Return on Investment for Training and Development
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Presentation to Hawkeye ASTD Chapter regarding methods for and alternatives to calculating Return-on-Investment for workplace learning interventions.
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Return on Investment for Training and Development
- 1. Return on Investment for Training and Development LOCATING THE BOTTOM LINE Gloria Regalbuto Bentley, Ph.D.
- 2. Overview What’s your motivation? Who’s responsibility is it, anyway? The “Front-end” of “Front-end” Analysis Negotiate Learning and Performance Objectives Use Existing Metrics Maybe it’s not ROI; it’s ROM
- 3. What’s your motivation? Feeling Defensive? What are you measuring? Competence Assessment? Other Goals? Are there things you shouldn’t measure?
- 4. What’s your motivation? Feeling Defensive? Importance of ROI Defending Existence Other Options: Full Cost of Training & Development Cost of Management Use Capital Asset Budgeting Model
- 5. What’s your motivation? What are you measuring? Kirkpatrick’s 4 levels: 1. Intervention Quality 2. Acquisition 3. Application 4. Organizational Payoff Social Contribution-(R. Kaufman) Success-Case Evaluation (R. Brinkerhoff)
- 6. What’s your motivation? Competence Assessment? Talent or Performance Management System % Competence Attained
- 7. What’s your motivation? Other Goals? Compliance & Certification “Fetch” Competency “Networking” The CEO wants it…
- 8. What’s your motivation? Are there things you shouldn’t measure? Jobs requiring high levels of expertise Jobs requiring high levels of discretionary decision-making Jobs with idiosyncratic, unique, or unrepeatable output
- 9. Who’s responsibility is it, anyway? Do you have control over application? What is the supervisor’s role? If you take responsibility, do you cause supervisors to abdicate theirs?
- 10. The “Front-end” of “Front-end” Analysis Needs Forecasting: Changes in strategic direction Expansion/Contraction Re-organization/Merger Compliance/Certification Bench-strength & Critical Manpower Planning New Methods, Processes, Equipment
- 11. Negotiate Learning and Performance Objectives Through Job & Task Analysis, target performance objectives linked to improved performance Measure the value of improved output, e.g.: o Increased Output Volume o Reduced Scrap or Waste o Reduced Labor Hours o Reduced Machine Maintenance o Reduced Turnover/Increased Retention o Increased Sales o New “Big Data” Technologies (e.g. sensors, GPS, etc.)
- 12. Use Existing Metrics New Metrics: Require new infrastructure Sustained tracking overtime Must be anchored in the workflow Incurs new labor costs Requires time to gain credibility
- 13. Maybe it’s not ROI; it’s ROM Change in cultural ethos Accomplishment of vision & mission Creation of good-will and/or customer satisfaction Visible adherence to stated values and ethics Societal Impact and Corporate Citizenship (Roger Kaufman’s #5)
- 14. Q&A: Discussion Any questions related to the presentation? What’s your personal experience? Are you working on anything right now that discussion might help?
Notes de l'éditeur
- Feeling Defensive?Assumes ROI is the important thing?If you are looking to defend your existence, the problem isn’t going to be solved with ROI.Lack of understanding of investments in human capitalLack of understanding of talent and performance management as integrated systems to ensure performance against strategic vision and objectives.That being said, there are ways to defend your existence…Calculate full cost of training, including professional development seminars, travel, consultants, across the corporation. Someone needs to be managing this.Calculate the full cost of management (Sum of Management Salaries). Who’s protecting that investment?Establish a Capital Asset Budget Model for T&D:Assess functional needsSubmit budgets central with justificationAllow Executives review and approve through the budget-cycle, based on relative importance to the strategic vision/plan.
- What are you measuring? (Kirkpatrick’s 4 levels=1: Quality of the intervention (learning materials); 2: Acquisition; 3: Application; 4: Organizational Payoff Immediate answer is 4: organizational payoff, but do you have control over application? Do you have control over supervisor’s? 5: Social Contribution (Roger Kaufman’s)“Success-case” Evaluation (Robert Brinkerhoff) is about sustained performance
- Does your organization care about competence (building up its human capital investment)Talent management systems require measure of “capacity for growth” in order to determine who to invest in as “high-potentials” and build bench-strengthDo you hold supervisors accountable for “% competence attained”?
- Other Goals?What about training for compliance? Certification?What about investments in the future (Fetch competencies)?What’s the value of “networking” for expert workers?The CEO wants it…
- Are there things you shouldn’t measure?Jobs requiring high levels of expertiseJobs with high levels of discretionary decision-makingJobs with idiosyncratic, unique, or unrepeatable outputDifficult to measure the value of non-repeatable output and probably not worth the cost in dollars or labor.