A dynamic monetary model for evaluating employees

Purpose – The paper seeks to develop an original monetary model for evaluating employees of a company. Employees are an important element of the business process. However, apart from their role as a means of production, their value is not disclosed on the assets side of the classical balance‐sheet. Employees may be disclosed among the assets only if they are expressed in value terms. Therefore, the fundamental aim of the paper is to provide an appropriate monetary mode for valuating employees. Design/methodology/approach – A descriptive approach is sued to identify the basic problems of existing monetary models for valuating employees. According to these findings a totally different approach is taken and an original dynamic model is developed to evaluate employees. Findings – Existing criteria do not offer appropriate solutions for expressing the value of an employee in monetary terms. The model presented here efficiently overcomes most of the practical problems and can be used as an appropriate estimator of employees' value expressed in monetary terms. Research limitations/implications – The model presented has not been sufficiently verified in practice. The model could prove to be directly applicable in those enterprises that would like to define the value of their employees. Originality/value – The model presented is original and presents one possible approach to the solution of the problems mentioned above.