2. 2www.exploreHR.org
AgendaAgenda
1. Measuring the Effectiveness of Training
Program
2. Measuring ‘Return on Investment’ of Training
3. Enhancing the Effectiveness and ROI of
Training
If you find this presentation useful, please consider telling others
about our site (www.exploreHR.org)(www.exploreHR.org)
5. 5www.exploreHR.org
The Four Levels of EvaluationThe Four Levels of Evaluation
Level 1 - Reaction
Level 2 - Learning
Level 3 – Behavior
Application
Level 4 – Business
Impact
Four LevelsFour Levels
of Trainingof Training
EffectivenessEffectiveness
6. 6www.exploreHR.org
Test the trainees to determine if
they learned the principles,
skills, and facts they were to
learn.
Evaluate trainees’ reactions to
the program. Did they like the
program? Did they think it
worthwhile?
Level 1 -Level 1 -
ReactionReaction
Level 2 -Level 2 -
LearningLearning
The Four Levels of EvaluationThe Four Levels of Evaluation
7. 7www.exploreHR.org
What final results were achieved in terms of the
training objectives previously set? Did the number
of customer complaints about employee drop? Did
the reject rate improve? Was turnover reduced,
and so forth.
Ask whether the trainees’ behavior on the job
changed because of the training program. For
example, are employees in the store’s complaint
department more courteous toward disgruntled
customers than previously?
Level 3 –Level 3 –
BehaviorBehavior
ApplicationApplication
Level 4 –Level 4 –
BusinessBusiness
ImpactImpact
The Four Levels of EvaluationThe Four Levels of Evaluation
8. 8www.exploreHR.org
Value ofValue of
InformationInformation
Frequency ofFrequency of
UseUse
Difficulty ofDifficulty of
AssessmentAssessment
Level
I. Reaction
II. Learning
III. Behavior
IV. Results
The Four Levels of EvaluationThe Four Levels of Evaluation
Least
valuable
Most
valuable
Frequent
Infrequent
Easy
Difficult
9. 9www.exploreHR.org
Level 1 - ReactionLevel 1 - Reaction
Evaluate trainees’
reactions to the program:
Did they like the program?
Did they like the
facilitators?
Did they like the training
accommodation and
facilities?
Level 1 -Level 1 -
ReactionReaction
10. 10www.exploreHR.org
Guidelines for Evaluating ReactionGuidelines for Evaluating Reaction
1. Determine what you want to find out
2. Design a form that will quantify reactions
3. Encourage written comments and suggestions
4. Get 100 percent immediate response
5. Get honest response
6. Develop acceptable standards
7. Measure reactions against standards, and take
appropriate action
8. Communicate reaction as appropriate
11. 11www.exploreHR.org
Please give us your frank reactions and comments. They will help us to evaluate
this program and improve future programs.
Program :
Facilitator :
1. How do you rate the subject (interest, benefit, etc)
a. Excellent
b. Very Good
c. Good
d. Fair
e. Poor
2. How do you rate the facilitator? (knowledge, ability to deliver and communicate?)
a. Excellent
b. Very Good
c. Good
d. Fair
e. Poor
3. How do you rate the facilities? (comfort, convinience, etc)
a. Excellent
b. Very Good
c. Good
d. Fair
e. Poor
4. What would have improved the program?
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
Sample of
Reaction
Form
12. 12www.exploreHR.org
Level 2 - LearningLevel 2 - Learning
Measuring learning means
determining one or more of
the following :
• What knowledge was
learned?
• What skills were
developed or improved?
• What attitudes were
changed?
