Financial Analysis for HR Managers

Steven Director is a professor in the Rutgers University School of Management and Labor Relations. He has held a number of leadership positions at Rutgers, including serving as Associate Dean, as Chair of the Human Resource Management Department, and as Director of the PhD program in Industrial Relations and Human Resources. Prior to joining Rutgers he was an Employment Policy Fellow at the Brookings Institution and on the faculty of Michigan State University. He received his Ph.D. and MBA degrees from the Northwestern University Kellogg School of Management. Dr. Director teaches courses in Labor Economics, Statistics, and Finance. His most frequent and preferred teaching assignment is a course in Financial Analysis for Human Resource Managers. In addition to his on-campus teaching, Dr. Director has taught Finance for HR to senior executives in the U.S., Europe, and Asia. Recognized for his ability to effectively communicate financial concepts to non-financial audiences, Dr. Director has also developed and delivered customized finance training for scientists, engineers, and physicians. His publications have appeared in numerous journals and edited volumes. His research interests include the financial aspects of HR, compensation and benefits policy, and the interaction between national and corporate employment policy. In January, 2003 he developed and partnered with the Society of Human Resource Management to produce the monthly Leading Indicator of National Employment (LINE) Report. Dr. Director continues to serve as economic advisor to this project and SHRM has now published over 100 consecutive monthly LINE reports. This data series is followed closely by financial analysts and business economists.

Chapter 1: Business Strategy, Financial Strategy, and HR Strategy   1
Chapter 2: The Income Statement: Do We Care About More Than the Bottom Line?   9
Chapter 3: The Balance Sheet: If Your People Are Your Most Important Asset, Where Do They Show Up on the Balance Sheet?   23
Chapter 4: Cash Flows: Timing Is Everything   43
Chapter 5: Financial Statements as a Window into Business Strategy   49
Chapter 6: Stocks, Bonds, and the Weighted Average Cost of Capital   59
Chapter 7: Capital Budgeting and Discounted Cash Flow Analysis   71
Chapter 8: Financial Analysis of Human Resource Initiatives   97
Chapter 9: Financial Analysis of a Corporation’s Strategic Initiatives   127
Chapter 10: Equity-Based Compensation: Stock and Stock Options   153
Chapter 11: Financial Aspects of Pension and Retirement Programs   185
Chapter 12: Creating Value and Rewarding Value Creation   217
Bibliography   249
Endnotes   257
Index   263