OVERVIEW

Measuring the return on investment (ROI) in training and development and performance improvement has consistently earned a place among the critical issues in the Human Resource Development (HRD) field. The topic appears routinely on conference agendas and at professional meetings. Journals and newsletters regularly embrace the concept with increasing print space. A professional organization has been developed to exchange information on ROI. At least a dozen books provide significant coverage of the topic. Even top executives have stepped up their appetite for ROI information.

Measuring ROI is a topic of much debate. It is rare for any topic to stir up emotions to the degree the ROI issue does. Return on investment is characterized as flawed and inappropriate by some, while others describe it as the only answer to their accountability concerns. The truth probably lies somewhere in between. Understanding the drivers for the ROI process and the inherent weaknesses and advantages of ROI makes it possible to take a rational approach to the issue and implement an appropriate mix of evaluation strategies that includes ROI. This chapter presents the basic issues and trends concerning ROI measurement.

Although the interest in the topic has heightened and much progress has been made, it is still an issue that challenges even the most sophisticated and progressive HRD departments. While some professionals argue that it is not possible to calculate the ROI, others quietly and deliberately proceed to develop measures and ROI calculations. The latter group is gaining tremendous support from the...