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Human Capital in Euros and Cents(2)

The Saarbrücken Formula, developed at the Department of Business Administration at the University of Saarbrücken, cannot solve all problems in this regard, nor does it intend to. Instead it concentrates on one concrete question – how high is the value of the human capital, expressed in Euros or any other currency, and categorized into variables that can be evaluated in monetary terms?

The Saarbrücken Formula regards human capital (HC) as a "stock value” and therefore takes into account neither the costs of capital acquisition nor the capital usage (productivity). The issue focuses much more on how the human capital is constituted and how it can be influenced to ensure a stable structure or bring about a structural improvement. What is particularly interesting is its recourse to monetary values. For instance, the assertion that motivation has sunk from 3.1 to 3.0 can also be expressed in Euros and Cents. Furthermore, the formula shows the consequences of measures in the area of knowledge management and personnel development, and also throws light on employee motivation with its components "commitment”, the readiness to perform ("willingness”); "context”, the ability to perform ("opportunity”); and "retention”, the inclination of the employee to stay in the company ("availability”).