IDEAS home Printed from https://ideas.repec.org/a/wly/navres/v54y2007i2p221-235.html
   My bibliography  Save this article

On valuing appreciating human assets in services

Author

Listed:
  • O. Zeynep Akşin

Abstract

This paper derives optimal policies for when to hire, train, and lay off employees in service organizations when worker productivity appreciates deterministically or stochastically under constant, monotonic, and cyclic service demand. The model, an extension of the machine replacement problem from the engineering economy literature, uses infinite horizon linear programming to produce optimal personnel planning strategies and dual prices that characterize the workforce's economic value. The effect of employee attrition is also considered. In its valuation of human assets, unlike pure accounting approaches that only try to measure, this paper proposes an approach to capture the interaction between firm decisions pertaining to human resources and human resource value. © 2006 Wiley Periodicals, Inc. Naval Research Logistics, 2007

Suggested Citation

  • O. Zeynep Akşin, 2007. "On valuing appreciating human assets in services," Naval Research Logistics (NRL), John Wiley & Sons, vol. 54(2), pages 221-235, March.
    • Handle: RePEc:wly:navres:v:54:y:2007:i:2:p:221-235
    DOI: 10.1002/nav.20197
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/nav.20197
    Download Restriction: no
    File URL: https://libkey.io/10.1002/nav.20197?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Kostiuk, Peter F & Follmann, Dean A, 1989. "Learning Curves, Personal Characteristics, and Job Performance," Journal of Labor Economics, University of Chicago Press, vol. 7(2), pages 129-146, April.
    2. Richard C. Grinold, 1971. "Infinite Horizon Programs," Management Science, INFORMS, vol. 18(3), pages 157-170, November.
    3. Joseph B. Mazzola & Kevin F. McCardle, 1997. "The Stochastic Learning Curve: Optimal Production in the Presence of Learning-Curve Uncertainty," Operations Research, INFORMS, vol. 45(3), pages 440-450, June.
    4. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," NBER Chapters, in: Investment in Human Beings, pages 9-49, National Bureau of Economic Research, Inc.
    5. Anthony Durso & Scott F. Donahue, 1995. "An Analytical Approach to Reshaping the United States Army," Interfaces, INFORMS, vol. 25(1), pages 109-133, February.
    6. M. G. Orrbeck & D. R. Schuette & H. E. Thompson, 1968. "The Effect of Worker Productivity on Production Smoothing," Management Science, INFORMS, vol. 14(6), pages 332-342, February.
    7. Bontis, Nick & Dragonetti, Nicola C. & Jacobsen, Kristine & Roos, Göran, 1999. "The knowledge toolbox:: A review of the tools available to measure and manage intangible resources," European Management Journal, Elsevier, vol. 17(4), pages 391-402, August.
    8. Gerchak, Yigal & Parlar, Mahmut & Sengupta, S. Sankar, 1990. "On manpower planning in the presence of learning," Engineering Costs and Production Economics, Elsevier, vol. 20(3), pages 295-303, December.
    9. Segalla, Michael & Jacobs-Belschak, Gabriele & Müller, Christiane, 2001. "Cultural influences on employee termination decisions:: Firing the good, average or the old?," European Management Journal, Elsevier, vol. 19(1), pages 58-72, February.
    10. F.I. Ugwuowo & S.I. McClean, 2000. "Modelling heterogeneity in a manpower system: a review," Applied Stochastic Models in Business and Industry, John Wiley & Sons, vol. 16(2), pages 99-110, April.
    11. Gerchak, Yigal & Golany, Boaz, 2000. "Hiring policies in an uncertain environment: Cost and productivity trade-offs," European Journal of Operational Research, Elsevier, vol. 125(1), pages 195-204, August.
    12. Victor R. Fuchs, 1968. "The Service Economy," NBER Books, National Bureau of Economic Research, Inc, number fuch68-1.
    13. James C. Bean & Robert L. Smith, 1985. "Optimal Capacity Expansion Over an Infinite Horizon," Management Science, INFORMS, vol. 31(12), pages 1523-1532, December.
    14. McLaughlin, Kenneth J, 1990. "General Productivity Growth in a Theory of Quits and Layoffs," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 75-98, January.
    15. Ronald J. Ebert, 1976. "Aggregate Planning with Learning Curve Productivity," Management Science, INFORMS, vol. 23(2), pages 171-182, October.
    16. Richard C. Grinold & David S. P. Hopkins, 1973. "Computing Optimal Solutions for Infinite-Horizon Mathematical Programs with a Transient Stage," Operations Research, INFORMS, vol. 21(1), pages 179-187, February.
    17. Noah Gans & Yong-Pin Zhou, 2002. "Managing Learning and Turnover in Employee Staffing," Operations Research, INFORMS, vol. 50(6), pages 991-1006, December.
