Magazine article Training & Development Journal

Economic Accountability for Training: Demands and Responses

Magazine article Training & Development Journal

Economic Accountability for Training: Demands and Responses

Article excerpt

Economic Accountability for Training: Demands and Responses

Accounting for the positive economic influence of training and development is the most critical issue in the training profession today. Business leaders realize how large the investment in training and development has become. So inevitably, questions about economic value arise: which training and development activities work? And at what cost?

Pressed to address those questions, many training and development professionals find themselves struggling to meet the expectations of managers and employees who want more training--and proof that particular training programs are worthwhile.

Despite the growing demand for accountability, financial accounting for training shows only a slight increase. As a rule, although training and development are undergoing more financial analysis, they are accounted for less than any other major corporate investment. For instance, a 1988 ASTD poll of organizations that led in training evaluation found that only 20 percent evaluated in terms of training's economic effect on the organization. In other words, when it comes to investments in training and development, subjective decisions prevail.

Many training professionals contend that accounting for training (through measurement and evaluation) takes too much time or is too costly. But, ASTD research has revealed organizations that account for training in flexible, practical ways, using relatively simple and inexpensive means. The training professionals in those organizations understand that, in the current business climate, accounting for training is essential to success and, sometimes, to survival.

At times economic conditions demand measurement and evaluation of all business functions, or top management may require financial justification for a training department's budget. But more often, and most important, are the routine judgments that top managers make about training's worth, using whatever information is available. Whether they say so or not, top managers constantly evaluate training efforts and assign a value to them.

If realistic information isn't at hand, these decision makers may draw arbitrary, inaccurate conclusions. Their view of training's worth may be based on its word-of-mouth reputation for past efforts or on their perceptions about training personnel. In the past, many training departments thrived on the basis of excellent reputations. But during the economic downturns and downsizing of the 1980s, a reputation unsubstantiated by data often proved inadequate evidence of a department's contribution and worth.

Human resource development (HRD) professionals reluctant to account for training need to reorient their thinking to face the business realities of the nineties. Instead of deciding whether to measure and evaluate training's results, they must decide how to determine its costs and benefits.

Advances in accounting for training

Many HRD professionals have discovered that accounting for training doesn't have to be cumbersome and doesn't necessarily lead to criticism. Trainers and training participants are usually more accepting of evaluation when its purpose is clear: evaluation information signals whether a training program is improving participant or organizational performance to an extent that's worth the investment.

Analysis of performance data may indicate that, to help improve participants' on-the-job performance and promote achievement of business goals, training program components need to be changed. Other aspects of performance management--personnel selection and compensation, tools and job aids, and so on--may also require adjustment.

These days, HRD professionals have more performance measurement information available than ever before. Fortunately, computer software has made information collection, analysis, and retrieval easier and more accurate. …

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