Lecture 2: ROI Institute

Question 1

Should learning and development be seen as a cost or an investment?

Answer 1

An investment, however T&D programs need to be converted into numbers in order to convince managers

Question 2

Which performance outputs is management interested in?

Answer 2

(1) Performance: whether people perform and behave differently than before
(2) Business impact: is employee satisfaction up, turnover down etc.
(3) ROI : return on investment

Question 3

What does the pyramid of the ROI institute entail?

Answer 3

(1) Payoff: is the problem worth solving / what is the impact?
(2) Business need: what is the main business problem that needs solving (e.g. are they allowed to show correct behaviour?)
(3) Performance need: what are the KSA’s of the staff and how do they influence business goals?
(4) Learning need: what change do they need to meet the business needs? (e.g. program to influence behaviour of leaders)
(5) Preference need: which intervention is necessary and how will employees react?

Question 4

Why data analytics now?

Answer 4

(1) 45% of learning is not effective
(2) sponsors and funders want to see the impact in monetary value
(3) opportunity as failure to attract / retain talent is in the top 2 challenges faced by CEO’s
(4) win a seat at the business table

Question 5

What is better, soft or hard data?

Answer 5

Hard data is the consequence of soft data, such as client / employee satisfaction, creativity & innovation and work habits (soft). These can lead to increased output, improved quality and cost / time savings (hard)

Question 6

What is the direct effect of a training?

Answer 6

To be more competent (knowing and doing)

or

To be more motivated (willing)

Question 7

What is the effect size (d)?

Answer 7

The difference in competence between someone who is trained and someone who is not trained

Question 8

What are the different kinds of effect sizes?

Answer 8

.20 = small effect
.50 = average effect
.80 = large effect

Question 9

How do you calculate the utility (u)?

Answer 9

If an above average employee is 40% better than an average employee they have become 40% more productive and work 140% instead of 100%

e.g. 5 trained above average people (T1) do the work of 7 untrained people (T0) because 5 * 140% = 7 * 100%