February 26, 2013.
Management, 6, (3), pp. 656–670. 21. Greer, C. R. Strategy and Human Resources: A General
8. Bates, S. “Executives Judge HR Based on Poor Metrics, Manager’s Perspective, Englewood Cliffs, NJ: Prentice-
Study Finds,” HR Magazine, September 2003, 48, (9), p. 12. Hall, 1995.
9. Ibid. 22. Becker, B. E. and Huselid, M. A. “High Performance
10. Coco, C., Jamison, F. and Black, H. “Connecting People Work Systems and Firm Performance: A Synthesis of
Investments and Business Outcomes at Lowe’s: Using Research and Managerial Implications,” Research in
Value Linkage Analytics to Link Employee Engagement Personnel and Human Resource Management, 16, 1998,
to Business Performance,” People and Strategy, 24, (2), pp. 53–101.
28–33 (2011).
11. Bates, S. “The Metrics Maze,” HR Magazine, December
2003, pp. 51–60.
READING 1.1
Us in g Targ ete d An a l y t i c s to I m p rove

Tale nt D e c i si o n s
Alec Levenson
The past decade saw the emergence of analytics as a potential a. The Capability-Opportunity-Motivation model for diag-
force for driving data-based decision making in HR (Lawler, nosing work-related behavior and productivity, a model
Levenson, and Boudreau, 2004; Levenson, 2005). At the begin- that can be used for job design;
ning of the decade, "human resources analytics" was not part b. A labor markets model of external opportunities and
of the language of business. Today, at the end of the decade, a career development, which can be used to analyze the
Google search for the same term produces more than 1.5 million cost-benefit of job design, staffing and talent management
results. When the topic of HR analytics was raised at the Center decisions; and
for Effective Organizations annual sponsors meeting in 2003, it c. An organization design model for diagnosing struc-
was not part of the formal agenda and there were no established tural barriers to enterprise-wide collaboration and
courses or seminars on the topic in the HR consulting and train- performance.
ing space. Today, an ever-expanding array of providers and con-
When HR professionals master these models and apply
tent work to train and certify practitioners in HR analytics and
them to everyday decision making, two things happen: 1) the
automate HR analysis.
path to identifying which analytics to apply becomes clear,
Yet despite the apparent progress, there still is much
and, 2) if there is no time for intensive analytics, the models—
uncertainty regarding how best to design, apply and integrate
their logic and the empirical evidence behind them—are
analytics into the daily workings of the HR function. The chal-
effective substitutes that improve the accuracy and impact of
lenge lies in understanding what analytics to apply where, and
talent and organizational decisions.
the time and resources needed to achieve true insights. This
article discusses the variety of analytics and skills that can be
used to achieve business insights related to HR and talent. Analytic Competencies in the HR function
Case study examples illustrate the importance of matching the Human capital analytics are most powerful when they help
analytic method to the issue under study. tell and validate a story that illustrates the driving forces
There is a good-news/bad-news story. The bad news is behind individuals’ and groups’ behaviors and perfor-
that the statistical skills needed to do technically sophisticated mance. As Boudreau and Ramstad (2006) point out, analyt-
analysis tend not to be located in HR, and, when they are ics need to be embedded within a logic framework that is
located in HR, tend to be concentrated in HR analytics centers linked to the business; and a change process is needed so
of excellence. The good news is that the limited availability of they are used in a way that ensures maximum impact. The
advanced statistical skills does not always restrict HR profes- logic framework ensures that the analytics are focused on
sionals’ ability to do meaningful analytics. What matters most the right issues and are set up to maximize the discovery of
is knowing what analytics to apply and where to apply them. data and analysis results that are actionable. The process for
It turns out that some of the best examples of analysis- using the results of the analytics ensures the data is turned
driven deep insights come from projects that require a large into action.
amount of time, energy and resources to complete but that do The first challenge in applying analytics is in choosing
not necessarily require the most technically advanced statisti- from the wide array of statistical and analytic techniques
cal methods. The challenge is in determining how to improve that are available. Providing an exhaustive list of techniques
decision making in everyday settings when very involved ana- would be overkill. Instead, Table 1 lists categories of ana-
lytics projects are not feasible. lytic competencies divided by type and level of complexity.
These three proven frameworks can be applied to make The categories are drawn in part from Rothwell and Sredl’s
better on-the-spot decisions, even in situations where there is (1992) competencies for a Human Resource Development
little time for extensive data collection: Researcher and in part from my personal experience con-
ducting and training others in human capital analytics and
Center for Effective Organizations, University of Southern California statistical analysis.
Table 1
HR Analytical Competencies
Analytical competencies related to statistical techniques
Level of statistical expertise required
(and approximate educational
Category Examples equivalent)
Basic data analysis • Mean • Beginning course in basic statistics
• Median • Minimal on-the-job experience apply-
• Minimum & maximum; range ing the techniques
• Percentiles • High school / undergraduate level
education
Intermediate data analysis • Correlation • One to two courses in basic statistics
• Statistically significant differences • 3–6 months on-the-job experience
• Standard deviation • High school / undergraduate
education
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DANCE ON STILTS AT THE GIRLS’ UNYAGO, NIUCHI
Newala, too, suffers from the distance of its water-supply—at least

the Newala of to-day does; there was once another Newala in a lovely
valley at the foot of the plateau. I visited it and found scarcely a trace
of houses, only a Christian cemetery, with the graves of several
missionaries and their converts, remaining as a monument of its
former glories. But the surroundings are wonderfully beautiful. A
thick grove of splendid mango-trees closes in the weather-worn
crosses and headstones; behind them, combining the useful and the
agreeable, is a whole plantation of lemon-trees covered with ripe
fruit; not the small African kind, but a much larger and also juicier
imported variety, which drops into the hands of the passing traveller,
without calling for any exertion on his part. Old Newala is now under
the jurisdiction of the native pastor, Daudi, at Chingulungulu, who,
as I am on very friendly terms with him, allows me, as a matter of
course, the use of this lemon-grove during my stay at Newala.
FEET MUTILATED BY THE RAVAGES OF THE “JIGGER”
(Sarcopsylla penetrans)
The water-supply of New Newala is in the bottom of the valley,

