Use Balanced Scorecard System for training evaluation

No organization or company can stay at the same level for quite a long time. There is a tough competition in the market and if you stop developing and improving you will be quickly wiped out by your competitors. Markets are volatile these days and there are many external problems, in addition to problems within a company. Businesses are actively using computers and IT solutions in their work. But still, one should not forget that a company is the people who work there, but not offices, facilities, equipment etc. This stuff will be useless if there will be no people who would operate it.

So, improving business is about improving people. Progressive companies regularly provide their employees with training. In needs saying that training always has certain goals. In fact, there is one ultimate goal – make employees more professional, which in its turn means increased profits or higher quality of products/services.

One should spend a definite amount of money for training employees. And of course, one expects relevant results. If an employee received additional knowledge, he would use it in practice. A training session is a complex process with many stages. Each stage corresponds to certain skill and area of knowledge. So, if you make any mistakes at any of these stages you are risking to waste your money since training will have no visible effects.

Of course, financial issue is among the most important in training. Coaching and training are investment in your personnel. By the ways, this is the most effective investment you can make. Even the best equipment requires trained operators. You need smart sales managers and layers who would make sure that your products/services are being actively sold.

Ineffective training is just a waste of time and, what is more important, money. Besides, your employees would not understand why they have to waste their time to undergo training that will prove useless for them. So, before starting any training programs you need to make sure that you have chosen the right direction. Talk to your employees, look at the performance evaluation figures. In this sense, Balanced Scorecard System is an extremely effective tool. Business performance metrics will evaluate KPIs (key performance indicators) so that you can see which areas of your business are among the weakest. These are the areas which require a special attention. And sure, you need to train personnel, since people may be not aware of mistakes they can make in their work.

As said above, when planning training sessions for your employees you plan to increase profits in future. If you fail, it will be a double loss of money, since you will waste part of money for training and get decreased profits.

Use of Balanced Scorecard system will make it possible for a manager to evaluate effectiveness of training sessions and introduce necessary corrections if necessary. Training metrics represents major KPIs in coaching and acquiring new knowledge. If you know weaknesses in training you will be able to take counter actions and stop wasting money.

Balanced Scorecard system analyses only major indicators that really represent state of things in training campaign. It is very important to focus of key factors and disregard things that only seem important. For example, certain training sessions can last 30 minutes instead of 50, and the results will be the same.

Training evaluation cycle

Training evaluation cycle

Use Balanced Scorecard system to evaluate training effectiveness

Use Balanced Scorecard system to evaluate training effectiveness

Now, let’s review major KPIs that influence effectiveness of training sessions organized for employees.

  1. Increase in training budget. This indicator is a tricky one. On the one hand, if training budgets are increased, it means that you take care of improving your employees and you invest money in your personnel. But on the other hand, huge training budgets do not necessarily mean that in the end your investments in the personnel will come back with profits. So, you need to make sure that your investments actually come back. But this is another indicator we will talk about later.
  2. Cost savings. Is its names suggests, this figure represents costs saved due to organized training. For instance, your employees learned to save working time when processing orders, or they learned to save costs or energy used in their work. The more you save, the more efficient your business is. Besides, you can introduce special bonuses for employees who come up with new saving methods.
  3. Cost per employee. This indicator is different from overall training budget. If cost per employee increases while expected profits do not, then something is wrong about organized training sessions. Cost per employee is the average of all money spend on training a coaching divided by the total number of employees. Thus, you can spend $1000 a year to train a typical manager, while training of top managers requires more money.
  4. Expected revenue increase. As repeatedly said in this article, organization of trainings is investment into personnel. Of course, a business owner naturally expects trained employees to earn more money. If training yields no results, then who needs it? This is waste of money. If you want to make your business efficient, you cannot afford losing money for training.

Of course, there are many more of KPIs relevant to the training activities. But the above 4 are among the major ones, to which you need to pay a special attention. Balanced Scorecard system will provide you with evaluation results expressed in figures, and if necessary, in graphs. Thus, you can call a meeting of training instructors and familiarize them with the results. It is possible to observe performance dynamics, i.e. increase or decrease of indicator values.

With Balanced Scorecard system you will be able to properly motivate your employees who will understand why they undergo certain training sessions. If a person sees definite results and improvement of own performance, he would certainly learn more from the next trainings session, seminars etc.

Use of Balanced Scorecard system is recommended to managers, HR managers, specialist in personnel training and motivation, efficiency manager etc. This software will certainly help you make your business better and more effective.

Training evaluation and implementation cycle

Training evaluation and implementation cycle

Training KPIs (key performance indicators)

Training KPIs (key performance indicators)

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