PERFORMANCE MANAGEMENT

ALIGNING
Training TO Strategy
Patrick PC Ow
Does your training programme facilitate the achievement of and alignment to your
organisation’s strategy, with the key objective of improving performance?

I
n both public and private sectors,
there are a growing number of re-
search findings of how a better-
trained workforce correlates with re-
duced costs, increased profitability, improved
services, and increased customer satisfaction.
According to the American Society for
Training and Development, one of the com-
ponents that give leading-edge companies
an edge is commitment to and investment
in learning and development, whereby
training is seen as a key element in their
strategic planning process.
There is therefore an increasing recog-
nition that training and developing the
workforce is a win-win business strategy
for achieving organisational goals,
whereby training and developing should be
an integral, planned part of doing business,
as opposed to an afterthought.
Performance goals must be included to
measure the effectiveness of training and
development activities, integrated as part
of the annual budget process and perfor-
mance plans, identifying and linking the re-
sources needed to achieve performance
goals and accomplishing organisational
objectives and strategies.
The steps in planning training strategi-
cally are shown below.

Steps Questions to Ask Process/ Activities

Analyse Established • To reach each strategic/corporate goal, what
Corporate Goals behavioural competencies must the current and/
or future workforce possess?
• Are there competency gaps that must be addressed/
managed to meet this strategic/corporate goal?
• Analyse the Company’s strategic and corporate performance goals.
• Identify the enterprise (organisation) wide competencies that
the workforce will need to accomplish these goals.
• Analyse competency gaps in the current or projected workforce.
• Required proficiencies and/or deficiencies.
• Causes/ reasons of deficiencies, if any.
• Identify barriers for closing the gap.

Develop Measurable • Could training alone address the competency gaps?
and Effective Training • Are there non-training strategies/approaches that
Strategies are needed to support the training intervention?
• What types of training should be provided (e.g.,
classroom, on-the-job training, etc.)?
• Do the anticipated benefits from training outweigh
the projected (total) costs?
Integrate and Align • What is the goal/objective of the proposed training?
Training into • Can you relate this proposed training goal to an ex-
Strategic Plans isting goal in the Company’s strategic plan?
• How will you objectively measure training goal accom-
plishments? Remember, what gets measured, gets done.
• What tasks and resources are required to imple-
ment the training?
Measure and Evaluate • Did you achieve the training goal?
Training Goal and
• How much did it cost to achieve this goal?
Outcomes
• Did accomplishing this training goal help support the
Company’s achievement of the related strategic goal?
• Did the benefits (outcomes) outweigh the total costs?
• What modifications should be made to the strate-
gic plan and/or training approaches, based on the
evaluation and performance findings?
• Generate alternative training strategies/approaches for ad-
dressing enterprise-wide competency gaps.
• Assess the total training costs and benefits (qualitative and
quantitative).
• Build the business case for the selected training approach for
management approval.
• Develop non-training strategies using other human resource
techniques/tools, for long-term ef fectiveness and
institutionalisation of practices within the workforce.
• Write training goals.
• Identify performance measures (indicators)/Key Performance
Indicators (KPIs) to measure outcomes, not effort or output.
• Develop an action plan, complete with measurable outcomes
to track training performance and effectiveness.
• Assess training goal achievement ruthlessly.
• Determine the full cost of training.
• Establish the worth/value of training to the business.
• Compare the benefits to the total costs.
• Assess results and outcomes (goal attainment and performance
improvement).
• Feedback to future training programmes and approaches, to
enhance training effectiveness.

