A systems approach to measuring return on investment for HRD interventions

TLDR

HRD program evaluation literature is sparse, and this study expands the methodological foundation. The study investigates an interdisciplinary method for measuring return on investment in HRD. Drawing on economics, I‑O psychology, financial control, and HRD research, the authors devised a systems approach that uses statistical and mathematical operations to quantify ROI and isolate non‑HRD effects, illustrated with real‑world scenarios. The authors defined the ROI concept for HRD and presented a theoretical systems framework.

Abstract

Abstract This study contributes to the limited methodological literature on HRD program evaluation and measurement. The study explores an interdisciplinary approach for return on investment (ROI) measurement in human resource development (HRD) research and practices. On the basis of a comprehensive review and analysis of relevant studies in economics, industrial‐organizational psychology, financial control, and HRD fields, we developed a systems approach to quantitatively measure ROI for HRD programs. The ROI concept for HRD field was defined, and a theoretical systems framework was developed. The applicability of using statistical and mathematical operations to determine ROI and isolate non‐HRD program impacts is discussed. Application scenarios are presented to demonstrate the utility of the systems approach in real‐world ROI measurement for HRD interventions.