some 1,600 feet lower down. The way is not only long and fatiguing,
but the water, when we get it, is thoroughly bad. We are suffering not
only from this, but from the fact that the arrangements at Newala are
nothing short of luxurious. We have a separate kitchen—a hut built
against the boma palisade on the right of the baraza, the interior of
which is not visible from our usual position. Our two cooks were not
long in finding this out, and they consequently do—or rather neglect
to do—what they please. In any case they do not seem to be very
particular about the boiling of our drinking-water—at least I can
attribute to no other cause certain attacks of a dysenteric nature,
from which both Knudsen and I have suffered for some time. If a
man like Omari has to be left unwatched for a moment, he is capable
of anything. Besides this complaint, we are inconvenienced by the
state of our nails, which have become as hard as glass, and crack on
the slightest provocation, and I have the additional infliction of
pimples all over me. As if all this were not enough, we have also, for
the last week been waging war against the jigger, who has found his
Eldorado in the hot sand of the Makonde plateau. Our men are seen
all day long—whenever their chronic colds and the dysentery likewise
raging among them permit—occupied in removing this scourge of
Africa from their feet and trying to prevent the disastrous
consequences of its presence. It is quite common to see natives of
this place with one or two toes missing; many have lost all their toes,
or even the whole front part of the foot, so that a well-formed leg
ends in a shapeless stump. These ravages are caused by the female of
Sarcopsylla penetrans, which bores its way under the skin and there
develops an egg-sac the size of a pea. In all books on the subject, it is
stated that one’s attention is called to the presence of this parasite by
an intolerable itching. This agrees very well with my experience, so
far as the softer parts of the sole, the spaces between and under the
toes, and the side of the foot are concerned, but if the creature
penetrates through the harder parts of the heel or ball of the foot, it
may escape even the most careful search till it has reached maturity.
Then there is no time to be lost, if the horrible ulceration, of which
we see cases by the dozen every day, is to be prevented. It is much
easier, by the way, to discover the insect on the white skin of a
European than on that of a native, on which the dark speck scarcely
shows. The four or five jiggers which, in spite of the fact that I
constantly wore high laced boots, chose my feet to settle in, were
taken out for me by the all-accomplished Knudsen, after which I
thought it advisable to wash out the cavities with corrosive
sublimate. The natives have a different sort of disinfectant—they fill
the hole with scraped roots. In a tiny Makua village on the slope of
the plateau south of Newala, we saw an old woman who had filled all
the spaces under her toe-nails with powdered roots by way of
prophylactic treatment. What will be the result, if any, who can say?
The rest of the many trifling ills which trouble our existence are
really more comic than serious. In the absence of anything else to
smoke, Knudsen and I at last opened a box of cigars procured from
the Indian store-keeper at Lindi, and tried them, with the most
distressing results. Whether they contain opium or some other
narcotic, neither of us can say, but after the tenth puff we were both
“off,” three-quarters stupefied and unspeakably wretched. Slowly we
recovered—and what happened next? Half-an-hour later we were
once more smoking these poisonous concoctions—so insatiable is the
craving for tobacco in the tropics.
Even my present attacks of fever scarcely deserve to be taken
seriously. I have had no less than three here at Newala, all of which
have run their course in an incredibly short time. In the early
afternoon, I am busy with my old natives, asking questions and
making notes. The strong midday coffee has stimulated my spirits to
an extraordinary degree, the brain is active and vigorous, and work
progresses rapidly, while a pleasant warmth pervades the whole
body. Suddenly this gives place to a violent chill, forcing me to put on
my overcoat, though it is only half-past three and the afternoon sun
is at its hottest. Now the brain no longer works with such acuteness
and logical precision; more especially does it fail me in trying to
establish the syntax of the difficult Makua language on which I have
ventured, as if I had not enough to do without it. Under the
circumstances it seems advisable to take my temperature, and I do
so, to save trouble, without leaving my seat, and while going on with
my work. On examination, I find it to be 101·48°. My tutors are
abruptly dismissed and my bed set up in the baraza; a few minutes
later I am in it and treating myself internally with hot water and
lemon-juice.
Three hours later, the thermometer marks nearly 104°, and I make
them carry me back into the tent, bed and all, as I am now perspiring
heavily, and exposure to the cold wind just beginning to blow might
mean a fatal chill. I lie still for a little while, and then find, to my
great relief, that the temperature is not rising, but rather falling. This
is about 7.30 p.m. At 8 p.m. I find, to my unbounded astonishment,
that it has fallen below 98·6°, and I feel perfectly well. I read for an
hour or two, and could very well enjoy a smoke, if I had the
wherewithal—Indian cigars being out of the question.
Having no medical training, I am at a loss to account for this state
of things. It is impossible that these transitory attacks of high fever
should be malarial; it seems more probable that they are due to a
kind of sunstroke. On consulting my note-book, I become more and
more inclined to think this is the case, for these attacks regularly
follow extreme fatigue and long exposure to strong sunshine. They at
least have the advantage of being only short interruptions to my
