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Measuring the impact of any training is not an easy task. You need to consider indicators such as targets, shareholders' expectations, employee retention, career development, performance improvement, customer satisfaction and productivity.
How do we measure training with tangible results versus training with intangible results? It is easy to measure the ROI of a technical skills training, but how do we measure the value of a leadership training?
Not all measures can or should be converted to monetary values. By design, some are captured and reported as intangible measures. Although these may not be perceived as being financially valuable, intangible measures are critical to the overall growth process. When combined with monetary benefits, they create a balanced assessment of results.
Robert S. Kaplan and David P. Norton created a scorecard method that balances business management by measuring performance across four perspectives: finance, customers, internal business processes, and learning and growth. The balanced scrorecard enables companies to track financial results while monitoring progress in building capabilities and acquiring intangible assets needed for growth.
Financial measures are based on productivity; however, these fail to provide adequate guidance for actions to be taken today and the day after to create future financial value.
Intangible assets and capabilities increasingly affect business success. Because measurement systems mainly consist of financial indicators, they let organizations focus on past performance and encourage a short-term view of strategy, failing to provide the long-term strategic management capabilities that today's organizations need.
The learning and growth perspective directs attention to the basis of future success – the organization's people and infrastructure. Adequate investment in these areas is critical to long-term success. Overall, any training should enhance a person's contribution to an organization.
• Intangible measures critical to firm's overall growth process
• The balanced scorecard measures performance in four areas
• Training should enhance a person's contribution to company
Source: Dr. Pon Mohaideen Pitchai, Special to Jobs & Careers
The writer is a Dubai-based HR and Management Consultant