Discusion

MINING HUMAN CAPITAL

Labour is probably the single largest expense of any business. According to some estimates, labour costs average about 60 percent of sales. In addition to salaries, labour costs include health insurance, paid time off, childcare benefits, tuition reimbursements, and any number of other programs designed to extrinsically motivate the workforce. Many companies offer the same types of benefits across their organizations without knowing whether the benefits really motivate employees at all. In other words, companies often dont know what return they are getting on their labour investment. The same is true where you work. Employers are now recognizing that benefits are a central piece of an applicants decision to join an employer. It is becoming important to provide varied benefits and provide a listing of the total benefits to the employee so they may more easily recognize the value of these benefits.

As you head back to your desk from a meeting on cafeteria-style benefit plans, your boss intercepts you and says she wants to talk with you about cutting labour costs. As she plops into your side chair, she is already describing a new type of software that applies data-mining technology to employee information in order to determine what the best motivator might be. We can get rid of the one-size-fits-all benefit programs and tailor the benefits to each employee. This software lets you slice and dice employee data, like age, seniority, education, commute time, postal code, even the age and condition of the persons office, she says. We could find out if we could pay someone, say, 20 percent less if we gave a three-month sabbatical every couple of years. Or we could predict the reaction of certain employees if we cut our RRSP match. Maybe thats not as important to everyone as we think. We could find out who would quit if we did that and who couldnt care less. Basically, we could find out what incentives would spike productivity the most with each employee, and that way we could cut costs without sabotaging morale. It would reduce the guesswork of rewarding our employees. Here is some literature on the various programs. Id like your team to draft a recommendation to top management by next Monday. Im really excited about this. She leaves a small stack of brochures on your desk corner and leaves your office.

Respond to the following:

a) Does employee data mining violate any of the motivational theories? How?

b) Will you recommend mining employee data, or despite your bosss enthusiasm, will you present reasons not to begin mining employee data? Explain your choice, using the motivational theories in the chapter as support for your recommendation.