Upload
hj-arriffin-mansor
View
993
Download
3
Tags:
Embed Size (px)
DESCRIPTION
How to measure the effectiveness of your training.
Citation preview
TRAINING NEED ANALYSIS
What is training?
• TRAINING IS TO IMPROVE WORK PERFORMANCE– ON THE JOB TRAINING OR– OFF THE JOB TRAINING
RETURN ON TRAINING
IMPROVEMENT VALUE
REDUCE COSTS
INCREASE REVENUE
REDUCE CAPITAL
TRAINING INVESTMENT
ACTUAL COSTS
OPPORTUNITY COSTS
INVESTMENTS
RETURN ON TRAINING
VALUE OF IMPROVEMENT
TRAINING INVESTMENT
THIS IS A RATIO JUSTIFYING THE INVESTMENT ON
TRAINING
What was the return on the investment?
Did it have an impact on the business?
Did they apply it on the job?
Did they learn what was required?
Did they like it?Level 1
Reaction
Level 4Impact
Level 5ROI
Level 3Application
Level 2Learning
Source: Jack J. Phillips. Return on Investment. Houston: Gulf Publishing Co., 1997.
Combined Evaluative Approach
5
Benefit-Cost Ratio = Program Benefits
Net Program Benefits*
Program CostsROI =
*Net Program Benefits = Program Benefits – Program Costs
X 100%
Source: ROI Institute.Measuring the ROI of Training and Performance Improvement Programs. Arlington, VA: ASTD, 2004. Page 2.9.
Program Costs
ROI Calculations
6
Customer Perspective
Financial Perspective
Learning &
Growth Perspective
Process Perspective
VISION&
STRATEGY
Balanced Scorecard Source:. Kaplan and Norton. The BalancedScorecard. Boston: HBS Press, 1996.
7
Balanced Scorecard
Balanced Scorecards tell you …..the knowledge, skills and systems that your employees will need (their learning and growth) …. to innovate and build the right strategic capabilities and efficiencies (the internal processes) ……that deliver specific value to the market (customers), ……which will eventually lead to higher shareholder value (the financials).
FinancialProcessLearning & GrowthCustomer
Vision &
Strategy
Source: David P. NortonBalanced Scorecard Report. “Use Strategy Maps to Communicate Your Strategy.” Page 169
8
• Human Capital Capability Scorecard™— predicts an organization’s ability to achieve future business results by analyzing data on an array of human capital indicators.
• Generates prioritized, fact-based recommendations for improving business results through more effective development and management of employees.
• Statistically analyzes the relationship between HCCS
scores (by P&L center, branch, etc.) to identify those factors that are the most powerful predictors of an organization’s performance
• Serves as a blueprint for creating employee investment strategies, and a baseline to evaluate the effectiveness of these strategies.
McBassi Methodology
9
We modified the Human Capital Capability Scorecard™ and our data collection to those elements with both of the following characteristics:
- Most relevant to employee development, and - Could be provided by a single individual within the organization
ABA CLO Summit Application
10
• The evidence clearly points to a positive relationship between human capital (learning) practices and investments, and financial returns.
• This relationship is most consistent for the measure that captures training and development expenditures per employee.
• The financial outcome most consistently associated with an array of human capital measures is net income per employee.
ABA CLO Summit Results
11
Median Net Income Per FTE (10/02 to 9/03), by Top Half/Bottom Half on Human Capital Variables
$0
$20,000
$40,000
$60,000
$80,000
Resources: T&DExpenditures Per FTE
Resources: Employeeto Trainer Ratio
Average SystemsMaturity Score
Average WorkforceOptimization Score
Average LearningCapacity Score
Human Capital Variable
Med
ian
Net
Inco
me/
FTE
Institutions in Top Half on HC Variable Institutions in Bottom Half on HC Variable
ABA CLO Summit Sample Results
12
Conclusion
There is every reason to believe that an institution’s increased focus on, and commitment to, human capital factors, especially learning and development, should lead to improved financial performance.
Which side of the fence are you on?
13
Conclusion
There is every reason to believe that an institution’s increased focus on, and commitment to, human capital factors, especially learning and development, should lead to improved financial performance.
Which side of the fence are you on?
14
Step 1 – identifying critical performance gaps
• Gaps is obtained through comparing actual against industry standards
• Critical is how material is the impact on the corporate objectives.
• Use ROE format as a coporate summary• Critical is derived from pareto and sensitivity
analysis
Define the Performance Gaps
DESIRED PERFORMANCE (Optimals)
- ACTUAL PERFORMANCE (Actuals)
= POSSIBLE TRAINING NEED
Describe Discrepancy
P. 31
Is it critical?
• Why is it important?• What if you did nothing?• How big is it? (Quantify if possible)• Who cares?• “Is the cost of the discrepancy high
enough that it seems worth pursuing a solution?”
P. 34
Step 2 - calculate the KPI of each critical performance areas
• Calculate KPIs for actual, standards and industry
• Compare KPIs to evaluate true performance.• The KPI may be used in ROI calcualtion.
Step 3 - Analysing further the critical performance gaps
• Is it true performance gaps?• Is the gap caused by factors other than
competency.• Benchmarkings to recognise best practices• Use input output analysis• Task and subtask analysis• Interviews, observations, focus groups,
documentations
Determine Cause(s)
Is it a problem of skill or
a problem of will?
I don’t wanna!I don’t know how.
I don’t wanna!
Yes, it is a skill deficiency
Arrange Formal Training
Arrange Practice
Arrange Feedback
Used to do it?
Used often?
no
yes
no
yes
Other questions
Change the Job
Arrange on-the-job training
Transfer or terminate
Simpler way?
Potential?
If a skill deficiency..
• Provide training• Provide practice• Provide feedback• Simplify the task• Develop a job aid• OJT• Transfer• Terminate
And one last question...
Obstacles?Remove
Obstacles
Step 4: To train or not to train?
• First determine cause(s)• Only then look at
possible solutions• Seek integrated
solution systems that get to the root of the problem
P. 39
Calculate cost
Select best solution(s)
Implement
Cause Solution
• If skill or knowledge……….training• If lack feedback……………..feedback, standards• If not motivated…………….rewards,
consequences• If unclear expectations…..std, measure, discuss• If job environment…………change environment• If potential……………………change personnel
P. 39
EVALUATE PERFORMANCE
LP HP
WP LP
COMPETENCY
MOTIVATION
Step 5 - calculate the ROI training
• The purpose of this step is to justify the training BEFORE the training start.
• Calculate the benefits generated by the training divided by the capital employed in the training.
• We obtain our ROI figures through the input output model.
Benefit-Cost Ratio = Program Benefits
Net Program Benefits*
Program CostsROI =
*Net Program Benefits = Program Benefits – Program Costs
X 100%
Source: ROI Institute.Measuring the ROI of Training and Performance Improvement Programs. Arlington, VA: ASTD, 2004. Page 2.9.
Program Costs
ROI Calculations
29
SUMMARY
1. Identify critical performance gaps using some benchmarks.
2. Identify key job holders and conduct competency profiling.
3. Identify best practices4. Identify effective training alternatives5. Use projected ROI to justify training