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# ROI on People Management Interventions - It is Possible!!

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My interpretation of the ROI for sof interventions

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### ROI on People Management Interventions - It is Possible!!

1. 1. ROI of Human Capital Interventions A Practice Toolkit
2. 2. Description IconRelevant quoteConcept/FrameworkTools, TechniquesTemplate
3. 3. Step 1Presenting Problem to Real Problem
4. 4. Step 1. Presenting Problem to Real Problem The first task of the practitioner is almost always analysis Starts with a “presenting” problem – not a “hunch” but a problem … as it presents itself
5. 5. Step 1. Presenting Problem to Real Problem Example… Lets take an example – higher staff turnover for Graduate Engineers (let say compared to an industry standard)The first question should not be, what skills and knowledge are required. It should be which metric(s) are affected negatively.
6. 6. Step 1. Presenting Problem to Real Problem Example… Cost to fill a vacant On boarding & position Orientation cost Cost of covering a vacant position (Calculated costs of Cost of productivity other employees ramp-up filling in while the position is vacant) Unit cost per replacement
7. 7. Step 1. Presenting Problem to Real Problem 1.1 Calculating benchmark employee costNr Metric Element Description Example1. Departing employee annual base N/a 100,000 salary2. Calculated annual benefits cost Estimated at 20% of 20,000 base salary3. Calculated monthly salary + benefits 10,0004. Calculated daily salary + benefits Based on 230 (8hr) 522 working days
8. 8. Step 1. Presenting Problem to Real Problem1.2 Cost of covering a vacant position (Calculated costs of other employees filling in while the position is vacant)Nr Metric Element Description Example1. Number of days until the vacant N/a 90 position is filled2. Calculated daily cost of covering a 33% of departing 522/3 vacant position employees daily salary + benefits3. Total cost to cover vacant position 15644
9. 9. Step 1. Presenting Problem to Real Problem 1.3 Cost to fill a vacant positionNr Metric Element Description Example1. HR/Hiring managers annual salary N/a 200,0002. Calculated HR/Hiring managers hourly rate Based on 230 (8hr) working 130 days and 20% fringe rate3. Cost of advertising (online and/or print) Enter cost 30004. Cost of resume screening HR/Hire manager hours * 50*130=6500 hourly rate5. Cost of interviews (telephone screening, 1st and HR/Hire manager hours * 50*130=6500 2nd) hourly rate6. Cost of behavioural and skills assessments Enter cost 30007. Cost of background checks (criminal, credit, Enter cost 4000 reference, education)8. Cost of travel/moving expenses (if applicable) Enter cost 50009. Total cost to fill a vacant position: 28,000
10. 10. Step 1. Presenting Problem to Real Problem 1.4 On boarding & Orientation costNr Metric Element Description Example1. Trainer/Manager annual salary: N/a 100,0002. Calculated trainer/manager daily rate Based on 230 (8hr) working 522 days and 20% fringe rate3. Total training days Enter number of days 104. Total on boarding and orientation cost N/a 5220
11. 11. Step 1. Presenting Problem to Real Problem 1.5 Cost of productivity ramp-up (During the first 3 months, an average new employee performs at 50% productivity of a tenured top performing employNr Metric Element Description Example1. Daily employee cost (salary + benefits) N/a 5222. Number of working days during first 3 months: Enter number of days (avg. 50 58 days3. Cost of productivity ramp-up N/a 26100
12. 12. Step 1. Presenting Problem to Real Problem 1.6 Unit cost for filling a vacancy R 74964Two important learning points:I. Know your metricsII. Negotiate, and even request help from your client to determine the right metrics. They are closer to the business and at the same time you obtain by in for the intervention.
