The Investment Approach to Employee Assistance Programs

The Investment Approach to Employee Assistance Programs

The Investment Approach to Employee Assistance Programs

The Investment Approach to Employee Assistance Programs

Synopsis

Organizations turn to employee assistance programs (EAPs) to protect themselves from the costly effects of substance abuse. Much has been written about EAPs from the perspective of treatment. Smits and Pace, however, examine the EAP from an investment perspective. This volume can help corporate decision makers choose the type and level of EAP investment that best meets their needs, learn how to manage their EAP investment for maximum effectiveness and efficiency, and assess their return on investment as a basis for future reinvestment decisions.

Excerpt

The workplace of the 1990s is characterized on the one hand by intense competition, reduced profit margins, and pressures to reduce overhead costs, and on the other hand by growing expectations that business should help solve social problems such as illiteracy, lack of adequate child care and eldercare programs, and substance abuse. Decision makers and the people who influence those decisions face extremely difficult choices among competing demands in an environment of limited resources. This book is about one such set of choices. We present a program designed to obviate performance problems and help troubled workers regain their productive capacity--the Employee Assistance Program (EAP)--plus the information needed to assess the return on investment this would provide. The book adopts the perspective of strategic human resource management (HRM)-- another feature of the 1990s--the idea that all resources should be aligned with the organization's strategies for survival and prosperity.

The investment approach to EAPs starts with a number of the same concepts that underscore the human resource accounting processes advocated by Hermanson (1964) and Flamholtz (1985), namely that human resources provide value to the firm, that the value of human resources can be expressed in dollar terms, that the value of the firm's human resources is subject to change over time, and that managers are responsible for the maintenance and enhancement of the value of the firm's human resources. In particular, our approach focuses on the strategic investments required for a successful EAP. Within the unique set of circumstances faced by a given organization, the EAP can be designed to meet its own strategic objectives, in turn assisting the survival and prosperity of the firm. The organization can expect a reasonable return when this investment is man-

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