Level 2 -Level 2 -
LearningLearning
13. 13www.exploreHR.org
Guidelines for Evaluating LearningGuidelines for Evaluating Learning
1. Use a control group if practical
2. Evaluate knowledge, skills and/or attitudes both
before and after the program
3. Use a paper-and-pencil test to measure knowledge
4. Use a performance test to measure skills
5. Get 100 percent immediate response
6. Use the results of evaluation to take appropriate
action
14. 14www.exploreHR.org
Guidelines for Evaluating LearningGuidelines for Evaluating Learning
Experimental Group Control Group
Pre Test Score 45 46
Post Test Score 55 48
Gain 10 2
Pretest and Posttest Scores on Change Management Training
Example :
15. 15www.exploreHR.org
Level 3 – Behavior ApplicationLevel 3 – Behavior Application
• The frequency of
application of new
skills/knowledge/
attitudes (on the job)
• The effectiveness of the
skills/knowledge/
attitudes (as applied on
the job)
Level 3 –Level 3 –
BehaviorBehavior
ApplicationApplication
16. 16www.exploreHR.org
Guidelines for Evaluating LearningGuidelines for Evaluating Learning
1. Use a control group if practical
2. Allow time for behavior change and application to take
place
3. Evaluate both before and after the program if practical
4. Survey and/or interview one or more of the following :
trainees, their immediate supervisor, their subordinates,
and others who often observe their behavior
5. Get 100 percent response or a sampling
6. Repeat the evaluation at appropriate times
7. Consider cost versus benefits
17. 17www.exploreHR.org
Example of Survey to Measure Behavior Application
Understanding and Motivating
1. Trying to understand my subordinates 5 4 3 2 1
2. Listening to my subordinates 5 4 3 2 1
3. Praising good work 5 4 3 2 1
4. Talking with subordinates about
their family and personal interests
5. Asking my subordinates for their ideas 5 4 3 2 1
6. Applying "Management by Walking Around" 5 4 3 2 1
Time and energy spent after the prgram
compared to time and energy spent before
the program
5 4 3 2 1
Instruction:
The objective of this questionnaire is to determine the extent to which those who
attended the recent program on Leadership have applied the principles and techniques
that they learned there to the job.
Circle the answer that you consider appropriate for each question.
5 = Much more 4 = More 3 = Same 2 = Less 1 = Much less
18. 18www.exploreHR.org
Level 4 – Business ResultsLevel 4 – Business Results
• Indicate the extent to which you
think this program has
influenced each of these
measures in your work unit,
department, or business unit:
• Productivity
• Quality
• Customer Response Time
• Cost Control
• Employee Satisfaction
• Customer Satisfaction
• Other
Level 4 –Level 4 –
BusinessBusiness
ResultsResults
19. 19www.exploreHR.org
Guidelines for Evaluating LearningGuidelines for Evaluating Learning
1. Use a control group if practical
2. Allow time for results to be achieved
3. Measure both before and after the program if practical
4. Repeat the evaluation at appropriate times
5. Consider cost versus benefits
6. Be satisfied with evidence if proof is not possible
22. 22www.exploreHR.org
Example : Measuring Training ResultsExample : Measuring Training Results
0.00
50.00
100.00
150.00
200.00
Program : TQMTQM
TrainingTraining
Results after 33
months ofmonths of
training,training, number
of defects
dropped to 80
units/day
120 units
80 units
Before trainingBefore training After trainingAfter training
23. 23www.exploreHR.org
0.00
10.00
20.00
30.00
40.00
50.00
Example : Measuring Training ResultsExample : Measuring Training Results
Program :
Sales TrainingSales Training
Results after 33
months trainingmonths training,
number of sales
per salesman
increase to 30
units/month.
20 units
30 units
Before trainingBefore training After trainingAfter training
25. 25www.exploreHR.org
Level 5 : Return on Investment of TrainingLevel 5 : Return on Investment of Training
Level 1 - Reaction
Level 2 - Learning
Level 3 – Behavior
Application
Level 4 –
Business Impact
Level 5 – Return
on Investment of
Training
26. 26www.exploreHR.org
Criteria for Selecting Programs for LevelsCriteria for Selecting Programs for Levels
4 and 5 Evaluation4 and 5 Evaluation
• Importance of the program in meeting the
organization’s goals
• Cost of the program
• Visibility of the program
• Size of the target audience
• Extent of management interest
27. 27www.exploreHR.org
Benefits of ROI of TrainingBenefits of ROI of Training
• Measure contribution
• Set priorities
• Focus on results
• Alter management perceptions of training
28. 28www.exploreHR.org
ROI of Training ModelROI of Training Model
CollectCollect
DataData
Isolate theIsolate the
Effects ofEffects of
TrainingTraining
Convert DataConvert Data
to Monetaryto Monetary
ValuesValues
Calculate ROICalculate ROI
of Trainingof Training
TabulateTabulate
ProgramProgram
CostsCosts
IdentifyIdentify
IntangibleIntangible
BenefitsBenefits
29. 29www.exploreHR.org
Net Program BenefitsNet Program Benefits
Program CostsProgram Costs
X 100X 100
Return on Investment FormulaReturn on Investment Formula
ROI =ROI =
ExampleExample ::
• Costs per program (25 participants)Costs per program (25 participants) $ 88,500$ 88,500
• Benefits per program (1st year)Benefits per program (1st year) $230,625$230,625
$ 230,625 – 88,500$ 230,625 – 88,500
$ 88,500$ 88,500
ROI =ROI = X 100X 100
ROI = 161 %ROI = 161 %
31. 31www.exploreHR.org
Example of Performance IndicatorsExample of Performance Indicators
• Units produced
• Items sold
• Work backlog
• New accounts opened
• Productivity
• Inventory turnover
• Etc.
