1. QUALITY ASSURING TECHNICAL - VOCATIONAL EDUCATION & TRAINING DEMONSTRATING RETURN ON INVESTMENT (ROI) W.C.FLETCHER:NOV 3&4, 2013

2. PRESENTATION OVERVIEW Definitions Key Features Globalization History of ROI Calculating ROI Indicators of ROI ROI in TVET Other ROI Indicators Evaluation Methods Benefits of ROI Summary Conclusion W.C.FLETCHER:NOV 3&4, 2013

3. PRINCIPAL OBJECTIVES Greater Awareness of ROI in TVET ROI as strategic tool for HCD ROI Influences resource allocation Measures & Indicators of ROI Evaluation Methodologies of ROI Benefits of Evaluating ROI W.C.FLETCHER:NOV 3&4, 2013

4. WHAT IS QUALITY ASSURANCE? “ Programme for the Systematic Monitoring and Evaluation of the various aspects of a Project, Service, or Facility to Ensure that Standards of Quality are met” Merriam – Webster on-line Dictionary W.C.FLETCHER:NOV 3&4, 2013

5. WHAT IS QUALITY ASSURANCE ? “ Part of Quality Management, providing Confidence that Quality requirements (needed or expectations that are stated, generally implied, or obligatory) will be Fulfilled” International Standards Organization (ISO) W.C.FLETCHER:NOV 3&4, 2013

6. WHY QUALITY ASSURE ? Build & Maintain Organizational Brand, Integrity and Reputation Minimize mismatch & LM distortions Create Competitive Advantage Provide Superior Utility Value Gain/retain Customer Affirmation W.C.FLETCHER:NOV 3&4, 2013

7. KEY ELEMENTS OF QA SYSTEM Planning – goal setting Implementation – guiding SOPs Evaluation – monitoring mechanism Review – analyse/compare results (EQAVET) W.C.FLETCHER:NOV 3&4, 2013

8. GLOBALIZATION & TVET Globalization defines 21 st century econ. Skills = currency of LM transactions, certification => instrument of trade, to navigate LM. Productivity determined by competence of employees as well as standardization of production systems. W.C.FLETCHER:NOV 3&4, 2013

9. GLOBALIZATION & TVET In final analysis, businesses compete for markets in the international arena In this environment (NWO), labour becomes internationalized through standardization and portability W.C.FLETCHER:NOV 3&4, 2013

10. GLOBALIZATION & TVET Against this background, modern and efficient TVET Quality Management System becomes an imperative, especially within context of Resource Constraints, Programme Relevance and International Competitiveness W.C.FLETCHER:NOV 3&4, 2013

11. QUALITY ASSURING TVET Competitive Forces Shape Strategy: Structures, Systems & Processes Facilities, Standards & Procedures Monitoring & Evaluation Technology - Leadership & People Value Proposition W.C.FLETCHER:NOV 3&4, 2013

12. TRAINING & ORG PERFORMANCE Why invest in TVET? Correlation training  performance? Body of literature that links training with organizational performance ILO links skills development (TVET) with organizational productivity W.C.FLETCHER:NOV 3&4, 2013

13. TRAINING & ORG PERFORMANCE Through training HR is transformed into HC => greater value-added Firms invest in HR, create distinctive competence and build org capacity - even without knowing the ROI W.C.FLETCHER:NOV 3&4, 2013

14. MEASURING ROI Calculating ROI ranges from a simple ratio: [Benefits/Costs] x 100 = %ROI To more complex means such as; Pay Back - months/years before benefits match costs incurred Note: shorter the pay back period, more feasible the investment W.C.FLETCHER:NOV 3&4, 2013

15. MEASURING ROI Sophisticated models - Computer applications, where I/O variables are processed and results generated ROI when indirect variables are less quantifiable => challenging exercise W.C.FLETCHER:NOV 3&4, 2013

16. INDICATORS OF ROI (1) Productivity Improvement: Improved work methods => reduced human effort Higher skill levels => faster work, reduced Cycle Time Greater intrinsic motivation => improved morale, greater output W.C.FLETCHER:NOV 3&4, 2013

17. INDICATORS OF ROI (2) Labour Savings: Less duplication of effort Fewer mistakes => less rework => higher quality => greater productivity Faster access to information Critical differentiator, provides competitive advantage W.C.FLETCHER:NOV 3&4, 2013

