Estimating the Worth of Training – Level 4 Evaluation

Determining the ROI of training is a hot topic in the training world these days. Ever since the publication of "The Human Resources Scorecard: Measuring the Return on Investment" (ed.), Butterworth-Heinemann 2001 by Dr. Jack Phillips, the focus has been—and is—on developing the ability to measure the ROI of training. While investment is difficult to quantify in public sector organizations, it is possible to determine the net worth of a training intervention by comparing the imputed or measurable dollar value of the impact of positive changes on the organization, with the cost of the training itself.

The PTG Level 4 evaluation capability utilizes a three-phased approach to measuring the worth of training:

• Phase 1 focuses on the development of an organizational capability in a given set of competencies. This method serves to answer the question, "How many individuals need these new competencies in order to improve measurably the organization's ability to perform?"
• Phase 2 focuses on identifying the impact on organizational performance indicators which serves to answer the question, "Given a critical mass of individuals acquiring and demonstrating new competencies, is there a demonstrable and favorable change in a key organizational performance indicator or indicators?"
• Phase 3 builds on the findings from Phases 1 and 2 to estimate the worth of training, based on the attainment of a critical mass of competent employees and the achievement of organizational performance indicator targets. Estimates are derived by quantifying the demonstrable and favorable changes in key organizational performance indicators, converting the quantified change into dollar values, viewing the changes in terms of high, medium and low impact, then comparing the worth of the changes with the dollar cost of the training to determine the net worth of the training.