Which statement best describes Utility Analysis in HR?

Which statement best describes Utility Analysis in HR?

• A. It focuses on qualitative judgments from managers
• B. It ignores costs and benefits of HR programs
• C. It summarizes key variables describing the consequences of HR programs to improve decision-making
• D. It measures only employee satisfaction outcomes

Answer: (C)

Utility analysis is a quantitative approach that translates the outcomes of HR programs into decision-useful information by identifying and estimating the variables that describe the consequences of those programs. This method collects the key costs and benefits—such as program expenses, time required, productivity gains, and retention improvements—and summarizes them in a way that helps leaders decide whether to implement or continue a program. It’s about converting HR results into a clear picture of value to inform choices, not about relying on gut feelings or only measuring one type of outcome. That’s why the best choice is the one that states it summarizes key variables describing the consequences of HR programs to improve decision-making. It isn’t focused on purely qualitative judgments, it doesn’t ignore costs and benefits, and it isn’t limited to employee satisfaction—it's about the broader, quantified impact on organizational outcomes.

Utility analysis is a quantitative approach that translates the outcomes of HR programs into decision-useful information by identifying and estimating the variables that describe the consequences of those programs. This method collects the key costs and benefits—such as program expenses, time required, productivity gains, and retention improvements—and summarizes them in a way that helps leaders decide whether to implement or continue a program. It’s about converting HR results into a clear picture of value to inform choices, not about relying on gut feelings or only measuring one type of outcome.

That’s why the best choice is the one that states it summarizes key variables describing the consequences of HR programs to improve decision-making. It isn’t focused on purely qualitative judgments, it doesn’t ignore costs and benefits, and it isn’t limited to employee satisfaction—it's about the broader, quantified impact on organizational outcomes.