The ROI Field Book: Strategies for Implementing ROI in HR and Training

Citation

Pulliam Phillips, P. (2008), "The ROI Field Book: Strategies for Implementing ROI in HR and Training", Human Resource Management International Digest, Vol. 16 No. 1. https://doi.org/10.1108/hrmid.2008.04416aae.001

The ROI Field Book: Strategies for Implementing ROI in HR and Training

The ROI Field Book: Strategies for Implementing ROI in HR and Training

Patricia Pulliam Phillips, Jack J. Phillips, Ron Drew Stone, Holly Burkett Elsevier Butterworth-Heinemann, 2007

Keywords: Return on investment, Human resource management, Strategy

Patricia Pulliam Phillips, Jack J. Phillips, Ron Drew Stone and Holly Burkett are experienced in using return on investment (ROI) to evaluate training. Through their ROI Institute they have helped hundreds of individuals and organizations to apply the technique.

The ROI Field Book targets human-resource development (HRD) specialists who are contemplating using ROI in their organization, conducting a study on ROI or trying to implement ROI. The book’s stated aim is to help organizations to implement ROI successfully. It pursues this by offering strategies, techniques and reproducible tools, and by identifying some common pitfalls. The book also contains a number of short case studies and some optional exercises for readers to undertake. It is accompanied by a CD-ROM, which contains a self-assessment test to check whether the reader’s organization is ready for ROI, plus templates for data collection and other practical ROI tools.

The book provides just enough theory for the uninitiated reader to understand some basic approaches to evaluation, as well as the principle of return on investment and its method of calculation. However, its main focus is on how to implement ROI. The book provides a step-by-step approach and offers useful guidance on when and when not to use ROI. It offers suggestions on how to overcome organizational barriers and technical hurdles, and on how to communicate to colleagues what you are trying to do.

Part 1, “Getting started”, covers the basics of evaluation and the ROI process, together with its potential challenges. Part 2, “Implementing the process”, deals with the key steps, from planning, through data collection, to the ROI calculation. It also discusses procedures for forecasting ROIs before new training programs are undertaken. Part 3, “Implementation issues”, looks at what must be addressed to make a success of ROI. Part 4, “Staying on track”, offers suggestions on how ROI can be made an ongoing process.

ROI is, of course, just another method of evaluating training – albeit a sophisticated one. The authors conceive of it as a fifth level, added to Kirkpatrick’s four levels of evaluation. But as well as being the highest level, ROI is probably the hardest to implement, not least because of the difficulties in obtaining data capable of reliable quantification. The authors acknowledge these difficulties, meeting them head-on and suggesting ways of overcoming them. They stress throughout that only tangible benefits, based on robust data, should be quantified, and that all quantifications should err on the cautious side. On the cost side, they advocate a “fully loaded” approach that incorporates every element, including learners’ salary costs and overheads. They argue that this strategy should lead to the calculated ROI being a conservative estimate, helping to deflect potential skepticism about the result.

The book is well set out in short, digestible sections, interspersed with text boxes and plenty of white space. The detail with which different data-collection techniques are described should be helpful even to people researching other areas. The book is somewhat prescriptive, implying that the authors’ approach to ROI is undisputed best practice. The bibliographies at the end of each chapter are sparse and tend to be dominated by the authors’ own publications. The chapter summaries are too short to be of much use. The CD-ROM is rather “low tech” and contains some needless repetition of charts that appear in the book. However, more positively, it offers Word documents of various instruments that the reader is allowed to use. These should be a real time saver for someone about to embark on an ROI study of his or her own.

Despite a few minor shortcomings, the book gives an excellent grounding in the practicalities of ROI.

Reviewed by Graham Cheetham.

A version of this review was originally published in Industrial and Commercial Training, Vol. 39 No. 4, 2007.