Title: The Human Resources Scorecard - Measuring the Return on Investment.
Authors:Phillips J J, Stone R D, Phillips P P
Publisher: Butterworth Heinemann Publishing, Woburn MA
Format: Hardback, 500 pages
Price: £35.99
ISBN: 0877193673
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Human resources, personnel or training managers in both the public and the private sector are increasingly being asked to justify expenditure on areas such as training. The Human Resources Scorecard, which describes itself as, "a step-by-step guide for measuring the impact of human resources" offers a combination of diagrams, checklists, sample questionnaires and case studies which could help those faced with pernicious budget reviews. The underlying aim of the book is to set out various ways in which the return on investment (ROI) of different aspects human resources management can be measured. and while most of us find it fairly easy to do this in the abstract, this book offers formulae and equations that should satisfy the most demanding finance manager.
The starting point for much of the analysis are Donald Kirkpatrick's 5 levels for measuring the impact of training programmes – reactions and immediate satisfaction ("happy sheets"), learning (skills or attitude changes), application and implementation (maybe a few weeks later), business impact (longer term changes) and ROI, which is defined as "the monetary value of the business impact [compared] with the costs of the … programme, usually expressed as a percentage". The book offers a variety of ways of planning human relations interventions, collecting data before, during and after events, converting the data to monetary values (the most difficult part) and finally, measuring the ROI. At each stage, the authors provide helpful and exhaustive lists of the questions to ask, the preparations to make and the pitfalls to avoid. When it comes to calculations, the equations that are necessary are explained clearly and in non-mathematical language. A significant part of secret of arriving at figure (in areas where people usually guess) is to balance figures against the degree of confidence (expressed as a percentage) of those guessing them. Hence all ROI percentages should be seen as understated, rather than wildly optimistic estimates. For those who have difficulty in reducing everything to monetary values, there’s a chapter on identifying intangible results – things such as customer satisfaction, team effectiveness and keeping staff who might otherwise leave.
The book concludes with half a dozen case studies from different industries covering areas such as equal opportunities, health and safety and stress management training, absenteeism reduction measures, competency based pay, technology based training and leadership development programmes. Each case is based on a different industry, and all contain detailed descriptions of the processes undertaken and the figures which resulted.
There’s more useful information on the same sort of thing on Jack Phillips website, http://www.roipro.com. My only criticisms of the book are that, like so many others, it relies on exclusively US examples expressed in US dollars, and doesn't bother to define a few terms that might not be immediately understood by natives of other English speaking cultures. But these are small points – overall, the book is very good value and highly recommended.
Reviewed by David Evans, E-Learning Consultant, Financial Projections Ltd.
