Training Evaluation Metrics

Aside from implementing training activities, HR managers also need to measure HR training performance with KPI or key performance indicators. This is necessary to ensure that training investments are optimized.

It is no longer surprising that today, more and more Human Resource (HR) practitioners have decided to measure HR training performance with KPI or key performance indicators.

It is the function of Human Resource departments to ensure that business organizations are able to generate high return on investment from their human capital or manpower, and at the same time, limit financial risk. Key functions of HR departments are recruitment strategy planning, hiring and recruitment of employees, selection, training and development, performance evaluation and management, promotions, industrial and employee relations, compensation and bonuses of employees, and career development. The emergence of human resources can be traced back to the early 1900s during the advent of the Taylorism movement.

Due to the variety of Human Resource functions, this department can take away a large chunk of an organization’s operational expenses. To make sure that this allocation is optimized, there is a need to regularly monitor the performance of the department. Perhaps the most costly among all HR functions is training. This includes all activities which enable employees or training participants to acquire new skills, competencies, and knowledge. Through training, employees become more adept at handling bigger responsibilities brought about by promotion. In fact, training and development is now widely considered a perk or employee benefit that can highly motivates employee longevity.

While a number of companies are willing to shell out millions in order to train their employees, these organizations regularly determine if their training investments are translated to higher profits. To do this, HR managers identify measures or metrics that quantitatively describe HR training performance. The most vital of these metrics are then considered as key performance indicators (KPIs) or success factors. There are various metrics that can be considered. It is up to the HR department to identify which among these are more important and crucial for the growth of a business organization. What is important is that these metrics should act as a bridge between training plans and training objectives. Though measuring training effectiveness can be very complex, especially to stakeholders and training personnel, this can potentially contribute long-term benefits for the business organization.

To measure HR training performance with KPI, metrics like average training hours per employee, average training cost per employee, and workforce productivity ratios could be used. Naturally, training cost is one of these metrics with the established relationship between training cost and employee turnover. Two other internal training metrics that could be used are instructor performance and end-user satisfaction. To ensure training success, it is always a good idea to measure and evaluate the competence of trainers by assessing their presentation skills, subject knowledge, and instructional guidelines adherence. End-user satisfaction could also be used, as the training audience could make training assessments even immediately after a session. Meanwhile, an increased employee retention rate could also be an indicator of a highly effective training program. On the other hand, increased sales is one metric that could indicate training success, especially if training efforts are centered on the company’s customer service and sales staff.

Training metrics is needed to determine the efficacy of training programs held by companies for their employees. When choosing which metrics to include, relevance is important here.

There comes a certain point in time when a company would have to hold training sessions for their employees, whether old or new. This is because at the fast pace the business world is at, there are certain technological advancements and whatnots that would really demand for training. Using and getting by the modern products brought about by technological advancements can be easy for the typical techie. However, you cannot say for sure that all members of your workforce are techie by nature. And training is not just about the new gadgets and gizmos bobbing all over the industry, for there are also modern methodologies and procedures that are being introduced as well. Thus, a lot of things can certainly encompass training. All of which, however, aim to equip the members of the workforce with newfound knowledge towards the goal of being more productive in their respective positions in the company. It is then safe to say that training can make any employee perform better and become more effective in completing their tasks and responsibilities. This is the primary reason why companies should invest in developing a systematic method of training metrics.

Metrics are quantifiable measures used to determine the efficiency of certain aspects in the work setting. In this context, metrics are the quantifiable aspects that are used to determine just how efficient a certain training program is. It is very important for companies to develop training metrics of their own so that they can ensure that the training sessions they hold are indeed effective in achieving their purpose. Furthermore, if the metrics indicate that the training sessions are effective, then it goes to show that the employees would become more productive and efficient in their respective jobs.

Now that the advantages of employing training metrics have been laid out, let us move on to the process of choosing which particular quantifiable measure to choose as training metrics. If there is one thing businesses should know about metrics is that no two companies can employ similar metrics all throughout. You have to understand that the metrics involved here should actually be in line with the goals and objectives that the company itself wants to achieve. Since no two companies can have the same goals and objectives all throughout, then it is safe to assume that no two companies employ the same set of metrics, particularly training metrics.

Choosing the appropriate training metrics to use can also be a bit confusing. However, this does not mean it is not doable at all. For the most part, it would actually be the human resource department of a company who would develop and choose the training metrics to use. This is of benefit because it is also the human resource department that would handle training sessions held by the company. Thus, they would have deeper insights on what quantifiable aspects to use as training metrics, to determine just how efficient and effective the company’s training programs and sessions are. Just remember to choose the metrics that are relevant to the purpose, as well as those that support the corporate goals and objectives.

Using a balanced scorecard as a training management tool helps business organizations have an accurate assessment of their training programs. This approach ensures a well-rounded assessment of training investments.