26 ACCOUNTANTS TODAY • March 2007


“According to the American
Society for Training and
Development, one of the
components that give leading-
edge companies an edge is
commitment to and investment
in learning and development,
whereby training is seen as a
key element in their strategic
planning process.”
March 2007 • ACCOUNTANTS TODAY
Aligning Training to Strategy
After targeting the performance goals that could be enhanced, identify the enterprise
(organisation)-wide competencies required to support corporate goal achievement. A com-
petency is defined as a behaviour or set of behaviours that describes required performance
in a particular work context (e.g. job, role or group of jobs, function, or whole organisation).
Competencies help ensure that individual and team performance are aligned to the organisation’s
mission and strategic directions. General competency areas for consideration are shown below:
Competency Areas Questions To Consider
Leadership • What new skills will employees need in the near term and longer term?
Communication • To achieve the corporate goals, what types of communication competencies
(interpersonal, written, and oral) are required for working effectively within
the organisation and for meeting external stakeholder needs?
Administrative & • Will new work/core processes be required to meet the goals?
Work Processes • If so, what competencies are required to support these processes?
Professional • What specialised knowledge or skills (e.g., scientific, engineering, legal,
medical, etc.) should performers possess?
Analytic Problem • What new problem-solving/analytical challenges are associated with the
Solving achievement of the goals?
• What competencies will be needed to address these challenges?
Decision Making • Will regulatory and operational changes require new approaches to
decision making?
Technology • What types of technological competencies are required to reach these
corporate goals?
After identifying the required enterprise-wide competencies for corporate goal achieve-
ment, assess to what degree the current and/or projected workforce possesses these
competencies. Determine reasons for workforce competency gaps, as shown below:
Types of Causes Questions To Consider
Environmental
If you answer “NO” . . . • Environmental factors impacting performance must be addressed.
• Training alone is unlikely to address the performance gap.
• Will employees have adequate tools/technology, resources, or
information to achieve the corporate goals?
• Are job standards and expectations communicated in a timely and
explicit fashion?
• Are job standards and expectations consistent with strategic and
performance plans?
• Are employees satisfied with the general working conditions?
• Do work processes and rules (regulations) facilitate (rather than
impede) corporate and training goal attainment?
• Do standard operating procedures/work processes support the goals?
Motivational
If you answer “NO”. . . • Address motivational factors by aligning incentives (financial/non-
financial) with strategic plan and removing disincentives for change.
• Training alone is unlikely to address the performance gap.
• Are there mechanisms in place to objectively measure performance
and provide positive and improvement feedback to performers?
• Will individual employees receive recognition for achieving the
organisation’s strategic and performance goals?
• Will there be consequences for poor performance that jeopardises
goal attainment?
• Can we terminate poor performers legally?
• Is it unlikely that informal leaders will reinforce others for resisting
change?
Knowledge/Skills
If you answer “NO”. . . • Lack of knowledge/ skills can be solved through training.
• Trainee attitudes towards training aligned.
• Have the employees successfully performed these competencies
previously?
• Have employees been trained in the work processes and tools/
technologies that will be used to reach goal attainment?
• Have managers and supervisors been trained to facilitate the change
of management processes required to reach these goals?
Figure 1 (next page) illustrates the overall process of identifying strategic training
requirements. After identifying strategic training requirements, the next step is to ex-
plore alternative training strategies and to build a business case for the training.
27
Aligning Training to Strategy

Competency gaps are addressed using both training and non-training solutions. If train- In building the business case for training,
ing solutions are to be pursued, then weigh the total costs and benefits of various train- consider the following:
ing strategies and build a business case to support the selected training approach. 䡲 Are the projected benefits consistent
Prior to making a commitment to provide training, fully understand the potential costs with the strategic and performance goals
and benefits (see table below). and measures?
Training Cost 䡲 What tangible value is created from clos-
• Development costs (e.g., salaries and benefits of personnel, equipment). ing the competency/ performance gap?
• Direct implementation costs (e.g., training materials, technology costs, facilities, travel, 䡲 What are the negative consequences if
equipment, trainer’s salary).
• Indirect implementation costs (e.g., overhead, general and administrative). training did not occur?
• Compensation for participants. 䡲 Do the potential benefits outweigh the
• Lost productivity or costs of “backfilling” positions during training.
costs?
Training Benefits Possible Indicators
Include the following information in the
Increased Outputs • Number of products produced or services provided.
• Number of work processes completed.
business case:
• Amount of backlogged work. 䡲 Strategic and performance goals that
Time/ Resource Savings • Ratio of productive/non-productive time. would be advanced by this training.
• Amount of overtime required. 䡲 Competency gaps to be addressed and how
• Amount of “break-in” time for new employees.
• Amount of equipment “down time”. effectiveness/outcomes are measured.
Improved Quality • Ratio of positive/negative customer feedback. 䡲 Potential benefits to be realised if the
• Ratio of positive/ negative findings from internal audits/studies. competency gap is closed (tangible and
• Amount of “rework” required.
intangible benefits).
• Percentage of products/services meeting standards.
• Number of innovative solutions/ products developed. 䡲 Training strategies considered.
• Changes in employee morale. 䡲 Training strategy selected and reasoning.
• Number of grievances and other personnel issues.
䡲 Total life cycle costs of developing and
Error Reduction • Number of errors.
• Number of safety-related complaints.
implementing the training.
• Number of accidents. 䡲 Comparison of costs and benefits.
• Number of rule/procedure violations. 䡲 Consequences to the strategic and perfor-
• Number of products/services rejected
mance goals if training is not conducted.

