Dr. Jack J. Phillips extended the model to capture the ultimate financial question: What is the Return on Investment of the training?
The Phillips ROI Methodology includes Kirkpatrick’s four levels and adds a crucial fifth level: ROI.
This fifth level involves:
- Isolating the Training’s Impact: Determining what portion of the Level 4 business result was due to the training (using control groups, trend analysis, or expert estimation).
- Converting to Monetary Value: Assigning dollar figures to the observed improvements (e.g., an error reduction saved $X in waste; increased customer retention is worth $Y in revenue).
The ROI Formula
Phillips formally defines ROI as a percentage using this simple formula:
ROI (%)=(Net Program Benefits / Program Costs) x 100
Where Net Program Benefits = Total Monetary Benefits from Level 4 results - Program Costs.
Example: If training cost $100,000 and led to a net attributed benefit of $300,000, the ROI is:
($300,000 / $100,000) x 100=300% ROI
The Phillips model emphasizes credibility and rigor, allowing L&D teams to translate outcomes into the language of executives ("dollars and cents") and answer: “For every dollar we spent, how many dollars did the company get back?”