Return on Investment:

Training and Development

Session 1
ROI and Evaluation

Objectives

At the completion of this unit, students will

be able to:
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Discuss the importance of determining ROI

in training environments.
Identify stakeholders and develop questions
to determine their views and needs.
Write training goals and observable
objectives based on stakeholders needs.

Objectives
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Describe the importance of the

assessment of learning for ROI.
Recognize the differences between
short-term and long-term assessment.
Identify items that belong on a training
budget sheet to determine ROI.
Calculate expenses and ROI.
Write a report on training that includes
all relevant data.

Return on Investment

Rooted in manufacturing.
Advanced to banking, health care, nonprofit, public and education sectors.
Part of quality and efficiency
methodologies.

ROI Is Used To:

> Quantify the effectiveness of training.
> Manage the training budget.
> Provide evidence to management and
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other stakeholders.
Build trust and respect for ourselves
and our unit.
Earn the ears of senior management.
Identify areas for improvement.
Provide data requested by senior
management.
Keep our jobs.

Models
Benefit/Cost Ratio

Program Benefits
BCR
Program Costs
ROI (%)

Benefit Cost
ROI (%)
x100
Cost

Why is ROI important to you?

Evaluation Levels
1. Reaction and Planned Action
2. Learning
3. Application and Implementation
4. Business Impact
5. Return on Investment

Stakeholders
Who are they?
> Anyone who pays for, participates in,
benefits from, or has decision-making
responsibility for HRD and training.
What should they know?
> The need for training.
> The results from training.
> The costs of training.

Needs Assessment and Task Analysis

Needs assessment: identifies gaps
between what is and what should be in the
organization.
Task analysis: investigates the specific
skill(s), knowledge or attitudes and at
which point there is a breakdown in use or
performance. If the analysis uncovers a
lack of knowledge, skills or attitude, then
training is required. If it reveals faulty
equipment, poor work conditions or lack of
incentive, then another solution is needed.

Return on Investment:
Training and Development
Session 2
Goals, Objectives, Assessment

Goals
Organizational Goals
These goals are typically targeted
toward the organizational level and
include such things as productivity, net
income, inventory and cash cycles, and
customer satisfaction.
Learning Goals
These goals typically focus on the
individuals in the organization and their
performance, knowledge and skills.

Writing Objectives
Easy as A, B, C, D
Audience: Who?
Behavior: What do they do?
Condition: What is the setting and
method of evaluation?
Degree: Measurement to be met.

Example Objective
At the completion of the course the learner
will be able to score 85% or better on a
written multiple choice 25 question test
Condition
Behavior
Degree

Audience

Example Verbs
Verbs to Use:

Verbs to Avoid

> Discuss

> Understand

> Explain

> Comprehend

> Demonstrate

> Know

> Identify

> Do

> List
> Perform
> Compare/Contrast
> Score (on an

assessment)

Objectives in ROI
Course objectives: What is it that the
learners will be able to do upon course
completion?
Application objectives: What goals do
the HRD/training practitioner have for the
application of the skills gained in training?
Impact objectives: What effect will
accomplishing the application objectives
have on the organization?

 Course objective: Learners will

be able to make 15 entries in a
customer database in 15 minutes
with no more than 1 error.
Application objective: Learners
will be able to reduce the data
entry error rate by 50 percent over
the next 6 months.
Impact objective: Employee time
spent correcting database errors is
reduced by 25 percent from last
years rate.

Increasing Scope

Example Objectives

Learning Assessment
Alignment between assessment and objective is
paramount.
> Easy to do with well-written objectives.
Cognitive, psychomotor and affective domains
are assessed in different ways.
> Cognitive: written and oral tests; discussion;
compare/contrast exercises.
> Psychomotor: demonstration; performance.
> Affective: longitudinal observation and/or
discussion.
Be sure to use the right type of assessment for
each objective of the learning event.