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Development of strategic goals is not an easy task.  In order to set correct strategic goals the company should possess complete information on its current conditions, weak points, strength, opportunities for development and growth etc.  There are many performance evaluation and strategic management tools available and the market.  SWOT analysis methodology is one of the most important and widely advertised.  SWOT is acronym for strengths, weaknesses, opportunities and threats.  Having performed such analysis the company becomes aware of what needs to be done to improve car and performance and implement strategic goals.

AKS-LABS offers SWOT analysis guide which is designed for business owners, top managers and generally everyone who is interested in the problem of strategic management and SWOT analysis.

This information package contains templates on SWOT analysis which can be used to create customized SWOT metrics for companies irrespective of their size.  You’ll also find there frequently asked questions and implementation examples of SWOT analysis.

It is also possible to track similarities and differences between the popular Balanced Scorecard and SWOT analysis which have been long considered competitors.  The extensive SWOT analysis guide gives a comprehensive description of this methodology.

Get yourself a free version of SWOT analysis guide from his page or purchase the full version here.

Well, this is not to say that training is not necessarily.  Just to the contrary, and effective training session will make it possible for an employee to use obtained knowledge and skills in real business.  But how can you say whether or not a training session is effective?  Will training cost become a major criterion?  Or does employees satisfaction with training matter most of all?

How training works

Consider using balanced scorecard and you will have answers to most of questions related to efficiency of training sessions.  Balanced scorecard will not only evaluate training efficiency but will also align training goals and measures with the company strategy.  In such a way, both top management and employees that undergo training sessions will understand why they do that and what benefits of training are.

Most important training KPIs

With a balanced scorecard it will be possible to see a clear cause and effect ties between training and implementation of strategic goals in each of the four categories of balanced scorecard: financial, customer, learning and growth, internal business processes.  For example, to implement some financial goals, like increasing net profit, it is necessary to gain new market share and attract new customers which is only possible through introduction of innovative products and services, which in its turn, is possible through education of personnel and their ability to use acquired knowledge in practice.

Much depends on the right choice of key performance indicators (KPIs).  It is also important to set the right weight for each indicator in category of indicators.  For some companies, it is impossible to increased training budget which, however, does not mean that their training sessions will be ineffective.  Of other companies, to the contrary, need additional funds to invest in training in human resource management to improve professional level of the personnel.

Use of balanced scorecard to evaluate training efficiency and is the right choice for any company.

This is how training works

As any business aspect and development direction, training must be properly evaluated.  Moreover, training goals and measures should be well integrated into the system of company strategy, values and mission.  Every training session must have clear aims and objectives and these objectives should approach and the company to implementation of strategic goals.

Any training session should have a clear message that is well understood for all participants. Of course, companies conducting training sessions want to have return of such kind of investment.  As known, investments in personnel are the most effective long-term investment tools.  With the help of balanced scorecard it will be possible to align training goals and measures with strategic goals of the company.

What makes an effective training session?

For example, the company wants to increase its market share by 10%.  This is only possible through introduction of innovative products and adoption of new sales methods.  In its turn, it can be achieved through improvement of personnel professional level.  So, training sessions should focus on new sales techniques and methods as well as adoption of innovative ideas.  In such a way, training results will directly influence implementation of objectives in all perspectives of balanced scorecard – financial, customer, internal processes, learning and growth.

At the same time, it is extremely important to create winning key performance indicators to correctly evaluate training performance.  The wrong KPIs will lead to wrong decision making which is not good.  Such key performance indicators may include training budget, number of employees who have undergone training sessions, number of training sessions per employee, employee satisfaction with training session etc.

The choice of key performance indicators depends on company strategic goals and organization structure.  With the help of balanced scorecard it will be very easy to see what needs to be done to achieve strategic goals as cause and effect ties will be understood even for ordinary employees.

So, training evaluation gives characteristic of training and coaching sessions.  Besides, with the help of balanced scorecard it is possible to measure company attention to training of personnel, changes in the training budget, track the number of employees who regulate undergo training and number of those who still requires additional education.  Balanced scorecard will also provide top management with cause and effect ties, so that managers can actually see how training influences performance of employees and how this performance affects financial results of the company.

What are effective training KPIs?

Training evaluation is expressed not only in financial terms.  Of course, it is very important how much money the company spends to educate one employee and how much the company expects to get as a result of such training.  But what is more important is employee attitude to training, willingness to participate in training sessions, employee initiatives as to changes and amendments in training programs etc.

Evaluation of training requires top managers and those in charge of BSC implementation to carefully choose relevant KPIs. For example, total number of training hours per employee or number of employees who have undergone training may not be indicative. Effectiveness of training must be measured with a complex and well balanced set of key performance indicators. Training scorecard must reflect cause and effect ties between training and employee performance.

Benefits of using training BSC

Top managers need to remember that ineffective or untimely training is just a waste of money which is absolutely unacceptable in modern post crisis world of business. Effective training will not only educate personnel but also improve their motivation, and BSC is a great help here. Being aware of training benefits, employees will be glad to use obtained knowledge in practice in order to benefit the company and get personal bonuses.

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What makes an effective training session?

During the past decades it has been agreed that human resource management plays an important role in the company.  Any company should start improvements with improvement of personnel professional level.  This is where training and coaching comes into play.  However, of as any aspects of business and managerial process training should be properly evaluated.  Moreover, all training campaigns and sessions should be subordinated to company strategic goals.  Of ideally, any training aims at improving of customer satisfaction and improvement of financial results of the company.

