The author proposes a method to evaluate the material benefit of a company's HR processes through applying a concept adapted from military strategy. Developed as part of coursework for NUS MNO4314 Consulting to Management course, conducted by Dr. Andreas Raharso

1. The Force Multiplier Band
Finding value in HR Processes through the Lens of War
March 2016 Quek Keng Yong

2. Force Multiple as a Performance Metric
• An employee in a large firm is able
to generate more value than an
individual due to the firm’s
additional resources, thus
The Firm is a Force Multiplier
• A firm with a force multiple value >
1 delivers more value as compared
to a similarly sized group of
unorganized individuals.
• As a firm’s force multiple increases,
its revenue per employee will also
increase. Holding all else constant,
the firm’s value rises as a result.
• In the military, a force multiplier is a
factor that “multiplies” the
effectiveness of a group of soldiers
• An example of a force multiplier in
action is the Battle of Thermopylae
(depicted in the movie “300”) where
highly skilled Spartans fought a
much larger Persian army.
Image Source: Cracked.com Web Site
Calculation
The firm’s force multiple can be
calculated using its revenue per employee
divided by GDP per worker in the country it
operates in (weighted average for multi-
national firms)

3. 0
5
10
15
20
25
30
35
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
FM for AAPL FM for MSFT Stock Price of AAPL
Case Study: Apple Inc. vs Microsoft Corporation
The amount of revenue per employee a firm drives is a critical metric used by hedge funds in
assessing a firm’s future growth and growth margins. Apple Inc. (AAPL) has managed to earn
USD $2.1M per employee in 2015, almost three times that of its traditional rival, Microsoft
Corporation (MSFT) which is at USD $800k/employee.
Its founder Steve Jobs returned to the ailing company in 1997, turning its fortunes around.
Sources: World Bank, Morningstar, Xignite
Apple’s Performance since the return of Steve Jobs
Processes in Place
Before Jobs settled in, Apple
employees were more than 10x as
effective as the average US worker,
similar to Microsoft’s, due to the
processes to manage human capital
in tech companies.
A Revolutionary Entrepreneur
Steve Jobs is remembered as a
visionary genius who had a “reality
distortion field,” that could inspire
people to achieve what they
previously thought was impossible.
The Power of Leadership
Apple’s FM peaks in 2011, the year
of Job’s death, at more than 30x.
Within 14 years, the great leader
added 18 men’s effectiveness to
each of his capable followers.
Microsoft’s FM barely changes.
$16
$663
“Return to Profitability” Era
Average FM: 12.05
“Mobile” Era
Average FM: 19.92
“Post-Jobs” Era
Average FM: 29.69

4. HR Processes create the Force Multiplier Band
HR processes are instrumental in helping a company improve its force multiple.
The actual force multiple at which individual employees operate is subject to
themselves and their direct superior. However, for each strategic business unit, HR
controls the maximum value, the Force Multiplier Ceiling, and the minimum value,
the Force Multiplier Floor, and this determines the effectiveness of managers
throughout the firm.
The 7 core HR processes identified by Dr. Garry R. Buettner are arranged according
to the value they affect the most:
Force Multiplier Ceiling
Recruitment &
Selection
Legal Issues
Workforce
Planning
Training &
Development
Compensation
Performance
Management
Job Design &
Analysis
Force Multiplier Floor
As such, the HR processes of the firm creates a “band” in which managers can
adjust their employees’ performance levels. This is henceforth referred to as the
Force Multiplier Band (FMB). The better the firm’s HR processes, the higher the
values of their FMB.
Force
Multiplier
Band

5. Upward Pull within the FMB
Electric field is defined as the electric force per unit charge. The direction of
the field is taken to be the direction of the force it would exert on a positive
test charge.
In the electric field on the right, a positive charge would rise to the top.
Similarly, within the Force Multiplier Band, employees experience a “pull”
that brings them closer to the Ceiling.
Software
Engineer I
Software
Engineer II
Software
Engineer III
Senior
Engineer
Staff
Engineer
Senior Staff
Engineer
Technical Track in Software Firm
Sources: Quora, Glassdoor.com
1.71
2.85
4.42
6.27
8.55
11.40
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Software Engineer I Software Engineer II Software Engineer III Senior Engineer Staff Engineer Senior Staff Engineer
FM Progression
“10x Engineers” are the top tier of engineers that
are 10x more productive than the average
When an employee first joins the firm, on Day 1, he/she is at 1.0x. He/she is unaware of all
firm’s resources and unable to tap on them to deliver additional value. The employee also
possesses untapped potential. The HR processes that push the FMB upwards also motivate
them to improve their performance and uncover their potential.
Here is how a merit-based promotion policy leads an employee to move up the FMB.
Force Multiplier Ceiling
Force Multiplier Floor

