California Virtual Campus

We are all faced with a very difficult time in terms of
staff development. With the State of California eliminating community college
staff development dollars from the budget, the issue is timely. Following is
information gleaned from a presentation on Return on Investment (ROI) presented
by Dr. Jack Phillips, world-renowned evaluation expert and developer of the ROI
process.

There is a paradigm shift in training/performance
improvement. We have gone from ‘activity based’ measurement – good for
bench-marking to a ‘results based’ measurement. This is a better measurement
approach for performance learning and development. Performance issues are more
focused on activity, not on results.

Why ROI?

Return on Investment analysis has been around for about 200
years. It is the ultimate level of evaluation, is a concept familiar to most
managers, has a history of application, and many top executives are requiring
ROI information. The best time to perform an ROI is when you don’t have to do
it.

A ROI study generates six types of data:

• Reaction, satisfaction, and planned actions
• Learning
• Application and Implementation
• Business impact
• Return of Investment
• Intangible Measures

There is a definite payoff in calculating ROI

Such calculations align programs to organizational needs,
show contributions of selected programs, and earn respect of senior management
and administrators. They can build staff morale, justify or defend budgets,
improve support for learning development and enhance design and implementation
processes. They can also identify inefficient programs that need to be
redesigned or eliminated and identify successful programs that can be
implemented in other areas.

Since most readers to this site are educators, the question
might come to mind, is calculating an ROI make sense for an educational
institution? Yes and many institutions are calculating the ROI of staff
development programs or programs in general such as the calculation done by
Georgetown University for one of their Masters programs.

While the scope of this article can’t possibly give all the
necessary data needed to calculate a ROI, in general the following must be
considered:

To define the Return on Investment, the following formula
should be used:

Some additional issues to consider in determining if this
is for your organization:

• High ROI values can be achieved with programs on
  leadership, team building, management development and supervisor training
• ROI should be implemented as a process improvement tool,
  not as a performance evaluation tool
• ROI should be conducted very selectively; perhaps 5-10%
  of programs and implemented using no more than 3 – 5% of the
  learning/development budget.
• ROI should be used to strengthen/improve the
  learning/education process.

Perhaps if institutions can determine ROI on staff
development, the next budget cuts from the state will look more kindly on the
benefits of providing staff at community colleges with training and development
funds.

For more information about ROI, refer to Dr. Jack Phillips
site at

http://www.franklincovey.com/jackphillips/. Dr. Phillips
has a superior track record for measuring the impact
of performance solutions. Take his survey for Training and Development
Programs Assessment: A Survey for Managers at

http://www.franklincovey.com/jackphillips/satest.html and see how your
organization measures up.

A short slide show about ROI and
‘Who is Using ROI’

http://roi.astd.org/about_the_network/1.

Resources for more information:
(all available through Amazon)

• The Bottom Line on ROI: Basics, Benefits, & Barriers to
  Measuring Training & Performance Improvement by Patricia
  Pulliam Phillips
• Return on Investment in Training
  and Performance Improvement Programs by Jack J. Phillips
• In Action: Measuring ROI in the Public Sector by
  Patricia Pulliam Phillips, Jack J. Phillips; Paperback
• Info-line: Level 5 Evaluation: Mastering ROI by Jack
  Phillips, Patricia F. Pulliam; Paperback