Dear Citehr Members,
After reading the query about Return on Investment in training and the comments associated with the post, I am surprised at the post entry by the consultant who without making any warranted points of discussion, has advertised a training program that will solve the entire gamut of ROI. It is all the more surprising to see some members asking about the commercial investment of such programs without identifying the root cause of the problem on why ROI is not taken into consideration by some organization leaders in India.
My Comments on the subject
As very rightly highlighted by certain Citehr members here, some organization leaders may have grown their respective organizations in terms of size, capacity, production levels, etc. as they are catching up with globalization. However, the thought process in some of these organizations is dated to an ancient civilization in terms of leadership style and management process. (still a mom and pop shop)
They choose not to invest in the development of their staff but want the ever increasing numbers to be achieved.
I wonder HOW?
The problem is some business leaders cannot look beyond numbers and the irony is that some have the HR team who plays the role of a YES MAN for every challenge posed in the people development process. While I do empathize that HR faces many constraints in an organization, they also have the ability to scale up their people management process’ in their current capacity.
In the west, HR is still a support function. However, they have defined process' in place that make the organization leader accountable as well for their ability or inability to lead the organization and people development process. Therefore a ROI model is identified based on the quantum of individual investment made by the leader as they are the front runners of the process.
Case Study – An organization leader has put a mandate on their HR team to hire staff at a given cost.
As identified by HR in their meeting with the organization leader; salary budget per person is lower than market standards in which a single staff member is required to move a mountain or two over a six day work week.
Training is called in to make the staff member turn into spiderman, batman, shaktiman and any other combination of a man or wo-man to achieve the pre-identified target, revenue, numbers.
This contributes to the second issue; The Training Broker or the Make Shift trainer who can teach anyone anything is called in. (They can teach spiderman to make cob webs, they can teach batman to jump from a building, they can teach shaktiman to move a building)
Many HR folk love these guys as the problem for HR is solved without considering their own errors in the process of people engagement and development. Here is where the hole starts getting deeper.
From a good trainers perspective, the right needs analysis would include a series of training interventions that will focus on product knowledge, process knowledge, sales & service. If the learning needs of the trainee is addressed, the ROI model that distinguishes between predictive and immediate measurement can be put into place.
However, HR that more or less works on a conservative budget, being a support function decides to slash half the curriculum. Hence, they do not have a mental or practical concept of ROI as they do not identify the right amount of investment in the people development process.
Outcome for the staff = Was promised the sun, moon and the stars, given poor individual development opportunities and after a year got summoned by HR that they are not motivated.
Question:
a. What is the cost of demotivated employees?
b. Which training module and ROI model can reverse the process of demotivation?
Outcome for HR = No problem, 2015 budget has been approved and we will re hire/replace.
Question:
a. How will HR hire or build the best talent in the event of poor annual budget allocation in the future?
b. Should HR wait for 2015 budget or start taking initiatives to build a productive work force by engaging Senior Leadership to invest in their people within their current capacity?
Impact on ROI in training cannot be measured or implemented if the organization itself does not have a proactive approach in people development. Therefore, an ROI in such situations is in itself a failure to begin with. Training plays the role of entertainment by making people run and jump over different areas of the classroom. This is given the classification of ice brakers, activities, etc.
That is not training. That is Jumbo Circus.
ROI Explained
Level 1
Reaction to the training material, program, core concepts, etc. The focus of the ROI model in this level is the close the gap between the expectations of the learning needs and how well did the program meets the expectations.
Measurement at this stage happens in the form of smiley sheets, assessments, feedback communication between the trainee and the management. At this stage, if the HR or operations does not discuss the outcome of the learning intervention and does not implement measures by providing on the job coaching to reiterate the learning objectives; the ROI is headed for failure.
Level 2
Learning and change in attitude of the trainee that is required on the job based on theories, principles, facts and techniques taught through the training program. Now the key point here is that a commitment needs to be gained.
How is HR or Operations putting measures in place to ensure that the commitment is maintained?
Level 3
Behaviour. Now that the trainee is groomed in the required skills and the commitment is gained; how is the change in behaviour being mapped?
a. Are there any weekly monitoring or observations assessments being mapped to the trainees appraisal in order to identify the shift in behaviour?
b. Has this been mapped to the performance management system?
c. Who is responsible for ensuring that the investment made in training is on the pay back modes in terms of visible changes in behaviour patterns?
d. How is the change in behaviour impacting product, process, targets, revenue?
Level 4
Results. If the first 3 steps and measures have been put in place then what is the tangible outcome in terms of results. Tangible results can be quantified in terms of cost, quality improvement, increase in quantity, etc.
Having simple tools in place, an ROI model can be identified by mapping the tangible results before the training and after the training.
My closing comments
It must be noted:
ROI does not measure "soft" benefits; it is a tool that can measure results.
Regards,
The Training Specialist