Beyond ROI: Measuring What Actually Drives Performance

ROI still matters—but research shows it works best when it’s part of a broader system for understanding how human capital creates value.

Some of the most useful insights don’t emerge from agreement. They emerge from informed disagreement.

Korn Ferry Institute researchers actively participate in professional forums where core assumptions about talent and performance are challenged in real time. At this year’s Society for  Industrial and Organizational Psychology (SIOP) conference, Korn Ferry Institute colleagues Lora Bishop (facilitator) and Bryn Chighizola (pro-ROI debate team member) took part in a 90-minute debate centered on a familiar question: Is ROI still fit for purpose in human capital evaluation?  

More than 75 industrial-organizational psychology professionals participated. At the start, nearly 60% landed in the middle: ROI was neither dead nor sufficient. By the end of the debate, fewer participants stayed neutral. More were willing to take a position—and moved toward a shared conclusion: ROI remains useful, even if imperfect. The view that ROI is outdated and misleading did not meaningfully expand.

ROI is Not the Problem—Overreliance Is

The debate itself is not new. Variations of it have followed leadership and talent work for decades:

Is ROI an outdated and misleading metric for evaluating human capital interventions—or does it remain the essential universal denominator for demonstrating value?

Both sides made a compelling case.

On one side, ROI remains the language many executives trust most. It offers a familiar way to compare investments, allocate resources, and evaluate trade‑offs. For boards, CEOs, CFOs, and business unit leaders, ROI provides something appealing: a common denominator to define the enduring question of, is it worth it?  

On the other side, ROI can distort the work it is meant to evaluate. Leadership effectiveness, trust, inclusion, capability, culture, equity, well-being, and team performance rarely move through a single linear pathway. When these outcomes are reduced to dollars too quickly, the result can appear precise while becoming less meaningful.

ROI is useful because it simplifies. ROI is risky because it simplifies. That is the paradox of ROI as a measure of organizational success.  

When ROI Carries Too Much Weight, Measurement Breaks Down

A similar pattern shows up in leadership behavior. Korn Ferry Institute research describes a bottom-line mentality—the tendency to prioritize financial outcomes above all else. When taken too far, this focus can narrow decision-making and crowd out other critical drivers of performance, even when leaders know those drivers matter.

Organizational effectiveness has long been understood as multidimensional.  It requires balancing multiple, and sometimes competing, criteria across stakeholders, time horizons, and domains. Nothing about this is simple, which helps explain why it is so often done poorly.

The Korn Ferry Institute’s outcome project data underscores this challenge. During the data-gathering phase, 64% of consultants reported that outcome data were not collected after implementation. When measures did exist, 93% were judged only somewhat effective or not effective. The barriers were familiar and practical as much as conceptual: limited data infrastructure, lack of standard instruments, low motivation to collect data, and client‑side constraints.  

This pattern mirrors broader research showing that organizations struggle with outcome measurement due to data limitations, methodological complexity, and weak causal linkage between metrics and outcomes.

The problem is not simply that ROI is overused. The challenge is that many organizations lack the measurement infrastructure required to use ROI responsibly. ROI is not dead. But it is often overburdened. ROI is being asked to do too many jobs at once—prove value, summarize complexity, satisfy executives, compare programs, validate decisions, and sometimes compensate for weak evidence design. No single metric can do all of that well. Decades of organizational research highlight the problem: the absence of any single, universally valid measure of success.  

Waiting for ROI Means Acting Too Late

For business leaders, the ROI debate is not academic. It shapes which investments get funded, which programs survive, and which forms of value become visible.

A narrow ROI lens tends to favor outcomes that are immediate, monetizable, and easier to isolate. That works well for some interventions. But human capital investments often create value through earlier signals that take time to convert into enterprise outcomes.

Engagement is one example.

