Management Values

Fundamental values must be addressed in many human resource issues, particularly those involved in major strategic initiatives. When senior managers formulate and implement
strategies, their values and philosophies are communicated to members of the organization through human resource policies and practices.7 For example, senior managers who are committed to the preservation of the organization’s human resources can manage the stress associated with major strategic events, through such measures as dealing with rumors and providing accurate information, so that misinformation does not have such a debilitating impact on employees.

How employees are treated following significant strategic events, such as a merger or acquisition, is a reflection of these values and communicates whether the organization views employees from an investment perspective. Those adopting an investment perspective seek to enhance the value of their human capital or, at the very least, prevent its depreciation.

Several factors will be considered in the discussion of strategic human resource investment decisions. As noted earlier, these will include management’s values, views of risk, the economic
rationale for investment in training, utility theory, and alternatives to human resou1rce investments. Investments in training are covered in this section because they are fundamental to the formation of human capital. Firms also invest in many other human resource practices with the expectation that there will be impacts on performance and financial returns