Can a simple mathematical expression help define company/employee relationship?

Some time ago, I looked at a post from one of the LinkedIn contacts that contained two mathematical equations.

The first thing that came to my mind was:

1. whether the stated mathematical equations can apply in measuring and expressing the relationship between the company and employees, and

2. can this help me express my opinion on the said process,

which ultimately led me to write my first article on LinkedIn.

To write the article, I additionally inserted another mathematical equation to more easily explain the very intention of the set thesis.

Namely, we are setting numbers 0.99; 1.00 and 1.01, which represent the employee and the income generated by an employee. The number 365 represents the resources, motivation, or support that a company provides to the employee. After setting our equation, we can simply reach a result that could satisfy anyone who makes strategic decisions. 

In this way, we could conclude that a simple mathematical formula can give us an answer on how to use our HR resources and quickly achieve significant results. All of us who have been responsible for team-leading know that the above mentioned is not so easy to implement.

So let's start part by part to unpack the stated "simple" mathematical equality into even simpler parts. Consider the numbers that represent the category of employees and define them as follows:

-0.99 represents employee and income brought by the "below-average employee" (BAE),

- 1.00 represents employee and income brought by the "average employees" (AE), and

- 1.01 represents employee and income brought by the "above-average employees" (AAE)

We can see that each of these employees ultimately gives a positive result and terms defined in the text, below, average and above are simply results based definitions. 

Defining the relationship between recognizing the quality of employees and income which employee generates and the ratio of investment of resources in them is our goal.

Additionally, to be able to continue, I have to point out one constant that occurs with many managers, and where many managers usually make mistakes. Most managers generally view their employees as a number or a cost that the company has, although this is not the primary position in all companies. Still, most companies define their employees as a number every year when drafting the budget, primarily in the cost part, and then try it to connect it with the revenue part of the budget in the hope that it will match and materialize.

You need to take time and try to use the above mathematical equality in such a way that each company must perform analysis and defines employees in their ranks by the above categories. What you need to do is to qualify the employees and check where all the mentioned employees are, i.e., to detect where of our BAE, AE, and AAE are.

Also, the most common statement used by companies is one where the company defines it's all employees as "the best employees". This thesis should be seen only as a company aspiration, which mainly depends on the ability of management to adjust to the plans and results of the company. Using the above-stated assumption, we can ask, "if we make positive results, then our all employees are the best"? Does it mean that "if we make negative results or we are below the plan", should indicate the opposite, or we need to go with a different approach?

However, it is indeed impossible for a company to have all the best employees, i.e., to be on the same level as the best that the company expects. In this regard, each company must have a clearly defined position on the stated distribution of employees. It should also be clear here that companies most often make mistakes in this division because they ignore the mathematical equality which we set at the beginning. Companies usually do not have adequately created mechanisms that would help them to accurately define their human resources and, based on that, their proper use. Due to the lack of these mechanisms, the company may usually identify employees who are BAE or AE as AAE and, on the contrary, identify AAE employees as AE/BAE.

If we used the idea of the above mathematical expression to calculate the number of invested resources in an individual employee or the whole company, it is logical that by applying the inverse mathematical function, we could check the result. In our case, the sign  "rooting" (as an inverse function of potentiation) of the results achieved by the employee, as a result, must give us the qualification/category of the employee.

It is important to note that human resource management usually neglect results that come after the equals sign (=). But often, what is happening after the equals sign represents the result that the employee provides.

After results, the questions that a company must answer are:

1. whether the company has introduced a proper control model related to performance expectations from the employee (his/her job)

2. whether the company has a properly established model that should apply after the control, i.e., possible retraining of employees within the above categories (i.e., whether the employee is ranked to one grade for the entire working life in the company or has an established clear development path)

All of the above gives us a picture of the complexity of the relationship that we must establish in the employee - company relationship.

Taking into account all the above, the company must primarily have a clear picture of its employees and determine the starting positions about them. Based on a clear picture of employees and their qualifications, it is possible to move a company's realizations further, and at the same time, plan the resources that the company will invest in the employee to achieve the anticipated results.

If the basic starting positions are correctly defined, it is possible to expect a correct result, i.e., that the employee who is marked as AAE (1.01) to score 37,783.

