roi of training 01
TRANSCRIPT
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Measuring ROI of Training
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Not everything that can be counted counts, andnot everything that counts can be counted
Albert Einstein
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Best Practice in Terms of ROI
Training magazines 2003 top 100
companies found that linking training
to specific business metrics requires
evaluation before, during, and after
training initiatives;
Many of the Top 100 companies
ranked by Training magazine tie
training initiatives directly to
retention efforts;
Also use other metrics sales;
production etc;
ROI used as basis for continued
improvement of training function;
Forecast ROI.
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The Case for ROI ?
Accenture
Allstate Insurance
Apple Computer
AT&T
Bristol-Myers Squibb
British TelecomCaremark
Comcast
Coors Brewing Co.
Deloitte & Touch
Delta AirlinesDHL Worldwide Express
Federal Express
General Motors
US Department of
Defense
US Department of Labor
US National Security
Agency
US Department of
Veteran Affairs
US General Accountability
Office
US Office of PersonnelManagement
NASA
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The Value Hierarchy
Paradigm Shift
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ROI -Delivery on theValue Promise
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The promise is in the way
we determine
training needs
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Moving from input (activity) tooutput (results) based training
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A Quick Diagnostic
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Question we develop and implement
training that
Absolutely Un True= 1 ; Absolutely True = 5
Link needs to business solutions 1 2 3 4 5
Based on assessment of current vs. desired
performance
1 2 3 4 5
Isolate application and business impact
objectives
1 2 3 4 5
Ensures communication of expectations to
stakeholders and participants
1 2 3 4 5
Ensures the work environment supports
reinforcement of implementation and
application
1 2 3 4 5
Builds partnerships with managers 1 2 3 4 5
Measures at more than reaction and
learning level
1 2 3 4 5
Communicates the results to all stakeholders 1 2 3 4 5
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How Does Your Organization Score
8-15
cti
ity ase
ittle ocus on esults
2
-31
Significant rogress
o esults ase
16-23
o
erate s ift
Or S ift in
ertain
reas
32-
ully Integrate
esults
ase
Syste
W ic In i i ual reas Do You Nee to ress?
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Activity Results
No established business need Business case
Little relation to performance Focus on improving
performance/change behavior
No/little focus on
objectives/competencies
Demonstrating competence over time
No/Little focus on preparing the
environment
Prepare environment to ensure
transfer and reinforcement
No/Little focus on measuring impactand value
System geared to preparing andproving the case
Mainly input focused Sound balance between input and
output
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We need to move towards a results
based approach
But what should we put in place?
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What Should Be In Place?
Evaluation approach
Intervention planningframework
Data gathering approach
Isolation framework
Calculation framework
Lead project
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Evaluation Approach
1. Reaction,
Satisfaction
2. Learning
3. Transfer/application
4. Business Impact
5. Return on
Investment
. Intangibles
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Element Description
Reaction Happiness with learning interventions
Learning Changes in knowledge, skills and attitudes
Transfer/application Changes in on the job behaviors over time
(competence)
Business Impact Changes in impact variables
ROI Intervention benefits in relation to cost
Intangibles Intervention benefits in relation to policy
and/or strategic direction and related factors
Evaluation Approach
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Evaluation Approach
Customer Focus Data
Availability
Value of Case
(relative)
Intangibles
ROI
Business Impact
Application and
implementation
Learning
Reaction
Element Assessment
Complexity
Limited/Low
Wide/High
Consumer
Client
Readily
Research
Limited/Low
Wide/Complex
Administrator
Business Partner
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Intervention Planning Framework
Reaction
Evaluation
eneral nee
LearningOutcomes
Learning
Material
Achieve ?
Assess
More
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Intervention
Planning
Framework
TO BE
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Data Gathering Approach
Process Framework
Reporting
Synthesize
Coherence
Presentation
Data Analysis
Data Processing
Data Consolidation and Storage
How What Where
Data Collection
How What Where
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Isolation Framework
External Factors
Management
Attention
Incentives
Systems/Procedures
Changes
Learning
Program
TOTAL
IMPROVEMENT
AFTER
PROGRAM
EFFECT OF
LEARNING ON
IMPROVEMENT
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Calculation
Benefit/Cost
Ratio =
BenefitsROI =
Program Benefits
Program Costs
Net Program Benefit
Program CostsX 100
1