Training Evaluation Metrics

If company top management wants to make an effective use of the personnel it should make sure that all employees are properly motivated to work for the company.  For example, if company management wants a particular employee to participate in a training session such an employee should know benefits of such education, otherwise he will simply come to a training session and leave it without learning any knowledge.  Motivation concerns all activity aspects of personnel.  When it comes to implementation of balanced scorecard, motivation of both top management and ordinary personnel is a number one concern.

Motivation is a must in training

On the one hand, company top management should really believe in the power of balanced scorecard and show their faith to company personnel.  On the other hand, ordinary employees at all company levels must be aware of both Balanced Scorecard benefits and their own contribution to the work of this system and implementation of company strategy goals, mission and values.

Balanced scorecard implementation starts with development of strategic goals and drawling of strategy maps.  Some companies are making a very serious mistake of imposing a strategy from the top to the bottom.  If company strategic goals and key performance indicators are not understood for ordinary employees they are very unlikely to show enthusiasm.  Thus, it is impossible to introduce any effective reward system.  If an employee does not understand what he’s rewarded for it is impossible to talk about proper motivation.

When it concerns education and training of personnel it is very important to select the right indicators to use them as a basis for reward system.  For example, if employees get benefits for the number of training sessions they have attended, it will be just a waste of money for the company.  But if the company pays an employee for the improved performance as a result of a training session this makes sense.

Poor motivation will wrack implementation of strategic goals

It is extremely important that people who work for the company understand why they take part in educational programs.  If they know how to use obtained knowledge to reach certain results within the framework of a strategy map such training session can be considered successful.  At the same time such an employee will be motivated to participate in training since he gets bonuses and rewards for effective use of obtained knowledge.

Finally, it needs mentioning that motivation systems can have both financial and nonfinancial nature.  Money is not the only thing managers may use to motivate personnel.

What are most critical success factors for any business?  Efficient organization structure, investments, innovation, establishment of long lasting relations with customers, employment of competent personnel, innovative products and services, aggressive marketing campaigns etc.  But the problem is that it will not work unless the personnel is regularly trained and educated.  Business world is changing rapidly, and so are IT and production technologies, as well as marketing and promotion techniques, sales methods etc.  If the company stops and its development, it is doomed to fail as it will have no chances to beat competitors.  For this reason training of personnel is extremely important, no matter in what business area the company is operating.

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.

Different trainings and coaching seminars have become so popular that many business owners never ask themselves a question: “What do we pay for?” A training session by itself does not guaranteeing a result.  Moreover, every company has to pay for education of their employees.  Of course, businesses face a choice: to hire experienced employees or two employed people with little experience and then educate them.  At the same time, it should be mentioned that both experienced and inexperienced employees require education.  Business is not idle. Production and IT technologies are constantly developing. That’s why personnel must not lag behind in order to stay competitive.

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.

Goal setting is one of the most important stages of balanced scorecard implementation.  To begin with it would be logical to say a couple words about balanced scorecard.  This revolutionary system of strategic management was the first include nonfinancial indicators to the set of indicators to within a certain performance evaluation system.  The problem is that financial indicators could not fully represent everything that happens to the company.  Financial indicators are lagging indicators, or in other words they represent something that has already happened to the company.  So, it’s very difficult to plan anything having only financial figures.

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.

Just hiring many employees for the company does not mean that such personnel will efficiently work.  Of course, every company and every HR department tries to find the best professionals.  Headhunting is very popular nowadays as business owners came to understand that employees are supreme value for a company.  But business never stays one place.  Companies are developing and reacting to market changes.  Sometimes it is very important that the company employees acquire me you knowledge and get new skills.  Sure thing that the skills are acquired during special training sessions which are organized in or outside the company.  It should be noted that training and coaching has become extremely popular in all business spheres.

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.

Nowadays too many business owners forget that the supreme value of their companies is the people who work there.  But the recent financial crisis has vividly demonstrated that well educated and efficient personnel is the key to success.  Those companies who had the best human resources managed to survive the crisis and even increase their profits and in large customer base.  This all became possible because these companies had a comprehensive strategy.  It is strategic planning that can lead a company to success.  In the modern markets short term goal policies sometimes prove to be ineffective.