13. 13. Step 1. Presenting Problem to Real Problem 1.7 Total cost of replacing graduate engineers R 74964 x 6 = R 449784Lets assume that we had to replace five graduate engineers the past six months
14. 14. Step 1. Presenting Problem to Real Problem Now we can move on to analysis We know now which metrics are affected Consultant specialityPresenting Analysis and Identification of Solution Intervention Problem/ Definition of Performance Competence Gap Generation StrategyOpportunity Business Need Need Non Training Solution
15. 15. Step 1. Presenting Problem to Real Problem The basic tasks in analysis 1. Data gathering 2. Data consolidation 3. Data analysis 4. Perspective and information for decision making
16. 16. Step 1. Presenting Problem to Real Problem Two types of data Quantitative”The truth is in a number” –however does not say muchabout context Data” More about context, howpeople experience in theirown words”. Qualitative
17. 17. Step 1. Presenting Problem to Real Problem Data gatheringI. QuestionnairesII. SurveysIII. TestsIV. InterviewsV. Focus groupsVI. ObservationVII. Performance recordsVIII.Knowledge and skills testingIX. Program follow upX. Project assignments
18. 18. Step 1. Presenting Problem to Real Problem Data gatheringI. Target population/participants;II. Supervisors of target population/participants;III. Subordinates of target population/participants;IV. Peer Group;V. HRD Staff;VI. Documentation: • Organizational Performance Records: • Disciplinary records; • Safety records; • Scorecards
19. 19. Step 1. Presenting Problem to Real Problem Contextual factors to consider when selecting data collection methodsI. Time for participants to respond;II. Costs;III.Amount of disruption of normal activities;IV. What is the level of certainty that you will achieve with the result;V. Practicality;VI. Culture/Philosophy – example the 10% syndrome.
20. 20. Step 1. Presenting Problem to Real Problem Requirements for effective data collection instruments and techniquesI. Construct validity ( methods, techniques and test instruments should be evaluated in terms of its theoretical grounding);II. Predictive validity (methods, techniques and test instruments should be evaluated regularly in terms of its ability to predict what it purport to predict);III. Face validity – for line management very important!
21. 21. Step 1. Presenting Problem to Real Problem Requirements for effective data collection instruments and techniquesReliability:I. Produce consistent results over time, that differentiates effectively, and are independent of the assessor/data collector, or context.
22. 22. Step 1. Presenting Problem to Real Problem Data consolidationData Consolidation Techniques are Wide and Varied Descriptive statistics Qualitative description, using organizational and other models and concepts
23. 23. Step 1. Presenting Problem to Real Problem Data analysis Data Analysis Varies According to Situation Descriptive and inferential statistics Qualitative decisions about the situation, based on decision making and techniques
24. 24. Note the following !• Because this toolkit does not aim to transfer knowledge about analysis as such the previous slides provides a brief and high level overview, for the sake of a clearity… for the sake of the toolkit we assume that the analysis provided clarity about the problem….
25. 25. Step 1. Presenting Problem to Real ProblemBrief Exposition of ProblemOur analysis shows that the HR and linemanagers involved in selection decisions dointerviews in a haphazard and nonscientific Lets assumefashion this based on the coreSolution exampleFollowing discussions with consultants, HRexperts and line all agreed we need toimplement competency based interviewing
26. 26. Step 1. Presenting Problem to Real ProblemThe training department is instructed todevelop an appropriate program and put allline and support staff through training – theyhowever indicate that a change in results isrequired quickly and that ROI for the trainingneed to be justified soon afterimplementation… Lets assume this based on the core example
27. 27. Presenting Problem to Real ProblemSo we have addressed this even before we asked any questions about training – and now we can move on to the next step Starts with a “presenting” problem – not a “hunch” but a problem … as it presents itself
28. 28. Step 2aPlanning the Intervention (Starting With the End In Mind)
29. 29. Step 2a: Planning the Intervention (With ROI in Mind)When we plan an intervention – considering that we want to measure ROI- we really reverse engineer (or start with the end in mind) – We use the Kirkpatrick Model to achieve this 4. Impact What is the business impact we need to achieve (refer step 1 where we got a firm grip on the metric that must change) 3. Transfer What is the work place behaviour that must change 2. Learning What knowledge, skills and attitudes need to be acquired 1. Reaction What is the required reaction of the learner to the intervention
30. 30. Step 2a: Planning the Intervention (With ROI in Mind)Back to our case study to show how we plan “backwards” – remember these objectives and measures for clarification, based on our core example/case study (re graduate engineers)Kirkpatrick Level Objectives MeasuresImpact Train target population (define) in behaviour based 25% reduction in total cost of filling interviewing techniques, with the aim to: vacancies for graduate engineers a. Improve predictive validity of selection decisions b. Driving down cost of filling vacancies for graduate engineersTransfer Correct application of behaviour based interviewing Expert observation with the aid of techniques by target populations during selection checklists show that all involved in interviewing selection interviews use the correct interviewing structure (agenda) and questioning techniques at least 85% of the time. Observation is conducted for two months following the initial training and corrective coaching is implemented where required, following interviews.
