Typical Measures of Return on Investment

Depending on the program, results can be measured in terms of time saved, productivity gained, market share increase or customer satisfaction.

July 5, 2005

Here are some ways to measure the payoff of some workforce management programs.

    The measures are quite broad for some programs. For example, a reward systems project can pay off in a variety of measures such as improved productivity, enhanced sales and revenues, improved quality, cycle-time reduction or even direct cost savings.

    In other programs, the influenced measures are quite narrow. For example, in labor management cooperation programs, the payoff typically comes in reduced grievances, fewer work stoppages and improved employee satisfaction. Orientation programs typically pay off in measures of early turnover (turnover in the first 90 days of employment), initial job performance and productivity.

Absenteeism control/reduction
    Absenteeism, customer satisfaction, job satisfaction

Business coaching
    Productivity/output, quality, time savings, efficiency, costs, employee satisfaction, customer satisfaction

Career development/career management
    Turnover, promotions, recruiting expense, employee satisfaction

Errors, stress, conflicts, productivity, employee satisfaction

Compensation plans
    Costs, productivity, quality, employee satisfaction

Compliance programs
Penalties/fines, charges, settlements, losses

Turnover, absenteeism, complaints, charges, settlements, losses

Cost savings, productivity improvement, quality improvement, cycle times, error reductions, employee satisfaction

Employee benefits plans
Costs, time savings, employee satisfaction

Employee relations program
Turnover, absenteeism, employee satisfaction, engagement

Gainsharing plans
Production costs, productivity, turnover

Labor-management cooperation programs
Work stoppage, grievances, absenteeism, employee satisfaction

Leadership development
    Productivity/output, quality, efficiency, cost/time savings, employee satisfaction, engagement

Marketing and advertising
    Sales, market share, customer loyalty, cost of sales, wallet share, customer satisfaction

Meeting planning
    Sales, productivity/output, quality, time savings, employee satisfaction, customer satisfaction

    Early turnover, training time, productivity

Personal productivity/time management
    Time savings, productivity, stress reduction, employee satisfaction

Project management
    Time savings, quality improvement, budgets

Recruiting source (new)
    Costs, yield, early turnover

Retention management
    Turnover, engagement, employee satisfaction

Safety incentive plan
    Accident frequency rates, accident severity rates, first-aid treatments

Selection tool (new)
Early turnover, training time, productivity

Self-directed teams
    Productivity/output, quality, customer satisfaction, turnover, absenteeism, employee satisfaction

Sexual harassment prevention
Complaints, turnover, employee satisfaction

Six Sigma
    Defects, rework, response time, cycle time, costs

Skill-based pay
Labor costs, turnover, absenteeism

Productivity/output, sales, market share, customer service, quality/service levels, cycle times, cost savings, employee satisfaction

Stress management
Medical costs, turnover, absenteeism, job satisfaction

Technical training (job-related)
Productivity, sales, quality, time, costs, customer service, turnover, absenteeism, employee satisfaction

Technology implementation
    Cycle times, error rates, productivity, efficiency, customer satisfaction

    Turnover, medical costs, accidents, absenteeism

Source: Excerpted from Investing in Your Company’s Human Capital, by Jack J. Phillips. Copyright 2005 by AMACOM Books.