work, as on the following morning I am always quite fresh and fit.
My treasure of a cook is suffering from an enormous hydrocele which
makes it difficult for him to get up, and Moritz is obliged to keep in
the dark on account of his inflamed eyes. Knudsen’s cook, a raw boy
from somewhere in the bush, knows still less of cooking than Omari;
consequently Nils Knudsen himself has been promoted to the vacant
post. Finding that we had come to the end of our supplies, he began
by sending to Chingulungulu for the four sucking-pigs which we had
bought from Matola and temporarily left in his charge; and when
they came up, neatly packed in a large crate, he callously slaughtered
the biggest of them. The first joint we were thoughtless enough to
entrust for roasting to Knudsen’s mshenzi cook, and it was
consequently uneatable; but we made the rest of the animal into a
jelly which we ate with great relish after weeks of underfeeding,
consuming incredible helpings of it at both midday and evening
meals. The only drawback is a certain want of variety in the tinned
vegetables. Dr. Jäger, to whom the Geographical Commission
entrusted the provisioning of the expeditions—mine as well as his
own—because he had more time on his hands than the rest of us,
seems to have laid in a huge stock of Teltow turnips,[46] an article of
food which is all very well for occasional use, but which quickly palls
when set before one every day; and we seem to have no other tins
left. There is no help for it—we must put up with the turnips; but I
am certain that, once I am home again, I shall not touch them for ten
years to come.
Amid all these minor evils, which, after all, go to make up the
genuine flavour of Africa, there is at least one cheering touch:
Knudsen has, with the dexterity of a skilled mechanic, repaired my 9
× 12 cm. camera, at least so far that I can use it with a little care.
How, in the absence of finger-nails, he was able to accomplish such a
ticklish piece of work, having no tool but a clumsy screw-driver for
taking to pieces and putting together again the complicated
mechanism of the instantaneous shutter, is still a mystery to me; but
he did it successfully. The loss of his finger-nails shows him in a light
contrasting curiously enough with the intelligence evinced by the
above operation; though, after all, it is scarcely surprising after his
ten years’ residence in the bush. One day, at Lindi, he had occasion
to wash a dog, which must have been in need of very thorough
cleansing, for the bottle handed to our friend for the purpose had an
extremely strong smell. Having performed his task in the most
conscientious manner, he perceived with some surprise that the dog
did not appear much the better for it, and was further surprised by
finding his own nails ulcerating away in the course of the next few
days. “How was I to know that carbolic acid has to be diluted?” he
mutters indignantly, from time to time, with a troubled gaze at his
mutilated finger-tips.
Since we came to Newala we have been making excursions in all
directions through the surrounding country, in accordance with old
habit, and also because the akida Sefu did not get together the tribal
elders from whom I wanted information so speedily as he had
promised. There is, however, no harm done, as, even if seen only
from the outside, the country and people are interesting enough.
The Makonde plateau is like a large rectangular table rounded off
at the corners. Measured from the Indian Ocean to Newala, it is
about seventy-five miles long, and between the Rovuma and the
Lukuledi it averages fifty miles in breadth, so that its superficial area
is about two-thirds of that of the kingdom of Saxony. The surface,
however, is not level, but uniformly inclined from its south-western
edge to the ocean. From the upper edge, on which Newala lies, the
eye ranges for many miles east and north-east, without encountering
any obstacle, over the Makonde bush. It is a green sea, from which
here and there thick clouds of smoke rise, to show that it, too, is
inhabited by men who carry on their tillage like so many other
primitive peoples, by cutting down and burning the bush, and
manuring with the ashes. Even in the radiant light of a tropical day
such a fire is a grand sight.
Much less effective is the impression produced just now by the
great western plain as seen from the edge of the plateau. As often as
time permits, I stroll along this edge, sometimes in one direction,
sometimes in another, in the hope of finding the air clear enough to
let me enjoy the view; but I have always been disappointed.
Wherever one looks, clouds of smoke rise from the burning bush,
and the air is full of smoke and vapour. It is a pity, for under more
favourable circumstances the panorama of the whole country up to
the distant Majeje hills must be truly magnificent. It is of little use
taking photographs now, and an outline sketch gives a very poor idea
of the scenery. In one of these excursions I went out of my way to
make a personal attempt on the Makonde bush. The present edge of
the plateau is the result of a far-reaching process of destruction
through erosion and denudation. The Makonde strata are
everywhere cut into by ravines, which, though short, are hundreds of
yards in depth. In consequence of the loose stratification of these
beds, not only are the walls of these ravines nearly vertical, but their
upper end is closed by an equally steep escarpment, so that the
western edge of the Makonde plateau is hemmed in by a series of
deep, basin-like valleys. In order to get from one side of such a ravine
to the other, I cut my way through the bush with a dozen of my men.
It was a very open part, with more grass than scrub, but even so the
short stretch of less than two hundred yards was very hard work; at
the end of it the men’s calicoes were in rags and they themselves
bleeding from hundreds of scratches, while even our strong khaki
suits had not escaped scatheless.
NATIVE PATH THROUGH THE MAKONDE BUSH, NEAR

