Enterprise Ireland Slides

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Return on Investment in TrainingMichael
DevaneyEnterprise Ireland Improving Business
Performance Through Investing in Training
Conference Thursday, 26th February 2004
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Learning Objectives

• Understand the need to measure Strategic HRD
  activities
• Understand the key elements of the Return on
  Investment in training framework and its
  application

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Strategic HRD

• Strategic HRD is a set of processes for
  developing people at work which should be linked
  to business strategy (Twigg and Albon)
• Growing need to ensure that the training is
  working and that it adds value to important
  bottom-line measures(productivity,quality,
  customers)
• Evaluation is part of this training process

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Evaluation Levels Defined

• Level
• 1. Reaction planned action
• 2. Learning
• 3. Application
• 4. Business impact
• 5. Return on investment

• Measurement focus
• Measures participant satisfaction with the
• programme and captures planned actions
• Measures changes in knowledge, skills, and
• attitudes
• Measures changes in impact variables
• Measures changes in business impact
• variables
• Compares programme benefits to the costs

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Evaluation Targets

• Level Targets
• Level 1. Reaction 100
• Level 2. Learning 50
• Level 3. Job application 30
• Level 4. Business impact 20
• Level 5. ROI 10

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Paradigm Shift in Training and Development /
Performace Improvement

• Activity
• Characterised by
• No business need for the programme
• No assessment of performance issues

• Results
• Charactiersed by
• Programme linked to specific business needs
• Assessment of performance effectiveness

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Paradigm Shift in Training continued

• Results
• Charactiersed by
• Specific objectives for behaviour and business
  impact
• Measurement of results and cost benefit analysis
  (ROI)
• Planning and reporting on training is output
  focused

• Activity
• Characterised by
• No specific measurable objectives
• No measurements of results or cost benefit
  analysis
• Planning and reporting on training is input
  focused

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Training Needs Assessment

• A complete needs assessment incorporates the
  business measures needing improvement.

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The Best Impact Objectives

• Must contain measures that are linked to the
  Skills and
• Knowledge taught in the program
• Describe measures that are easily collected
• Are results-based, clearly worded and specific
• Specify what the participant has accomplished in
  the business unit as a result of the training
• Hard data Soft data
• Output Customer service
• Quality Work climate
• Costs Work habits
• Time focused

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ROI MODEL
CALCULATE THE RETURN ON INVESTMENT
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Case Study - Medifare
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Benefits of Return on Investment

• Measures Contribution of Training
• Aids in Priority Setting
• Focuses on Results
• Alters Management Perceptions of Training