An ROI Based Approach to Human Capital
At times is seems as though investments in HR interventions lie outside the normal business criteria applied to any other investment decision.
This may be because it is felt that such criteria cannot be applied due to an inability to accurately measure/quantify human performance. Or, that by their very nature human asses should not be subjected to the normal commercial forms of measurement/evaluation.
For whatever reason, there is a risk of missing valuable opportunities, e.g. to demonstrate HR's added value and strategic contribution.
Alternatively adopting a ROI based approach provides the opportunity to:
- Demonstrate conclusively in economic terms the value added by investment in HR interventions;
- Uplift HR interventions to a strategic level so as to run over longer terms based on their accepted economic contribution - rather than 'quick fix' solution;
- evaluate people's performance in a fair, objective manner and provide them with access to the methodologies and behavioral approaches that underlie superior performance so that they may develop themselves appropriately.
Competency International's Approach to ROI
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