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Training Effectiveness: Presentation To

This document discusses different ways to measure the effectiveness of training programs, including reaction, knowledge acquisition, behavior change, business impact, and return on investment. It provides examples of how each area can be measured and highlights data from the American Society for Training and Development (ASTD) benchmarking service showing that companies who invest more in training programs tend to have higher stock returns.

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Namita Asthana
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83 views

Training Effectiveness: Presentation To

This document discusses different ways to measure the effectiveness of training programs, including reaction, knowledge acquisition, behavior change, business impact, and return on investment. It provides examples of how each area can be measured and highlights data from the American Society for Training and Development (ASTD) benchmarking service showing that companies who invest more in training programs tend to have higher stock returns.

Uploaded by

Namita Asthana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Training Effectiveness

Presentation to:
AESC
September 13, 2005
How Do We Measure
The Effectiveness of Training
 Reaction
 Knowledge Acquisition

 Behavior Change

 Business Change

 Return on Investment
REACTION
 Can Be:  Measure:
 Evaluation forms  Trainer feedback
 Discussions  Participant feedback
 Questions  Management feedback
 Observation  Outside feedback
 Grapevine  Vendors

 Partners

 Customers
Why Measure beyond
Reaction?
 Expected Program Life Cycle
 Importance of Program in Organization’s
Goals
 Cost of the Program
 Visibility of the Program
 Size of the Target Audience
 Extent of Management Interest
Knowledge Acquisition
 How To Measure:
 Pre-Test / Post Test
 Post Test
 Achievement Test / Standardized Exam
 Participant Report
 Manager Report
Behavior Change
 Self Report
 Peer Report
 Manager Report
 Observer
 Trainer
 Auditor
Business Change
 Measures business impact changes related to
the training program
 Examples:
 Service Improvement  Turnover
 Productivity  Reduction in Errors
 Sales  Decrease in LTIs

 Measurement becomes difficult because of other


types of organizational initiatives in addition to
training
Return On Investment
The ROI is a return ratio that compares the net
benefits of a training project, verses the total
costs to conduct the training. For example, if a
training workshop has an ROI of 200%, the net
benefits derived from the training are double
those of the total costs to implement the
training.
Intangible Measures
 “Soft Data” - probably Subjective but
Important
 Examples:
 Public Image
 Job Satisfaction
 Organizational Commitment
 Stress Level
 Teamwork
 Customer Service
The Inside Source
American Society for Training & Development

 ASTD’s Benchmarking Service


 Collected standard information since 1997
from more than 5,000 organizations about their
training investments, activities, practices, and
outcomes.

 Offers customized benchmarking to any


organization worldwide.
Training Investment Leaders

 On the basis of the number of firms submitting data in


2002, twenty-eight (28) Training Investment Leaders were
identified. These U.S. organizations were ranked based on
the following four categories of training measures:
 Investment: Expenditures as a percentage of payroll
and per eligible employee for training.
 Time: Total hours of training per eligible employee.
 Reach: Percent of Employees Trained
 Sophistication: Use of Learning Technologies
Training Investments
in the U.S., 2002
Training Expenditures as a % of Payroll

Forecast: 4.5%
 2003 4.0%
3.5%
 2004
3.0% 1998
2.5%
2.0% 1999
1.5% 2000
1.0%
2001
0.5%
0.0% 2002
Benchmarking Training
Service Investment
Leaders
U.S. Training Investments
on the Rise Again, 2002
Training Expenditures per Employee

Forecast: $1,800
 2003 $1,600
$1,400
 2004 $1,200
$1,000 1998
$800 1999
$600 2000
$400 2001
$200
2002
$0
Benchmarking Training
Service Investment
Leaders
Record Levels of U.S. Employees
Receive Training, 2002
% of Employees Trained
Forecast:
100
 2003 90
 2004 80
70
60
50 1999
40 2000
30 2001
20 2002
10
0
Benchmarking Training
Service Investment
Leaders
Training Investment Leaders Provide
Twice As Many Hours of Training
(U.S., 2002)
Training Hours Per Eligible Employee
Forecast:
 2003 70.0
60.0
50.0
Benchmarking
40.0 Service

30.0 Training
20.0 Investment
Leaders
10.0
0.0
1999 2000 2001 2002
U.S. E-Learning Jump, 2002
Forecast: % of Training Time via Technology
 2003
16.0% 15.4%
14.0%
12.0%
10.5%
10.0% 9.1%
8.5% 8.4% 8.8%
8.0%
6.0%
4.0%
2.0%
0.0%
1997 1998 1999 2000 2001 2002
Profiting from Learning, 2000
 ASTD Study:
 575 publicly-traded U.S. based firms
enabling ASTD to link their specific
investments in training and education
(late 1990s) to publicly-reported financial
performance data.
Total Stockholder Return
Total Stockholder Return Increases with
Higher Training Expenditures

25.00%
Shareholder Return ,
Subsequent Year

20.00%
Median Total

15.00%

10.00%

5.00%

0.00%
$125 $370 $660 $1,361
Training Expenditures Per Quartile
More Training =
Outperform the Market

Mean TSR, Subsequent Year


40
 Top half is
45% more 36.9%
30
than the S&P
500 25.5%
 Top half is 86% 20
more than bottom
half 19.8%
 Bottom half is
10
22%
lower than S&P
500
Bottom Half S&P 500 Top Half

Training Investments
How Big is the Stock
Return Effect?

 An increase of one standard


deviation in training expenditures per
employee (or about $680) is
associated with a 6% point increase
in total return to stockholders.
For more information contact:
Rick Hicks
Randy Smith Training Solutions
337-235-4493
[email protected]
Or
Natalie Carlson
512-401-0239
[email protected]
What is ASTD?
 ASTD is a leading association of workplace learning
and performance professionals.

 ASTD's 70,000 members and associates come from


more than 100 countries and thousands of
organizations.

 ASTD marks its beginning in 1944 when the


organization held its first annual conference.
ASTD Vision and Mission
 ASTD’s Vision:
 A worldwide leader in workplace learning and
performance.

 ASTD’s Mission:
 Through exceptional learning and performance, we
create a world that works better.

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