This is how training works

That is why it is very important to train and educate personnel.  Moreover, this training should be economical if effective.  It is evident that an employer should spend a certain amount of money to educate one employee.  And naturally, an employer expects employee to work better and bring more profits for the company.

An efficient HR department needs to conduct training sessions for employees in such a way so that the entire company benefits from it.  Every training session should have its goals.  At the same time, employees should understand why the need such a training.

Use of balanced scorecard in evaluation of training will help both managers, HR specialists and ordinary employees better understand the importance of training sessions, their efficiency and expected financial gains.

Balanced scorecard uses the principle of key performance indicators evaluation.  Every business or any business aspect has its own set of KPIs.  Training also has specific key performance indicators which help managers find out whether or not a training session was effective.

Training KPIs to be measured

So, what are these key performance indicators?

First and foremost, this is cost per employee.  As said above, the company spends a certain amount of money to train one employee.  One needs to keep balance here, as saving too much and training may result in low education level of the personnel.  This leads us to the next KPI which is expected revenue per employee.  Obviously, the company wants to have profits resulted in education of personnel.  So if the company gets profits as a result of training sessions it means that the training was in general effective.

Training budget is in another indicator one should pay a special attention.  If the company manages to gradually increase this budget and at the same time increase profits this signals that the training campaign proves to be effective.

It is impossible to wane in the Morton business without proper management.  No matter how much money you can invest in your company, it doesn’t matter how many office buildings and production facilities you have, without proper human resource management your business will fail.  Nowadays, many businessmen forget about people who work for them.  These people think that their business is their money, real estate, offices, computers etc.  But the reality is that your business is people who work for you.

Thus, it is very important to train your personnel and raise professional level of your employees.  It doesn’t matter what position such an employee in the occupied.  Even if your secretary will work faster the entire company may benefit from it, say apart of top managers, project managers and other people with much responsibility.

Measure major training kpi

Different trainings, seminars and workshops are very popular in all businesses fields.  You invest money in your personnel.  It needs saying that such investments are very long lasting and they yield positive results.  However are we can talk about positive results only in case these trainings are professionally organized and efficiently conducted.  An ineffective training session will turn into a waste of your money and your employees’ time.  Ineffective training will spoil company’s image.  If people do not benefit from such training they will not certainly work better.

Taking into account the above said, training sessions must be evaluated.  Evaluation process may take much time, the cause the training session is a complex structure with many elements.  But using balanced scorecard system you will be able to measure all those elements, commonly known as key performance indicators or KPIs.

Balanced scorecard system helps in measurement of KPIs so that you are able to measure overall performance of your human resource department that is in charge of organizing and conducting training sessions for the personnel.

Balanced scorecard system is a great business tool to evaluate everything that can be measured in figures and percents.  If you regularly perform training evaluation, you will be able to track changes (positive or negative).

Results obtained by balanced scorecard system can be used in strategic planning.  It is very unwise to invest money in business expansion if your employees are not ready to operate on a higher level.  Thus, with the help of balanced scorecard system you will measure training efficiency and introduce changes into it to solve current problems.

Use Balanced Scorecard system to measure training kpi

National and world economies are just a recovering from the most severe economic crisis since the great depression.  Tough competition and read used buying power of customers resulted in failure of many businesses all over the world.  Competition is something that keeps businesses alert.  At the same time the aim of every competitor is to wipe out your business& attract your customers.  Thus, it is very important for in a business to do everything possible to stay competitive.  It is impossible to be competitive with incompetent personnel.  This is a very serious problem for most businesses, as companies have money and resources to succeed in business but the people who work for the company are not ready to work professionally.

For this reason company management all from all denies is special trainings for their personnel.  If you warned to improve something about your company you should definitely start with the people who work there.  At the same time training should be effective, and drain definite results.  The ultimate goal of any business is making profits, and effective training is a compulsory element in earning more money.

Use the best training measure system

Training evaluation must be performed from time to time to measure efficiency of seminars, training sessions and training masses.  Training is a complex process with many stages and if you make mistake on the initial stage you won’t get expected results.  That is why you need to evaluate training and use obtained results in your father work and strategic planning.  It is not easy to properly measure training performance.  However, if you choose to use balanced scorecard system this process will become much easier for you and the people who work for the company.

