1. Unit 10: Evaluating Training and Return on Investment 2009

2. 2 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. © SHRM 2009

3. 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. 3 © SHRM 2009

4. Training Evaluation Was the training effective? Training effectiveness: The benefits the organization and trainees receive from training. 4 © SHRM 2009

5. 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. 5 © SHRM 2009

6. 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. 6 © SHRM 2009

7. Instructional Design: ADDIE Model 7 © SHRM 2009

8. 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. 8 © SHRM 2009

9. Kirkpatrick’s Four-Level Model of Evaluation Level 1: Reaction Level 2: Learning Level 3: Behavior Level 4: Results 9 © SHRM 2009

10. Level 1: Reaction Reaction: How did participants react to the program? > Smile sheets. > Informal comments from participants. > Focus group sessions with participants. 10 © SHRM 2009

11. 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. 11 © SHRM 2009

12. 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. 12 © SHRM 2009

13. 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. 13 © SHRM 2009

14. Levels of Evaluation vs. Value 14 Kirkpatrick, & Kirkpatrick, 2006 © SHRM 2009

15. Your Training Project Design evaluation instruments for your training project. 15 © SHRM 2009

16. 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. © SHRM 2008 16

17. Return on Investment Return on Investment/Benefit-Cost Ratio: Program Benefits Benefit-Cost Ratio = ---------------------------- Program Costs $2,500 Benefit-Cost = 2.5:1----------- $1,000 17 © SHRM 2009

18. Benefit-Cost Ratio Program benefits : $6,500 Program costs:$8,495 What is the benefit-cost ratio? 18 © SHRM 2009

19. What About ROI? Return on Investment – ROI (%) Program benefit: $2,500 ----------- = 2.5 x 100 = 250% Program cost: $1,000 ROI = 250% 19 © SHRM 2009

20. 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. 20 © SHRM 2009

21. 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. 21 © SHRM 2009

22. 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. 22 © SHRM 2009

23. Training and Organization Success 23 Strategic Planning Assessment Design Development Implementation Evaluation