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Revenue, Cost and Performance Off-Sets
Increased Revenue, Cost Reductions and
Other Hard Financial Benefits: A critical part of every training
program should be the development of Action Plans that participants
are expected to apply on the job. These plans are designed to help
participants to apply the skills and techniques learned in the program
to actual business issues faced day-to-day at work. When properly
focused and followed-up on we can expect measurable performance
improvement. The key to achieving hard financial benefits is to ensure
that the Action Plans are tied to current business unit objectives.
Increased Productivity and Other Soft
or Estimated Financial Benefits: Action Plans developed during the
training programs and applied by participants when they return to work
can also indirectly contribute to the achievement of organizational
objectives. We might expect, for example, that training will reduce
turnover and thus save the company money. Clearly, training by itself
cannot claim to be the only variable in the equation, but it can
impact employee retention. Your company and its training partner can
collaborate to identify those benefits of training that impact the
company's financial performance indirectly and then assign some value
to achieving a measurable change on those metrics.
Increased Job Effectiveness and
Improvements in Other Behavioral Measures: In addition to financial
measures, training can and should have a significant and measurable
impact on participant behaviors on the job. The survey instruments
utilized in many training programs provide an invaluable tool to
document behavior change and increased personal effectiveness with
others as a result of training. For example, if we assert that
management is defined as the art and science of getting results
through others, then the most effective way to determine if training
improves management performance on the job is to ask the people who
report to these managers. It will be their "testimony" that
will prove most objective and most reliable measure of improvement.
Readministering survey instruments 12 months after training will yield
an important measure of whether training has a meaningful impact on
performance. Again, these measures can be assigned some financial
value for the organization and can then be used to help determine
training's ROI. If, for example, your employees report that work unit
goals are clearer, that they have a clearer understanding of what is
expected of them, that work is better planned, then it is fair to
conclude that their immediate supervisors are more effective and their
performance has been improved.
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Recommended
Scope of
Analysis
Direct
Project
Costs
Revenue,
Cost
and
Performance
Off-Sets
System
Components
That Will
Generate
A Positive ROI
Summary
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