It’s no secret that HR and L&D professionals find it challenging to measure the ROI of employee training to prove investments contribute towards improved individual and business performance. After all, since employee performance is linked to and measured in support of business objectives, so too must investments in learning and development opportunities.
As Heather Meeker Green recently pointed out, HR and L&D leaders are able to make the connection from the beginning between learning initiatives and business outcomes. Associating employee development with the competencies that will help employees in their current and future role positively impacts employee engagement and retention, as well as directly supports business priorities.
Meeker also notes that, unfortunately, the process of linking and quantifying learning outcomes often breaks down. Short term methods of measuring training effectiveness such as learner satisfaction surveys and skill assessments given before and after training yield some information, but fail to assess the longer range impact on employee performance.
To address this, consider strengthening the connection between learning initiatives and employee performance by leveraging managers as performance coaches and establishing multi-range strategies.
The link between performance and learning
The model developed by the Center for Creative Leadership claims that people learn 70 percent of their jobs through experience. It makes sense, then, to construct L&D strategies to maximize the ROI of employee training by utilizing goal setting, stretch assignments, project work and targeted development through ongoing performance management to drive skill application and retention.
The goal is for these two essential processes, ongoing performance management and learning and development, to be seen as integral parts of the equation to creating a high-performing workforce. Leaders must first identify the key competencies, behaviors and performance goals that are aligned with the organization’s strategic direction. Then, organizations can embed those learning objectives within the performance management process, equipping and enlisting managers as learning and performance coaches. This is a cost-effective way of circulating new knowledge, skills and abilities throughout an organization and also provides additional tools for measuring the ROI of L&D.
The power of coaching
There is a problem, however. The close association between performance management and L&D takes on a new dimension when you consider findings from recent research conducted by Brandon Hall. While 64 percent of organizations indicated that training managers to be effective coaches was their greatest performance management opportunity, only 11 percent or less of managers were competent in the critical leadership and coaching skills of clearly communicating performance expectations, giving timely, actionable feedback or defining actionable development. Without the advantage of effective performance coaches, employees will miss opportunities to acquire, practice and apply new skills in the most impactful setting – on the job.
Clearly, if performance management and L&D are to be impactful components within the rhythm of business, investing in developing managers’ coaching skills is a necessary element for success and should be an L&D priority.
Measuring long-term ROI
When L&D goals are closely aligned with business priorities, the opportunities for measuring ROI through establishing and monitoring key performance indicators (KPIs) should be closely aligned.
For example, if an organization wants to increase sales in a certain region, it should first identify the specific competencies needed by employees to support this goal. If skills gaps in certain areas are identified, such as customer service skills, L&D investments can be tailored to address this need. ROI can be measured in several places along the pipeline, yielding information useful for enhancing different elements in the program.
Pre-and post-training assessments provide short term indicators. Mid-term assessments can focus on measuring the development of customer service skills through direct observation as well as indirect measurements such as customer satisfaction surveys. Ultimately, success will show up in improved repeat sales figures.
In summary, to ensure L&D investments impact employee performance and business results, link training closely with ongoing performance management and tie them both as an integral part of the natural business rhythm by identifying the competencies needed for business success and establishing KPIs for short, mid and long-term results. Further enhance long-term success by investing in managers as coaches, providing on-the-job feedback and learning opportunities to meet current and future needs.
