How do we measure value creation from training?

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How do we measure value creation from training?

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How do we measure value creation from training?

Everyone is prepared to believe that we need training, but what is training actually worth? What are the benefits? Are there credible measurement methods to evaluate value creation? What should you say to a senior manager who sees cutting the training budget as a way to make significant savings?

The Kirkpatrick/Phillips model shows us how and why to assess training outcomes.

What should we evaluate?

Evaluating value creation involves comparing the cost of an investment with what you get in return. Cost is quite easy to calculate, but return on investment is more complex and multidimensional as it involves stakeholders at various levels and with different goals.

Calculating the overall cost of training involves putting together a set of accounting data that can be divided into three categories:

  • Direct costs: payments made to training organizations, travel, hotel bills, etc.
  • Indirect costs: salaries paid to staff while training.
  • Overhead costs: training department, salaries of in-house trainers and instructional designers, rooms set aside for training, equipment, software licences, etc.

Assessing the benefits of training is quite different. Instead of a set of data, it involves a chain of measurable proofs of benefit, as shown in the Kirkpatrick/Phillips pyramid.

The Kirkpatrick/Phillips pyramid identifies five dimensions that form a sequence:

Pyramide-Learning-Measurment-(1)
  • What is the value created for my company? Does it justify the investment made in training? – ROI
  • What impact does the training have on my results? – Results
  • Do I apply the training in real situations at work? – Behavior
  • Did I learn something? – Learning
  • Am I satisfied with the training? Did I enjoy it? Was it interesting? – Reaction

According to Kirkpatrick, each dimension of the pyramid has an effect on the one above: it impacts the one above, but doesn’t necessarily trigger it. Taken as a whole, these dimensions make it possible to create a “chain of proof” (Pottiez, 2013) that demonstrates the impact of the training on the entire organization (the different stakeholders):

Employee/learner Stakeholders
If I find my training satisfying, I’ll be able to remember it more effectively…

If I remember the content, I’ll be more likely to apply it to my job …

If I have opportunities to apply the training, it will be more likely to impact my results

And if my results improve, this will likely create value for my company.

Run by the trainer / Developed by a designer

Checked by the Training Department

Supported by the Line Manager / Monitored by HR

Assessed by the Board of Directors

It looks pretty easy when presented like this, but in fact while 90% of companies assess satisfaction, only 2% assess ROI (Wargnier). There are several reasons for this, one of them being that many benefits are intangible.

The intangibles

Can we put a figure on everything?

According to Phillips (2012), intangibles are benefits that cannot be given a monetary value. How much is my sense of wellbeing at work worth? How much do my leadership skills bring to the company? These benefits are sometimes a direct outcome of training. Training on stress or priority management can have major benefits and significantly enhance the wellbeing of a staff member. But how can we measure the impact this will have on their relationships with others or their ability to delegate, or how it will reduce stress in the long term?

Phillips identifies several intangibles: leadership, innovation, creativity, teamwork, quality of service, reputation, intellectual capital… which happen to be some of the key values of companies such as Coca Cola, Boeing, Oracle and Novartis. And yet these values that are so vital to large companies are considered to be impossible to evaluate.

Intangibles don’t appear on balance sheets or in financial reports, but they are undeniable success factors. They transform organizations, management approaches, and the way new products and services are designed, produced and sold. (Phillips, 2006).

Why evaluating?

Training evaluation is vital for three reasons (Kirkpatrick,1998):

  1. Demonstrating the benefits of training: The training department has to show how it contributes to the objectives of the organization, and communicate with future learners (staff members) and their managers to encourage them to take part in training programs. Demonstrating outcomes allows you to justify the training budget and encourage staff members to engage in training, while giving managers proof of the impact they can make by allowing their subordinates to sign up for the programs.
  1. Defining training strategy: Evaluation helps you decide whether or not to continue with training programs. How should you decide whether or not to maintain a program? What information do you need to justify changes to your training strategy? Evaluation provides factual data upon which you can base your decisions.
  1. Ensuring quality: Evaluation provides information on how to improve future training programs. How can you be sure that detailed programs meet learner expectations? How can you improve them? Evaluating gives you information and feedback on quality.

In response to the contradiction outlined above, several research papers offer solutions based on the Kirkpatrick/Phillips model. In another article you’ll find out how to evaluate training, who to involve, and how to assess the intangibles that are so important for companies.

To find out more, download our free e-book

Sources:

  • Kirkpatrick, D.L. 1998. Evaluating training programs.
  • Phillips J, Pulliam Phillips P. 2015. Handbook of Training Evaluation and Measurement Methods
  • Pottiez, J. (2013). L’évaluation de la formation. Paris: Dunod.
  • Wargnier, J. Crossknowledge White Paper Evaluating and demonstrating the value of training

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