EVALUATION IN THE PUBLIC SERVICE
it be calculated?
there is an increasing emphasis on improving the quality of services in
the public sector. Service delivery forms an essential dimension of the
government’s focus to improve public services. To support this
objective, the Public Finance Management Act provides an institutional
framework for sound financial management in the public sector.
This means that a greater emphasis is now being placed on proper
financial planning and governance, as well as the monitoring and
evaluation of financial resources. One of the challenges for public
managers at public service departments, and indeed NGOs will be to
determine the ROI of monies spent on different projects within their
sphere of responsibility.
While tangible measures such as sales may not be visible in the public sector, there are still ways of converting the cost and benefits of different interventions to rand values. We normally challenge the public sector HR practitioners to indicate whether the things they do have no cost or benefit implications. The critical question is then can ROI be calculated? Here are 10 important sub questions to help you think about this.
these questions clearly indicates that it is indeed possible to convert
the cost and benefits of training and other HR interventions to rand
values. And if you have rand values, you can calculate ROI. Let us give
you an example of how ROI was calculated in the public sector in New York.
During 1980’s there was a huge increase in crime in the greater New York
area. The Nassau County Police Department decided to do something about
it. They realised that highly skilled police officers will be critical to
deal with the increase in crime. They
subsequently embarked on interpersonal skills training for police
officers. The training
focused on three key areas: Better communications, more effective teamwork
and better relationships within the police department, and also with the
improvements were affected. This is how they have calculated the ROI.
ROI% = (benefits – costs) x
100 ($333 168 – $136 530)
x 100 = 144%
this example you can see that a ROI of 144% has been achieved (McCarty,
2001). This means that for every dollar invested in training, more than
$14 is returned, not a bad ROI at all!
The ROI values are based on participants’ estimates in the action
plans they have implemented to improve their performance.
in South Africa, a major government department launched a pilot project to
calculate the ROI in project management training. They wanted to determine
whether their managers can improve results if they apply project
management principles and practices to the projects they are involved in. In some departments significant cost savings were achieved
due to the increase in efficiency and financial management of resources
allocated to the particular project. A final ROI of 539% was achieved.
the above example relates to training, impact studies can also be done on
other HR interventions. For
instance, in a recent study on the impact of HR practices on the
performance of public servants in Eritrea (Africa’s youngest and poorest
country), eight HR practices altogether explain 56% of the change in
performance (Tessema & Soeters, 2006). These HR practices were
recruitment and selection, placement, training, compensation, performance
appraisal, promotion practices, grievance procedures as well as pension
and social security.
Measuring ROI in training usually requires a major paradigm shift on the part of training and human resource managers. In the light of this, it is important to follow proper guidelines for the effective implementation of ROI measurement.
the light of the above, it is clear that ROI can also be calculated in the
public sector. It provides
NGOs and public managers with a tool to quantify the value they add to
their organisations. What is important, though, is that training managers
must commit themselves to collecting all the necessary data - information
that can be measured. To
collect this data, they will need to form sound relationships with line
managers and other stakeholders of the organisation. Once these results
are available, you will be able to determine the financial value of
training. This process can assist you to make important decisions about
various training interventions, such as the value of management
development programmes, whether to outsource training, etc.
ROI provides the training manager with an opportunity to become an
accountable public service manager – from merely a trainer offering
training, to a manager producing tangible performance results that can be
measured in financial terms.
D.L. & Kirkpatrick, J.D. 2006. Evaluating
Training Programs: The four levels.
San Francisco: Berrett-Koehler
R.J. 2001. Resisting Measurement: Evaluating Soft Skills Training for
Senior Police Officers – Nassau County Police Department. In Phillips,
J. & Phillips, P. Measuring
Return on Investment In Action Series, Volume 3. Virginia: ASTD
M., Opperman, R. & Dyrbye, C. 2003. Measuring
Return on Investment in Training: A practical implementation guide.
M.T. & Soeters, J.L. 2006. Challenges
and prospects of HRM in developing countries: testing the HRM-performance
link in Eritrean civil service. International
Journal of Human Resource Management
They are co-authors of the book “Measuring
ROI in Training: A practical implementation guide” and have
participated in ROI evaluation projects in South Africa, USA, The
Netherlands, Malaysia and Botswana.