OutputOutput
• Equipment downtime
• Overtime
• Time to project
completion
• Processing time
• Repair time
• Lost time days
• Etc
TimeTime
32. 32www.exploreHR.org
Example of Hard IndicatorsExample of Hard Indicators
• Unit costs
• Variable costs
• Overhead costs
• Operating costs
• Number of cost
reduction
• Etc.
CostCost
• Scrap
• Waste
• Rejects
• Error rates
• Rework
• Product defects
• Product failure
QualityQuality
33. 33www.exploreHR.org
Example of Performance ResultsExample of Performance Results
• Some performance results after trainingSome performance results after training
program:program:
• Scrap was reduced from 11 % to 7.4 %
• Absenteeism was reduce from 7 % to 3.25 %
• The annual turnover rate was reduced from 30
% to 16 %
• Lost time accidents were reduced 95 %
34. 34www.exploreHR.org
Isolating the Effects of TrainingIsolating the Effects of Training
Methods toMethods to
Isolate theIsolate the
Effects ofEffects of
TrainingTraining
UsingUsing
Control GroupControl Group
TrendTrend
LinesLines
ParticipantsParticipants
EstimateEstimate
Supervisors ofSupervisors of
ParticipantsParticipants
EstimateEstimate
35. 35www.exploreHR.org
UsingUsing
ControlControl
GroupGroup
• A control group arrangement can be
used to isolate training impact.
• With this strategy, one group
receives training, while another,
similar group does not receive
training.
• The difference in the performance of
the two groups is attributed to the
training program.
Isolating the Effects of TrainingIsolating the Effects of Training
36. 36www.exploreHR.org
TrendTrend
LinesLines
• Trend lines are used to project the
values of specific output variables if
training had not been undertaken.
• The projection is compared to the
actual data after training, and the
difference represents the estimate
impact of training.
Isolating the Effects of TrainingIsolating the Effects of Training
37. 37www.exploreHR.org
Trend Lines AnalysisTrend Lines Analysis
Jan Feb Mar Apr JulJunMay Aug
At the beginning of
May, a Sales training
Program session was
held
VolumeofSales
The
difference
represents
the estimate
impact of
training.
Trend Projection
Actual sales performance
38. 38www.exploreHR.org
Participants andParticipants and
Supervisors ofSupervisors of
ParticipantsParticipants
Estimate ofEstimate of
Training’s ImpactTraining’s Impact
• This method rests on the assumption that
participants (and their supervisors) are
capable of estimating how much a
performance improvement is related to the
training program.
• Because their actions have produced the
improvement, participants (and their
supervisors) may have very accurate input
on the issue.
• They should know how much of the
change was caused by applying what they
have learned in the program.
Isolating the Effects of TrainingIsolating the Effects of Training
39. 39www.exploreHR.org
Participants andParticipants and
Supervisors ofSupervisors of
ParticipantsParticipants
Estimate ofEstimate of
Training’s ImpactTraining’s Impact
• Typical Questions to Estimate :Typical Questions to Estimate :
• What percent this improvement
can be attributed to the application
of skills/techniques/knowledge
gained in the training program?
• What confidence do you have in
this estimate, expresses as a
percent?
• What other factors contributed to
this improvement in performance?
Isolating the Effects of TrainingIsolating the Effects of Training
40. 40www.exploreHR.org
1 Training Program 50% 70%
2 Change in Procedures 10% 80%
3 Adjustment in Standards 10% 50%
4 Revision to Incentive Plan 20% 90%
5 Increased Management Attention 10% 50%
6 Other - -
Percent
Improvement
Caused by
Confidence
Expressed as
a Percent
Factors Which Influenced
ImprovementNo.
