this juncture. If a sales training program results in an increase of $60,000 in realized monetary gains and the total cost of the program was $10,000, the ROI using the foregoing formula would be 500 percent. For every $1 invested in training, there would be a net benefit of $5 in increased revenue from additional sales (Kirkwood, 2002).
To get an accurate portrait of ROI in training, Beckett (2003) recommends that the basic ROI formula should be augmented by surveys of trainees which ask them to rate the business impact of the course in which they have participated. Survey data of this type goes beyond simple cost-benefit analysis and adds a new dimension to the entire experience. Surveying both trainees and their managers or supervisors provides ôsoftö or qualitative information that can explain or augment data generated by the standard, business model ROI calculation as depicted above.
Kirkwood (2002) described the Kirkpatrick ROI methodology or model which provides four levels of evaluation widely used in learning organizations. In this model, the levels addressed are: 1) the reactions of the training participants; 2) the evaluation via testing of what participants learned; 3) the application or transfer of the training to the participantsÆ jobs; and 4) the measurement and impact of the training on organizational performance. It is level 4 that is most specifically addressed in the standard or business model ROI calculations.
What Kirkwood (2002) emphasizes is that by adding the other elements of evaluation found in the Kirkpatrick model to a standard ROI evaluation, greater depth and variety of data on training efficacy can be achieved. This makes it possible for trainers and HRM professionals to more fully evaluate their efforts and refine activities to address strategic organizational plans and objectives.
Employee training represents a significant expenditure for many organizations, but often ...