How to evaluate the business impact of training programs

Training is aimed at improving individual and group performances and in turn influencing the overall performance of your business. Hence it is important to evaluate the impact of training programs and ensure that your employees can demonstrate a positive impact of the training through improved productivity.

Some of the ways of doing this evaluation are post-training quizzes, one-to-one discussions, employee surveys, participant case studies, and official certification exams. However, there is a proven methodology – The Kirkpatrick Evaluation Model.

Pioneered by Donald Kirkpatrick, it is referred to as the four levels of evaluation for training programs. This Kirkpatrick’s model was amended slightly over time to include a fifth level, ROI, by Jack Phillips, measuring Return on Investment of level four results.

The five levels are as depicted below.

Each of these levels will be considered one at a time. As we move up the levels, it becomes more difficult to measure the results. But at the same time it becomes more aligned with the business objectives. The five levels are as follows:

1. Reaction

This is the degree to which your staff react favourably to the training program. In other words, did they enjoy the training?

This level may not be an immediate or obvious link to Return on Investment. However, if they feel positive about the training program, this will have an impact on how they will perform, which could result in a future impact on your bottom line.

Use surveys, questionnaires or talk to learners before and after the course to collect their feedback on the learning experience.

2. Learning

This level checks the degree to which your staff acquired the intended knowledge, skills, and attitudes based on their participation in the training program. Put differently, did knowledge transfer occur?

In practical ways, this can be measured through tests or some form of demonstration of skills/knowledge.

Prior to your program, consider what skills you want your team to master? You can then use assessments or tests before and after the training to benchmark performance changes as a result of the training program.

Level two performance assessments are relatively easy to establish if the skills your staff are being trained on are readily quantifiable.

3. Behavior

This is the degree to which the training has impacted the participant’s performance and attitude at work. In other words, did your staff’s behavior change as a result of the training? Evaluate this using a combination of these methods:

  • Self-assessment questionnaires
  • Informal feedback from peers and managers
  • Focus groups
  • On-the-job observation
  • Actual job performance key performance indicators (KPIs)
  • Customer surveys, comments, or complaints

4. Results

This level is the most closely linked with ROI. It is the degree to which targeted outcomes occur as a result of the training and subsequent reinforcement of level three. Put simply, did the training lead to increased business results?

Measure the tangible results of the training such as reduced cost, improved quality, faster project completion, increased productivity, employee retention, better marketing leads, increased sales, and higher morale. Key metrics to measure are:

  • Improved business results
  • Increased productivity and quality of work
  • Employee retention
  • Higher morale
  • Customer satisfaction index

Please note that many outcomes of training are not measurable. Factors like job satisfaction, the enjoyment of learning, and helping employees understand that they are valued assets worthy of development may seem intangible but can be very powerful with a relatively direct effect on financial outcomes at some point in the future

5. Return on Investment (ROI)

This level is the measure of the return on investment (ROI) of level four results. Simply put, ROI here means a measure of the benefit of this training versus its cost.

Steps for measuring ROI:

  1. Convert the results of Level four to monetary benefits
  2. Get training program costs
  3. Compare the monetary benefits with the costs to get the Net Training Program Benefits (= Monetary Benefits – Training Program Costs).
  4. The non-monetary benefits (though intangible) can be presented as additional evidence of the training program’s success
  5. Expressed as a percentage, calculate ROI as (Net Training Program Benefits / Training Program Costs) x 100.

It is recommended that you decide over which period you wish to measure your ROI. This may be a time period that fits with your planning cycle e.g. one year. Or you may prefer the period to match the lifetime of the benefit i.e. the time the staff stays in the role where they apply the skills taught.

It will be nice to implement all the five levels of this model each time you’re evaluating the business impact of a training program, but you don’t have to as it can be expensive and time-consuming. Measure only what it takes to substantiate a confident decision about the value returned on the training.

Here is a practical guide. Add levels as follows, depending on the type of training and your goals:

  • Level 1 (Reaction) for all programs
  • Level 2 (Learning) for “hard-skills” programs
  • Level 3 (Behavior) for strategic programs
  • Levels 4 & 5 (Results & ROI) for programs costing over N4m

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