MAHUTA
I see increasing reason to believe that the view formed some time
back as to the origin of the Makonde bush is the correct one. I have
no doubt that it is not a natural product, but the result of human
occupation. Those parts of the high country where man—as a very
slight amount of practice enables the eye to perceive at once—has not
yet penetrated with axe and hoe, are still occupied by a splendid
timber forest quite able to sustain a comparison with our mixed
forests in Germany. But wherever man has once built his hut or tilled
his field, this horrible bush springs up. Every phase of this process
may be seen in the course of a couple of hours’ walk along the main
road. From the bush to right or left, one hears the sound of the axe—
not from one spot only, but from several directions at once. A few
steps further on, we can see what is taking place. The brush has been
cut down and piled up in heaps to the height of a yard or more,
between which the trunks of the large trees stand up like the last
pillars of a magnificent ruined building. These, too, present a
melancholy spectacle: the destructive Makonde have ringed them—
cut a broad strip of bark all round to ensure their dying off—and also
piled up pyramids of brush round them. Father and son, mother and
son-in-law, are chopping away perseveringly in the background—too
busy, almost, to look round at the white stranger, who usually excites
so much interest. If you pass by the same place a week later, the piles
of brushwood have disappeared and a thick layer of ashes has taken
the place of the green forest. The large trees stretch their
smouldering trunks and branches in dumb accusation to heaven—if
they have not already fallen and been more or less reduced to ashes,
perhaps only showing as a white stripe on the dark ground.
This work of destruction is carried out by the Makonde alike on the
virgin forest and on the bush which has sprung up on sites already
cultivated and deserted. In the second case they are saved the trouble
of burning the large trees, these being entirely absent in the
secondary bush.
After burning this piece of forest ground and loosening it with the
hoe, the native sows his corn and plants his vegetables. All over the
country, he goes in for bed-culture, which requires, and, in fact,
receives, the most careful attention. Weeds are nowhere tolerated in
the south of German East Africa. The crops may fail on the plains,
where droughts are frequent, but never on the plateau with its
abundant rains and heavy dews. Its fortunate inhabitants even have
the satisfaction of seeing the proud Wayao and Wamakua working
for them as labourers, driven by hunger to serve where they were
accustomed to rule.
But the light, sandy soil is soon exhausted, and would yield no
harvest the second year if cultivated twice running. This fact has
been familiar to the native for ages; consequently he provides in
time, and, while his crop is growing, prepares the next plot with axe
and firebrand. Next year he plants this with his various crops and
lets the first piece lie fallow. For a short time it remains waste and
desolate; then nature steps in to repair the destruction wrought by
man; a thousand new growths spring out of the exhausted soil, and
even the old stumps put forth fresh shoots. Next year the new growth
is up to one’s knees, and in a few years more it is that terrible,
impenetrable bush, which maintains its position till the black
occupier of the land has made the round of all the available sites and
come back to his starting point.
The Makonde are, body and soul, so to speak, one with this bush.
According to my Yao informants, indeed, their name means nothing
else but “bush people.” Their own tradition says that they have been
settled up here for a very long time, but to my surprise they laid great
stress on an original immigration. Their old homes were in the
south-east, near Mikindani and the mouth of the Rovuma, whence
their peaceful forefathers were driven by the continual raids of the
Sakalavas from Madagascar and the warlike Shirazis[47] of the coast,
to take refuge on the almost inaccessible plateau. I have studied
African ethnology for twenty years, but the fact that changes of
population in this apparently quiet and peaceable corner of the earth
could have been occasioned by outside enterprises taking place on
the high seas, was completely new to me. It is, no doubt, however,
correct.
The charming tribal legend of the Makonde—besides informing us
of other interesting matters—explains why they have to live in the
thickest of the bush and a long way from the edge of the plateau,
instead of making their permanent homes beside the purling brooks
and springs of the low country.
“The place where the tribe originated is Mahuta, on the southern
side of the plateau towards the Rovuma, where of old time there was
nothing but thick bush. Out of this bush came a man who never
washed himself or shaved his head, and who ate and drank but little.
He went out and made a human figure from the wood of a tree
growing in the open country, which he took home to his abode in the
bush and there set it upright. In the night this image came to life and
was a woman. The man and woman went down together to the
Rovuma to wash themselves. Here the woman gave birth to a still-
born child. They left that place and passed over the high land into the
valley of the Mbemkuru, where the woman had another child, which
was also born dead. Then they returned to the high bush country of
Mahuta, where the third child was born, which lived and grew up. In
course of time, the couple had many more children, and called
themselves Wamatanda. These were the ancestral stock of the
Makonde, also called Wamakonde,[48] i.e., aborigines. Their
forefather, the man from the bush, gave his children the command to
bury their dead upright, in memory of the mother of their race who
was cut out of wood and awoke to life when standing upright. He also
warned them against settling in the valleys and near large streams,
for sickness and death dwelt there. They were to make it a rule to
have their huts at least an hour’s walk from the nearest watering-
place; then their children would thrive and escape illness.”
The explanation of the name Makonde given by my informants is
somewhat different from that contained in the above legend, which I
extract from a little book (small, but packed with information), by
Pater Adams, entitled Lindi und sein Hinterland. Otherwise, my
results agree exactly with the statements of the legend. Washing?
Hapana—there is no such thing. Why should they do so? As it is, the
supply of water scarcely suffices for cooking and drinking; other
people do not wash, so why should the Makonde distinguish himself
by such needless eccentricity? As for shaving the head, the short,
woolly crop scarcely needs it,[49] so the second ancestral precept is
likewise easy enough to follow. Beyond this, however, there is
nothing ridiculous in the ancestor’s advice. I have obtained from
various local artists a fairly large number of figures carved in wood,
ranging from fifteen to twenty-three inches in height, and
representing women belonging to the great group of the Mavia,
Makonde, and Matambwe tribes. The carving is remarkably well
done and renders the female type with great accuracy, especially the
keloid ornamentation, to be described later on. As to the object and
meaning of their works the sculptors either could or (more probably)
would tell me nothing, and I was forced to content myself with the
scanty information vouchsafed by one man, who said that the figures
were merely intended to represent the nembo—the artificial
deformations of pelele, ear-discs, and keloids. The legend recorded
by Pater Adams places these figures in a new light. They must surely
be more than mere dolls; and we may even venture to assume that
they are—though the majority of present-day Makonde are probably
unaware of the fact—representations of the tribal ancestress.
The references in the legend to the descent from Mahuta to the
Rovuma, and to a journey across the highlands into the Mbekuru
valley, undoubtedly indicate the previous history of the tribe, the
travels of the ancestral pair typifying the migrations of their
descendants. The descent to the neighbouring Rovuma valley, with
its extraordinary fertility and great abundance of game, is intelligible
at a glance—but the crossing of the Lukuledi depression, the ascent
to the Rondo Plateau and the descent to the Mbemkuru, also lie
within the bounds of probability, for all these districts have exactly
the same character as the extreme south. Now, however, comes a
point of especial interest for our bacteriological age. The primitive
Makonde did not enjoy their lives in the marshy river-valleys.
Disease raged among them, and many died. It was only after they
had returned to their original home near Mahuta, that the health
conditions of these people improved. We are very apt to think of the
African as a stupid person whose ignorance of nature is only equalled
by his fear of it, and who looks on all mishaps as caused by evil
spirits and malignant natural powers. It is much more correct to
assume in this case that the people very early learnt to distinguish
districts infested with malaria from those where it is absent.
This knowledge is crystallized in the
ancestral warning against settling in the
valleys and near the great waters, the
dwelling-places of disease and death. At the
same time, for security against the hostile
Mavia south of the Rovuma, it was enacted
that every settlement must be not less than a
certain distance from the southern edge of the
plateau. Such in fact is their mode of life at the
present day. It is not such a bad one, and
certainly they are both safer and more
comfortable than the Makua, the recent
intruders from the south, who have made USUAL METHOD OF
good their footing on the western edge of the CLOSING HUT-DOOR
plateau, extending over a fairly wide belt of
country. Neither Makua nor Makonde show in their dwellings
anything of the size and comeliness of the Yao houses in the plain,
especially at Masasi, Chingulungulu and Zuza’s. Jumbe Chauro, a
Makonde hamlet not far from Newala, on the road to Mahuta, is the
most important settlement of the tribe I have yet seen, and has fairly
spacious huts. But how slovenly is their construction compared with
the palatial residences of the elephant-hunters living in the plain.
The roofs are still more untidy than in the general run of huts during
the dry season, the walls show here and there the scanty beginnings
or the lamentable remains of the mud plastering, and the interior is a
veritable dog-kennel; dirt, dust and disorder everywhere. A few huts
only show any attempt at division into rooms, and this consists
merely of very roughly-made bamboo partitions. In one point alone
have I noticed any indication of progress—in the method of fastening
the door. Houses all over the south are secured in a simple but
ingenious manner. The door consists of a set of stout pieces of wood
or bamboo, tied with bark-string to two cross-pieces, and moving in
two grooves round one of the door-posts, so as to open inwards. If
the owner wishes to leave home, he takes two logs as thick as a man’s
upper arm and about a yard long. One of these is placed obliquely
against the middle of the door from the inside, so as to form an angle
of from 60° to 75° with the ground. He then places the second piece
horizontally across the first, pressing it downward with all his might.
It is kept in place by two strong posts planted in the ground a few
inches inside the door. This fastening is absolutely safe, but of course
cannot be applied to both doors at once, otherwise how could the
owner leave or enter his house? I have not yet succeeded in finding
out how the back door is fastened.
MAKONDE LOCK AND KEY AT JUMBE CHAURO

