Academic journal article Academy of Strategic Management Journal

The Modeling of Industrial Entity's Dynamics Staff Costs

Academic journal article Academy of Strategic Management Journal

The Modeling of Industrial Entity's Dynamics Staff Costs

Article excerpt

(ProQuest: ... denotes formulae omitted.)

INTRODUCTION

In the changing economic conditions of business, the questions of managing decisions link with the staff costs of industrial entity in perspective are became special actual. Determination the strategy of such management costs means the dynamics of human capital development that is competitive advantage of commercial organization. In this context it is necessary to review costs both on attraction and on allowance and motivation of personnel to effective activity. In this case the investment into accumulation of personnel knowledge, abilities and skills are become important. Many researches point out this fact. J.Octavian and D. Nicoleta note that investment into education is one of way to human capital development and also to entity competitive advantage. V. Sum determines advantages in personnel abilities and skills like one of company development form which based on knowledge. So this form promotes to quality increase and efficiency of activity. In this case the development of personnel stimulation system is necessary, i.e. determination of principles and rules of personnel rewards into interrelation with strategic company goals. Y.H. Hsieh and H.M. Chen note that namely strategic accordance between business strategy and human capital strategy promotes to personnel motivation and effective activity. P. Boxall emphasizes the competitive advantage achievement as interrelation business strategy and system of rewards. B.K. Boyd and A. Salamin clarify that the bonus programs are one of the key aspects for the determination of this link. The future project of that program is a factor of stable company development. Other researchers in particular H.-M. Chen and Y.-H. Hsieh consider the necessity of interrelation personnel incentive bonus with company's life cycle stages. All of that promote to increase company competitiveness. Many specialists in particular M.B. Hargis, D.B. Bradley III, R. Barrett, S. Mayson, J.G. Messersmith and J.P. Guthrie emphasize that such interrelation is important for companies both on stage of maturity and on origin and formation stages. Because of changes in business the evaluation of personnel rewards strategy is needed in business requirements and as a consequence the system of costs on personnel is also needed. Consequently, as W.-J.A. Chang and T.C. Huang stress the projecting for the future all of important elements of system costs on personnel including all kinds of rewards and personnel incentive bonuses. T.J. Bush has a similar opinion. He maintains that the bonuses system is important factor for increasing efficiency activity of company. This system motivates the personnel to improve their own professional skills; therefore the question of information about the perspectives of personnel bonuses system development is important for company. R. White has a similar view on this question, so he points out the necessity of a strategic approach to a determination of a logical personnel bonuses system. T.-C. Huang emphasized that the link between personnel managing with incentive bonuses is one of the element of managing system of total costs on personnel. D.-S. Wang and C.-L. Shyu share out the main factors of conformity between company developments and influence such link on the effectivity of personnel activity in perspective.

In this way the staff costs project on perspective is one of the key stages of determination of management human capital strategy in accordance with long-term and short-term business tasks. The modeling of dynamics and optimization perspectives trends serves as instruments to achievement goals. The modeling process allows finding out the changing direction of researching object, to optimize its state in future and demonstrate consecutive changes of total staff costs. It is necessary because of many processes which have impact on costs are in perpetual variation. Besides that, the dynamics costs on personnel modeling promotes to determination of changing character of financial resources in perspective directing for attraction, allowance and motivation of personnel on responsibility centers and the company's personnel categories. …

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