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Training & Development Program: How to Evaluate ROI

When you are in charge of learning and development for your team or your organization, then you probably know how crucial it is to measure the effectiveness of a training. Afterall one of the important parameters is ROI. You don’t want to spend money or time on training that doesn’t provide a good return.

Assessment of learning effectiveness has two layers to it.

  • To evaluate the quality of the intervention itself
  • The ultimate impact on the business outcomes

Various Stages of Evaluation

Developed by Donald Kirkpatrick, The Four Levels of Evaluation is also referred to as the Kirkpatrick Evaluation Model. It is the most recognized method to evaluate the effectiveness of training programs. Let’s have a look at its various stages

1) Reaction – This stage is all about the reaction of the training participants and their thoughts about the experience. Communication is only effective when the other side has received the message intended. Whether the training was relevant for the trainees, how satisfied the trainees are with the training experience, or whether they felt engaged? These are primary questions which you must be asking your team. Studies suggest that 80 percent of training events include Level 1 evaluation.

2) Learning – This stage is where you need to measure the degree to which trainees acquired the intended skills and knowledge. This is where you as well as the trainer determined whether the training objectives are met. This is either be a pre-training or post-training or only a post-training evaluation.

3) Behavior –  This stage measures the participant’s behavioral change and improvement after applying the skills on the job. This is more about applying the skills what they have learned in stage 2 i.e. Learning.

4) Results – The results or effects that the trainee’s performance has on the business is what evaluated at this stage. The results consist of tangible factors like increased productivity, increased sales, improved quality and efficiency,  reduced cost, employee retention, & higher morale.

How to evaluate ROI

Now that you are done with the qualitative analysis and the above-mentioned evaluation process helped you arrive at an overview of your L&D outcomes and you are sure of whether or not you received the desired performance results, the next level does the quantitative analysis and to dig deeper into a stage where increase in growth at an overall business level is your goal. Measuring effectiveness both qualitatively & quantitatively is a crucial step to generate the necessary buy-in with the CXO suite. Here are the three major factor you need to watch out for

Sales growth: Especially sales-oriented training should ultimately result in outgrowing sales numbers. Conduct a pre and post-training analysis of the team’s projects and productivity to understand whether the training has fruitfully increased delivery numbers.

Cost reductions: One of the prime objectives of training is to have production ready employees, thereby enabling cost savings. For example, when trained for opportunity seeking, employees may come up with cost-effective projects. Analyse the relationship between –

  • upskilling
  • Behavioral changes and work of the employee and
  • reduced costs for the team.

Employee retention: The goal of conducting a training session is not just growth in terms of business measures, but also to indirectly upskilling the team’s or employee’s talent. Training is an important and effective tool to retain employees. It helps build a trust and employee stickiness with the company. This ultimately helps reduce recruitment efforts and costs. Hence track whether your team has a knack for learning, does a training program excites them, boosts their morale and their retention levels accordingly. Follow these simple evaluation techniques and your L&D strategy will be good to go.

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Payel Bhowmick

The author is an analyst at SpringPeople & writes on emerging technology trends for IT professionals. Passionate about technology, her current area of focus is the digital revolution currently underway in the edu-tech industry. When not at work, Payel splits her time between writing, reading and watching sci-fi movies.
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One comment

  1. Revenue being the driving force for any strategic decision for any organization, it is always a good to understand the ROI on L&D programs. Very nicely articulated, the key factors to be considered by the organizations.

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