HCM is based on the conviction that people are assets and investing in them will create added value. The major vehicles for such invest- ments are learning and development programmes. To apply HCM techniques it is first necessary to appreciate the nature of learning and development and then to understand methods of evaluation as a means of developing data that can be used to justify and plan learning and development programmes.
The nature of learning and development
Learning is a continuous process that not only enhances existing capabilities but also leads to the development of the skills, knowledge and a�itudes that prepare people for enlarged or higher level resp- onsibilities in the future.
The encouragement of learning makes use of a process model concerned with facilitating the learning activities of individuals and providing learning resources for them to use. Conversely, the provision of training involves the use of a content model which means deciding in advance the knowledge and skills that need to be enhanced by training, planning the programme, deciding on training methods and presenting the content in a logical sequence through various forms of instruction. Today the approach is to focus on individual learning and ensure that it takes place when required – ‘ just-for-you’ and ‘just-in- time’ learning.
Watkins and Marsick (1993) defined a spectrum of learning from informal to formal experiences as:
❚ unanticipated experiences and encounters that result in learning as an incidental by-product, which may or may not be consciously recognized;
❚ new job assignments and participation in teams, or other job-related challenges that provide for learning and self-development;
❚ self-initiated and self-planned experiences, including the use of media and seeking out a coach or mentor;
❚ total quality or improvement groups/active learning designed to promote continuous learning for continuous improvement;
❚ providing a framework for learning associated with personal dev- elopment planning or career planning;
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❚ the combination of less-structured with structured opportunity to learn from these experiences;
❚ designed programmes of mentoring, coaching or workplace learning;
❚ formal training programmes or courses involving instruction.
Learning programmes are concerned with:
❚ defining the objectives of learning;
❚ creating an environment in which effective learning can take place (a learning culture);
❚ adopting a systematic, planned and balanced approach to the delivery of learning;
❚ identifying learning and development needs;
❚ satisfying these needs by making use of blended learning ap- proaches – eg self-managed learning, e-learning and training;
❚ evaluating the effectiveness of these processes.
Measures of the impact and effectiveness of training
The three methods of measuring training are training evaluation, return on investment (ROI) and quantitative data as described below.
Training evaluation
Four levels of training evaluation have been suggested by Kirkpatrick (1994):
Level 1. Reaction – at this level, evaluation measures how those who participated in the training have reacted to it. In a sense, it is a measure of immediate customer satisfaction.
Level 2. Evaluating learning – this level obtains information on the extent to which learning objectives have been a�ained. It will aim to find how much knowledge was acquired, what skills were developed or improved, and, as appropriate, the extent to which a�itudes have changed in the desired direction. So
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far as possible, the evaluation of learning should involve the use of tests before and a�er the programme – paper and pencil or performance tests.
Level 3. Evaluating behaviour – this level evaluates the extent to which behaviour has changed as required when people a�ending the programme have returned to their jobs. The question to be answered is the extent to which knowledge, skills and a�itudes have been transferred from the training to the workplace. Ideally, the evaluation should take place both before and a�er the training. Time should be allowed for the change in behaviour to take place. The evaluation needs to assess the extent to which specific learning objectives relating to changes in behaviour and the application of knowledge and skills have been achieved.
Level 4. Evaluating results – this is the ultimate level of evaluation and provides the basis for assessing the benefits of the training against its costs. The evaluation has to be based on before and a�er measures and has to determine the extent to which the fundamental objectives of the training have been achieved in areas such as increasing sales, raising productivity, reducing accidents or increasing customer satisfaction. Evaluating results is obviously easier when they can be quantified. However, it is not always easy to prove the contribution to improved results made by training as distinct from other factors and as Kirkpatrick says: ‘Be satisfied with evidence, because proof is usually impossible to get.’
ROI
Some commentators believe that the best means of assessing the over- all impact of training on organizational performance is the ROI it generates. ROI is calculated by the following formula:
Benefits from training (£) – costs of training (£) × 100 Costs of training (£)
Kearns and Miller (1997) contend that only this sort of measure is useful in evaluating the overall impact of training. They argue that particular hard measures should be used to evaluate specific training;
Applications of HCM ❚ 107 for example, if development aims to bring about greater awareness of customers then it should be measured by the eventual effect on customer spend, customer satisfaction and number of customers.
The pressure to produce financial justifications for any organizational activity, especially in areas such as learning and development, has increased the interest in ROI. The problem is that while it is easy to record the costs it is much harder to produce convincing financial assessments of the benefits. Kearns (2005b) provides a response to this concern:
All business is about the art of speculation and the risk of the unknown. The trick here is not to try and work to a higher standard of credibility than anyone else in the organization. If accountants are prepared to guess about amortisation costs or marketing directors to guess about market share why should a trainer not be prepared to have a guess at the potential benefits of training?
He recommends the use of ‘a rule of thumb’ when using ROI to the effect that any training should improve the performance of trainees by at least 1 per cent. Thus, if the return on sales training is being measured, the benefits could be calculated as 1 per cent of profit on sales.
Mayo (2004) suggests that there are two connected types of ‘return’
that can be used to judge whether an HR function is spending money and time to best advantage: the ‘future value added’ for stakeholders;
the ‘return on investment’ from specific projects and programmes.
These could apply to training or to any other activity.
Competency measurement
Another method of evaluation is to measure increases in levels of competency as established by performance management.
Quantitative data
Quantitative data that indicates activity levels includes:
❚ personal development plans completed as a percentage of employees;
❚ training hours per employee;
❚ percentage of managers taking part in formal development programmes.
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But these measures give no indication of quality in terms of impact on performance and results.