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Transformative HR: How Great Companies Use Evidence-Based Change for Sustainable Advantage by Ravin Jesuthasan, John W. Boudreau

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CHAPTER 5

“SPREADING PEANUT BUTTER” OR OPTIMIZING INVESTMENTS?

Optimization follows from segmentation and is about exploiting the differences between employee groups to enable the organization to realize the optimal value exchange between itself and a particular group. It means identifying where and how certain investments will yield an excess return while minimizing or eliminating investments that are underperforming.

Optimization sounds like an engineering word for common sense. If the optimal route to the village is to walk through the glade, why would anyone take the suboptimal route through the swamp? Yet suboptimal decisions are made all the time. This may be because of a lack of awareness of the options (“We didn’t know there was a glade”), ...

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