Travel$ense User's Guide (PDF, 139 MB) - NBAA

164TRAVEL$ENSEinclude not only salaries and wages but also other compensation and fringebenefits.To estimate total employment costs from salaries or wages, businessescommonly use a multiplier to account for additional compensation and fringebenefits paid to, or on behalf of, employees.There also are other factors that businesses use in determining the value, incontrast to total cost, of the business traveler’s time. These factors wouldinclude considerations of the employee’s skill and experience and his expectedcontribution to profitability. It is only natural that businesses hold values oftheir employees that are greater than their costs to employ them. Employeeswould be terminated if their value was determined to be less than their cost.Human resources are expected to provide a return for the business, just as arephysical resources. When managerial resources are considered, even greaterreturns are expected.Empirical studies relating to the value of time and time savings in airtransportation merely establish precedent for the use of the value of timesaving in cost benefit analysis of personnel using corporate aircraft services.Time value as utilized in this analysis is based upon an examination of thosewho use corporate aircraft services and an appraisal of the value of timereceived from those users.The measurement of individual human capital resources and, specificallymanagerial resources of a business firm, is now in wide use as a fully recognizedscience. The insurance industry led this field of study with primary interest inthe areas of business life insurance and business interruption insurance. Of thestudies accomplished to date, the majority relate to small businesses wherethere are close relationships of management resource value to compensation,ownership and property values. 7 In large corporations however, whereproperty values are large and varied and executives have little or no ownership,the value of managers to the corporation rests in their talents and skills. 8Estimates of the value of management resources, individually or as a group, tendto vary widely depending on the analytical technique or method utilized, andthere are many analytical techniques and methods. There is no blanket formulafor the appraisal of human resource values, but it also is true that no oneformula exists in other fields of appraisal concerning tangible assets, such asproperty appraisals. 9 There are many instances on record where two or moregroups of expert appraisers, working independently and simultaneously on the7 Huebner, S.S., The Human Value In Business Compared With Property Value, National Association of LifeUnderwriters Proceedings, 1924, pp. 17-40.8 Todd, J.D., A Model for Valuation of Managerial Resources, CLU Journal, January 1990, p. 26.9 0p. Cit., Smith, J.S. p. 654.Copyright © 1999, National Business Aviation Association, Inc.