Measuring The Impact Of Corporate Employee Training Programs: The Role Of KPIs

Measuring The Impact Of Corporate Employee Training Programs - The Role Of KPIs
Summary: For long, the training industry has struggled to demonstrate the organizational impact of training. An effective training program is a product. How do we know when the training product has succeeded? In this article we discover the role of job metrics in measuring the impact of a training program.

Minting The Gold In KPIs Or KPMs

As training and development professionals, we focus on filling training gaps through employee training programs. Whether delivered in a classroom or self-paced online formats, training programs need to maximize learning transfer from the job role to impacting the organizational goals. The key objective is to prove the impact of your training programs on your organization.

But how do we measure the success of a training program? Business leaders now insist on seeing hard data, a tangible value out of a training program. As strategic training partners, the need for viable measurement is growing to be more important than ever. Corporate training companies should be able to measure the value of the training program and tie it to hard data that adds to the bottom line.

The History Of Measuring Training Programs

In 1959, Donald Kirkpatrick introduced 4 levels of measurement. This was the first of its kind of focus in training measurement.

  1. Reaction
    What the learner's thoughts, feelings, and opinions are regarding the training.
  2. Learning
    The increase in knowledge and skill of the learner.
  3. Behavioral change
    The level of change in the learner’s behavior in the workplace.
  4. Results
    The overall change in the organization due to the training.

Later Jack Phillips extended Kirkpatrick’s model by adding a fifth level of measurement. The measurement model that evolved out of Dr. Donald Kirkpatrick and Dr. Jack Phillips has become the most credible evaluation model today. The Phillips ROI MethodologyTM ties the potential payoff (i.e. the Return On Investment (ROI) to the outcomes of a corporate employee training program). This is where linking the business goals to the training outcomes has seen much discussion.

While we discuss, debate, and recommend multiple cornerstones of measuring the deep impact of employee training programs, let us identify key measurement milestones along with the training development and delivery lifecycle.

Key Performance Indicators (Metrics) Aligned With Training Goals

Typically, business unit managers request a training program when they identify the need to address a problem and training is required to improve a metric. For example, if the packaging unit of a pharmaceutical company observes 2-3 non-compliance issues per 100 packaged orders, but suddenly notices 6-7 issues per 100 packaged orders, the managers start analyzing the reasons for the non-compliance. They may request compliance training on GMP to improve the metrics.

A change in metrics or Key Performance Indicators can drive the need for training. So, determining the Key Performance Indicator that can be influenced by a change in knowledge, skill, or attitude can be the first milestone of measuring training impact. The training goals should mention how they intend to impact the Key Performance Indicators. So, the Key Performance Indicators measure the results of knowledge, skills, and behavior change.

Measurable Objectives, Measurable Training

This helps the Instructional Designer and the business manager to identify the metrics that need to be impacted by the training and align along with the training objectives. The impact of training on knowledge and skills can be measured through pre-assessment and post-assessment results of the training. Reports from Learning Management Systems are helpful in the case of online formats of training.

Corporate training companies can promisingly measure training results working along with the following steps:

  • Creating measurable training objectives
  • Creating instructional strategies that achieve such measurable objectives
  • Creating mastery levels of knowledge or skills linked to measurable objectives (5 levels of evaluation)

Collecting and analyzing data that help evaluate the deep impact of corporate employee training programs involves multiple techniques and steps. Depending on the nature of the training program, hard data representing quality, cost, time, and output may be collected. Similarly, soft data, including job satisfaction, training satisfaction, etc., may be collected. Using Kirkpatrick and Phillip's evaluation methods, some of the data collection methods adopted are:

  • Tests and assessments (pre and post-training) to assess knowledge, skills
  • Interviews to assess learner reaction and program satisfaction
  • Business performance monitoring to assess operational and performance records to identify improvement rates
  • Follow-up surveys and questionnaires to collect stakeholder feedback

Analyzing Data Collected From Training Programs

Apart from training, there are some other factors that can influence the performance of an employee. For example, employee bonus programs can have a direct impact on employee performance. Hence it is important to isolate training evaluation and its impact on employee performance. To distinguish the business impact of a training program from other factors, one or more isolation techniques may be used. These isolation programs include:

  • Control groups
    Control groups are ones that are not participating in the programs. Comparing the outcomes of pilot groups with control groups is the most effective way of evaluating the training outcome.
  • Stakeholder and participant forecasts
    Estimates of improvement from stakeholders and participants are collected and compared to actual outcomes.
  • Trend lines
    Trend lines are used to establish futuristic business impact data of the training program. These data projections are compared to actual data to calculate the business impact of the training program.

Finally, the training ROI is calculated using the program benefits and costs. The key metrics are Benefit-Cost Ratio (BCR) and ROI. The widely accepted formulae used are:

  • BCR = Total Program Benefits / Total Program Costs
  • ROI = {(Total Program Benefits – Total Program Costs)/ Total Program Costs} x 100%

Corporate training companies need to shift thinking toward measuring the deep impact of training programs with the ability to present statistical data on how training programs impact business goals. Using Key Performance Indicators and metrics to align with analytics derived from Learning Management Systems (LMS) can help derive tangible results. It is also recommended to understand and leverage the data analytic capabilities of the HR and training systems (LMS or CMS) used in an organization.

Measuring the deep impact of the training programs can be time-consuming and complicated. However, the very essence of deep impact is the fact that effective training programs can impact more touchpoints of an organization that we can figure. Hence the importance of adopting appropriate measurement methods that offer training leaders data on how training programs can help achieve business goals.