The Convergent and Discriminant Validity of the Stochastic Rewards Model for Human Resource Valuation: A Field Study

A recent paper by Flamholtz and Wollman described the conceptualisation, development, and implementa‐tion of the stochastic rewards model for human resource valuation (SRVM) in a human capital intensive firm. An essential prerequisite before such models can actually be implemented in organisations (and used in personnel management in the ways described by Flamholtz and Wollman) is to assess the empirical validity of the numbers generated as measurements of human resource value. The purpose of the study reported in this paper, therefore, is to investigate the “convergent and discriminant validity” of the SRVM in the context of a human capital intensive firm. Our intent is to contribute to the development of human resource accounting by going beyond the theoretical justification of the previously proposed SRVM and present some empirical evidence on the validity of the numbers generated by the model.