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Proving the Value of HR: How and Why to Measure ROI


By Jack J. Phillips and Patricia Pulliam Phillips

2005, 210 pages, Paperback with CD-ROM

ISBN: 978-1-586440-49-7

SHRMStore Item: 61.16503

Order from SHRMStore or call (800) 444-5006

Also available as an eBook: Kindle.

MEASURING THE RETURN ON INVESTMENT (ROI) OF HUMAN RESOURCES IS CRITICAL FOR SUCCESS IN TODAY'S BUSINESS WORLD and is an absolute requirement for HR professionals who are part of the senior executive team. HR managers and executives must show HR's contribution, and prove that HR policies, practices, and solutions add directly to the organization's bottom line.

Proving the Value of HR shows how to measure ROI and provides basic, step-by-step instructions to develop the ROI of HR. It addresses the critical issues in collecting, analyzing, and reporting data. More important, it shows how the ROI methodology is a communication tool to strengthen the relationship with senior management as well as a process-improvement tool to enhance and improve HR's contribution.

The book is practical, with examples, charts, figures, and illustrations. It equips the HR manager with the tools necessary to tackle return on investment.

Proving the Value of HR focuses on how to actually calculate return on investment in a very methodical, systematic, and logical way. It is much easier to read than other ROI-based books and uses examples directly from the practice of human resources. It is the only book available that focuses ROI practices and techniques on the human resources profession.

The accompanying CD-ROM expands the scope of the book with 49 tools and templates, charts and graphs, a complete case study, self-assessment instruments, exercises, plus ROI formulas in a spreadsheet-ready format.

The book begins with the discussion of the accountability crisis that continues to tarnish the image of human resources. Next, the business case for ROI is presented as a way to address the crisis and show the value of HR programs.

Readers will learn the basics of calculating ROI of business programs. Readers will be able to choose HR programs for ROI calculation and to apply ROI to their own work. Readers will learn how to effectively communicate the ROI of their programs to their organization's senior executive team.

Read an Excerpt.


 Praise for the Book


"At last! A concisely presented, step-by-step approach to measuring ROI for HR."--Kimo Kippen, Vice President, Human Reources, Renaissance Hotels & Resorts North America

"Jack and Patricia's strategies to isolate the HR contribution and validate the monetary values of programs make this book indispensable. Thanks for offering our profession a valuation roadmap!"--Anthony A. Oshiotse, Human Resource Manager, Science and Technology, Corning, Incorporated


 Table of Contents


The Accountability Crisis

The ROI Methodology

Preparing for ROI

Data Collection Issues

Data Analysis

HR Cost and ROI

Measuring Intangibles

Communicating and Using Evaluation Data

Taking a Sensible Approach to ROI

Appendix: ROI Case Studies




 About the Authors


A world-renowned expert on measurement and evaluation, Jack J. Phillips, Ph.D., is Chairman of the ROI Institute. Through the Institute, Phillips provides consulting services for Fortune 500 companies and workshops for major conference providers throughout the world. Phillips is also the author or editor of more than 30 books and more than 100 articles.

His expertise in measurement and evaluation is based on more than 27 of corporate experience. Phillips has served as training and development manager at two Fortune 500 firms, senior HR officer at two firms, president of a regional federal savings bank, and management professor at a major state university.

His background in training and HR led Phillips to develop the ROI ProcessTM a revolutionary process that provides bottom-line figures and accountability for all types of training, performance improvement, human resources, and technology programs.

His other books include How to Measure Training Results; The Human Resources Scorecard; The Consultant's Scorecard; HRD Trends Worldwide: Shared Solutions to Compete in a Global Economy; Return on Investment in Training and Performance Improvement Programs; Handbook of Training Evaluation and Measurement Methods; and Accountability in Human Resource Management.

Patricia Pulliam Phillips, Ph.D., is an internationally recognized author, consultant, and researcher. She is the President and CEO of the ROI Institute, Inc. and Chairman of The Chelsea Group, Inc., an international consulting firm that supports organizations and their efforts to build accountability into their training, human resources, and performance improvement programs. She helps organizations implement the ROI MethodologyTM in countries around the world including South Africa, Singapore, Japan, New Zealand, Australia, Italy, Turkey, France, Germany, Canada, and throughout the United States.

Phillips has facilitated the implementation of ROI in private sector and public sector organizations. She has conducted ROI impact studies on programs such as leadership development, sales, new hire orientation, human performance improvement programs as well as K-12 educator development, educator National Board Certification mentoring program, and faculty fellowship programs. She works with corporations, government and academia to broaden the application of ROI evaluation to programs directly influencing the economic growth of communities around the world.

Phillips has authored a number of publications on the subject of accountability and ROI. Phillips' most recent publications included The Bottomline on ROI, which won 2003 ISPI Award of Excellence; casebooks Measuring Return on Investment, Measuring ROI in the Public Sector, and Retaining Your Best Employees; and The Human Resources Scorecard: Measuring Return on Investment. She is published in a variety of journals, serves as adjunct faculty teaching training evaluation, and speaks on the subject at conferences including ASTD's International Conference and Exposition and the ISPI International Conference.