Jul 22, 2010

Tracking the Outcome of Training

It's good to see that McKinsey Quarterly article that focuses on training outcomes rather than the "input metric" tracking that is usually the focus of L&D initiatives. And happy that I had articulated similar thoughts on impact of training in 2004 :-)

Some excerpt from the article titled Putting a value on training
Picking the right metrics is the key to creating real value from training. Most for-profit organizations have a longer list of quantitative business-performance metrics than BGCA does. A retailer pursuing better customer service and sales growth, for example, could train employees by getting its managers to provide real-time coaching and to role-model best-practice customer-engagement techniques. Rather than just measuring the managers’ time allocation or employee-engagement data—as most would do now—the retailer should measure the impact of its programs through hard business metrics, such as sales, basket sizes, and conversion rates in critical categories or departments. Similarly, a manufacturer might try to improve its operations by teaching plant supervisors lean-manufacturing and coaching skills, but rather than tracking only how many managers have been trained, it should track metrics such as downtime, the overall effectiveness of equipment, or fill rates.

In every case, companies must continually review and revise the links between skills, performance, and training programs. Typically, to determine which metrics should be improved, companies assess their current performance against industry benchmarks or their own goals. Like retailers and manufacturers, most other companies know what kinds of skills are tied to different areas of performance. So a good next step is to conduct an analysis of the relevant groups of employees to identify the most important specific skills for them (as BGCA did) and which performance-enhancing skills they currently lack. To get a clear read on the impact of a program, it’s crucial to control for the influence of external factors (for instance, the opening of new retail competitors in local markets) and of extraordinary internal factors (such as a scheduled plant shutdown for preventative maintenance). It’s also crucial to make appropriate comparisons within peer groups defined by preexisting performance bands or market types.