Email Jim at jim.thompson@ipulpmedia.com

The Human Resources function can be allocated to several distinct areas. There are such matters as recruiting, discharge, vacation, personal time off, maternity or paternity leave, union negotiations, and "the problem children", for lack of a better term. What if the loaded costs of the HR department were allocated to all the employees annually, based on these various needs.

It would work like this. Everyone is allocated so much time for each function and the balance is the amount allocated for what I am calling "the problem children." This is all allocated on an hours basis. Let's say one is typically allocated 1 hour for insurance questions. Two hours to set up maternity or paternity leave (not the actual leave, the time in HR to set it up). So forth and so on--you get the idea.

At the beginning of the fiscal year, each employee is told their allocation, and it is regularly reported on their pay stubs.

Via the pay stub, each employee is kept apprised if their burden to the HR department is in line with the standards.

As it stands today, an employee's time with the HR department is "free." No one is keeping track of how much time HR has to interact with Roger. If Roger is a high maintenance employee, there is no pain for Roger.

With the system I have described, Roger can be warned and counseled if he is taking too much HR time, just like he might be warned or counseled if he is taking too much time off. Actually, Roger taking too much time with HR is worse than if he is just absent, for not only is he not getting his job done, but he is also occupying time in HR.

I don't know anywhere this has been done, but there seems to be many merits to it. What do you think? Drop me a line.

Be safe and we will talk next week.

For a deeper dive, go here.

Study Guide: Allocating Human Resources Expenses

This guide provides a review of the proposal by Jim Thompson for a new system of allocating Human Resources (HR) expenses. It includes a quiz to test comprehension, a set of essay questions for deeper analysis, and a glossary of key terms as defined within the source text.

Quiz: Key Concepts of HR Expense Allocation

Answer the following questions in 2-3 sentences, based on the provided source material.

1. What is the central idea proposed by the author for managing HR expenses?
2. How would the proposed allocation system operate on a practical, day-to-day basis for employees?
3. According to the author, what is the current problem with how employee interactions with HR are managed?
4. What specific examples of HR functions does the author mention as being part of the allocation?
5. In the proposed system, how would employees be kept informed of their HR time usage?
6. What does the author label as "problem children" in the context of HR interactions?
7. What potential action could be taken against an employee, like "Roger," who exceeds their HR time allocation?
8. Why does the author consider an employee taking too much HR time to be "worse" than an employee who is simply absent?
9. What is the unit of measurement for the proposed HR allocation system?
10. What does the author say about the prevalence of this proposed system in other organizations?

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Answer Key

1. The central idea is to allocate the loaded costs of the HR department to all employees annually. This allocation would be based on the amount of time each employee uses for various HR functions.
2. Each employee would be given a specific allocation of HR time, in hours, at the start of the fiscal year. Their usage would be tracked, and the balance would be regularly reported to them.
3. The author states that currently, an employee's time with the HR department is considered "free." This means there is no tracking or direct consequence for an employee who is "high maintenance" and uses a disproportionate amount of HR resources.
4. The text provides examples such as time for insurance questions (1 hour), setting up maternity or paternity leave (2 hours), recruiting, discharge, vacation, personal time off, and union negotiations.
5. Employees would be kept apprised of their HR time usage via their pay stubs. This regular reporting would show them if their burden on the HR department is in line with the established standards.
6. The term "problem children" is used by the author to refer to employees who require a significant and potentially excessive amount of time and resources from the HR department. The balance of an employee's standard HR allocation is designated for these types of interactions.
7. An employee who uses too much HR time could be warned and counseled. This is presented as being similar to counseling an employee for taking too much time off.
8. The author argues it is worse because the employee is not only failing to get their own job done, but they are also occupying the time of HR personnel, creating a dual productivity loss.
9. The proposed system would allocate and track HR usage on an hours basis. For example, an employee might be allocated one hour for insurance questions.
10. The author states, "I don't know anywhere this has been done," indicating that the proposed system is a novel idea and not a common practice.

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Essay Questions for Further Analysis

The following questions are designed to encourage deeper critical thinking about the source text. Answers are not provided.

1. Analyze the potential merits and drawbacks of implementing the author's proposed HR expense allocation system. What are the likely benefits for the company, and what are the potential negative impacts on employees and workplace culture?
2. Discuss the author's use of the term "problem children." What are the ethical and managerial implications of categorizing employees in this way and creating a system to formally track them?
3. The author compares excessive use of HR time to excessive absenteeism. Evaluate the validity of this comparison. In what ways are the two issues similar and in what ways are they fundamentally different from a management perspective?
4. Explore how the proposed system could change the relationship between employees and the Human Resources department. Would it make HR more efficient, or could it discourage employees from seeking necessary assistance for legitimate issues?
5. Imagine you are an HR manager tasked with responding to Jim Thompson's proposal. Based on the information in the text, construct an argument either for or against a pilot program of this system, outlining the key factors you would need to consider.

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Glossary of Key Terms

Term Definition

Allocating HR Expenses The central concept of the proposal, which involves distributing the costs of the Human Resources department to employees based on their individual usage of HR services.

Allocation The specific amount of time, measured in hours, assigned to each employee at the beginning of a fiscal year for various HR functions (e.g., insurance questions, leave setup).

High Maintenance Employee An employee who requires a significant amount of time and interaction from the HR department, for which there is currently no "pain" or consequence.

Loaded Costs The complete costs associated with the HR department, which the author proposes should be allocated among all employees.

Pay Stub Reporting The proposed method for regularly communicating to each employee their HR time allocation and how their actual usage compares to the standard.

"Problem Children" The author's term for employees who use a disproportionate amount of HR resources. A balance of allocated HR hours is intended to cover time spent on these individuals.

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