Isolating the Effects of TrainingIsolating the Effects of Training
Example of a Participant’s EstimationExample of a Participant’s Estimation
The confidence percentage is multiplied by the
estimate (50 % x 70 %) to produce a usable traininga usable training
factor value of 35 %factor value of 35 %
41. 41www.exploreHR.org
1 Training Program 50% 70%
2 Change in Procedures 10% 80%
3 Adjustment in Standards 10% 50%
4 Revision to Incentive Plan 20% 90%
5 Increased Management Attention 10% 50%
6 Other - -
Percent
Improvement
Caused by
Confidence
Expressed as
a Percent
Factors Which Influenced
ImprovementNo.
Isolating the Effects of TrainingIsolating the Effects of Training
Example of a Participant’s EstimationExample of a Participant’s Estimation
• The confidence percentage is multiplied by the estimate (50 % x 70 %) to
produce a usable training factor value of 35 %
• This adjusted percentage is then multiplied by the actual amount of
improvement (post-program minus pre-program value) to isolate the portion
attributed to training
• The adjusted improvement is now ready for conversion to monetary values,
and used in the return on investment
42. 42www.exploreHR.org
Converting Data to Monetary ValuesConverting Data to Monetary Values
ConvertingConverting
Data toData to
MonetaryMonetary
ValuesValues
• Steps to Convert Data to MonetarySteps to Convert Data to Monetary
ValuesValues
1. Focus on a unit of improvement
2. Determine a value of each unit
3. Calculate the change in performance
data
4. Determine an annual amount of change
5. Calculate the annual value of
improvement
43. 43www.exploreHR.org
Steps to Convert Data to Monetary ValuesSteps to Convert Data to Monetary Values
An example to illustrate the steps to convert data to monetary values
1. Focus on unit
improvement
• One grievance reaching step two in the
four-step grievance resolution process
StepsSteps IllustrationIllustration
2. Determine a
value of each
unit
• Using internal experts, the cost of an
average grievance was estimated to be $
6,500 when considering time and direct
costs (V = $ 6,500)
44. 44www.exploreHR.org
Steps to Convert Data to Monetary ValuesSteps to Convert Data to Monetary Values
3. Calculate the
change in
performance
data
• Six months after the program was completed,
total grievances per month reaching step two
declined by ten.
• Seven of the then grievance reductions were
related to the program as determined by
supervisors (isolating the effects of training)
StepsSteps IllustrationIllustration
4. Determine an
annual amount
for the change
• Using the six month value, seven per month
(grievance reductions), yields an annual
improvement of 84 (7 x 12 months)
45. 45www.exploreHR.org
Steps to Convert Data to Monetary ValuesSteps to Convert Data to Monetary Values
5. Calculate the
annual value of
improvement
• Annual value = 84 x $ 6,500 = $ 546,000
StepsSteps IllustrationIllustration
46. 46www.exploreHR.org
TabulatingTabulating
cost of thecost of the
programprogram
• Tabulating the costs involves
monitoring or developing all of the
related costs of the program
targeted for the ROI calculation.
