BizNet OnLine Magazine, Book Review, The ROI of Human Capital

This Months Book Review
Jac Fitz-enz, The ROI of Human Capital (New York: AMACOM, 2000).
Reviewed by Eric Wm. Skopec, Ph.D

In Review:

Most nonfiction publishers employ skilled editors and subject-matter experts to screen book proposals and evaluate manuscripts. Such prepublication reviews are intended to determine the merits of books before publishers invest in production and distribution, and reviewers are typically asked to appraise materials in terms of four criteria:

1. Timeliness of the subject

2. Contribution to projected audiences’ knowledge of the subject

3. Coherence of the exposition, and

4. Tone or manner of addressing the audience

The value of the editorial systems is most evident in the rare cases where they fail to protect publisher and reader alike. Unfortunately, the book reviewed here is just one of those cases.

Timeliness

Knowledge management and attendant efforts to measure the valued added by employees’ skills are among today’s most compelling topics. Virtually all major business consulting firms and countless business professors are addressing the topics. As a result, you might expect the current volume to score well on this criterion. Sadly, that is not the case because the author has included far too many previously published materials that are only tangentially relevant to the topic at hand. As a result, few readers are likely to invest the time required to separate relevant and timely concepts from an otherwise undistinguished collection of material.

Contribution

There is a robust and growing body of literature on intellectual capital and knowledge management. Placing the current volume in context presents a bit of a puzzle. Although the author cites some of the leading works, he fails to demonstrate that this book either extends the field or corrects prevailing errors. He regularly asserts that few managers adequately value their employees’ knowledge and that otherwise well regarded theorists have missed the point, but I found his arguments unconvincing at best and trivial at worst. Moreover, his recurrent assertions that intellectual capital is important and that employee contributions should be measured presents an interesting quandary: those who already agree will find little value in seeing the mantra repeated while dissenters are unlikely to be persuaded by the pile of unsupported assertions.

Coherence

Readers have a right to expect a coherent progression through any body of text. Common patterns include sequential development of a point of view, progressively more details exposition of a thesis, and a collection of freestanding essays addressing a common theme. Other patterns are readily available, but even a comprehensive list leads me to characterize the current volume’s approach as “none of the above.” Neither prefatory remarks nor initial paragraphs in each chapter reveal an underlying pattern that may contribute to readers’ appreciation of the subject. My own conclusion is that the structure is best characterized as a pastiche designed to permit the inclusion of as much previously published material as possible.

Tone

Finally, I found the author’s tone overbearing and unconscionably smug throughout. Witness the following passage:

I have spent twenty years explaining and demonstrating [that staff work can be evaluated in quantitative terms] by showing the linking methodology and publishing company, industry, national and international benchmark data, but some people still won’t let got of the myth and deal with reality. Either I am a lousy communicator or I’m talking to a bunch of zombies. (p. 21)

While a casual reader might vote for the first alternative, readers versed in the field are likely to suggest a third possibility: the author doesn’t have much of interest to say to contemporary managers.

Given the prevailing tone of this review, you might wonder why I spent as much time with this work as I did. The answer is simple: I owed the BIZNET editors a favor and this is the book they handed me. Cynicism aside, there is an important point underlying my observations: if you are interested in valuing human capital—and most managers should be—you can invest your time more profitably studying other works on the subject. Those that come to mind quickly include Thomas O. Davenport, Human Capital: What It Is and Why People Invest It, and Gregory G. Dess and Joseph C. Picken, Beyond Productivity: How Leading Companies Achieve Superior Performance by Leveraging Their Human Capital.
Reviewed by Eric Wm. Skopec, Ph.D. , Regional Director of Business and Management at Learning Tree University.

Dr. Skopec is responsible for developing and managing LTU’s business programs including the ground breaking E-Marketing certificate and the widely respected Project Management program. He has written nine books including Everything’s Negotiable (AMACOM, 1994), The Practical Executive and Team Building (NTC Business Books, 1997), and The Global Telecommunications Revolution (Irwin/McGraw-Hill, forthcoming). His email address is at ERIC@LTU.ORG.

Learning Tree University has campuses in Chatsworth, Thousand Oaks, and Irvine, California, and selected courses are available online. For further information, please visit WWW.LTU.ORG.

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