Designing and Implementing an HR Scorecard

Verizon HR has effectively designed and implemented a strategic management system, which is based upon the balanced scorecard model of Dr. David Norton and Dr. Robert Kaplan of Harvard Business School. The HR Balanced Scorecard was conceived with New Economy organizational dynamics in mind. The scorecard uses a broad range of “leading and lagging” indicators—overall strategy, operational processes, customer perceptions, and financials to evaluate the effectiveness of HR initiatives to the bottom line. The HR Balanced Scorecard provides the means to monitor workforce indicators, analyze workforce statistics, diagnose workforce issues, calculate the negative financial impact, prescribe solutions, and track improvements. © 2001 John Wiley & Sons, Inc.     

Organizational Task Environments: An Evaluation of Convergent and Discriminant Validity*

ABSTRACT The organizational task environment (OTE) construct is evaluated using a large, independent sample. A general measurement model for three latent variables, munificence, dynamism and complexity is constructed for confirmatory factor analysis. This model is then tested for both convergent and discriminant validity using a multitrait‐multimethod matrix approach. The OTE model in this study demonstrates convergent validity, but it does not exhibit discriminant validity. The results of this study do not provide support for one of the key components of construct validity. Measurement issues are discussed, as well as the implications of this study for the organizational theory and strategic management disciplines.     

Jurisdictional homogeneity and the Tiebout hypothesis

In this paper, an alternative to the capitalization approach to testing the Tiebout model is presented. The Tiebout foot voting mechanism suggests that households will sort and stratify into (approximately) homogeneous local public goods jurisdictions. At a point in time, the efficiency of the sort will be positively related to the number of existing jurisdictions. Using a measure of homogeneity introduced by Theil, the relationship between stratification (homogeneity within jurisdiction) and number of jurisdictions is tested. For a sample of school districts within 33 SMSAs, the Tiebout stratification hypothesis is confirmed.     

ECONOMICS OF CORPORATE GOVERNANCE REFORM

This paper develops three basic economic principles for effective corporate governance: (1) information accuracy and timeliness, (2) management accountability, and (3) auditor independence. Accuracy and timeliness of information is critical to providing market participants with the data necessary to monitor and evaluate managers. Management accountability focuses on strengthening the incentives of managers to act in shareholders' interests and on increasing the likelihood and magnitude of punishment for wrongdoing. Auditor independence reduces the incentives and likelihood that auditors would give managers more leeway to undertake fraudulent or questionable acts.
The author provides a preliminary assessment of how well legislative reforms, such as the Sarbanes-Oxley Act, regulatory changes at the SEC, and private sector responses such as those from self-regulatory organizations like the NYSE and NASDAQ, conform to these economic principles. The paper concludes by commenting on current proposals from the SEC on "shareholder democracy" and emphasizing the importance of balancing private and public regulatory responses.     

STOCK DIVIDENDS AS SIGNALS

This study analyzes stock dividends as signals from managers. It is argued that in the presence of information asymmetries between managers and investors, stock dividends provide a relatively inexpensive and unambiguous signalling device. Based on an examination of the daily returns around 317 stock dividend announcements, it is concluded that these announcements are interpreted by investors as signals from managers. Further analysis also indicates that stock dividend size is positively related to announcement day returns.     

Regulatory Optimal Bank Size

This paper presents a study of potential outcomes of bank growth. Banks grow by expanding market presence within the geographic region within which they are domiciled and by expanding presence into other regions via new implantations. Growth leads to improved diversification, but also results in an increase in the risk of catastrophe that a bank’s failure may engender. The conclusion is that there will exist a threshold size of bank at which the rate of growth in its systemic risk exceeds the rate of decline in its risk of insolvency. An empirical study of US bank call report data provides results that are consistent with the theory presented in the first part of the paper.