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ou measure ROA, ROE, ROI
and ROC and a host of other
key performance indicators
(KPIs) in your business. But
what we never see measured
is Return on PeopleTM (ROP),
arguably the one key differentiator that
drives competitive advantage in a global
environment where all competitors have
access to similar capital, materials, pro-
cesses and technology.
People are your greatest asset; your
greatest expense; your worst headache
when you don’t have the right ones; and
your greatest source of talent, ingenuity
and creativity when you get it right. It’s
time to add this people-centric bench-
mark to drive enterprise excellence.
A provocative new lens for enterprise
Return on People is an often-overlooked
measure of productivity that highlights
how well leaders are able to transform
the talent in their companies into com-
petitive advantage and value that cus-
tomers are willing to pay for. It’s a hall-
mark of enterprise excellence, because
it’s a sum-total measure of people-driven
efficiency and effectiveness.
When you view your business through
the Return on People lens, you’ll get
an entirely new sense of what is really
A powerful catalyst for people-centric
If you’re committed to building a
people-centric organization, Return on
People is the powerful metric that helps
leaders and their employees jointly set
the bar higher, commit to new levels of
collaboration and achieve more than
they ever thought they could.
People want to be the best; they want
to win; and when they understand what
“best” looks like, they become fully en-
gaged in driving results at every level.
Delta Building Products applied the
Return on People benchmark. “I recall
your session as if it was only yesterday.
You asked us all to plot our “profit per
employee” on the chart. Unfortunately,
at that stage, this indicator was in the
negative — actually, negative $9,955 per
employee. While our management team
knew we were in a loss position, the
impact of seeing our ‘profit per employ-
ee’ at the ‘bottom of the class’ was very
impactful. We immediately set a new
goal. For our year ended Dec. 31, 2015, I
am pleased to confirm that we achieved
$31K of profit per employee — the
highest profitability levels in the orga-
nization’s history,” said Mikel Rhodes,
CFO of Delta.
Are you average? Below average?
Above average? It’s time to find out.
The Return on People Benchmark is
based on bell-curving the profit per
employee of the Fortune 500, but don’t
let that concern you if you’re a small or
mid-size company. When comparisons
on both local and global lists of “top”
companies are made, the distribution
is the same, and the average and
median are often similar. This metric is
based on the Fortune 500 because it
includes 72 different industry catego-
ries, which makes it easier for you to
benchmark against an industry similar
to your own.
At a glance
Over 50 percent of the Fortune 500 earn
less than $26,000 as their Return on
People per year, yet the top 5 percent
earns almost 10 times that much. Com-
panies earning an “A” benchmark earn
14 times as much as an average firm.
When was the last time your senior
management team sat down to take
a strategic look at setting profitability
targets based on leading your industry,
rather than setting targets based on
looking back at historical results?
Change the conversations. Change
Follow the instructions in the Action
Plan later in this article to calculate
your Return on People, compare your-
self to the benchmark and then have
the conversation about whether or not
your grade reflects all the hard work
and energy you’ve been investing.
If there’s a disconnect between where
you’re at and where you want to be,
the Benchmark Report will point you to
the P.R .O.F.I+T Roadmap overview that
you can follow to shift your results.
In the manufacturing sector, the bar
is even higher.
The average Return on People among
manufacturing companies is an im-
pressive $67,700 — more than 2.5
times the average of the overall index.
However, the vast majority are still
only ranking a C, so there’s work to be
done. Are you keeping pace or falling
With profit comes prosperity.
With prosperity comes possibilities, as
many of this year’s companies found
when they successfully completed major
acquisitions or investments because
their strong balance sheet made invest-
ing or borrowing to invest possible.
Return on PeopleTM of the Fortune 500
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