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Image Credit: <freelancefolder.com

Image Credit: <freelancefolder.com>

As the 2008 financial crisis (and many other events throughout human history) have shown us, much of our economy functions on perception. Our confidence in an instrument to deliver value is often as important to our prosperity as the actual ability of that instrument to deliver value.

Often, but not always.

While perception of value gins much of the global economy, it is the actual delivery of value that fundamentally sustains it.

This makes compensating people based on what they have done exceedingly difficult. A resume listing one’s experiences – much like a business relationship or the valuation of an asset – has subjective value. We only know what it’s really worth if we attempt to leverage it in some way.

As a Human Resources professional, this makes the topics of compensation and talent management as much art as they are science.

The easy thing to do is to push to find out how a candidate’s prior company valuated him or here and make a decision on hiring and compensation largely around that valuation. If someone made too little then they probably aren’t ready for the job… too much and the job is too small for them. Just enough and a 6%-10% raise should do the trick.

This line of approach is safer – and probably saner – than the alternative, which would be valuating the worth of a candidate and his/her ability to do a job based exclusively on the interview and vetting processes.

…It is also more difficult to defend than a valuation based on internal metrics – and less likely to align pay with performance (or yield the best talent).

What do think is the best way to measure a candidate’s value?

As always, please share your thoughts in the comments section below.



If you have questions about something you’ve read here (or simply want to connect) you can reach me at any of the following addresses: 

SomethingDifferentHR@gmail.com OR rorytrotter86@gmail.com