Evaluate training effectiveness

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How to measure the effectiveness of your training.

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Evaluate training effectiveness

  1. 1. TRAINING NEED ANALYSIS
  2. 2. What is training?• TRAINING IS TO IMPROVE WORK PERFORMANCE – ON THE JOB TRAINING OR – OFF THE JOB TRAINING
  3. 3. RETURN ON TRAININGIMPROVEMENT VALUE TRAINING INVESTMENT REDUCE INVESTMENTS CAPITAL INCREASE OPPORTUNITY COSTS REVENUEREDUCE ACTUAL COSTSCOSTS
  4. 4. RETURN ON VALUE OF IMPROVEMENTTRAININGTHIS IS A RATIO JUSTIFYING THE INVESTMENT ON TRAINING TRAINING INVESTMENT
  5. 5. Combined Evaluative Approach Source: Jack J. Phillips. What was the return Level 5 Return on Investment. Houston: Gulf on the investment? ROI Publishing Co., 1997. Did it have an impact Level 4 Impact on the business? Did they apply it on Level 3 Application the job? Did they learn what Level 2 Learning was required? Level 1 Did they like it? Reaction 5
  6. 6. ROI Calculations Source: ROI Institute. Measuring the ROI of Training and Performance Improvement Programs. Program Benefits Arlington, VA: ASTD, Benefit-Cost Ratio = 2004. Page 2.9. Program Costs Net Program Benefits* ROI = X 100% Program Costs*Net Program Benefits = Program Benefits – Program Costs 6
  7. 7. Balanced Scorecard Source:. Kaplan and Norton. The Balanced Scorecard. Boston: HBS Press, 1996. Financial Perspective VISION Customer & Process Perspective STRATEGY Perspective Learning & Growth Perspective 7
  8. 8. Balanced Scorecard Source: David P. Norton Balanced Scorecard Balanced Scorecards tell you ….. Report. “Use Strategy Maps to Communicate the knowledge, skills and systems that Your Strategy.” Page 169 your employees will need (their learning and growth) …. to innovate and build the right strategic capabilities and efficiencies (the internal processes) ……that deliver specific value to the market (customers), ……which will eventually lead to higher shareholder value (the financials). Financial Vision & Strategy Process Learning & Growth Customer 8
  9. 9. McBassi Methodology• Human Capital Capability Scorecard™— predicts an organization’s ability to achieve future business results by analyzing data on an array of human capital indicators.• Generates prioritized, fact-based recommendations for improving business results through more effective development and management of employees.• Statistically analyzes the relationship between HCCS scores (by P&L center, branch, etc.) to identify those factors that are the most powerful predictors of an organization’s performance• Serves as a blueprint for creating employee investment strategies, and a baseline to evaluate the effectiveness of these strategies. 9
  10. 10. ABA CLO Summit Application We modified the Human Capital Capability Scorecard™ and our data collection to those elements with both of the following characteristics: - Most relevant to employee development, and - Could be provided by a single individual within the organization 10
  11. 11. ABA CLO Summit Results• The evidence clearly points to a positive relationship between human capital (learning) practices and investments, and financial returns.• This relationship is most consistent for the measure that captures training and development expenditures per employee.• The financial outcome most consistently associated with an array of human capital measures is net income per employee. 11
  12. 12. ABA CLO Summit Sample Results Median Net Income Per FTE (10/02 to 9/03), by Top Half/Bottom Half on Human Capital Variables $80,000Median Net Income/FTE $60,000 $40,000 $20,000 $0 Resources: T&D Resources: Employee Average Systems Average Workforce Average Learning Expenditures Per FTE to Trainer Ratio Maturity Score Optimization Score Capacity Score Human Capital Variable Institutions in Top Half on HC Variable Institutions in Bottom Half on HC Variable 12
  13. 13. Conclusion There is every reason to believe that an institution’s increased focus on, and commitment to, human capital factors, especially learning and development, should lead to improved financial performance. Which side of the fence are you on? 13
  14. 14. Conclusion There is every reason to believe that an institution’s increased focus on, and commitment to, human capital factors, especially learning and development, should lead to improved financial performance. Which side of the fence are you on? 14
  15. 15. Step 1 – identifying critical performance gaps• Gaps is obtained through comparing actual against industry standards• Critical is how material is the impact on the corporate objectives.• Use ROE format as a coporate summary• Critical is derived from pareto and sensitivity analysis
  16. 16. P. 31Define the Performance Gaps Describe DiscrepancyDESIRED PERFORMANCE (Optimals)- ACTUAL PERFORMANCE (Actuals) = POSSIBLE TRAINING NEED
  17. 17. P. 34 Is it critical?• Why is it important?• What if you did nothing?• How big is it? (Quantify if possible)• Who cares?• “Is the cost of the discrepancy high enough that it seems worth pursuing a solution?”
  18. 18. Step 2 - calculate the KPI of each critical performance areas• Calculate KPIs for actual, standards and industry• Compare KPIs to evaluate true performance.• The KPI may be used in ROI calcualtion.
  19. 19. Step 3 - Analysing further the critical performance gaps• Is it true performance gaps?• Is the gap caused by factors other than competency.• Benchmarkings to recognise best practices• Use input output analysis• Task and subtask analysis• Interviews, observations, focus groups, documentations
  20. 20. Determine Cause(s) Is it a problem of skill or a problem of will? I don’t wanna!I don’t wanna! I don’t know how.
  21. 21. Yes, it is a skill deficiencyArrange Formal no Used to do Training it? yesArrange Practice no Used often?Arrange Feedback yes
  22. 22. Other questions Change the Job Simpler way?Arrange on-the-job training Potential?Transfer or terminate
  23. 23. If a skill deficiency..• Provide training• Provide practice• Provide feedback• Simplify the task• Develop a job aid• OJT• Transfer• Terminate
  24. 24. And one last question... RemoveObstacles? Obstacles
  25. 25. P. 39 Step 4: To train or not to train? Calculate cost• First determine cause(s)• Only then look at Select best solution(s) possible solutions• Seek integrated Implement solution systems that get to the root of the problem
  26. 26. P. 39 Cause Solution• If skill or knowledge……….training• If lack feedback……………..feedback, standards• If not motivated…………….rewards, consequences• If unclear expectations…..std, measure, discuss• If job environment…………change environment• If potential……………………change personnel
  27. 27. EVALUATE PERFORMANCE C O M P E T E N C Y LP HP WP LP MOTIVATION
  28. 28. Step 5 - calculate the ROI training• The purpose of this step is to justify the training BEFORE the training start.• Calculate the benefits generated by the training divided by the capital employed in the training.• We obtain our ROI figures through the input output model.
  29. 29. ROI Calculations Source: ROI Institute. Measuring the ROI of Training and Performance Improvement Programs. Program Benefits Arlington, VA: ASTD, Benefit-Cost Ratio = 2004. Page 2.9. Program Costs Net Program Benefits* ROI = X 100% Program Costs*Net Program Benefits = Program Benefits – Program Costs 29
  30. 30. SUMMARY1. Identify critical performance gaps using some benchmarks.2. Identify key job holders and conduct competency profiling.3. Identify best practices4. Identify effective training alternatives5. Use projected ROI to justify training

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