IRF-Master Measurement Calculator tool

Welcome to the Incentive Research Foundation's free Master Measurement Calculator tool. This tool will take you through the steps we recommend in measuring the impact and ROI of incentive, reward and recognition programs.

This tool is based on the IRF's. Master Measurement Model research

When finished, you can generate an email with the details of your report by clicking �Phase I-Forecast Report�.

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Disclaimer: This tool is for estimation and calculation purposes only. It does not guarantee the success of any program or effort estimated herein.

Please provide your details before proceeding:

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Phase One: Determining the Potential Program Payoff

Even if your organization does not require a formal business case, taking time to forecast the program�s benefits and costs will help you determine the program�s scale. Skip this phase only if resolving the underlying business issue is mandated (e.g. some safety projects) or if the anticipated payoff is so large and obvious that a cost/benefit analysis is unnecessary.

Step One: Calculate Program Benefit

What opportunity or problem will the incentive or reward program address? Examples:

Drive an additional 25% in annual sales
Increase product or service quality
Decrease safety issues
Improve customer satisfaction
Improve productivity
Reduce employee absenteeism or turnover

A	Briefly summarize the problem or opportunity here:

B	What is the program�s anticipated annual benefit in dollars (i.e. annual cost savings or revenue gains)? Be sure to consult with other experts and practitioners to ensure you quantify and monetize all potential time savings and productivity opportunities. Examples: Accident costs could include lost workdays, medical expenses, increased insurance premiums, and investigation costs, etc. Improved productivity for design engineers could lower the project cost per engineer and raise customer satisfaction. Reduced absenteeism
	$

Step 2 : Calculate Potential Adverse Impact

If the program achieves its goals, will it have an adverse impact or unintended consequences elsewhere in the organization? Examples:

Will an increase in sales require more overtime in manufacturing?
Will targeting an increase in quality reduce volume in the short term?

These effects are usually not reasons to cancel a program. However, anticipating them and calculating their costs will give you a more accurate estimation of the program�s value.

A	List possible adverse impact or unintended consequences stemming from your program. Take some time to consider thoroughly how the program�s success might impact other parts of the organization upstream or downstream.

B	Is there a hard dollar estimate you can anticipate? For example: If higher sales volume leads to more overtime in manufacturing, estimate the additional compensation required. If not applicable, leave this section blank.
	$

Step Three: Calculate Fully-Loaded Costs

Note: If you anticipate certain costs not listed (such as overtime in production or delivery, cost of new hires, etc.) please add those at the bottom of the page.

A	Forecast Fully-Loaded Costs:
	Cash Reward costs	$
	Non-cash reward costs	$
	Program design costs (manager/executive time - salaries/benefits)	$
	Costs of ROI analysis	$
	Program admin costs (salaries/benefits or hourly)	$
	Program advertising costs	$
	Consultant fees	$
	Vendor costs (i.e. non-cash reward supplier)	$
	Training/Orientation (incl. cost of facilities, materials, etc.)	$
	Travel (transport, lodging, meals, etc)	$
	Materials	$
	Other impact costs (Per step two)	$
		$
		$
		$
	Total	$

Step Four: Forecast Benefit/Cost Ratio & ROI

A	Forecast Benefit / Cost Ratio (Forecast Benefit $ / Forecast Fully Loaded Costs $)	%

	Forecast Benefits $	$
	Forecast Fully Loaded Costs $)	$

B	Forecast ROI (Forecast Adjusted Benefits $ – Forecast Fully Loaded Costs $) / Forecast Fully Loaded Costs $	%

You should now be able to make an informed decision about your program.

Step Five: Prepare Data Collection Plan So That You Can Calculate Actual ROI Later On

The first step in an actual measurement process is the data collection plan. Data will fall into two categories: that which you can convert to hard numbers (tangible) and those that will be difficult to quantify or monetize (intangibles).

This will be more straight-forward in some cases than others. Examples:

If your program is aimed at improving safety, you may want to know accident frequency and severity statistics.
If your incentive program is designed to drive better call center results, you may want to collect data such as number and weight of calls handled, waiting time, cycle time, order errors and customer satisfaction results. In some cases, you may need to interview relevant staff or customers.

Enter data into as many rows as you need for your plan and leave the remainder blank.

A	Using the previous Cost/Benefit calculations as a guide, enter potential measures into as many rows as you need for your plan and leave the remainder blank. Tangible: capable of being appraised at an actual or approximate value (e.g. cost of goods, time off, absenteeism rates) Intangible: existing only in connection with something else (e.g. goodwill, morale, etc.) **These measures will carry forward to Phase II: Actual Impact Measurement and ROI� (For a list of potential measures, see the IRF Master Measurement Model report)
	Data/Measures Needed	Source	Where / How will you get your data?	Tangible/intangible

Would you like to get a detailed report of your forecast?
If yes, click the �Phase 1 Forecast Report� button below.

