Employees’ worth (or value) is a complicated question to answer; it’s a real dichotomy due to the concurrent subjectivity and objectivity to the parties concerned. In this article, we’ll analyse, interpret the quantitative data points and qualitative emotions to try and find a mutually satisfying method.
Differentiating between qualitative and quantitative data
Before we go any further, it should be understood that a business’s employees are their primary asset. You’re investing in people, first. The skills they bring to the table should be seen as secondary. Employees need to be viewed from a holistic perspective. However, this opens a dichotomy: on the one hand, employees are hired to perform a job for which they will receive compensation, but they’re also red-blooded human beings and deserve to be treated with dignity and respect. These two aspects are not mutually exclusive. So, firstly, let’s differentiate between employees’ quantitative and qualitative facets.
Qualitative data describes the qualities or characteristics of the employee. It generally appears in narrative form (such as notes taken from a discussion in an interview.) While this data may be challenging to analyse, as an experienced employer, you should have the ability to glean the qualitative data you require to know whether the employee will be a good fit for the role and the business as a whole. In a previous article, we explained How to (properly) interview a job candidate, it provides insight into how to build qualitative candidate-interviewing strategies. Here’s an excerpt:
“From the outset, forget about ‘the glove either fits, or it doesn’t’ mentality. In fact, start with a metaphorical blank canvas so that you can have a well-rounded idea of the big picture by the end of the interview; based on that outcome, you should have enough evidence to make an informed decision. The point of the interview is to get to know the person behind the CV. Conducting an interview is an art; questions should be designed to directly, indirectly and subtly elicit responses that uncover whether the candidate has all the correct attributes to fulfil the job role successfully.”
This is the data that can be measured, analysed and interpreted to satisfy objective criteria such as key performance indicators (KPIs) to determine whether the employee fulfils the requirements for the job role. There are numerous ways through which you can extract this data. One of the most widely used methods is to ask the employee to complete a carefully designed task that will test his/her abilities to understand and perform the job. The method of measurement is up to you but make sure it reflects the criteria accurately. As mentioned above, qualitative and quantitative factors should have a symbiotic relationship, meaning that both sides benefit from the interaction. In this case, correct interpretation will provide the employer with an in-depth view of the total value an employee brings to a business.
At this point, you may be thinking ‘okay, I understand that amalgamating qualitative and quantitative data to form a balanced perspective of an employee is best in an ideal situation but, at the same time, I’m running a business that has finite costs to the company. How can I utilise the above information pragmatically?’ You are 100% correct. The extraction of employee value through qualitative and quantitative data is only part of the puzzle; now, it needs to be ‘inserted’ into a business’s balance sheet to determine an employee’s cost to company (CTC) value.
According to an article published on Baseline, author Paul A. Strassmann says, “Economists have long viewed compensation as an employee’s worth. I argue that one must turn to the competitive marketplace to determine the true worth of an employee. And chief information officers should understand how to calculate the worth of their employees before they move to cut information-technology costs.” This is a subjective statement which, for many, would be right on the money. Any business-savvy employer knows that compensation should align with the industry’s market value for a particular job role. He/she has to use relevant metrics to calculate a ‘real world’ salary for the employee.
It’s worthwhile consulting a reputable HR company that offers tools to assist you in making this decision. Numerous aspects need to be taken into consideration when evaluating compensation; this is where a salary scale comes into the equation. It takes into account that salaries will vary depending on the potential employee’s experience, mandatory job requirements, geographical location, the company’s internal hiring structure, as well as the methods of negotiation utilised.
Scaling salaries can be a complex process depending on the type of job role being evaluated. That’s why it’s vital to speak to an HR company that’s experienced in this area.
In conclusion, it can be deduced that employees’ worth should be based on ALL of the above-mentioned information working together to form a result based on emotional and logical reasoning that gives you an all-rounded perspective of their value to you and your business.