Thoughts on return of investment aspects for training
Read an interesting article in the Harvard business review a while back around management training programs, and the return of investment for training programs.
Now performance improvement consultants know that traditional view for ROI in training is seen as an increase in productivity or performance as the basis for ROI studies. What most consultants also know is that calculating ROI is especially difficult on short lived projects for training. I found the article suggestion simple to understand and yet very effective.
The first aim for a consultant should always be to define the financial value of the behavioural change the customer desires. To do this we must clearly define the business results the client is getting, and answering how the customer would like to see the business results change. The difference between the desired and current business results equals the financial value of solving the ROI question.
Coupled with a robust mapping of components that make up ROI, you should be getting a clearer picture for your clients on ROI studies.
To complete a mapping exercise (as described by Robinson and Robinson) you would need to complete the following exercise:
1) Determine what the operational results should be.
2) Determine what the on-the-job performance criteria must be to reach the
operational results.
3) Determine what the current on-the-job performance criteria is
4) Determine what the current operational result is.
5) Determine the environmental factors (both internal and external) that may
impacting performance
Once you have determine the above you will be able to establish what the financial value of the behavioural (or then the on-the-job) performance is going to benefit the customer, and on top of that, advice the client what environmental factors will influence the success rate of the ROI.
Now performance improvement consultants know that traditional view for ROI in training is seen as an increase in productivity or performance as the basis for ROI studies. What most consultants also know is that calculating ROI is especially difficult on short lived projects for training. I found the article suggestion simple to understand and yet very effective.
The first aim for a consultant should always be to define the financial value of the behavioural change the customer desires. To do this we must clearly define the business results the client is getting, and answering how the customer would like to see the business results change. The difference between the desired and current business results equals the financial value of solving the ROI question.
Coupled with a robust mapping of components that make up ROI, you should be getting a clearer picture for your clients on ROI studies.
To complete a mapping exercise (as described by Robinson and Robinson) you would need to complete the following exercise:
1) Determine what the operational results should be.
2) Determine what the on-the-job performance criteria must be to reach the
operational results.
3) Determine what the current on-the-job performance criteria is
4) Determine what the current operational result is.
5) Determine the environmental factors (both internal and external) that may
impacting performance
Once you have determine the above you will be able to establish what the financial value of the behavioural (or then the on-the-job) performance is going to benefit the customer, and on top of that, advice the client what environmental factors will influence the success rate of the ROI.
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