Research shows strong relationships between work engagement and early indicators such as job satisfaction, organizational commitment, and turnover intention. As engagement rises, satisfaction and attachment increase, while intent to leave declines. For example, in one Korn Ferry case study, 56% of employees who left within two years had previously indicated their intentions. Intent to leave is one of the clearest early warning signals of actual turnover.  

These relationships reflect a broader causal chain: human capital interventions shape employee experience, which in turn drives behavioral and financial outcomes.

By the time unwanted turnover appears in the financials, leaders are already late. The earlier indicators—trust, confidence in leadership, career growth, well‑being, psychological safety, and intent to stay—are where intervention is still possible.

ROI can estimate part of the consequence. It may help quantify the cost of attrition. But ROI alone cannot explain the system that produced the risk. This is where ROI’s negative space becomes important: value that exists even when organizations do not yet measure it well.

ROI’s Blind Spot: Menopause as a Workforce Issue  

Menopause illustrates a form of business impact that often sits outside traditional ROI measurement. Korn Ferry Institute research, conducted with Vira Health, found that 47% of surveyed women reported work performance disruption due to perimenopause or menopause-related symptoms, with many experiencing multiple symptoms that affected effectiveness.

Additional findings showed that up to 40% of women missed between a few days up to a week of work in a given month because of symptoms. This resulted in increased turnover risk (13% had quit; 15% had considered quitting) and was further compounded by limited availability of workplace support (74% reported that formal workplace policies or programs did not meet their needs).

ROI matters here not because we already know the intervention, but because we already know the cost of doing nothing. When menopause is creating measurable losses through absenteeism (e.g., $1.8 billion annually in US), presenteeism, turnover, and reduced progression, the organization is already absorbing a negative return.

Research consistently shows that intangible assets, such as employee well-being, trust, and capability, are primary drivers of long-term value, yet are frequently excluded from traditional financial measurement systems.  

The absence of a clean ROI calculation does not mean the absence of cost. It means leaders may be making decisions without seeing the full business case. The opposite is also true. When measurement is strong, talent decisions can be linked directly to enterprise value.  

Using ROI—Responsibly  

The answer is not to abandon ROI. The answer is to give it a clearer role and stronger guardrails.

Leaders need to think about measurement in three layers:

1. The system: What drives performance (capability, culture, leadership, experience)
2. The signals: What shows change early (engagement, trust, intent to stay)
3. The outcomes: What shows impact later (turnover, productivity, financial return, ROI)

ROI belongs at the outcome level. It is most useful when it informs business decisions. It becomes far less useful when treated as a complete summary of reality.

Before asking for ROI, leaders should ask:

• Who needs to believe this result?
• What decision will it inform?
• What business problem does it address?
• What level of evidence will be considered meaningful?

Not every initiative should claim direct financial return. Some can credibly show participation, learning, behavior change, adoption, leading indicators, or business outcomes. Only some can credibly isolate ROI—and the evidence bar should be defined before results are known.

A weak ROI finding may show that the intervention needs more time, implementation was inconsistent, adoption barriers were underestimated, or the wrong outcome was selected. That is not failure. That is useful evidence.  

The most mature organizations build reusable proof. Sustainable effectiveness depends on institutionalizing measurement through shared systems, feedback loops, and organizational learning. Over time, they identify reliable predictors of business impact and act with confidence.

ROI is neither dead nor sufficient on its own. It still has a place—but only as one component of a broader organizational effectiveness system. The organizations that move fastest over the next five years will not be the ones that abandon ROI. They will be the ones that stop asking it to explain everything.

What’s Next

Over the coming year, the Korn Ferry Institute will build on this work by examining outcomes across a range of talent domains, including pay, engagement, learning and development, and assessment. These studies will focus on clarifying which signals consistently reflect meaningful change, where measurement gaps tend to persist, and how organizations can strengthen outcomes discipline over time to deepen shared understanding of how human capital investments translate into enterprise impact.  

Next, we will dive into the current state of business outcomes as reported by board members, executives, and VPs, to define the breadth and depth of their measurement discipline and its relationship to a competitive advantage.