What’s Your Personal ROI?

“Loyalty, hard work and diligence are all great assets, but leadership today wants to know what your personal contribution is to cost reduction, increase in sales…what’s the return for your hours put in, and your salary and benefits that they pay you for that work?” — Terry Humphrey, American business coach.

“It’s really up to each of us to make certain that our personal and professional value is realized by those around us… Never assume that people know that kind of information.” — Sheryl Sookman, Principal, The MeetingConnection

“You possess personal capital. It is comprised of your time, effort, knowledge and skills. Investing that capital wisely yields a return on your investment. The higher your return on investment (your ROI), the more profit you earn.” — Nan Russell, American business writer and performance coach.

The concept of personal return on investment (ROI) is one that’s been steadily gaining currency in the business world over the past few years. While the term can be defined in several ways, in common usage it’s just what it sounds like: the investment potential that you, as an employee, offer to your company. Now, I realize that it may seem somewhat degrading to be treated (and especially to treat yourself) as a mere investment…but to some extent, that’s precisely what you are.

And like any other resource, you’re only as good as your ROI. The harsh realities of survival in the Great Recession have hammered this point home to employers and employees alike. As a modern worker, you’ve got to be hardnosed about your ultimate value to your employer. You ignore this at your peril.

Elsewhere in the business world, ROI is defined as the profit realized from a resource minus the original and ongoing investment. It’s no different with personal ROI. In addition to your pay, the company is probably providing you with various benefits, as well as regular training and/or education, experience in your field, and personal stability. What are you providing in return? The company is pumping resources and cash into you, so how are repaying them?

You’d better be returning a substantial multiple of your investment on a consistent basis—and more importantly, you have to be able to prove that you are. Before you can do that effectively, you’ll need to sit down and determine what you bring to the table. Perform a tough, even brutal self-assessment of your value, focusing on these factors:

• What are you really good at?
• What makes you special?
• What distinguishes you from your peers?
• How do you personally help the company achieve its corporate goals?

As a business resource, your value is dollar-driven. A good rule of thumb is that you should be able to prove that you’ve earned or saved the company at least three times your base salary every single year.

In some jobs, proving your ROI is easy. If you’re a salesman who’s just landed a $5,000,000 account, it’s easy to point to that accomplishment. But not every job directly results in corporate income. For example, what if you work in Human Resources or Customer Service? Well, you’ll need to dig deeper for your provable ROI, by showing how deft you are at hiring profitable, productive workers, or maintaining intra-departmental harmony, or soothing the feathers of irate customers—whatever the case may be for your particular position.

If you ever find yourself coming up short, you must be willing to invest your personal capital, especially your time and energy, in order to increase your personal ROI and thereby make yourself more attractive. In addition to working hard, fast, and smart, don’t hesitate to further your education, get more training, or institute new systems to maximize efficiency and performance in your job or organization.

I recommend a recalculation of your ROI every six months or so. Be reasonably creative about what you’ve accomplished, and don’t leave out anything that might be relevant. Do you have a tendency to finish projects early and under budget? Include that in your assessment, because you’ve saved the company money. Are you good with clients, able to develop a positive relationship that lasts for years? Then you’ve earned the company money, because that’s where profits come from: multiple sales to repeat customers (at a good margin, of course).

You may not be able to provide a specific dollar amount or percentage for your personal ROI, but you should be able to demonstrate the fact that, without you, the company would be worse off.

And never forget this: you can’t assume that anyone will automatically realize your worth. So in addition to being able to prove your ROI when called upon, you need to be proactive about stepping forward and demonstrating that hiring you was a positive investment decision. This is especially true if you feel you’re undervalued. As the saying goes, the squeaky wheel gets the grease; but be careful here, because obnoxious squeakiness can get you the boot instead.

Demonstrate by your actions and initiative that you’re worthy. Then, be politely assertive, though not aggressive, in pointing out your personal ROI to those who matter in your organization—so that you can maximize your value both to the company and to yourself.

Share:

Trackbacks

  1. […] those involved into account. Some teams work together like well-oiled machines; others have their squeaky wheels. Plan for any intra-team issues you can reasonably […]

  2. […] to effective delegation – determine your personal ROI and delegate the tasks outside of your […]

Speak Your Mind

*