Thursday, 16 July 2009


If you know nothing about that, I will help you in answering the same.

Its calculated by way of Human Resource Accounting (HR Accounting), it seems.

There are different models used for the same and one of the popular ones is "Lev & Schwartz model " (Ever heard of these two guys?)

How's the calculation done?

It simply discounts your potential future earnings as an employee and computes a Present Value. There u are. Your worth as on date to generate so much income for your company is reflected.

This is how Infosys came out with a valuation for its employees recently- read the link.

So to improve employee worth what do we do?

The company simply has to pay its employees more.

But then the employees have to earn their respective higher salaries right?

So they have to put in better performance.

Ultimately it boils down to this but ina scientific manner:-

1) Since you are yourself not aware of your worth, your company computes the same to tell you this :-

" First of all you are not as worthy as you think you are. Understood? and hence start working hard from now or else you wont be there next time for us to calculate your worth. Understood lazy bugger?"

Still not clear? Read the Research Scholar's writing about the model from the link given below.

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