Return on Investment De Kock, Philip Training Evaluation & Measuring ROI on Training. Ripple Training, Cape Town, January 2007.

Measuring ROI on Training “Not everything that can be counted counts, and not everything that counts can be counted.” Albert Einstein

The Value Hierarchy Reaction, Satisfaction Learning Application and Implementation Business Impact Return on Investment Intangibles

The Value Hierarhcy Level 1 - Reaction, Satisfaction: How your learners feel about your training course? Level 2 - Learning: Changes in knowledge, skills and attitudes? Level 3 - Application and Implementation: Can the learner apply the new K, S, A in his/her job?

The Value Hierarchy Level 4 - Business Impact: Has the business been more productive or profitable due to the learner’s new K, S, A? Level 5 - ROI: The training course benefits in relation to the costs. Level 6 - Intangibles: The training benefits in relation to company policies, strategies or decisions.

How do we collect information for the Value Hierarchy?  At what level do you want to measure?  Who is your target group? (who are you going to give the info to?)  What are you going to do with the information? (for budgeting, strategy, report...)  What resources do you have? (any company documents that already exist e.g. performance records, productivity…)

Data collecting instruments InstrumentLevel 1Level 2Level 3Level 4Level 5Level 6 Questionnaires Yes Observation Yes Interviews Yes Focus Groups Yes Performance contracts Yes Competence (K, S, A) testing Yes

Sources of Information Learners / participants Supervisors / Managers of participants Subordinates of participants Peer group HRD department Company performance records: –Performance contracts –Disciplinary records –Safety records

5 Golden Training Evaluation Questions? 1.How did your learner apply the K, S, A? 2.What impact did the K, S, A have? 3.What difference did this make in your learner’s department? 4.What is the monetary value of these results? 5.How much of this improvement was actually caused by your training?

Hard Data Can convert to monetary values. Outputs – number of applications processed? Costs – cost per application processed? Quality – number of errors made during processing? Time – how long does it take to process and approve an application?

Soft Data Difficult to convert soft data to monetary values… Employee turnover – how many employees enter and/or leave your company? Absenteeism – how many employees are off sick in a month? Is there a pattern? Grievances / Disciplinary – how many conflict situations between employee & manager or employee & employee?

Converting Data to Money: Teambuilding Accident Tourvest Bus Driver -PDP! Accident Costs: Bus damage? Insurance premiums? Litigation against Co? Medical Costs: X-rays Medication Blood pressure Stress control Sick Leave: Hourly / Daily rate Replacement Labour? Total cost of bus accident

ROI calculations Benefit / Cost Ratio = Training program benefits Training program costs Benefit ROI = Nett Training program benefit x 100 Training program costs 1

Questions?? Thank you for your participation.