I will consistently repeat certain concepts through this blog. One constant message you will hear: “To get promotions you need to 1) do the job management wants done-and more, 2) fit into the organization, and 3) give a great return on investment. In addition, you need to effectively communicate all three to management.
Our last post outlined all the costs employers invest in their employees. Today, we continue exploring how to give a good return on investment.
Estimating How Much You Make or Save the Company
In some of the previous posts in this series we discussed the need to
- Understand what job they want you to do—and do more than that\
- Identify how they measure results in metrics and benchmarks
- Use a formula to establish the value of your contribution
- Decide what you want to improve about your performance and how to do it
- Chart your actual performance to management’s expectations and your goals
- Use the formula from above to estimate how much money you made or saved
Factoring the Return on Investment
Once you know how much money you made or saved the company, you subtract how much you cost the company from the amount of money you contribute to estimate your return on investment. For example:
- $67,000 (contribution) – $32,200 (costs) =$35,000 ROI = 2 times
- $440,000 (contribution) – $98,000 (costs) = $342,000 ROI = 4.8 times
- $2,000,000 (sales contribution) –$190,000 (costs) = 1,810,000 ROI = 10.6 times
Expected Returns on Investment
Each type of job generates a different expected return on investment based on the capacity of that job to generate revenues or savings. For example,
- Secretaries generate limited revenues or savings, thus a ROI of only 1-2 times
- Sales people generate most revenues, thus an expected ROI of 10-20 times
Wednesday we how communicating effectively with management helps get a promotion
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