Enhancing Return on HR Investment: Risk Management With Real Options Approach

What is it about?

The “real options” approach enables organizations to evaluate investment opportunities of HR in uncertain environments and highlights how these investments create value through future choices (i.e., HR options). HR options are “investments in the human capital pool of an organization that provides the capability to respond to future contingent events.” This research applies this logic to analyze the uncertainties associated with HR in organizations and discuss how organizations manage these uncertainties through HR “options” that are capabilities generated by various HR management practices.

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Photo by Daniel Dan on Unsplash

Photo by Daniel Dan on Unsplash