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QUALITY ASSURING TECHNICAL -VOCATIONAL EDUCATION & TRAINING
DEMONSTRATING RETURN ON INVESTMENT (ROI)
W. C . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
KEY ELEMENTS OF QA SYSTEM• Planning – goal setting • Implementation – guiding SOPs • Evaluation – monitoring
mechanism• Review – analyse/compare results (EQAVET)
W. C . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
GLOBALIZATION & TVET
Globalization defines 21st 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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
QUALITY ASSURING TVET
Competitive Forces Shape Strategy:• Structures, Systems & Processes • Facilities, Standards & Procedures• Monitoring & Evaluation • Technology - Leadership & People • Value Proposition
W. C . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
WHY MEASURE ROI IN TVET?
Rationalization of Scarce Resourc
es
Provides Scientifi
c Evidenc
e of Outcom
es
Facilitates Career Advance
ment
Facilitates Comparative Analysis
W. C . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
HISTORY OF ROI IN TRAINING
Kirkpatrick’s 4 - level model1. Reaction – the degree of favourable
reaction to training intervention2. Learning – degree to which intended
competence (KSA) is developed after training intervention
W. C . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
HISTORY OF ROI IN TRAINING
3. Behaviour – degree of application,
post training intervention4. Results – degree to which
targeted outcomes are achieved (ROI)
W. C . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
EQAVET INDICATORS OF ROI
• Programme Participation Rate• Completion Rate (Certification)• Employment Rate (skills utilization)• Productivity Improvement• Unemployment Rate (decline)• Organizational Competitiveness
W. C . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
OTHER INDICATORS OF ROI
Individual level:
• Enhanced Reflective Capacity• Critical Thinking & Analytical Skills• Problem Solving Capability• Continuous Improvement• Autonomous & Accountability
W. C . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
EVALUATION METHODOLOGIES
• Several methods of evaluating ROI
• Method used depends on objectives of ROI evaluation, examples:
• Control Group, Modelling, and Estimating
W. C . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
EXAMPLE - EVALUATION CRITERIA H A R D D A T A
Production output
Units sold
Products rejected
Scrap produced
Labour productivity
Number of accidents
S O F T D A T A
Work ethics
Absenteeism
Work climate
Social Tension
Work attitude
Staff development
W. C . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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
SUMMARY & CONCLUSION
• Globalization drives International Competitiveness
• TVET’S Relevance linked to QA• Demonstrating ROI Strategic Tool• Comparative Analysis • Capacity Building & HCD
W. C . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
W. C . F L E TC H E R : N O V 3 & 4 , 2 0 1 3
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 !!