31. 31. Step 2a: Planning the Intervention (With ROI in Mind)Back to our case study to show how we plan “backwards” – remember these objectives and measures a merely examplesKirkpatrick Level Objectives MeasuresLearning Using Blooms Taxonomy of Learning Objectives here are 100% compliance with the Bloom a few examples of the objectives that will be outlined Taxonomy, alignment with SAQA Unit here: Standards and also SAQA guidelines a. The learner should demonstrate that they can and requirements for assessment analyse a CV, with the aim to develop behaviour and moderation; based questions for an interview; Learners score 75% on theoretical b. The learner should demonstrate the ability to paper to pass and 80% on practical develop interview questions according to the simulation interview. behavioural interview format c. Etc. etc… Remember this is a snapshot – there is a whole learning map and course development process underlying these objectives
32. 32. Step 2a: Planning the Intervention (With ROI in Mind)Back to our case study to show how we plan “backwards” – remember these objectives and measures a merely examplesKirkpatrick Level Objectives MeasuresReaction The reaction to the learning material, environment, Using a Likert type scale participants perception of preparation, facilitator style and rate the following on average no less than “agree”: a. Preparation b. Facilitator style c. Learning environment d. Participation e. General expectations met
33. 33. Step 2a: Planning the Intervention (With ROI in Mind) What have we achieved by planning the intervention this way? ROI ?Results A path – trail linking the business need with the interventionResultsResultsResults
34. 34. Step 2a: Planning the Intervention (With ROI in Mind) We can also go some steps further and plan where we will get the information to evaluate the intervention and how…Kirkpatrick Level Objectives Measures Where Will We Find In What Format Information For EvaluationImpact See previous slides See previous HR Budget vis Actual Business Report slides Staff Turn Over Records HR ReportTransfer See previous slides See previous Audit/Observation results Possibly checklists slidesLearning See previous slides See previous Test scores Tests papers and slides Practical simulation answer sheets scores Simulation checklists and grading papersReaction See previous slides See previous Survey results Possibly tabulated slides and presented in graphs
35. 35. Step 2bPlanning the Intervention (Planning Beyond Training – With ROI In Mind)
36. 36. Step 2b: Planning the Intervention (With ROI in Mind)Usually once we have done the planning and developed the training intervention we are ready to implement… b. We need to determine what technique(s) we will use to show that the intervention actually had an impact a. With ROI in mind our planning needs to go some steps further…
37. 37. Step 2b: Planning the Intervention (With ROI in Mind)We need to determine what technique(s) we will use to show that the intervention actually had an impact – but our dilemma is this… External Factors Management Attention OR SOMETHING AND YES THERE IS Incentives ELSE? IMPROVEMENT Systems/Procedures AFTER Changes PROGRAM Here is our training IS IT THE program TRAINING PROGRAM?
38. 38. Step 2b: Planning the Intervention (With ROI in Mind) We have to isolate the effects of our intervention!I. Isolating the results/effect of our intervention is the most difficult and also most important element of building the case for value (ROI);II. Because of this, value at the higher levels is seldom determined;III. However, the credibility not only of your study to show value, but also the training function is based on this element.
39. 39. Step 2b: Planning the Intervention (With ROI in Mind) We have to isolate the effects of our intervention!I. The complexity of isolating the effect, is a function of the variables that are in play at any moment in time in an organization;II. The analyst should however always try to prove a causal relationship to an acceptable degree of accuracy;III. Acknowledging the forces that influence individual, group and business performance is the first step in this process.
40. 40. Step 2b: Planning the Intervention (With ROI in Mind) We have to isolate the effects of our intervention!Remember that we are trying to isolate the effect of out intervention to an acceptabledegree of accuracy – this makes very important to involve and agree with the client:a. What metrics should change as result of the intervention (see step 1)b. What isolation technique will be used (because they differ in terms of accuracy) Let’s consider the isolation techniques…
41. 41. Step 2b: Planning the Intervention (With ROI in Mind) Lets look at the techniques! a. Trend line analysis of performance data; With these b. Control groups; techniques we try to isolate the c. Participant’s estimation of impact; effects of our intervention d. Supervisor’s estimation of impact; e. Management’s estimation of impact; f. Use of previous studies g. Subordinate’s report of other factors; h. Estimating the impact of other factors; i. Use of customer input.