How training works

When a company spends money to train and educate employee, it naturally expects some results.  Employee should use update knowledge and skills to show high performance which will benefit the company.  When using balanced scorecard to evaluate training it is highly recommended to set realistic and clear strategic goals.  Having said the wrong goals, it would be impossible to succeed in BSC implementation.  Of the entire system will fail and the money spent for training will be wasted.

At a first glance, goal setting in training seems quite simple.  But such goals as “to conduct as many training sessions as possible” or “to increase employee participation in training sessions” will not do much for the company.  Goals in training should directly correspond to the relevant financial goals.  For example, a company may want to increase sales volumes by improving customer satisfaction and introduction of new products.  To achieve this, personnel should be trained to promote new products in the market as well as learn the latest methods of working with new and existing customers.  Only in such a way these goals will be meaningful.  Moreover, training goals should be understood for ordinary employees as they will participate in training and spend their time.

It is also very important that employees understand benefits of training sessions both for the company and for themselves.

What makes effective training?

The last decade saw a sharp increase in popularity of balanced scorecard.  This revolutionary concept implied evaluation of financial and nonfinancial indicators.  By the way, many are of human resource key performance indicators are nonfinancial.  At a first glance, it is rather difficult to measure such things as employee loyalty or training efficiency, say apart of organization climate.  But balanced scorecard does measure such things which helps see the progress of the company on the way to implementation of strategic goals.  It is imperative that all HR action and campaigns are well integrated into the system of company values, mission and strategic goals, otherwise there will be conflicts.

How training leads to financial results

Evaluation of human resource department is also about evaluation of training efficiency.  It is imperative for employees to understand why the need training and what benefits they will have as a result of such training.  Personnel motivation means a lot.  As such, employees should implement their personal goals and at the same time reach strategic goals of the company.  This is a real art of human resource management.

When using balanced scorecard to evaluate HR efficiency and training performance, top managers should carefully choose key performance indicators which influence key success factors.  Such indicators may concern different aspects of training campaigns: training cost per employee, employee attitude two was training, expected revenue per employee as a result of training campaign and a number of others.  These indicators and their evaluation should show clear cause and effect ties so that managers can actually see what needs to be changed to implement strategic goals of the company.

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Effect of training on organization performance

The last decade saw a sharp increase in popularity of different training courses, seminars, coaching campaigns etc.  It became clear that an initiative coming from the lowest managerial level may give a company enormous competitive advantage over rival companies.  Well educated personnel possessing me you knowledge and techniques will directly work with customers.  Changes in the company management are OK, but the company needs to make sure that those front line employees who contact customers on the everyday basis should use their knowledge to profit the company.  Training and coaching is an inseparable part of a great company performance.  As any performance, of training should be evaluated since the company needs to spend certain amount of money to conduct training sessions, and naturally the company wants to get this money back in profits.

Balance scorecard makes it possible to evaluate training through introduction of key performance indicators and their measurement.  BSC is different from other performance evaluation systems by the fact that all goals and objectives, as well as measures, are subordinated to the company strategy.  In other words, everything performed within the framework of training campaigns aims at implementation of strategic goals.

Of course, it is impossible to avoid financial indicators in evaluation of training efficiency.  Cost per employee cost per training campaign, number of canned beans and total costs of very important indicators.  But balanced scorecard has a full range of nonfinancial indicators which can reveal weaknesses in training campaigns.

With the help of balanced scorecard it will be easier to motivate personnel participate in training.  Every employee should understand why he needs training and what benefits he and his company will get.  By using acquired knowledge in practice and employee can drain profits for the company and get benefits for himself in case a company has a comprehensive compensation and bonus system.

Key training KPIs

Evaluation of training will make it possible to see if the company personnel is ready to use innovative methods and techniques, operate new equipment, apply innovative approaches to customer relations etc.

This is how training works

However, just organizing all the training session may be not enough.  That training should be effective and efficient.  Naturally, every business owner expects to earn money before investing it.  Training is investment in personnel.  By the way, many business specialists consider investing in personnel to be the most effective long-term investment.  Inefficient training sessions will turn out to be a waste of time and money.  Besides, employees need to understand why they should undergo training and what benefits it entails.

With the help of balanced scorecard it will be possible to measure efficiency of training and track the way how strategic goals are being implemented.  Were strategic goals can one set in training?  For example, this may be improving computer literacy of the personnel or increasing professional level of salesmen, etc.

Effective training campaign

Balanced Scorecard communicates strategic vision with operational management (what is being done to reach strategic goals).  It visualizes the strategy and makes it possible to see what should be improved in training campaigns.  Balanced Scorecard uses a set of KPIs which are known as key performance indicators.  These indicators can be financial and nonfinancial.  In training both categories of indicators are quite relevant.  Two financial indicators we can refer cost per training sessions, training budget, cost per employee or expected revenue you per employee.  To nonfinancial were refer employees satisfaction, number of training sessions held, average training session time and a number of others.  It should be noted that the choice of key performance indicators solely depends on the company strategic goals.

Ultimate goal is of course increasing company revenue you.  So if as a result of the training session an employee can yield better results such training session can be considered effective.  But there is always room for improvement.