How Do You Measure ROI in HR? Let's Share Our Thoughts and Insights

Hi all,

I was just going through an article on "How do we measure ROI in HR."

Please share your thoughts.

Thanks,
Rooma

Dear Rooma,

Nice topic you have brought out. Please refer to this site for other posts on this subject. The entire HR world is trying to find out exactly this. Once HR can ascertain its ROI properly, it will become one of the most coveted management disciplines. If you can find the method, you can surely become the Peter Drucker of HRM, and I am not joking.

Regards, SC

Dear Rooma,

This is really a great issue to discuss. I came across the topic of ROI when I was doing project work during my MBA. There are so many issues involved in this ROI in HR, such as employee productivity, time and attendance, capital invested in the employee for a particular project, etc. There are a few issues that can't be calculated manually or even through performance appraisal methods.

Hope you gained some information from my reply.

Bye

Hi Rooma,

There are various functions involved in HR, and it is a difficult task to measure ROI in all the functions, such as the measurement of ROI of Training, Team Building, Designing a compensation package, Performance appraisal, and many more.

We can start with one at a time. Here is some information on How to calculate ROI for Goal setting.

A critical component of goal setting is a return on investment (ROI) analysis. A performance increase forecast is needed to calculate the investment required. This, in turn, guides five key program decisions.

1. Program rules must be inspiring. Team members judge the quality of the program by the rules. They will ask, "What's in it for me?" and "What is required?" A unique and meaningful proposition should be readily available.

2. Interact with a strong communications plan that reflects corporate image. Print, video, websites, flash mail, or kick-off meetings, a consistent look, and message are necessary. There is a direct correlation between communication frequency and results.

3. Use technology to track and connect with team members. Tracking is more important than periodic progress statements. It is the umbilical cord linking the team activity to individual and corporate performance. The more members know about what they have achieved and how far they need to go, the more engaged and active they become.

4. Use education to power the program. Education is an important component. Elevating skills and knowledge establishes a competitive point of difference, aligns business goals, and increases performance.

5. Combine awards and recognition with the program for a synergistic effect. Awards can make an impact. It's best to customize the offerings to the performance and interests of the members. Combining various awards - travels, recognition, and points - makes a powerful award collection.

Apply these techniques, and every team member will be playing the same tune, creating the sweet sound of success.

Hope this information will be of help. For other functions, let's wait to see what others have to say.

Cheers,

Archna