Balanced scorecard system measures individual indicators which are known as key performance indicators.  KPIs are values expressed in figures and per cents that show how well your business or its aspect is doing.

Cost per employee is one of the most important indicators in training metrics.  This figure shows how much you spend two train one employee.  At the same time you need to compare this figure2 revenue per employee which is the second most important indicator.

You also need to pay attention2 cost savings which is the amount of money you manage to save as a result of a well organized training session.  For example you may save on electricity bills, time required for the project etc.

Training measure system will help in performance evaluation

There is a universal rule in the world of business. You need to the constantly developing your company, of course if you want to succeed.  Of what do we mean by development?  Of course, this is investment in different business spheres.  If you want to earn more you need to invest.  As a rule, businessmen invest in production facilities, new offices etc.  However, many people forget about investment in human resources, or in other words investment in personnel.  What kind of investment is that?

You have probably noticed that different training and seminars for employees have become extremely popular in all businesses fields.  Indeed, you should invest money in people who will then use update knowledge to make more profits for your company.  Even if you possess huge Financial Resources you still need people who will make an effective use of them.

Measure training ratios with BSC system

A regular training of personnel is very important for companies and businesses, irrespectively of their size.  A well organized the training session will raise competence of your employees. There they will learn new things, techniques and methods and put this in practice.

At the same time one needs to make sure that such training sessions have a positive impact on employees’ efficiency.  In other words, efficiency of training sessions needs to be measured.  Balanced scorecard system is one of the best tools for performance measurements.  This software will test key performance indicator (KPIs) which represents different aspects of the company performance.

In human resource management and training there is the special set of KPIs.  It is very important to choose major KPIs and focus on key issues.  Balanced scorecard system will give you a unique opportunity to measure effectiveness of training.  If you locate problems early you will not suffer big losses as ineffective training is just a waste of time and what is more important waste of money.

Use Balanced Scorecard system to measure training ratios

Balanced scorecard system will make it possible to organize effective training seminars and sessions.  By tracking the ratio of cost per employee and revenue per employee you will be able to see what was wrong in training receive.  As known, goal of any training session is to increase professional level of the employees so that they can bring ma profits for the company.

Balanced scorecard system is very easy to use.  If you want to evaluate training ratio of this is the best tool to be used in human resource management.

Running business is not an easy thing.  You need to take into account so many factors, and at the same time fide the games competitors which have only one goal – wiping you out.  Customers are of very picky these days, so you need to do much work to attract them.  You need to be always alert as markets changes very quickly.  Thus, you need to be ready for such changes.  You means business owner of the company management, as well as ordinary employees.  You need to know that you have the most competent professional personnel as compared to competitors.

Investing in personnel is a very smart decision.  By all denies in an effective special training session for your employees you lay down the foundation of your company success in future the cause of it is that people who work in your company of making profits for you.  Even if you buy the most expensive equipment, computers, office buildings and production facilities has all but make no sense if your employees are not competent enough to use such resources.

Training ROI as important element in training evaluation

That is why it is imperative to train personnel.  As a rule that, human resource department is responsible for such tasks.  Personnel needs to be regularly trained.  The more your employees know the more they can use in real business.  At the same time, a training seminar may be a waste of time and money if eventually you fail to reach financial goals.  It is not a secret that training sessions are conducted with one goal – to earn more money in future.  If you failed to reach this goal your training was ineffective.

However, using balanced scorecard system you will be able to measure efficiency of training sessions, and different elements of training process.  Balanced scorecard system helps in locating problems at their early stages.  This tool also helps in finding solutions.  For example, regular use of balanced scorecard system makes it possible to track changes in training efficiency.  Return on investment (which is a goal of any training) is a key issue here. Training ROI means that a trained employee uses his/her knowledge to make more profits for the company.

The use of balanced scorecard system is highly recommended for human resource managers and top managers who are responsible for training and coaching of personnel.  At the same time balanced scorecard system contributes to employees’ self confidence, motivation and loyalty.

Balanced Scorecard system helps in evaluation of training roi