    18. Lau, Ahl & Lau, Hs, 1978. "Some Proposed Approaches For Writing Off Capitalized Human Resource Assets," Journal of Accounting Research, Wiley Blackwell, vol. 16(1), pages 80-102.
    19. Liang, Timothy T. & Buclatin, Ben B., 1988. "Improving the utilization of training resources through optimal personnel assignment in the U.S. Navy," European Journal of Operational Research, Elsevier, vol. 33(2), pages 183-190, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Noah Gans & Yong-Pin Zhou, 2002. "Managing Learning and Turnover in Employee Staffing," Operations Research, INFORMS, vol. 50(6), pages 991-1006, December.
    2. Michael J. Fry & Michael J. Magazine & Uday S. Rao, 2006. "Firefighter Staffing Including Temporary Absences and Wastage," Operations Research, INFORMS, vol. 54(2), pages 353-365, April.
    3. Mazzola, Joseph B. & Neebe, Alan W. & Rump, Christopher M., 1998. "Multiproduct production planning in the presence of work-force learning," European Journal of Operational Research, Elsevier, vol. 106(2-3), pages 336-356, April.
    4. Onesun Steve Yoo & Guillaume Roels & Charles J. Corbett, 2016. "The Time–Money Trade-Off for Entrepreneurs: When to Hire the First Employee?," Manufacturing & Service Operations Management, INFORMS, vol. 18(4), pages 559-569, October.
    5. Steven J. Davis & Pawel M. Krolikowski, 2023. "Sticky Wages on the Layoff Margin," NBER Working Papers 31528, National Bureau of Economic Research, Inc.
    6. Nahum Biger & Steven Plaut, 2000. "Trade Secrets, Firm-Specific Human Capital, and Optimal Contracting," European Journal of Law and Economics, Springer, vol. 9(1), pages 51-73, January.
    7. Anderson, Edward G., 2001. "Managing the impact of high market growth and learning on knowledge worker productivity and service quality," European Journal of Operational Research, Elsevier, vol. 134(3), pages 508-524, November.
    8. Marie Doumic & Mathieu Mezache & Benoît Perthame & Edouard Ribes & Delphine Salort, 2017. "Strategic Workforce Planning and sales force : a demographic approach to productivity," Working Papers hal-01449812, HAL.
    9. Ghate, Archis, 2015. "Circumventing the Slater conundrum in countably infinite linear programs," European Journal of Operational Research, Elsevier, vol. 246(3), pages 708-720.
    10. Loewenstein, Mark A & Spletzer, James R, 1998. "Dividing the Costs and Returns to General Training," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 142-171, January.
    11. Giuseppe Marzo, 2013. "Some Unintended Consequences of Metaphors: The Case of Capital in Intellectual Capital Research," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2013(3-4), pages 111-140.
    12. Sanjeev Bordoloi, 2006. "A control rule for recruitment planning in engineering consultancy," Journal of Productivity Analysis, Springer, vol. 26(2), pages 147-163, October.
    13. Womer, K. & Li, H. & Camm, J. & Osterman, C. & Radhakrishnan, R., 2017. "Learning and Bayesian updating in long cycle made-to-order (MTO) production," Omega, Elsevier, vol. 69(C), pages 29-42.
    14. Alessandro Arlotto & Stephen E. Chick & Noah Gans, 2014. "Optimal Hiring and Retention Policies for Heterogeneous Workers Who Learn," Management Science, INFORMS, vol. 60(1), pages 110-129, January.
    15. Wioletta Wierzbicka, 2021. "Differentiation in levels of human capital among small cities in Warminsko-Mazurskie Voivodship," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 9(2), pages 209-222, December.
    16. Bordoloi, Sanjeev K. & Matsuo, Hirofumi, 2001. "Human resource planning in knowledge-intensive operations: A model for learning with stochastic turnover," European Journal of Operational Research, Elsevier, vol. 130(1), pages 169-189, April.
    17. Kawai, Eizo, 2001. "Re-examination of wage, employment, and hours adjustments: what is crucial for differences in the adjustments?," Japan and the World Economy, Elsevier, vol. 13(4), pages 483-497, December.
    18. Md. Mominur Rahman & Bilkis Akhter, 2021. "The impact of investment in human capital on bank performance: evidence from Bangladesh," Future Business Journal, Springer, vol. 7(1), pages 1-13, December.
    19. Robert Rowthorn & Ken Coutts, 2004. "De-industrialisation and the balance of payments in advanced economies," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 28(5), pages 767-790, September.
    20. Joseph Francois & Bernard Hoekman, 2010. "Services Trade and Policy," Journal of Economic Literature, American Economic Association, vol. 48(3), pages 642-692, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:navres:v:54:y:2007:i:2:p:221-235. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)1520-6750 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.