18. INDICATORS OF ROI (3) Other Cost Savings: Fewer machine breakdowns => lower maintenance costs => greater profit Lower Staff T/O => lower HR cost Fewer customer complaints, greater loyalty => higher retention rate W.C.FLETCHER:NOV 3&4, 2013

19. EVALUATING ROI IN TVET ROI in TVET means; measuring all economic returns generated from investing in training Comparing results with the true cost of training programme Determine average annual ROI W.C.FLETCHER:NOV 3&4, 2013

20. WHY MEASURE ROI IN TVET ? Evaluating ROI is not an audit of training, neither cost saving Rather an objective evaluation and re- engineering of training programmes Tool to ensure that future training is targeted and effective W.C.FLETCHER:NOV 3&4, 2013

21. WHY MEASURE ROI IN TVET? Rationaliz ation of Scarce Resources Provides Scientific Evidence of Outcomes Facilitates Career Advancem ent Facilitates Comparati ve Analysis

22. WHY MEASURE ROI IN TVET? Like other investments, QA TVET consumes resources (cost), it also produces benefits Reasonable rate of return (for risk) is therefore an expectation Probably more talked about, than actually done! W.C.FLETCHER:NOV 3&4, 2013

23. HISTORY OF ROI IN TRAINING Kirkpatrick’s 4 - level model 1.Reaction – the degree of favourable reaction to training intervention 2.Learning – degree to which intended competence (KSA) is developed after training intervention W.C.FLETCHER:NOV 3&4, 2013

24. HISTORY OF ROI IN TRAINING 3.Behaviour – degree of application, post training intervention 4.Results – degree to which targeted outcomes are achieved (ROI) W.C.FLETCHER:NOV 3&4, 2013

25. EQAVET INDICATORS OF ROI Programme Participation Rate Completion Rate (Certification) Employment Rate (skills utilization) Productivity Improvement Unemployment Rate (decline) Organizational Competitiveness W.C.FLETCHER:NOV 3&4, 2013

26. OTHER INDICATORS OF ROI Individual level: Enhanced Reflective Capacity Critical Thinking & Analytical Skills Problem Solving Capability Continuous Improvement Autonomous & Accountability W.C.FLETCHER:NOV 3&4, 2013

27. EVALUATION METHODOLOGIES Several methods of evaluating ROI Method used depends on objectives of ROI evaluation, examples: Control Group, Modelling, and Estimating W.C.FLETCHER:NOV 3&4, 2013

28. CONTROL GROUPS High validity in terms of isolating effects of training programme One group participates, other does not (similar in all other respects) Random selection techniques Disadvantage - some staff do not get benefit of the training programme W.C.FLETCHER:NOV 3&4, 2013

29. MODELLING Analytical & mathematical, non- linear relationships Several variables influence results, calls for sophisticated stats models Appropriate data & models available, => accurate predictor of performance variables W.C.FLETCHER:NOV 3&4, 2013

30. ESTIMATION Participants state how much of their improvement due to training prog. Adjusted for level of confidence (60% x 70% con = 42%) Validate – supervisors & peers asked to weight estimates = > 360 -degree W.C.FLETCHER:NOV 3&4, 2013

31. EVALUATION CRITERIA Evaluation criteria classified as either hard or soft data Hard: quantitative - easily convertible into monetary terms Soft: qualitative - from HR training database, not easily convertible $$ W.C.FLETCHER:NOV 3&4, 2013

32. EXAMPLE - EVALUATION CRITERIA HARD DATA Production output Units sold Products rejected Scrap produced Labour productivity Number of accidents SOFT DATA Work ethics Absenteeism Work climate Social Tension Work attitude Staff development W.C.FLETCHER:NOV 3&4, 2013

33. BENEFITS OF EVALUATING ROI Validates training as a business tool for improving performance & profit Justifies training costs incurred by HR Improvement in training prog design Rational selection of training delivery methodologies W.C.FLETCHER:NOV 3&4, 2013

34. SUMMARY & CONCLUSION Globalization drives International Competitiveness TVET’S Relevance linked to QA Demonstrating ROI Strategic Tool Comparative Analysis Capacity Building & HCD W.C.FLETCHER:NOV 3&4, 2013

35. ACKNOWLEDGEMENTS European Quality Assurance in Vocational Education & Training (EQAVET) International Labour Organization (ILO) Naish, Richard: ROI – Building Business case for people development Kirkpatrick, Donald: Evaluating Training Prog. THANKS FOR YOUR ATTENTION !! W.C.FLETCHER:NOV 3&4, 2013