Tabulating Cost of the ProgramTabulating Cost of the Program
47. 47www.exploreHR.org
TabulatingTabulating
cost of thecost of the
programprogram
• Cost components that should be
included are :
• The cost to design and develop
the program
• The cost of all program materials
provided to each participant
• The cost for facilitator
• The cost of the facilities of the
training program
Tabulating Cost of the ProgramTabulating Cost of the Program
48. 48www.exploreHR.org
TabulatingTabulating
cost of thecost of the
programprogram
• Cost components that should be
included are :
• Travel, lodging, and meal costs
for the participants
• Salaries, plus employee benefits
of the participants who attend
the training
• Administrative and overhead
costs of the training function,
allocated in some convenient
way
Tabulating Cost of the ProgramTabulating Cost of the Program
49. 49www.exploreHR.org
An Example to Illustrate ROI analysisAn Example to Illustrate ROI analysis
Weeks after
training Trained Group Control Group
1 US$ 9,723 9,698
2 9,978 9,720
3 10,424 9,812
13 13,690 11,572
14 11,491 9,683
15 11,044 10,092
Average for weeks 12,075 10,449
13, 14, 15
Post Training Data
Average Weekly Sales
50. 50www.exploreHR.org
An Example to Illustrate ROI analysisAn Example to Illustrate ROI analysis
Data US$
Average weekly sales
Trained Group 12,075
Control Group 10,449
Increase 1,626
Profit Contribution from Training 2 % 32.50
(Training Impacts)
Total weekly improvement 1,495
(32.5 x 46 participants)
Total annual benefit 71,760
($ 1,495 x 48 weeks)
Annualized Program Benefits
Note : 46 participants were still in job after 3 months
51. 51www.exploreHR.org
An Example to Illustrate ROI analysisAn Example to Illustrate ROI analysis
Cost US$
Facilitation fees 11,250
Program materials : $ 35 x 46 1,610
Meals : 3 days x $ 28 x 46 1,288
Participant salaries plus benefit (35 %) 12,442
Coordination and Evaluation 2,500
Total Cost 29,090
Cost Summary : An Illustration
ROI (%):
$ 71,760 - $ 29,090
$ 29,090
146 %
x 100=
=
53. 53www.exploreHR.org
How Effective is Your Training Program?How Effective is Your Training Program?
Broad and Newstrom (1992) report studies have
shown less than 30% of what is30% of what is actually taughtactually taught
transfers to the job in a way that enhancestransfers to the job in a way that enhances
performanceperformance.
Source : Broad, M., & Newstrom, J. W. (1992). Transfer of training: Action packed
strategies to ensure high payoff from training investments. Reading, MA: Addison-
Wesley.
54. 54www.exploreHR.org
Source of Barriers to TrainingSource of Barriers to Training TransferTransfer
• Lack of reinforcement on the job
• Interference from immediate (work) environment
• Nonsupportive organizational culture
• Trainees’ perception of impractical training programs
• Separation from the inspiration or support of the trainer
55. 55www.exploreHR.org
The Transfer PartnershipThe Transfer Partnership
Trainee Trainee recognizes need for
new skills
Trainee Trainer
Trainer designs and/or
delivers learning experiences
Trainee Trainer
Manager supports learning
and application on the job
Manager
57. 57www.exploreHR.org
ManagerManager
Before TrainingBefore Training
• Build transfer of training into supervisory
performance standards
• Collect baseline performance data
• Involve supervisors and trainees in needs
analysis process
• Involve trainees in program planning
• Brief trainees on the importance of the training
(course objective, content, process, and
application on the job)
• Review instructional content and materials
• Plan to participate in training sessions
• Encourage trainees attendance at all sessions
58. 58www.exploreHR.org
TrainerTrainer
Before TrainingBefore Training
• Align the training plan with the organization's
strategic plan
• Systematically design instruction
• Provide proactive opportunities
• Design a peer coaching component for the
program and its follow-up activities
60. 60www.exploreHR.org
ManagerManager
During TrainingDuring Training
• Prevent interruptions
• Transfer work assignment to others
• Monitor attendance and attention to training
• Recognize trainee participation
• Participate in transfer action planning
• Review information on employee in training
• Plan assessment of transfer of new skills to the
job
61. 61www.exploreHR.org
TrainerTrainer
During TrainingDuring Training
• Develop application-oriented objectives
• Answer the “WIIFM” question
• Manage the unlearning process
• Provide realistic work-related tasks
• Give individualized feedback
• Provide job performance aid
63. 63www.exploreHR.org
ManagerManager
After TrainingAfter Training
• Plan trainees’ reentry
• Provide opportunities to practice new skills
• Have trainees participate in transfer-related
decisions
• Reduce job pressures initially
• Give positive reinforcement
• Schedule trainee briefings for co-workers
• Set mutual expectations for improvement
• Arrange proactive (refresher) sessions
• Provide and support the use of job aids
66. 66www.exploreHR.org
Recommended Further ReadingsRecommended Further Readings
1. Donald Kirkpatrick, Evaluating Training Programs : The Four Levels,
Berrett-Koehler Publishers
2. Jack J. Phillips and Patricia Phillips, In Action : Measuring Return On
Investment, American Society for Training & Development
3. Mary Broad and John Newstrom, Transfer of training: Action Packed
Strategies to Ensure High Payoff from Training Investments, Addison-
Wesley.
