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Training & Development Metrics – “the ROI Dashboard”

Posted on Tuesday, 18 October 2011 09:23AM
Alex Gallon
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Details:
Overview: This article presents some views and some background for those internal Learning & Development specialists seraching for the "holy grail" in terms of their own functions ROI on learning & development.

These views are intended to promote and hopefully widen thinking about ROI in the L&D function.
Author Biography: Alex Gallon FCIPD has spent many years designing and implementing training solutions that meet business needs, more particularly solutions that add value to an organisations competeitive edge.
Alex is a human resources professional with experience in senior HR management roles for a wide range of organisations.

Specialties:-
Organisational Development. Employee engagement strategies, Investors in People, Management Development, Management Training & Performance Management
Article:
Who are the "experts" in learning & development metrics? Who are the valuable contributors in the search for “ultimate evaluation” in learning & development functions?

I offer on my list:

Donald Kirkpatrick - Four level model of training evlauation
Dr Jac Fitzenz - The ROI of Human Capital
Dr Jack Phillips - The ROI Institute
Dr Laurie McBassi - Human Capital Analytics
Robert O Brinkerhoff - The success case evaluation method
Jay Cross - The power of informal learning/e-learning
R.A. Guzzo & B.A. Gannett - Inhibitors to effective task performance

What really matters to the organisation though? I would offer:

1. The efficiency of learning function itself
2. The organisation’s key performance indicators, its benchmarking & its capacity
3. Return on investment
4. Psychological capital

I’d like to look at each of these in turn and in doing so begin to offer some thoughts on what the L & D’s Return on Investment “Dashboard” might contain.

1. Learning function efficiency.

Here the choices are numerous and what suits one organisation, may not suit another. On offer as potential metrics are:

a) Training days per member of staff
b) Training days per member of part time staff
c) Training days per casual staff member
d) Equality of opportunity/test of fairness across items a, b & c above
e) Off-the-job training days
f) Training spend as % of salary bill/payroll
g) % of staff with personal development plans

Etc. etc. my list has another 12 items on it and it’s still going …………..

2. Key performance indicators, benchmarking & capacity

Here we begin to examine what the organisation’s vision, values and key performance indicators may be saying about the metrics it wishes to the L & D function to consider.

Again, here the choices are numerous and what suits one organisation, may not suit another. On offer as potential metrics are:

a) Revenue per employee
b) Profit per employee
c) Sales per employee
d) Employee satisfaction survey
e) Performance management review data – upward movements
f) Management feedback
g) Achievement of learning and development initiatives contributing to KPIs etc.

Etc. etc. my list has another 5 items on it and it’s still going …………..

3. Return on Investment

For me, this is the move in thinking from evaluating training to valuing learning.
Firstly, this requires us to ensure that we have included provision for the type of evaluation in our training budget i.e. planned to evaluate as part of our plan.
Secondly, it requires us to now consider some further possible metrics:

a) Time to competence
b) Proportion of employees with required competence level
c) Customer feedback data
d) Employees engagement data
e) Number of individuals able to move into key positions
f) Organisational, team & indivudual achievement against performance management criteria
g) Cost/benefit data for specific learning interventions
h) Performance data on targets i.e. absence, retention, internal promotions etc

4. Psychological capital

As my mentors in CIPD would want me to point out, I’m sure, the other area for potential metrics is psychological capital. Let’s have a definition first:

““The sum of positive opinion about the organisation held by people OUTSIDE the organisation”

How the organisation is perceived is divided into 3 types:

? Producer of goods and services – brand image? Utility of product? Social acceptability of product?

? Employer – great place to work?

? Corporate citizen – ecological stance? Contributions to charity? Assistance to region/town

This effectively brings in to play, external benchmarking criteria and the opportunity to extend the metrics into areas such as:

a) Quality Awards
b) Business Awards
c) Egon Ronay/Michelin etc.
d) ISO 9000
e) Brand recognition studies
f) Fortune “Best Companies to Work for” Index
g) European Commission “Best 100 Employers”
h) Investors in People Standard
i) Sunday Times Top 100 Companies
j) FTSE Index of socially responsible companies
k) Christian Aid report on corporate responsibility

What should the metrics be on your L & D dashboard?

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