Corporations spend huge sums on training but is the cost effective and justified?

1. Training Effectiveness:
Is the Cost Justified?
A Six Sigma Black Belt Project
Daniel Bloom SCRP
Managing Consultant
Daniel Bloom & Associates, Inc.
Human Capital Consultants
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2. Evolutionary Nature of
Workplace
Industrial Age Information Age
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CompetitivenessCompetitiveness
InnovationInnovation
Human CapitalHuman Capital
Expense
Non-Owned
Assets
From Presentation by Russ Moen of Express Personnel
HR Tampa Monthly Meeting
Collabo
ration
Collabo
ration
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3. Premise #1Premise #1
In fiscal year 2008, AmericanIn fiscal year 2008, American
corporations spent $56,200,000,000 oncorporations spent $56,200,000,000 on
providing training to their employeesproviding training to their employees
-- Workforce Management WebsiteWorkforce Management Website
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4. Premise #2Premise #2
In today’s competitive talent market, the
primary goal for many FTE’s is to enhance their
portfolio of career skills that they can bring to
their current or future employer. Especially true
with late Boomers, Gen X, Gen Y
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5. Premise #3Premise #3
Two types of “Training” being offered
Hard Skills or Training – Designed to increase an
Employee’s ability to complete a process
Soft Skills Training or Education – Designed to increase
an Employee’s Career Portfolio and enable them to
become more engaged employees.
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6. Management PerspectiveManagement Perspective
Equally Critical Issue is whether:
“We are conducting this training for “X” amount
of hours per year.
Are we getting our monies worth for the time and
funds invested to produce the training?”
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7. Premise #4Premise #4
Equally Critical Issue is in which scenario training is
being requested:
“Mr. Manager are you asking for this training
due to a skill problem or a will problem?”
Will problem is a management issue and
carries no ROI
Will problem is NOT a training issue
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8. Traditional Assessments
Evaluation MethodsEvaluation Methods
Kirkpatrick ModelKirkpatrick Model
Phillips ROI ModelPhillips ROI Model
Total Cost of OwnershipTotal Cost of Ownership
Simple Return on InvestmentSimple Return on Investment
DuPont Equation Attribute ModelDuPont Equation Attribute Model
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9. Traditional Assessments
Evaluation MethodsEvaluation Methods
Success Case ModelSuccess Case Model
Kolb’s Learning StylesKolb’s Learning Styles
People Performance Model (Performance vs. Potential)People Performance Model (Performance vs. Potential)
Joahri Window (Known vs. Unknown)Joahri Window (Known vs. Unknown)
Participatory Training Evaluation ModelParticipatory Training Evaluation Model
Solomon Four ModelSolomon Four Model
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10. Training Root Causes
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11. Proposed Question
Using the power of the World Wide Web
via LinkedIn and Yahoo we posed the
following question to approximately
100,000 individuals worldwide
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12. Proposed Question
 “I am currently working on completing my training for a
six-sigma black belt. Part of that process is to complete a
major project. The project that has been agreed on with
the instructor is one devoted to Training Effectiveness
and how to evaluate it. The end result will be a report and
a dashboard that will graphically portray the various ROI
methods and provide the user with the capability to see
how they are doing across several methods. We intend
to talk to some companies to gather their training data to
be entered into the matrices. We are also considering
including a Training Balanced Scorecard. We are open to
input or for companies that might like to participate.”
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13. Data Points
Critical Data Points
 Each participating organizations was asked to provide
data points which were central to the ability of the project
to draw its conclusions about the effectiveness of the
offered training:
 Sales Revenue
 Total Number of Training Hours
 Total Number of FTE and PTE’s Trained
 Type of Training
 Results from Training Evaluations
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14. Measure
Critical Data Points
 Three Segments of the Ishikawa Cause and Effect
Diagram are of Concern
 Process /Methods
 Type of Training
 Feedback
 Materials (Feedback Format)
 People
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15. Analyze
Data EvaluationData Evaluation
Internet Project Description PostingInternet Project Description Posting
 100,000 individuals received the postings100,000 individuals received the postings
 25 respondents (.03 percent response)25 respondents (.03 percent response)
 General consensus isGeneral consensus is
 ““We just give the training, we never evaluate it”We just give the training, we never evaluate it”
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16. Analyze
ASTD BENCHMARK FORUM 2005 REPORTASTD BENCHMARK FORUM 2005 REPORT
 Average Percentage of Training Program Evaluation LevelsAverage Percentage of Training Program Evaluation Levels
 91.3% Evaluated Reaction Responses (Happy Smile91.3% Evaluated Reaction Responses (Happy Smile
Sheets)Sheets)
 53.9% Evaluated Learning Responses (Did the FTE Learn53.9% Evaluated Learning Responses (Did the FTE Learn
from the training)from the training)
 22.9% Evaluated Learning Transfer Levels22.9% Evaluated Learning Transfer Levels
 7.6% Evaluated the Impact Levels7.6% Evaluated the Impact Levels
 3.2% Evaluated the projected Return on Investment3.2% Evaluated the projected Return on Investment
 2.1% Evaluated the actual Return on Investment2.1% Evaluated the actual Return on Investment
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17. Training Return on
Investment
Based on Tool implemented by DuPont
Corporation
Assessed on what you want out of the
training for the long run.
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18. Improve
Model asks corporations to assess training from a
different perspective
 Aligns training to the expected outcomes
 Outcomes based on alignment with the corporate
goals
 Outcomes based on the anticipated goals of the
training
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19. Improve
Model asks corporations to assess training from a
different perspective
 Outcomes ranked in the order of importance
 Based on a similar assessment used to introduce a
new employee benefit by the DuPont Corporation
 Form modified for use with a training program
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20. Improve
Outcomes were looked at from some Training Criteria
Areas
 Performance Levels
 Increased Peer Pressure
 Employee Motivation
 Performance Assessment
 Focused Process Improvement
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21. Improve
Outcomes also looked at some additional Training
Criteria Areas
 Bottom Line Impact
 Corporate Values
 Competitive Advantage
 Employee Loyalty
 Compensation Benefits
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22. Improve
Outcomes also looked at some additional Training
Criteria Areas
 Building Trust
 Relationship Building
 Networking Benefits
 Follow-up Coaching
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23. Improve
DuPont Attribute Training Evaluation Model
 Final Step is to evaluate your training from three views
 Each is done from a monetary perspective
 Views
 Corporate Goal for Training
 Actual Performance Results
 Training Impact ( Corporate Goal – Actual Performance)
 Return on Investment Calculation
 Training Impact – Training Cost = Return on Investment
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24. Improve
ROI of TrainingROI of Training
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25. Control
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Goal: To develop a Standard Training
Model which will achieve critical metrics
within the business organization
Purpose of the Training
FTE Involvement at the highest level possible
Management Buy-In to the Training Results