Figure 1
Strategic Goal: Reduce highway fatalities and injuries 20% by 2008.

Performance Goal: Increase national safety belt use for front-seat occupants to 75%

Major Outputs and Tasks: (1) Educate the public. (2) Improve occupant-protection-use laws. (3) Support states in enforcing the laws.

Enterprise-Wide Competency Requirements

• Ability to use the Internet and other electronic means as tools for public education and awareness.
• Ability to evaluate the effectiveness of outreach campaigns.
• Ability to build partnerships with States and other stakeholder groups.
• Knowledge of State occupant-protection-use laws.
• Ability to analyse data regarding enforcement best practices.

Description of Gaps
• Employees can manage the design and development of public information
campaigns using traditional media outlets but lack the skills associated
with using the Internet for public awareness campaigns
• Funding is needed for the development and use of Internet-based public
awareness tools.
Potential Strategic Training Needs
Description of Gaps
• Employees can manage the design and development of public
information campaigns using traditional media outlets but lack the skills
associated with using the Internet for public awareness campaigns
• Funding is needed for the development and use of Internet-based public
awareness tools.

Cost-Benefit Analysis

Training Plan/Business Care Key Performance Indicators/Measures

28 ACCOUNTANTS TODAY • March 2007

 Aligning Training to Strategy

When training is truly integrated into the
organisation’s strategic plan, it is more likely
to receive the required support and re-
sources. If the organisation’s mission in-
cludes a training and education fo-
cus, then training goals may be in-
cluded directly in the strategic plan.
Include target levels and perfor-
mance indicators/ measures to
measure training and strategic
goal attainment. The process of
linking strategic goals to training
indicators are shown in Figure 2.
After training goals and perfor-
mance measures are identified,
develop action plans for imple-
menting, evaluating and measur-
ing the selected training strategy.
An action plan is a detailed de-
scription of the steps used to
implement the selected training
strategy — it describes who per-
forms each step and when the
step is scheduled for completion.
The resources necessary to carry
out each task and the methods of
measuring achievements should
also be specified in the plan.
After the training action plan is
implemented, establish a tracking
system to monitor and measure its
execution, outcome and impact. For each
scheduled milestone, compare the actual
performance with the proposed perfor-
mance level, and report the training results.
For all variances in scheduled perfor-
mance, ask the following questions:
䡲 How does the reported performance
compare with previous per for-
mance?
䡲 Is the per formance/schedule
variance likely to prevent goal
achievement?
䡲 Are external factors affecting per-
formance? If so, what are these fac-
tors?
䡲 Is the per formance/schedule
variance due to unrealistic initial
projections/ planning? If so, what
adjustments should be made?
䡲 What modifications should be
made to the action plan?
䡲 When will performance informa-
tion be collected again?
When training is successfully in-
tegrated and aligned, it supports the
organisation’s attainment of its stra-
tegic goals. We can then establish
the worth of the training by convert-
ing the change in the performance
indicator into a Ringgit value rep-
resenting its worth. AT
You can contact the author at
patrickow@ gmail.com.

Figure 2

Strategic Goal: Maximise trade compliance through a balanced programme of informed

compliance, targeted enforcement actions, and the facilitation of complying cargo.

Performance Goal: Achieve a 95% compliance rate for all primary focus industries

Training Outcome Indicator/Measure Training Output Indicator/Measure

• 10% increase in collection of import fees. • All personnel will receive training by the end of the fiscal year.

An outcome goal is an assessment of the results of a
programme compared to its intended purpose.
Training Impact Indicator/ Measure
• Risk management training will increase compliance levels by 95%
(the comparable collection level without risk management is 85%).
The value of this increase is estimated at more than RM2.5 million.
An output goal sets a target level for the goods and services
produced by a programme or organisation and provided to the public
or to other programmes or organisations. Both outcome and output
measures are set out as performance goals or performance indicators.
Training Input Indicator/ Measure
• 20% decrease in compliance resources used.

Impact indicators measure the direct or indirect effects or
consequences resulting from achieving programme goals. An
example of an impact is the comparison of actual programme
outcomes with estimates of the outcomes that would have occurred
in the absence of the programme.
Input indicators are measures of what an agency or manager has
available to implement the programme or activity. Inputs can include:
employees (FTE), funding, equipment or facilities, supplies on hand,
goods or services received, work processes or rules. When calculating
efficiency, input is defined as the resources used.

March 2007 • ACCOUNTANTS TODAY 29