This is the general way of closing a house. The Makonde at Jumbe
Chauro, however, have a much more complicated, solid and original
one. Here, too, the door is as already described, except that there is
only one post on the inside, standing by itself about six inches from
one side of the doorway. Opposite this post is a hole in the wall just
large enough to admit a man’s arm. The door is closed inside by a
large wooden bolt passing through a hole in this post and pressing
with its free end against the door. The other end has three holes into
which fit three pegs running in vertical grooves inside the post. The
door is opened with a wooden key about a foot long, somewhat
curved and sloped off at the butt; the other end has three pegs
corresponding to the holes, in the bolt, so that, when it is thrust
through the hole in the wall and inserted into the rectangular
opening in the post, the pegs can be lifted and the bolt drawn out.[50]
MODE OF INSERTING THE KEY
With no small pride first one householder and then a second

showed me on the spot the action of this greatest invention of the
Makonde Highlands. To both with an admiring exclamation of
“Vizuri sana!” (“Very fine!”). I expressed the wish to take back these
marvels with me to Ulaya, to show the Wazungu what clever fellows
the Makonde are. Scarcely five minutes after my return to camp at
Newala, the two men came up sweating under the weight of two
heavy logs which they laid down at my feet, handing over at the same
time the keys of the fallen fortress. Arguing, logically enough, that if
the key was wanted, the lock would be wanted with it, they had taken
their axes and chopped down the posts—as it never occurred to them
to dig them out of the ground and so bring them intact. Thus I have
two badly damaged specimens, and the owners, instead of praise,
come in for a blowing-up.
The Makua huts in the environs of Newala are especially
miserable; their more than slovenly construction reminds one of the
temporary erections of the Makua at Hatia’s, though the people here
have not been concerned in a war. It must therefore be due to
congenital idleness, or else to the absence of a powerful chief. Even
the baraza at Mlipa’s, a short hour’s walk south-east of Newala,
shares in this general neglect. While public buildings in this country
are usually looked after more or less carefully, this is in evident
danger of being blown over by the first strong easterly gale. The only
attractive object in this whole district is the grave of the late chief
Mlipa. I visited it in the morning, while the sun was still trying with
partial success to break through the rolling mists, and the circular
grove of tall euphorbias, which, with a broken pot, is all that marks
the old king’s resting-place, impressed one with a touch of pathos.
Even my very materially-minded carriers seemed to feel something
of the sort, for instead of their usual ribald songs, they chanted
solemnly, as we marched on through the dense green of the Makonde
bush:—
“We shall arrive with the great master; we stand in a row and have
no fear about getting our food and our money from the Serkali (the
Government). We are not afraid; we are going along with the great
master, the lion; we are going down to the coast and back.”
With regard to the characteristic features of the various tribes here
on the western edge of the plateau, I can arrive at no other
conclusion than the one already come to in the plain, viz., that it is
impossible for anyone but a trained anthropologist to assign any
given individual at once to his proper tribe. In fact, I think that even
an anthropological specialist, after the most careful examination,
might find it a difficult task to decide. The whole congeries of peoples
collected in the region bounded on the west by the great Central
African rift, Tanganyika and Nyasa, and on the east by the Indian
Ocean, are closely related to each other—some of their languages are
only distinguished from one another as dialects of the same speech,
and no doubt all the tribes present the same shape of skull and
structure of skeleton. Thus, surely, there can be no very striking
differences in outward appearance.
Even did such exist, I should have no time
to concern myself with them, for day after day,
I have to see or hear, as the case may be—in
any case to grasp and record—an
extraordinary number of ethnographic
phenomena. I am almost disposed to think it
fortunate that some departments of inquiry, at
least, are barred by external circumstances.
Chief among these is the subject of iron-
working. We are apt to think of Africa as a
country where iron ore is everywhere, so to
speak, to be picked up by the roadside, and
where it would be quite surprising if the
inhabitants had not learnt to smelt the
material ready to their hand. In fact, the
knowledge of this art ranges all over the
continent, from the Kabyles in the north to the
Kafirs in the south. Here between the Rovuma
and the Lukuledi the conditions are not so
favourable. According to the statements of the
Makonde, neither ironstone nor any other
form of iron ore is known to them. They have
not therefore advanced to the art of smelting
the metal, but have hitherto bought all their
THE ANCESTRESS OF
THE MAKONDE
iron implements from neighbouring tribes.
Even in the plain the inhabitants are not much
better off. Only one man now living is said to
understand the art of smelting iron. This old fundi lives close to
Huwe, that isolated, steep-sided block of granite which rises out of
the green solitude between Masasi and Chingulungulu, and whose
jagged and splintered top meets the traveller’s eye everywhere. While
still at Masasi I wished to see this man at work, but was told that,
frightened by the rising, he had retired across the Rovuma, though
he would soon return. All subsequent inquiries as to whether the
fundi had come back met with the genuine African answer, “Bado”
(“Not yet”).
BRAZIER
Some consolation was afforded me by a brassfounder, whom I