42. 42. Step 2b: Planning the Intervention (With ROI in Mind) Lets look at the techniques! a. Trend line analysis of performance data; b. Control groups; c. Participant’s estimation of impact; d. Supervisor’s estimation of impact; With these e. Management’s estimation of impact; techniques we try to isolate the f. Use of previous studies effects of other interventions g. Subordinate’s report of other factors; and then declare the rest as due h. Estimating the impact of other factors; to our effort i. Use of customer input.
43. 43. Step 2b: Planning the Intervention (With ROI in Mind) Trend Line AnalysisI. Draw a trend-line using previous performance data as a base;II. When intervention is conducted, actual performance is plotted and compared to the trend line;III. Improvement in actual performance over what the trend line predicted can then be reasonably attributed to the intervention.
44. 44. Step 2b: Planning the Intervention (With ROI in Mind) Trend Line Analysis- Advantages and Disadvantages Advantages DisadvantagesI. Show quick results I. Uses only one factor to isolate the effect of the intervention (time- before andII. Easy to calculate after implementation)III. Easy to understand II. Thus less accurate and client could beIV. Inexpensive sceptical to accept only an analysis ofV. Not difficult to organize (basically just the trend line. monitor changes in metrics)VI. A good first order analysis
45. 45. Step 2b: Planning the Intervention (With ROI in Mind) Example- Not from our central case study… Effect of the interventionCOMPLAINTS Average Pre Program 55 Average Sexual Post Program 35 Harassment Prevention Program O N D J F M A M J J A S O N D J F M A M J J A S O TIME
46. 46. Step 2b: Planning the Intervention (With ROI in Mind) Control Groups TechniqueI. Similar to classical research the control group method, involves an experimental group and a control group;II. The so called experimental group will be the target of our intervention;III. The control group would be a group that is paired with the experimental group, but would not undergo the intervention;IV. Important things to remember with this method are: a. Paring need to be thought about carefully so as not to dilute the impact of the intervention; b. Although not as rigid as classical research key factors that could dilute the impact or assessment of the impact of the intervention need to be controlled.
47. 47. Step 2b: Planning the Intervention (With ROI in Mind) Control Groups- Advantages and Disadvantages Advantages DisadvantagesI. More accurate than most techniques I. More complicatedII. If the pairing and control of variables are II. Require more planning, negotiation, agreed with the client the outcome has high control and monitoring level of credibility III. As result of above many practitioners areIII. With this control groups, given the level of unwilling to use this technique accuracy it is possible to benchmark the ROI IV. Requires absolute agreement with the of certain interventions given a client environment that variables will be predetermined set of variables kept constant for the duration of the ROI evaluation.
48. 48. Step 2b: Planning the Intervention (With ROI in Mind) Schematic Explanation of control groups design1. Pairing 2. Control Variables Control M1 M2 Group Experimental M1 Intervention M2 Group *M = measurement
49. 49. Step 2b: Planning the Intervention (With ROI in Mind) Looking at pairing and control of variables PAIRING Note: I. Too small then meaningful pairing is not possible – too big then you are not going to be able to control the variables during and after the implementation of your Select your intervention;experimental and control group II. Remember we go for reasonable carefully accuracy therefore you pair the major elements and also control the major variables!! III. The above makes it very important to agree upfront with your client environment what how pairing will be VARIABLES done and which variables will be controlled.
50. 50. Step 2b: Planning the Intervention (With ROI in Mind) So what do you typically pair? Pair for (Primarily) General demography Performance level Leadership stype Nature of work Size Negotiate creafully
51. 51. Step 2b: Planning the Intervention (With ROI in Mind) So what do you typically try to control? Changes in: Changes in: Systems and procedures Recognition and reward General demography Performance level Leadership stype Nature of work Turn over structure Function +Size Negotiate creafully Negotiate creafully
52. 52. Step 2b: Planning the Intervention (With ROI in Mind) Remember your decision about pairing and control of variables…. = (f) (your knowledge and judgement) + agreement with the client environment + practicability
53. 53. Step 2b: Planning the Intervention (With ROI in Mind) Estimation of impact by third parties ( this technique can include an estimation of theperceived impact of the intervention, by participants, participants supervisors, participants managers) This technique provides participants with a questionnaire, and based on the improvement ask them to respond to the following: I. What percent of this improvement can be attributed to the application of skills/techniques/knowledge gained in the training program? II. What is the basis for this estimation? III. What confidence do you have in this estimate, expressed as a percentage? IV. What other factors contributed to this improvement in performance? V. What other individuals or groups could estimate this percentage or determine the amount?
