I have been providing an on-going critique of Jac Fitz-Enz’s work, openly and very vigorously, ever since I became aware of it nearly 20 years ago because it was so obviously limited by looking only at inputs and ‘measuring HR’ rather than business value. In my view his work never warranted a second glance but very recently a new client sought my help on ‘HR measurement’ and asked me what I thought of this book – here is my answer.
Fitz-Enz started his Saratoga ‘HR metrics’ business in 1980 (now operated by the clones at PwC) after having worked in HR since 1969, but he never seemed to acknowledge that his data always failed to answer the simplest but most important question of all – does HR add value? Here he continues to stumble on resolutely, blindly and with characteristic humility declaring (page 88) that -
“Adhering to my vision and sticking to my model led me to develop a worldwide reputation for measuring human capital management that endures to this day”
Not quite the assessment of his legacy reached in 2009 by The Conference Board’s report into Evidence Based HR -
“Since Fitz-Enz introduced measurement to the HR function in the 1980’s most of the focus has been primarily on measuring the efficiency of HR functions. This focus fails to address the more meaningful issues of how human capital creates value and how HR interventions serve as catalysts for improving business outcomes.”
It is rare to hear Americans admit they got it wrong but in this case even the Conference Board seems blissfully unaware of its own ‘deliberate’ mistake – one cannot judge the efficiency of something if one has not established its value – junk mail is junk regardless of the efficiency of its delivery. So the first thing to say about this book is that Fitz-Enz has failed yet again to define the word ‘value’ even though its subtitle holds out the false promise of predicting “the economic value of your company’s human capital investments”.
So is he any more insightful in defining human capital? If you read page 304 he describes it as -
“your employees and active contingent workers”
Hardly the “breakthrough” that this book purports to be and, after calling employees ‘human resources’ for so many years, he offers no explanation as to why this new term of ‘human capital’ is necessary or indeed what innovation it might herald.
Perhaps even more worrying for the serious reader is his attempt at distinguishing ‘analytics’ from ‘analysis’ by using both words interchangeably (page 4) describing analytics as -
“the science of analysis… the process of dismantling or separating into constituents to study. …… analysis is taking something apart to understand it better”
There is no new analytical method on show here, just conventional, analytical thinking applied to HR. Yet he conveniently sidesteps the most intractable issue – studying the behaviour and management of human capital in the workplace does not lend itself to conventional, simplistic, deconstructive thinking. Reducing the psychological contract, for example, into its component parts is like separating mayonnaise into eggs and oil. What you end up with is a mess that is less than the whole – try pouring raw eggs and oil over your salad and you will get my drift.
Let’s face it, what Fitz-Enz is doing here, and has always done, is to shamelessly product-ize (HCM:21) what should be a very serious subject. Only the most gullible and hopelessly innumerate HR people will believe it has anything to offer them or their organisation. More importantly, their CEO needs this diversion like a hole in the head. Maybe that is why, amongst all of the “Praise for The New HR Analytics” shown on the inside cover, not one testimonial is from a CEO of a company that actually produces anything?
Don’t expect to learn anything new or valuable from Fitz-Enz’s “New HR Analytics”. The details in the case studies provided only serve to point up how full of holes and inconsistencies the whole concept is. Fitz-Enz and his supporters (Dave Ulrich among them) have arguably done more damage to the cause of measuring human capital value over the last 20 years than anyone else. So this is not a time to mince our words: unless anyone wants my third hand copy it is destined for the trash can. Anything this far past its sell-by date is not worthy of the shelf space next to any half-decent management text.