came across in the bush near Akundonde’s. This man is the favourite
of women, and therefore no doubt of the gods; he welds the glittering
brass rods purchased at the coast into those massive, heavy rings
which, on the wrists and ankles of the local fair ones, continually give
me fresh food for admiration. Like every decent master-craftsman he
had all his tools with him, consisting of a pair of bellows, three
crucibles and a hammer—nothing more, apparently. He was quite
willing to show his skill, and in a twinkling had fixed his bellows on
the ground. They are simply two goat-skins, taken off whole, the four
legs being closed by knots, while the upper opening, intended to
admit the air, is kept stretched by two pieces of wood. At the lower
end of the skin a smaller opening is left into which a wooden tube is
stuck. The fundi has quickly borrowed a heap of wood-embers from
the nearest hut; he then fixes the free ends of the two tubes into an
earthen pipe, and clamps them to the ground by means of a bent
piece of wood. Now he fills one of his small clay crucibles, the dross
on which shows that they have been long in use, with the yellow
material, places it in the midst of the embers, which, at present are
only faintly glimmering, and begins his work. In quick alternation
the smith’s two hands move up and down with the open ends of the
bellows; as he raises his hand he holds the slit wide open, so as to let
the air enter the skin bag unhindered. In pressing it down he closes
the bag, and the air puffs through the bamboo tube and clay pipe into
the fire, which quickly burns up. The smith, however, does not keep
on with this work, but beckons to another man, who relieves him at
the bellows, while he takes some more tools out of a large skin pouch
carried on his back. I look on in wonder as, with a smooth round
stick about the thickness of a finger, he bores a few vertical holes into
the clean sand of the soil. This should not be difficult, yet the man
seems to be taking great pains over it. Then he fastens down to the
ground, with a couple of wooden clamps, a neat little trough made by
splitting a joint of bamboo in half, so that the ends are closed by the
two knots. At last the yellow metal has attained the right consistency,
and the fundi lifts the crucible from the fire by means of two sticks
split at the end to serve as tongs. A short swift turn to the left—a
tilting of the crucible—and the molten brass, hissing and giving forth
clouds of smoke, flows first into the bamboo mould and then into the
holes in the ground.
The technique of this backwoods craftsman may not be very far
advanced, but it cannot be denied that he knows how to obtain an
adequate result by the simplest means. The ladies of highest rank in
this country—that is to say, those who can afford it, wear two kinds
of these massive brass rings, one cylindrical, the other semicircular
in section. The latter are cast in the most ingenious way in the
bamboo mould, the former in the circular hole in the sand. It is quite
a simple matter for the fundi to fit these bars to the limbs of his fair
customers; with a few light strokes of his hammer he bends the
pliable brass round arm or ankle without further inconvenience to
the wearer.
SHAPING THE POT
SMOOTHING WITH MAIZE-COB
CUTTING THE EDGE