54. 54. Step 2b: Planning the Intervention (With ROI in Mind)Estimation of impact by third parties – how do you increase the confidence level for this technique? I. Individuals who do not respond to the questionnaire or provide non- usable data on the questionnaire are assumed to report no improvement/impact; II. Extreme data and unrealistic claims are omitted from the analysis; III. Only annualized values are used, it is assumed that there are no benefits from the program after the first year of implementation; IV. The confidence level, expressed as a percent, is multiplied by the improvement value to reduce the amount of the improvement by the potential error; V. If value is expressed it is also factored by the confidence value.
55. 55. Step 2b: Planning the Intervention (With ROI in Mind) Estimation Of Impact By Third Parties - Advantages And Disadvantages Advantages DisadvantagesI. Easy to implement; I. Less accurate than control groupsII. Based on the assumption that participants II. Based on perceptions – could be are capable of determining or estimating regarded as Return on Expectation impact; rather than ROIIII. Although an estimate, this value will usually III. Could become victim of “group think” have considerable credibility with management because participants are at the centre of the change or improvement;IV. High face validity.
56. 56. Step 2b: Planning the Intervention (With ROI in Mind) Example from an actual coaching intervention- Not from our central case study… Participants and management agreed whichAll indicators the respectivewere pre groups willagreed with the rateclient
57. 57. Step 2b: Planning the Intervention (With ROI in Mind) So now we can complete our planKirkpatrick Objectives Measures Where Will We In What When Purpose ofLevel Find Information Format Data For Evaluation Collection and AnalysisImpact See previous See HR Budget vis Business Six months ROI and slides previous Actual Report after final Training slides Staff Turn Over course was Evaluation Records HR Report presentedTransfer See previous See Audit/Observatio Possibly Period of three Training slides previous n results checklists months Evaluation slides following trainingLearning See previous See Test scores Tests papers Within one Training slides previous Practical and answer week following Evaluation slides simulation scores sheets training Simulation checklists and grading papersReaction See previous See Survey results Possibly Within one Training slides previous tabulated and week following Evaluation slides presented in training graphs
58. 58. Step 2b: Planning the Intervention (With ROI in Mind)Note – because the techniques related to isolating the impact of other factors are not used often it is only referred to in this toolkit… a. Trend line analysis of performance data; b. Control groups; c. Participant’s estimation of impact; d. Supervisor’s estimation of impact; With these e. Management’s estimation of impact; techniques we try to isolate the f. Use of previous studies effects of other interventions g. Subordinate’s report of other factors; and then declare the rest as due h. Estimating the impact of other factors; to our effort i. Use of customer input.
59. 59. Step 3Implementation and Data Gathering (With ROI in Mind)
60. 60. Implementation and Data Gathering (With ROI in Mind)Referring back to our original example (turnover in graduate engineers) – let us assume the following: Correct Correct pairing pairing Correct Correct control of control of variables variables Agreement Agreement Mine A on metrics Mine B on metrics Control Experiential We opted for a control group evaluation method
61. 61. Implementation and Data Gathering (With ROI in Mind)Referring back to our original example (turnover in graduate engineers) – let us assume the following: Impact Transfer -Evaluation completed Six months after the intervention the need for Learning -Evaluation completed replacement of graduates were down by 50% in the experimental Reaction – Evaluation group completed
62. 62. Implementation and Data Gathering (With ROI in Mind)Referring back to our original example (turnover in graduate engineers) – let us assume the following: Impact Transfer -Evaluation completed In the control group the need for replacement of graduate engineers also Learning -Evaluation completed down by 10%...possibly because of anticipation of changes in HR approach Reaction – Evaluation completed
63. 63. Implementation and Data Gathering (With ROI in Mind)Referring back to our original example (turnover in graduate engineers) – let us assume the following: Impact Transfer -Evaluation completed In the control group the need for replacement of graduate engineers also Learning -Evaluation completed down by 10%...possibly because of anticipation of changes in HR approach Reaction – Evaluation completed
64. 64. So because to the method we used we can assign thechange in te metric to our intervention, mainly because we controlled major variables. We do this as follows…
