Chapter 5. Invest as Long as There Is a Payoff

Some organizations prefer to invest in human capital when there is evidence that it is providing benefits. They often compare monetary benefits with the costs of human capital programs. This strategy is becoming more popular following the increased interest in accountability, particularly the use of return on investment (ROI) as a business-evaluation tool. With this strategy, all HR programs are evaluated and a few key programs are evaluated at the ROI level—the monetary benefits compared to the cost of investment—the same way the ROI is calculated for an investment in buildings or equipment.

The ROI Strategy

The ROI strategy focuses on implementing a comprehensive measurement and evaluation process ...

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