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Measuring ROI of Training
Measuring ROI of Training
ROI of
Training
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Agenda
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Measuring the Effectiveness of
Training Program
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Training Process
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The Four Levels of Evaluation
Level 1 - Reaction
Level 2 - Learning
Four Levels
of Training
Level 3 – Behavior Effectiveness
Application
Level 4 – Business
Impact
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The Four Levels of Evaluation
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The Four Levels of Evaluation
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The Four Levels of Evaluation
II. Learning
III. Behavior
Most Infrequent Difficult
IV. Results valuable
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Level 1 - Reaction
Evaluate trainees’
reactions to the program:
Did they like the program?
Level 1 - Did they like the
Reaction
facilitators?
Did they like the training
accommodation and
facilities?
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Guidelines for Evaluating Reaction
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Sample of
Reaction
Please give us
Form
Program :
Facilitator :
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Level 2 - Learning
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Guidelines for Evaluating Learning
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Guidelines for Evaluating Learning
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Pre Te 15
Level 3 – Behavior Application
• The frequency of
application of new
skills/knowledge/
Level 3 – attitudes (on the job)
Behavior
Application • The effectiveness of the
skills/knowledge/
attitudes (as applied on
the job)
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Guidelines for Evaluating Learning
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Example of Survey to Measure Behavior Application
Instruction:
The objective of this questionnaire is to determine the extent to which those who
attended the recent program on Leadership have applied the principles and techniques
that they learned there to the job.
Circle the answer that you consider appropriate for each question.
5 = Much more 4 = More 3 = Same 2 = Less 1 = Much less
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Level 4 – Business Results
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Guidelines for Evaluating Learning
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Performance Indicators
• Downtime duration
• Number of defect products
• Sales volume
• Production unit
• Customer satisfaction index
• Response time to orders
• Number of accidents at work
• Others
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Performance Indicators
• Job satisfaction
• Conducive working relationship
• Effective communication
• Stress rate
• Quality in decision-making
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Example : Measuring Training Results
200.00
Program : TQM
Training
150.00
Results after 3
120 units
months of
100.00
training, number
80 units
of defects
dropped to 80 50.00
units/day
0.00
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Example : Measuring Training Results
Program : 50.00
Sales Training
40.00
Results after 3
months training,
training 30.00
30 units
number of sales
per salesman 20.00 20 units
increase to 30
units/month. 10.00
0.00
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Measuring
Return on Investment of
Training
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Level 5 : Return on Investment of Training
Level 1 - Reaction
Level 2 - Learning
Level 3 – Behavior
Application
Level 4 –
Business Impact
Level 5 – Return
on Investment of
Training
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Criteria for Selecting Programs for Levels
4 and 5 Evaluation
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Benefits of ROI of Training
• Measure contribution
• Set priorities
• Focus on results
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ROI of Training Model
Identify
Intangible Calculate ROI
Benefits of Training
Tabulate
Program
Costs
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Return on Investment Formula
Net Program Benefits
ROI = X 100
Program Costs
Example :
$ 230,625 – 88,500
ROI = X 100
$ 88,500
ROI = 161 %
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Collecting Data
• Identify appropriate
Collect performance indicators
Data
• Develop a collection plan
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Example of Performance Indicators
Output Time
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Example of Hard Indicators
Cost Quality
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Example of Performance Results
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Isolating the Effects of Training
Using
Control Group
Trend
Methods to Lines
Isolate the
Effects of Participants
Training Estimate
Supervisors of
Participants
Estimate
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Isolating the Effects of Training
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Isolating the Effects of Training
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Trend Lines Analysis
Trend Projection
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Isolating the Effects of Training
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Isolating the Effects of Training
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Isolating the Effects of Training
•
F
The confidence percentage is multiplied by the estimate (50 % x 70 %) to
produce a usable training factor value of 35 %
•
•
No.
This adjusted percentage is then multiplied by the actual amount of
improvement (post-program minus pre-program value) to isolate the portion
attributed to training
The adjusted improvement is now ready for conversion to monetary values,
and used in the return on investment
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Converting Data to Monetary Values
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Steps to Convert Data to Monetary Values
Steps Illustration
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Steps to Convert Data to Monetary Values
Steps Illustration
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Steps to Convert Data to Monetary Values
Steps Illustration
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Tabulating Cost of the Program
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Tabulating Cost of the Program
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Tabulating Cost of the Program
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An Example to Illustrate ROI analysis
$ 71,760 - $ 29,090
= x 100
$ 29,090
= 146 %
Facilitation fees
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Enhancing Training
Effectiveness
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How Effective is Your Training Program?
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Source of Barriers to Training Transfer
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The Transfer Partnership
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The Transfer Matrix
Time Periods
Before During After
Manager
Role Players
Trainer
Trainee
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Before Training
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Before Training
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During Training
• Prevent interruptions
Manager • Transfer work assignment to others
• Monitor attendance and attention to training
• Recognize trainee participation
• Participate in transfer action planning
• Review information on employee in training
• Plan assessment of transfer of new skills to the
job
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During Training
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During Training
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After Training
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After Training
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After Training
• Practice self-management
Trainee • Review training content and learned skills
• Develop a mentoring relationship
• Maintain contact with training ‘buddies’
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References/Recommended Further Readings
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End of Material
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