If you are ready to calculate your program�s actual impact, click �Next� to proceed to Phase Two.

Phase Two: Actual Impact Measurement – Benefit/Cost Ratio and ROI

Step One: Calculate Percentage Improvement and Dollar Value

Depending on the nature of your program, a period of time will need to elapse between the program�s start and measuring its impact and ROI. This might be three to six months or sometimes up to a year or more.

As you collect your data, calculate the percent improvement and convert the tangible measures into hard dollar amounts. In each case, use conservative methods to convert your metrics into hard dollar savings or revenue/profits. Leave Hard Dollar Value blank for intangible measures. Examples:

Product quality improvement, customer satisfaction
Increases in engagement, morale, and learning outcomes

Measure (from Phase 1, Step 5)	Percentage Improvement (if applicable)	Hard Dollar Value
	%	$
	%	$
	%	$
	%	$
	%	$
	%	$
	%	$

* Leave the Hard Dollar Value blank for intangible measures

Step Two: Isolate Effects of the Program and Estimate Confidence Level

Attribution: How much of the improvement (sales increase, reduction in accidents, lower attrition, etc.) can be attributed to the rewards/incentives program? This percentage will always be an estimate and will vary depending on the length of the program and other initiatives currently underway. For example, if sales increased 25% over the course of a year while the program was in effect, were there other factors such as an improved economy, fewer competitors, significantly more advertising, additional training, etc., that may have contributed to the increase? If so, you may assign an attribution of 80%. This means the program was only responsible for 80% of the improvement that occurred in this metric over the time period. (You may need the help of experts, managers, practitioners, and even customers to do this well.)
Confidence Level: Assign a confidence level to each of the measures. For example, if you�ve estimated that 65% of the sales increase can be attributed to the programs, how confident are you (or your leadership) in that estimate? If you were 90% confident, for example, you would assign a confidence level of 90%. Confidence Levels help you adjust to fit the risk profile of executive leadership.

Assign Attribution and Confidence Levels to the Metrics Below

Example: Sales incentive program helps increase annual sales from $4 million to $5 Million. Market conditions and sales training improve over this time frame as well.

Before Program: $4 million in annual sales.
One Year After Program: $5 million in annual sales (25% increase)
Attribution: 65%
Confidence Level: 80% (conservative)
Real Benefit: 1,000,000 x 65% x 80% = $520,000

Leave Blank for Intangible Benefits

Measure	Hard Dollar Value	Attribution	Confidence Level	Adjusted Value
	$	%	%	$
	$	%	%	$
	$	%	%	$
	$	%	%	$
	$	%	%	$
	$	%	%	$
	$	%	%	$

Total Adjusted Benefit		$

Step Three: Calculate Actual Costs

What are the actual fully loaded costs? Use the categories in Phase One, Step Three and add any category of cost that was overlooked in the forecast. Remember to include all associated costs no matter how small or obscure.

Actual Fully-Loaded Costs:	Forecast Fully-Loaded Costs (From Step I - 3)	Actual Fully-Loaded Costs
Cash Reward costs	$	$
Non-cash reward costs	$	$
Program design costs (manager/executive time – salaries/benefits)	$	$
Costs of ROI analysis	$	$
Program admin costs (salaries/benefits or hourly)	$	$
Program advertising costs	$	$
Consultant fees	$	$
Vendor costs (i.e. non-cash reward supplier)	$	$
Training/Orientation (incl. cost of facilities, materials, etc.)	$	$
Travel (transport, lodging, meals, etc)	$	$
Materials	$	$
Other impact costs (Per step two)	$	$
	$	$
	$	$
	$	$
Total	$	$

Step Four: What is the Benefit/Cost Ratio and ROI for your program?

A	Benefit / Cost Ratio (Adjusted Benefit $ / Forecast Fully Loaded Costs $)	%

	Adjusted Benefits $	$
	Fully Loaded Costs $	$

B	ROI (Adjusted Benefits $ – Fully Loaded Costs $) / Forecast Fully Loaded Costs $	%

Step Five: Additional Intangible Value

Was any additional intangible value realized. For example, by improving safety, was there an increase in employee engagement? By improving quality, was there a measurable improvement in the organization�s reputation or image? Did something the program encourage lead to the receipt of an industry award? List any intangible benefits derived from the program here that you didn't list previously:

Add additional intangible benefits below:

Would you like to get a detailed report of your ROI Analysis?

Click below to receive the detailed report.

Enter all numbers without symbols, commas or other punctuation. (i.e., Ten Thousand Dollars must be entered as 10000 not $10000 or 10,000 or 10000.00.)