Transcript Unit 10: Evaluating Training and Return on Investment Unit 10, Class 1: Evaluating Training • Learning Objectives By the end of this unit,

Unit 10: Evaluating Training and Return
on Investment
2009
Unit 10, Class 1: Evaluating Training
• Learning Objectives
By the end of this unit, students will:
> Determine benefits of a training program.
> Calculate benefit/cost ratio.
> Calculate return on investment (ROI).
> Identify when ROI evaluation is not
appropriate.
> Use other methods to verify training value
when ROI is not appropriate.
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Training Evaluation
• Reluctance to evaluate:
> Managers are unwilling to devote time to evaluation.
> Lack of know-how or no importance.
• Why evaluate?
> Link to organizational strategy.
> Effectiveness of training.
> Return on investment.
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Training Evaluation
Was the training effective?
• Training effectiveness: The benefits the
organization and trainees receive from training.
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Training Evaluation
• Formative evaluation: Evaluation of training
that takes place during program design.
> May result in content change.
> May involve pilot test.
> May adjust to meet needs of the trainees.
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Training Evaluation
• Summative evaluation: Evaluation conducted
at the end of training.
> Used to determine the extent to which
trainees have changed as a result of the
training program.
> Used to measure return on investment.
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Instructional Design: ADDIE Model
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Evaluation Process
• Conduct a needs analysis.
• Develop measurable learning outcomes and
plan for transfer of training.
• Develop outcome measures.
• Choose an evaluation strategy.
• Plan and execute the evaluation.
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Kirkpatrick’s Four-Level Model of Evaluation
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Level 1: Reaction
Level 2: Learning
Level 3: Behavior
Level 4: Results
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Level 1: Reaction
• Reaction: How did participants react to the
program?
> Smile sheets.
> Informal comments from participants.
> Focus group sessions with participants.
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Level 2: Learning
• Learning: To what extent did participants
improve knowledge and skills and change
attitudes as a result of the training?
> Pre- and post-tests scores.
> On-the-job assessment.
> Supervisor reports.
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Level 3: Behavior
• Behavior: Do learners use their newly acquired
skills and knowledge on the job?
> Transfer of training.
> On-the-job observation.
> Self-evaluation.
> Supervisor and peer evaluation.
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Level 4: Results
• Results: What organizational benefits resulted
from the training?
> Difficult and costly to collect.
> Impossible to isolate the results of training.
> Measuring return on investment.
> Financial reports.
> Quality inspections.
> Interviews.
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Levels of Evaluation vs. Value
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Kirkpatrick, & Kirkpatrick, 2006
Your Training Project
Design evaluation instruments for
your training project.
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Unit 10, Class 2:
Return on Investment: Benefit-Cost Ratio
• Benefit-Cost Ratio:
> Aids in decision-making process.
> Consistent analysis across programs.
> Information difficult to obtain.
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Return on Investment
• Return on Investment/Benefit-Cost Ratio:
Program Benefits
Benefit-Cost Ratio = ---------------------------Program Costs
Benefit-Cost = 2.5:1
$2,500
----------$1,000
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Benefit-Cost Ratio
Program benefits :
Program costs:
$6,500
$8,495
What is the benefit-cost ratio?
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What About ROI?
Return on Investment – ROI (%)
Program benefit: $2,500
----------- = 2.5 x 100 = 250%
Program cost: $1,000
ROI = 250%
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Determining Benefits
• Measuring training benefits:
> Benefits must consider training objectives.
> Literature summaries of benefits of specific training.
> Assessment of pilot training programs.
Observations of successful trainees.
> Estimates from trainees and managers.
>
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Programs Best Suited for ROI Analysis
• Training appropriate for ROI analysis:
> Clearly identified outcomes.
> Not one-time events.
> Broad-based and highly visible in the organization.
> Strategically focused.
> Training effects can be isolated.
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When ROI Isn’t Appropriate
• Justifying training when ROI isn’t the answer:
> Success cases.
> Measuring the payback period.
> The consequences of NOT training.
• Focus on most important programs.
• Make training a true business partnership.
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Training and Organization Success
Strategic Planning
Evaluation
Assessment
Implementation
Design
Development
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