From Kirkpatrick to ROI
Step 1 / 2·Level 5: putting money into the equation
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Learning objectives — after this module you will:
- Grasp the 5-level measurement pyramid: Reaction → Learning → Behavior → Results → ROI
- Know when to measure to ROI and when to stop at Level 3–4
- Understand the principle of monetizing value
Level 5: putting money into the equation
Understand the ROI methodology built on Kirkpatrick.
You learned the 4-level Kirkpatrick model in the Training Impact course (TTD's Level 1). Jack Phillips added LEVEL 5 — ROI: converting business results (Level 4) into MONEY, subtracting program cost, yielding a return on investment. The formula: ROI (%) = (Net benefit ÷ Program cost) × 100, where Net benefit = Monetized benefit − Cost.
Example: an error-reduction program for 40 workers costs 200M. After 6 months, the reduced error rate saves 320M/year (other factors isolated). ROI = (320 − 200) ÷ 200 × 100 = 60% in the first year.
Don't measure ROI for every program
Measuring ROI is labor-intensive — best practice reserves it for ~5–10% of programs: large budget, leadership interest, results measurable in numbers. Culture training, onboarding: stopping at Level 3–4 is enough and honest. Measuring everything = measuring dishonestly.
Key takeaway: ROI = (net benefit ÷ cost) × 100; only measure it for the 5–10% of key programs.