FINISHING THE BOTTOM
LAST SMOOTHING BEFORE

BURNING
FIRING THE BRUSH-PILE

LIGHTING THE FARTHER SIDE OF
THE PILE
TURNING THE RED-HOT VESSEL
NYASA WOMAN MAKING POTS AT MASASI

Pottery is an art which must always and everywhere excite the
interest of the student, just because it is so intimately connected with
the development of human culture, and because its relics are one of
the principal factors in the reconstruction of our own condition in
prehistoric times. I shall always remember with pleasure the two or
three afternoons at Masasi when Salim Matola’s mother, a slightly-
built, graceful, pleasant-looking woman, explained to me with
touching patience, by means of concrete illustrations, the ceramic art
of her people. The only implements for this primitive process were a
lump of clay in her left hand, and in the right a calabash containing
the following valuables: the fragment of a maize-cob stripped of all
its grains, a smooth, oval pebble, about the size of a pigeon’s egg, a
few chips of gourd-shell, a bamboo splinter about the length of one’s
hand, a small shell, and a bunch of some herb resembling spinach.
Nothing more. The woman scraped with the
shell a round, shallow hole in the soft, fine
sand of the soil, and, when an active young
girl had filled the calabash with water for her,
she began to knead the clay. As if by magic it
gradually assumed the shape of a rough but
already well-shaped vessel, which only wanted
a little touching up with the instruments
before mentioned. I looked out with the
MAKUA WOMAN closest attention for any indication of the use
MAKING A POT. of the potter’s wheel, in however rudimentary
SHOWS THE a form, but no—hapana (there is none). The
BEGINNINGS OF THE embryo pot stood firmly in its little
POTTER’S WHEEL
depression, and the woman walked round it in
a stooping posture, whether she was removing
small stones or similar foreign bodies with the maize-cob, smoothing
the inner or outer surface with the splinter of bamboo, or later, after
letting it dry for a day, pricking in the ornamentation with a pointed
bit of gourd-shell, or working out the bottom, or cutting the edge
with a sharp bamboo knife, or giving the last touches to the finished
vessel. This occupation of the women is infinitely toilsome, but it is
without doubt an accurate reproduction of the process in use among
our ancestors of the Neolithic and Bronze ages.
There is no doubt that the invention of pottery, an item in human
progress whose importance cannot be over-estimated, is due to
women. Rough, coarse and unfeeling, the men of the horde range
over the countryside. When the united cunning of the hunters has
succeeded in killing the game; not one of them thinks of carrying
home the spoil. A bright fire, kindled by a vigorous wielding of the
drill, is crackling beside them; the animal has been cleaned and cut
up secundum artem, and, after a slight singeing, will soon disappear
under their sharp teeth; no one all this time giving a single thought
to wife or child.
To what shifts, on the other hand, the primitive wife, and still more
the primitive mother, was put! Not even prehistoric stomachs could
endure an unvarying diet of raw food. Something or other suggested
the beneficial effect of hot water on the majority of approved but
indigestible dishes. Perhaps a neighbour had tried holding the hard
roots or tubers over the fire in a calabash filled with water—or maybe
an ostrich-egg-shell, or a hastily improvised vessel of bark. They
became much softer and more palatable than they had previously
been; but, unfortunately, the vessel could not stand the fire and got
charred on the outside. That can be remedied, thought our
ancestress, and plastered a layer of wet clay round a similar vessel.
This is an improvement; the cooking utensil remains uninjured, but
the heat of the fire has shrunk it, so that it is loose in its shell. The
next step is to detach it, so, with a firm grip and a jerk, shell and
kernel are separated, and pottery is invented. Perhaps, however, the
discovery which led to an intelligent use of the burnt-clay shell, was
made in a slightly different way. Ostrich-eggs and calabashes are not
to be found in every part of the world, but everywhere mankind has
arrived at the art of making baskets out of pliant materials, such as
bark, bast, strips of palm-leaf, supple twigs, etc. Our inventor has no
water-tight vessel provided by nature. “Never mind, let us line the
basket with clay.” This answers the purpose, but alas! the basket gets
burnt over the blazing fire, the woman watches the process of
cooking with increasing uneasiness, fearing a leak, but no leak
appears. The food, done to a turn, is eaten with peculiar relish; and
the cooking-vessel is examined, half in curiosity, half in satisfaction
at the result. The plastic clay is now hard as stone, and at the same
time looks exceedingly well, for the neat plaiting of the burnt basket
is traced all over it in a pretty pattern. Thus, simultaneously with
pottery, its ornamentation was invented.
Primitive woman has another claim to respect. It was the man,
roving abroad, who invented the art of producing fire at will, but the
woman, unable to imitate him in this, has been a Vestal from the
earliest times. Nothing gives so much trouble as the keeping alight of
the smouldering brand, and, above all, when all the men are absent
from the camp. Heavy rain-clouds gather, already the first large
drops are falling, the first gusts of the storm rage over the plain. The
little flame, a greater anxiety to the woman than her own children,
flickers unsteadily in the blast. What is to be done? A sudden thought
occurs to her, and in an instant she has constructed a primitive hut
out of strips of bark, to protect the flame against rain and wind.
This, or something very like it, was the way in which the principle
of the house was discovered; and even the most hardened misogynist
cannot fairly refuse a woman the credit of it. The protection of the
hearth-fire from the weather is the germ from which the human
dwelling was evolved. Men had little, if any share, in this forward
step, and that only at a late stage. Even at the present day, the
plastering of the housewall with clay and the manufacture of pottery
are exclusively the women’s business. These are two very significant
survivals. Our European kitchen-garden, too, is originally a woman’s
invention, and the hoe, the primitive instrument of agriculture, is,
characteristically enough, still used in this department. But the
noblest achievement which we owe to the other sex is unquestionably
the art of cookery. Roasting alone—the oldest process—is one for
which men took the hint (a very obvious one) from nature. It must
have been suggested by the scorched carcase of some animal
overtaken by the destructive forest-fires. But boiling—the process of
improving organic substances by the help of water heated to boiling-
point—is a much later discovery. It is so recent that it has not even
yet penetrated to all parts of the world. The Polynesians understand
how to steam food, that is, to cook it, neatly wrapped in leaves, in a
hole in the earth between hot stones, the air being excluded, and
(sometimes) a few drops of water sprinkled on the stones; but they
do not understand boiling.
To come back from this digression, we find that the slender Nyasa
woman has, after once more carefully examining the finished pot,
put it aside in the shade to dry. On the following day she sends me
word by her son, Salim Matola, who is always on hand, that she is
going to do the burning, and, on coming out of my house, I find her
already hard at work. She has spread on the ground a layer of very
dry sticks, about as thick as one’s thumb, has laid the pot (now of a
yellowish-grey colour) on them, and is piling brushwood round it.
My faithful Pesa mbili, the mnyampara, who has been standing by,
most obligingly, with a lighted stick, now hands it to her. Both of
them, blowing steadily, light the pile on the lee side, and, when the
flame begins to catch, on the weather side also. Soon the whole is in a
blaze, but the dry fuel is quickly consumed and the fire dies down, so
that we see the red-hot vessel rising from the ashes. The woman
turns it continually with a long stick, sometimes one way and
sometimes another, so that it may be evenly heated all over. In
twenty minutes she rolls it out of the ash-heap, takes up the bundle
of spinach, which has been lying for two days in a jar of water, and
sprinkles the red-hot clay with it. The places where the drops fall are
marked by black spots on the uniform reddish-brown surface. With a
sigh of relief, and with visible satisfaction, the woman rises to an
erect position; she is standing just in a line between me and the fire,
from which a cloud of smoke is just rising: I press the ball of my
camera, the shutter clicks—the apotheosis is achieved! Like a
priestess, representative of her inventive sex, the graceful woman
stands: at her feet the hearth-fire she has given us beside her the
invention she has devised for us, in the background the home she has
built for us.
At Newala, also, I have had the manufacture of pottery carried on
in my presence. Technically the process is better than that already
described, for here we find the beginnings of the potter’s wheel,
which does not seem to exist in the plains; at least I have seen
nothing of the sort. The artist, a frightfully stupid Makua woman, did
not make a depression in the ground to receive the pot she was about
to shape, but used instead a large potsherd. Otherwise, she went to
work in much the same way as Salim’s mother, except that she saved
herself the trouble of walking round and round her work by squatting
at her ease and letting the pot and potsherd rotate round her; this is
surely the first step towards a machine. But it does not follow that
the pot was improved by the process. It is true that it was beautifully
rounded and presented a very creditable appearance when finished,
but the numerous large and small vessels which I have seen, and, in
part, collected, in the “less advanced” districts, are no less so. We
moderns imagine that instruments of precision are necessary to
produce excellent results. Go to the prehistoric collections of our
museums and look at the pots, urns and bowls of our ancestors in the
dim ages of the past, and you will at once perceive your error.
MAKING LONGITUDINAL CUT IN
BARK
DRAWING THE BARK OFF THE LOG
REMOVING THE OUTER BARK

