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(April 19, 2004) - One of the major paradoxes of good systems design is the principle of suboptimization. In order to make an overall system work at its highest capacity, some operations work at less than optimal effectiveness. This is why heavy duty transportation machines are designed to carry twice what anyone would expect.

In overall workforce design and quality, it is not realistic (once an organization clears the 500 person hurdle) to suggest that all members should be top quality. Besides the obvious cash consequences, high powered professionals grow unhappy quickly in environments that do not need their skills. Aggregate (Workforce) Quality is:

The best mix of departmental strengths resulting in the overall lowest number of people required to meet objectives.

In engineering oriented companies, for example, you might hire only 4.0 Ivy League grads for engineering slots while seeking a lesser quality grouping for customer service (Now that we think of it, this seems to be a mainstream strategy.) As has been the case in each of our examples, there is a relatively constant tie between cost and quality in Human Capital.

Aggregate (Workforce) Quality is, in one way of saying it, the lowest quality individuals required to perform the task (assuming a verifiable correlation between individual quality and cost). Since the "task" of any organization is complex and, usually, internally conflicted, this view implies a range of quality across a range of functions. Critical core competencies are staffed with the best. Other functions are staffed with the best available.

Now, we understand that no manager, Recruiting or otherwise, could survive by describing workforce management in these sorts of terms. No person wants to be considered lower quality. In fact, the measure of quality is just a perspective from one setting. Nonetheless, the language we've used so freely would do little but unnecessarily injure feelings and pride.

That caveat is the single largest reason that a definition of Human Capital Quality is so hard to agree on. Quality implies ranking. Ranking has an impact on self-esteem. Not all organizations wish to have this sort of rigor in the workforce design process.

Yet, you can feel this definition at work in most places. When a receptionist performs his work in an astounding way, you can almost always thank the marketing or HR departments.

Human Capital Quality is a business investment. Over investing is as much a mistake as under investing. What we're searching for is less offensive language to help business leaders spend financial capital on human capital more wisely.

John Sumser

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Workstream(tm) helps companies attract, manage and retain employees ... it's really that simple.

Led by CEO Michael Mullarkey, Workstream Inc. (NASDAQ: WSTM) provides reliable and affordable web-based HR products and services to growing companies. Workstream offerings are easy to implement, easy to administer, and ready to grow with your business. Toll-free: 877-470-WORK  ~  Online: www.workstreaminc. com

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