26. Control
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Goal: To develop a Standard Training
Model which will achieve critical metrics
within the business organization
Increased Client/FTE Engagement Levels
Direct increase in revenue stream attributed
to the training outcome
Can be shown in a Kaplan-Norton Balanced
Scorecard Model

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28. Training Effectiveness Model - Goals
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29. Training Effectiveness Model –
Effectiveness Rating
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30. Training Effectiveness Tool
Return on Investment
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31. Training Effectiveness Tool
Improvement Dashboard
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32. Training Effectiveness Tool
Course Record
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33. Conclusions
Majority of Corporations globally are not carrying
evaluations out to the point of being able to determine
the economic impact of their training on the bottom line
Majority of corporations globally confine their evaluations
to basically determining the FTE reaction to the
presented training
Corporations need to find a new method to accurately
evaluate the training impact that is faster, better and
cheaper
The DuPont Attribute Training Model can be the solution
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34. Questions ?Questions ?
Daniel Bloom and Associates, Inc.
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35. Have Further Questions :
Daniel Bloom SPHR,SSBB,SCRP
CEO, Managing Consultant
Daniel Bloom & Associates, Inc.
PO Box 1233
Largo, FL 33779
(727) 581-6216
dan@dbaiconsulting.com
http://www.dbaiconsulting.com
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