How to Effectively Measure HR Training Performance with KPI
Sunday, April 13th, 2008Aside 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.