BEATING THE BARK
WORKING THE BARK-CLOTH AFTER BEATING, TO MAKE IT

SOFT
MANUFACTURE OF BARK-CLOTH AT NEWALA

To-day, nearly the whole population of German East Africa is
clothed in imported calico. This was not always the case; even now in
some parts of the north dressed skins are still the prevailing wear,
and in the north-western districts—east and north of Lake
Tanganyika—lies a zone where bark-cloth has not yet been
superseded. Probably not many generations have passed since such
bark fabrics and kilts of skins were the only clothing even in the
south. Even to-day, large quantities of this bright-red or drab
material are still to be found; but if we wish to see it, we must look in
the granaries and on the drying stages inside the native huts, where
it serves less ambitious uses as wrappings for those seeds and fruits
which require to be packed with special care. The salt produced at
Masasi, too, is packed for transport to a distance in large sheets of
bark-cloth. Wherever I found it in any degree possible, I studied the
process of making this cloth. The native requisitioned for the
purpose arrived, carrying a log between two and three yards long and
as thick as his thigh, and nothing else except a curiously-shaped
mallet and the usual long, sharp and pointed knife which all men and
boys wear in a belt at their backs without a sheath—horribile dictu!
[51]
Silently he squats down before me, and with two rapid cuts has
drawn a couple of circles round the log some two yards apart, and
slits the bark lengthwise between them with the point of his knife.
With evident care, he then scrapes off the outer rind all round the
log, so that in a quarter of an hour the inner red layer of the bark
shows up brightly-coloured between the two untouched ends. With
some trouble and much caution, he now loosens the bark at one end,
and opens the cylinder. He then stands up, takes hold of the free
edge with both hands, and turning it inside out, slowly but steadily
pulls it off in one piece. Now comes the troublesome work of
scraping all superfluous particles of outer bark from the outside of
the long, narrow piece of material, while the inner side is carefully
scrutinised for defective spots. At last it is ready for beating. Having
signalled to a friend, who immediately places a bowl of water beside
him, the artificer damps his sheet of bark all over, seizes his mallet,
lays one end of the stuff on the smoothest spot of the log, and
hammers away slowly but continuously. “Very simple!” I think to
myself. “Why, I could do that, too!”—but I am forced to change my
opinions a little later on; for the beating is quite an art, if the fabric is
not to be beaten to pieces. To prevent the breaking of the fibres, the
stuff is several times folded across, so as to interpose several
thicknesses between the mallet and the block. At last the required
state is reached, and the fundi seizes the sheet, still folded, by both
ends, and wrings it out, or calls an assistant to take one end while he
holds the other. The cloth produced in this way is not nearly so fine
and uniform in texture as the famous Uganda bark-cloth, but it is
quite soft, and, above all, cheap.
Now, too, I examine the mallet. My craftsman has been using the
simpler but better form of this implement, a conical block of some
hard wood, its base—the striking surface—being scored across and
across with more or less deeply-cut grooves, and the handle stuck
into a hole in the middle. The other and earlier form of mallet is
shaped in the same way, but the head is fastened by an ingenious
network of bark strips into the split bamboo serving as a handle. The
observation so often made, that ancient customs persist longest in
connection with religious ceremonies and in the life of children, here
finds confirmation. As we shall soon see, bark-cloth is still worn
during the unyago,[52] having been prepared with special solemn
ceremonies; and many a mother, if she has no other garment handy,
will still put her little one into a kilt of bark-cloth, which, after all,
looks better, besides being more in keeping with its African
surroundings, than the ridiculous bit of print from Ulaya.
MAKUA WOMEN

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(eBook PDF) Strategic Human

Resource Management 5th Edition by

Australia • Brazil • Mexico • Singapore • United Kingdom • United States

READING 6.1: Sexual Harassment Versus Workplace Romance: Social Media Spillover

7 Employment Law 221

International Assignments 287

9 Training and Development 303

10 Performance Management and Feedback 327

12 Labor Relations 407

13 Employee Separation and Retention Management 435

14 Global Human Resource Management 467

SUBJECT INDEX 507

Organization and Content

New to the Fifth Edition

MindTap: Empower Your Students

Access Everything You Need in One Place

Empower Students to Reach Their Potential

Control Your Course—and Your Content

Get a Dedicated Team, Whenever You Need It

Ability to Learn and Grow

Decision Making Capabilities

Adopting an Investment Perspective

Managing Employees at United Parcel Service

Managing an organization’s employees as investments mandates the development of an appro-

• Operational • management practices

Understanding and Measuring Human Capital

Employee Operational Financial/ Market-

Measuring Human Assets/Capital at Dow Chemical

Moneyball and the Oakland Athletics

HR Metrics and Analytics

Labor Supply Chain Management at Valero Energy

Measuring Employee Impact and Financial Performance at Lowe’s

People Analytics at Google

Factors Influencing How “Investment-Oriented”

Management Values Utilitarianism

Attitude Toward Risk Availability of Outsourcing

Nature of Employee Skills

Senior management values and actions determine organizational investment in assets. It

An investment perspective of HR is often not adopted because it involves making a

Us in g Targ ete d An a l y t i c s to I m p rove

Newala, too, suffers from the distance of its water-supply—at least

The water-supply of New Newala is in the bottom of the valley,

NATIVE PATH THROUGH THE MAKONDE BUSH, NEAR

MAKONDE LOCK AND KEY AT JUMBE CHAURO

MODE OF INSERTING THE KEY

With no small pride first one householder and then a second

Some consolation was afforded me by a brassfounder, whom I

SMOOTHING WITH MAIZE-COB

CUTTING THE EDGE

LAST SMOOTHING BEFORE

FIRING THE BRUSH-PILE

TURNING THE RED-HOT VESSEL

NYASA WOMAN MAKING POTS AT MASASI

DRAWING THE BARK OFF THE LOG

REMOVING THE OUTER BARK

WORKING THE BARK-CLOTH AFTER BEATING, TO MAKE IT

MANUFACTURE OF BARK-CLOTH AT NEWALA

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