Training is generally defined as the process of acquiring new skills, knowledge, and competencies through instruction of vocational and practical skills, as well as theoretical concepts. A common worldwide trend is geared towards the continuance of training throughout an employee’s working life. Some organizations label this as professional development. Training is very important not only for the purpose of retaining employees but also for attracting high-quality job applicants. Training development is now universally accepted as one of the primary drivers of employment.

While training could be very beneficial for employees, business organizations should also ensure that training benefits could be translated to higher return on investment (ROI). The many training programs companies implement are no good if these do not bring satisfactory results in the end. More and more firms are now recognizing the importance of assessing training efficiency and determining how training impacts the entire organization. Companies have found different ways to undertake this endeavor. Basically, success factors or key performance indicators are identified by HR managers and other company stakeholders. These metrics are then used to provide quick assessment of how an organization is doing in terms of training and corporate objectives. Among the many training assessment methods, the Balanced Scorecard approach is one of the more widely used. Developed by management experts, Robert Kaplan and David Norton, this strategic approach allows business organizations to integrate their vision and objectives into operational plans and strategies.

As a performance management system, the Balanced Scorecard approach works from different perspectives namely; financial perspective, customer perspective, business process perspective, and learning and growth perspective. The financial perspective includes assessment of all relevant financial data. This perspective is included in this approach, as both Kaplan and Norton acknowledge the need for companies to associate training success with financial success. Customer perspective, on the other hand, is rooted on the new management philosophy on the importance of customer satisfaction and customer focus. Poor performance in terms of customer perspective could be an indicator of a performance decline in the future. The Business Process perspective, meanwhile, takes a look at how internal business processes work. The metrics under this perspective help managers determine how the company is performing. At the same time, this indicates whether or not products and services that are provided to end-users conform to set quality standards. Finally, the learning and growth perspective focuses on employee training and improvement of corporate cultural values to facilitate success of future organizational endeavors. The categorization of performance measures in four different perspectives is designed to make gathering and selection of metrics more convenient for managers.

Balanced scorecard as a training management tool is very effective as it gives HR and training managers a more accurate and well-rounded picture of how training programs can potentially affect the success of an organization, not just on one, but on four different perspectives. Because of its effectiveness as a management tool, the Balanced Scorecard is now implemented in various government agencies, corporate units including non-profit organizations and learning institutions, and military units.

Most companies with employee training programs evaluate training efficiency based on questionnaires and happy sheets. While this is a good and time tested method of training evaluation, it is simply not enough and more quantitative and concrete training evaluation metrics are required for making important training related decisions.

Each and every organization has different kinds of training programs for different purposes, with most large companies having an individual training department with their own individual budgets. Unfortunately, training evaluation is never given as much of a priority as the evaluation of other performance metrics in any organization, like sales or growth etcetera.

This is because most organizations do not think that training influences the bottom line as much as other factors, which is totally false. Training influences the bottom line, though in a small manner, through the cost that is incurred on training expenses and the benefits that are reaped by the organization as a result of employee training. While getting employees to fill out questionnaires describing the benefit of the training they have undergone is all well and good, better methods of training evaluation, preferably quantitative ones need to be used if you want your company and your employees to benefit from training programs. Some of the key criteria which should be used for the evaluation of corporate training are:

Costs: Knowing how much your training programs cost is necessary for evaluating any kind of training program objectively. The main emphasis of all training programs somewhere or the other focuses on increasing profits, even if it is through indirect programs like employee retention or employee interaction programs and the effect on the bottom line can be gauged only once you know the exact amount of money that your firm is spending on the training programs. In order to calculate training cost, you need to factor in both the direct cost of training- payment to external agencies involved in training, travel, consultancy, material etcetera and the indirect cost of training, which generally includes things like the cost of training equipment and facilities and the emoluments of training staff employed in-house.
Employee Learning: Since the main objective of any kind of training program is to increase the knowledge level of a trainee with regard to certain subjects, measuring the increase in knowledge or learning is a crucial variable that will directly tell you about the effectiveness of any training program. Taking before and after exams or simply taking tests after the training has been imparted can give you a fair idea about the effectiveness of your training program in improving your trainees’ level of knowledge. Needless to say, if the students in your program fail to pass these tests or barely pass, your training program needs to be re-looked at and maybe restructured.

Profit: An increase in productivity and profits as a result of training is a new but useful way of evaluating your training programs. However, considering that the final objective of any training program is to help increase performance and profits, this is the most direct method of evaluating a training program. Profits are supposed to go up after a training program since employees who have imbibed training are supposed to be more efficient and skilled than they were earlier. Better employee performance as a result of training will directly impact profits and you can easily compare the costs involved in training with the benefits thereof, or to be more precise calculate the return on investment of your training program to gauge its effectiveness.

In this blog we are writing about training performance management tools, such as Metrics, KPIs, Scorecards. We are going to review various evaluation tools as well as application of these tools to particular business areas.

There are some products that are a good start point for manager who want to create his own training estimation system.

Another tool which helps to build your own performance evaluation tools is Balanced Scorecard Designer:

On this web-site you will find more articles on training performance evaluation with scorecards, metrics, KPIs.