Measuring the economic impact of human resource programs

Methods that allow estimating the dollar impact of human resource programs are now available to Industrial/Organizational (I/O) psychologists and other human resource professionals. Dollar estimates running into the tens and hundreds of thousands of dollars (and higher) have been established for various recruitment, selection and training programs across a wide variety of white and blue collar jobs. Most of this work has gone largely unnoticed by mainstream business communities due in large part to the inability of psychologists and other human resource professionals to communicate their research findings in a manner that is clear and credible to organizational decision makers and consistent with typical business conventions. It is concluded that I/O psychologists and other technical human resource professionals should place more emphasis on adequately communicating cost-benefit estimates to managers and other organizational decision makers, and that managers and organizational decision makers should routinely request such estimates from internal professional staff members and/or outside consulting firms.John M. Rauschenberger is a personnel research consultant in the Workforce Research and Selection Systems Section of Ford Motor Company. Frank L. Schmidt is the Sheets Distinguished Professor of Human Resources at the University of Iowa. He is on the Editorial Board of theJournal of Applied Psychology, and has been the recipient of the James McKeen Cattell Award for Research Design.