65. 65. Step 4 Converting the Change As Result of theIntervention to Value and Calculating ROI
66. 66. Step 4.a Converting the Change As Result of the Intervention to ValueReferring back to our original example (turnover in graduate engineers)…this is how it is dome… Identify the unit of In our case study: Value per unit = improvement Number of R 74964 (see slide 12 replacements of AND 13 graduate engineers in the past six months Determine the Original replacements = Original cost of performance level 6 replacement change Six months after the R 449784 intervention = 3 Our latest cost of Improvement of 50% replacement following intervention R 224892 Calculate the 50% saving R 224892 performance improvement
67. 67. Step 4.a Converting the Change As Result of the Intervention to ValueBecause this is such a vast area to know here is some additional input re calculating the value of change in a metric.. Primary Measurements of Improvement
68. 68. Step 4.a Converting the Change As Result of the Intervention to Value Always try to link to a metric – alternatively use the method ofEstimation Of Impact By Third Parties –See slide 55 and 56 (this method is also referred to as Return on Expectation)
69. 69. Step 4.a Converting the Change As Result of the Intervention to Value See whether one can link tangible values to these?OUTPUT TIMEUnits Produced Equipment DowntimeTons Manufactured OvertimeItems Assembled Time to Project CompletionMoney Collected Processing TimeItems Sold Break in Time for New EmployeesForms Processed Learning TimeLoans Approved Meeting SchedulesInventory Turnover Repair TimePatients Visited Work StoppagesApplications Processed Order ResponseTasks Completed Late ReportingOutput Per Hour Lost Time DaysProductivity QUALITYNew Accounts Generated ScrapCOSTS WasteBudget Variances RejectsUnit Costs Error RatesCost By Account ReworkVariable Costs ShortagesFixed Costs Product DefectsOverhead Cost Deviation From StandardOperating Costs Product FailuresNumber of Cost Reductions Inventory AdjustmentsProject Cost Savings Time Card CorrectionsAccident Costs Percent of Tasks Completed ProperlySales Expense Number of Accidents
70. 70. Step 4.a Converting the Change As Result of the Intervention to Value And these….WORK HABITS CUSTOMER SERVICEAbsenteeism Customer ComplaintsTardiness Customer SatisfactionVisits to the Dispensary Customer DissatisfactionFirst Aid Treatments Customer ImpressionsViolations of Safety Rules Customer LoyaltyNumber of Communication Break-downs Customer RetentionExcessive Breaks Customer ValueFollow-Up Lost Customers EMPLOYEE DEVELOPMENT/ADVANCEMENTWORK CLIMATE/SATISFACTION Number of Promotions Number of Pay IncreasesNumber of Grievances Number of Learning Programs AttendedNumber of Discrimination Charges Requests for TransferEmployee Complaints Performance Appraisal RatingsJob Satisfaction Increases in Job EffectivenessEmployee TurnoverLitigation INITIATIVE/INNOVATIONOrganization Commitment Implementation of New IdeasEmployee Loyalty Successful Completion of ProjectsIncreased Confidence Number of Suggestions Implemented Setting Goals and Objectives New Products and Services Developed New Patents and Copyrights
71. 71. Step 4.a Converting the Change As Result of the Intervention to Value Or determining value on a case by case basis using historical data Legal fee; Actual cost Settlement from records cost Total of Cost35 complaints R 285,000 Estimated Staff time; additional Management from staff time R 285,000/35 = Cost per complaint Cost of Sexual Harassment Complaint
72. 72. Step 4.a Converting the Change As Result of the Intervention to ValueIn our case example we did determine the value of the change and can therefore now move on to calculate cost benefit and therefore also ROI
73. 73. Step 4.b Calculating ROI First thing to do now is to determine the cost of the intervention – again back to our main example …Cost element Notes ZAR value (for the sake of our example)Development Costs If you use more than one trainer or one R50,000 trainer on more than one project – pro-rateProgram Materials R10,000Instructor/Facilitator Costs If you use more than one trainer or one R10,000 trainer on more than one project – pro-rateFacilities Costs R10,000Travel and lodging R10,000Salaries and time loss of participants Will need to consult HR and line and pro-rate R50,000Administration costs R5,000Evaluation costs R 5,000Total cost of the intervention R150,000
74. 74. Step 4.b Calculating ROIFirst thing to do now is to determine the cost of the intervention – again back to our main example … Net Program Benefits (R224892- R150,000) Benefit/Cost Ratio = Program Costs (R150,000) Ratio = 0.499928
75. 75. Step 4.b Calculating ROIFirst thing to do now is to determine the cost of the intervention – again back to our main example … Net Program Benefits (R224892- R150,000) X 100 Benefits ROI = Program Costs (R150,000) 1 Benefit ROI = 50% thus for every R1 I spent on this program you got your money back through saving as well as an additional 50 cents.