But if the basic starting positions are not adequately defined. The company may expect from the employee who is rated by the company as AAE (1.01) and have expectation from AAE to score result of 37,783 and still, an employee will not be able to give the expected result. Companies should, at the very beginning, defined this employee as AE with an anticipated outcome of 1.00 or BAE with an expected outcome of 0.025.

Companies should use significant resources in defining these three basic categories of employees. Of course, it is necessary to take into account the type of work that a particular employee performs. It is essential because if the employee is AAE in one field, there is no guarantee, nor is it necessary to use the assumption that he/she can be qualified or provide above-average skills in another area.

After we have defined the settings of employees in the initial mathematical expression, we need to set/explain the number 365, i.e., the part of mathematical equality that refers to the company. We identify number 365 in such a way that the year has 365 days, and with "FTE" or "full-time employee," it can be used as a correct measure. For employees who are hired for a shorter period, i.e., for specific projects, it is easier to calculate the given parameters, because the stated result will not include future variations. While for employees who are in the company for a more extended period of employment, it is necessary to include additional values in the mathematical equality, i.e., to add the number of years which are expected for FTE to remain in company.

However, by including new variables, the mentioned mathematical setting would open new challenges that can give us answers to questions such as:

1. how satisfied and productive an employee can be in their workplace,

2. when he/she needs a change (either for progress or for, the regression) and

3. when it is time for the employee and the company to reach the point of terminating the contract

We need to include all of these variations if we all want to think about what the company's priority goal is.

Once we have defined the first part of mathematical equality that applies to employees, we set the section that applies to the company. The company plans what each workplace should have as a basis, whether it is a tool in the form of a computer, car, pen, or some other subject/device that helps the employee to perform work activities. Additional benefits, mainly differ from the level of employees, as well as the goals of the company, are differently planned. Here the number 365 gets its final definition and is inversely applied to each employee.

For this small study, I have defined that the necessary investment and benefits that a company gives to an individual employee are denoted by 365. The stated number represents the number of the company's investments of resources in the employee within 365 days. It is not the same for every employee even on the same types of jobs, because although employees in the same position have the same tools and the same work environment, they may have differences in other resources that the company invests in them. For long term employees, we will define the development and investment for each job with "n".

This time we will not go into mathematical equations in detail, but I will stay at the fundamental assumed equality for one year or 365 days.

Once the company has adequately established the modalities of management, evaluation, control, and reevaluation of employees, it must correctly define the number 365, i.e., investments in all employees, BAE, AE, as well as in AAE. When a company plans to invest resources, it must be aware that investing in the AE in the form of 365 + 1 (+ 2, + 3, + 4, etc. ) will always give the same result concerning the investment. Analogously, investing in a BAE will provide the company extra less, the new investments will only continue to add and to increase a cost side. A third example of equality was investing in an AAE; with any additional resource, the company will gain in increasing results with every new investment.

This thesis is essential for the company because sometimes, companies in these cases know that they are making seemingly unimportant mistakes which can have a significant impact on the results, that reflects in the following:

1. Investing in an employee which we define in the wrong category

2. Suspension of investment in AAE.

At the first mistake, the company made a wrong assumption at the start. Primarily without taking into account the process itself and without establishing in it the modalities of management, evaluation, control, and reevaluation of employees, it continues to spend resources based on wrong assumptions.

In the second mistake, the company is satisfied with the current results of the AAE. It continues to invest the same amount instead of analyzing what additional investments are necessary in this case, which the company must invest to improve the results additionally. Companies usually valuable resources, instead of the development of AAE, are spending on the further development of BAE or those who are wrongly categorized. Even though some companies make an additional mistake, so they enter into calculations that the investments of resources are reduced among AAE, assuming that they will continue to give previous results. However, using a mathematical equation, it is clear that lowering resources (number 365) can provide a lower result for an AAE and the same for the AE. When we talk about BAE is even better to go with a reduction of investment because if we reduce the level of resources invested in the BAE, thus cost are reduced. This number is essential when a company starts with its resource planning per employee. Companies can apply the principle of mathematical equality to different company/employee relations. 

Finally, when I wonder if we can use simple mathematical equality to define the relationship between an employee and a company, it can be said YES.

However, the company must have a clearly defined process consisting of a series of simplified processes of minor equations. This process will give us a picture of the modality of management, evaluation, control, and reevaluation in the company than we can also include this simple mathematical equality, to help the company in finding answers in the decision-making process.