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Typical Measures of Return on Investment

By Jack Ph.D.

Jul. 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


Communications
   
Errors, stress, conflicts, productivity, employee satisfaction


Compensation plans
    Costs, productivity, quality, employee satisfaction


Compliance programs
   
Penalties/fines, charges, settlements, losses


Diversity
   
Turnover, absenteeism, complaints, charges, settlements, losses


E-learning
   
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


Orientation
    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


Strategy/policy
   
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


Wellness/fitness
    Turnover, medical costs, accidents, absenteeism


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

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