6. 1.8
1.2
3
0.8
0.3
0.5
0
1
2
3
4
ADAM BERTRAND CAROL
FORCE MULTIPLES OF SALES STAFF UNDER
SALES MANAGER DANIEL
Performance Potential
Mechanisms of Firm Exit in the FMB
FM Ceiling
FM Floor
Force
Multiplier
Band
ADAM
• Employee performing within
band
• Employee expects to keep
working at firm
• Manager can use variety of
methods to motivate employee
to perform
BERTRAND
• Employee performance near
borderline
• If employee performance falls
below FM Floor consistently,
the Performance Management
process should lead him to exit
the firm
CAROL
• Employee performance at
upper limit
• Employee unable to capture
additional value of working at
full potential due to FM Ceiling
• May lose this employee to a
rival firm (higher Compensation
= higher FM Ceiling)
Direct superior cannot effectively motivate employees performing near FM Floor and FM
Ceiling since there is a high chance that they will exit the firm.
ILLUSTRATION PURPOSES,
NOT BEST PRACTICE
The wider the Force Multiplier Band (Ceiling - Floor), the less staff turnover there will be within
the firm. Staff with performance exceeding the Ceiling, or under the Floor, will tend to leave.

7. Force Multiplier for Managers’ Performance
Command Progression in Modern Army
Source: Wikipedia
For employees on the management track, the Force Multiplier of the business unit led by
them should be used as an indicator of their performance, rather than their individual FM.
Like a military officer, he/she will lead an increasing number of people as he/she climbs the
career ladder.
Corporal Sergeant Lieutenant Captain
Lieutenant
Colonel
Colonel
3
Fireteam
13
Squad
55
Platoon
225
Company
1000
Battalion
5000
Regiment
Size
Management Track in Retail Firm
Sales Rep
Senior
Sales Rep
Sales
Manager
Branch
Manager
Area
Director
Regional
Director
0 0 5 20 100 400Team Size
The business context differs from the military context, as the employee takes a longer time
to become the official leader of a team, whereas a soldier can start taking command right
after the training phase. Thus for those at junior ranks, the firm’s HR staff should actively
identify leadership qualities and other indicators, to assess their potential proficiency in
management roles.
Unit

8. Corporate Context and Support Functions
When the entire firm is taken into context, the Force Multiplier Band is not entirely horizontal
as certain HR processes may differ between business units.
Under this framework, the performance evaluation of a support function should be linked to
the business units which it supports, using a weighted average (weighted using man-hours
and/or relevant resources consumed).
In this fictional Firm Z, we have a Sales
department that has a much higher FM
Ceiling than the Operations and Marketing
departments.
This is due to the commission-based
compensation policy of Firm Z’s internal
sales staff, which incentivizes these
employees to perform highly at their jobs.
8.0 8.0
12.0
2.02.0
4.0
11.1
6.4
7.8
Operations Marketing Sales Total
Accounting Hours Consumed 1000 2600 400 4000
Force Multiplier Contribution 1.95 4.16 1.11 7.22
Accounting Department, Firm Z
FM
FM Floor
FM Ceiling

9. HR Processes’ effect on BU & Firm Performance
Raise FM
Ceiling
Raise FM Pull
Raise FM Floor
• Compensation
• Training & Development
Bottom 10% of
employees
FM: 1.69
Mid 80% of
employees
FM: 7.24
Top 10% of
employees
FM: 14.98
• Workforce Planning
• Training & Development
• Recruitment & Selection
• Performance Management
• Legal Issues
HR Processes Effect on FMB Resultant FM
FM for
Business
Unit A:
7.46
FM for
Business
Unit B:
11.82
FM for
Business
Unit C:
3.31
Firm FM:
7.53

10. The Dual Effect on Firm Revenue
Reduced by
FMB width
Revenue = Firm FM ∗ No. of Employees ∗ (1 – Staff Turnover) ∗ GDP per Worker
Group FMBs for Technology Firm Y
10.2
11.8
6.7
5.0
3.83.9
Continuous Optimization
of HR Processes

11. Points to Note
Perceived
Unfairness
Many staff in sales are
comfortable with taking
home a small percentage
of the revenue they
generate, but employees
working in other
functional departments
may view the FMB
framework in a negative
light. E.g. Some employees
may have pre-existing
assumptions about their
capabilities that do not
tally with FMB figures,
causing tension at work.
Labour-Reliant
Industries
Certain industries have
standard business models
that utilize large quantities
of cheap labor. One
example is the US retail
industry, which employs
millions at minimum
wage. The FMB for these
employees is very low and
narrow, and difficult to
adjust (e.g. USD$5
increase in hourly wage
entirely eliminates
worker’s contribution to
profit margin)
Human Capital
Outliers
This framework cannot
accurately capture the
effect of outlier employees
that do not work in
revenue centers. For
example, a technician in a
IT department of a bank
who is able to complete
tasks two times faster
than normal will not
significantly boost his
department’s FM, nor will
his performance be
noticed by this framework.