Introduction

With todays challenging economy, L&D budgets are receiving more scrutiny
than ever. Participant feedback forms (i.e., smiley sheets) administered
immediately after a learning program are no longer enough, and HR and talent
management professionals are feeling the pressure to look for more solid
evidence to justify the investment in their programs. This is particularly the case
in leadership development programs, where the focus is often on the
development of intangible skills. Because L&D programs often provide more
long-term value rather than short-term effects, senior leaders may consider
eliminating them as an easy way to cut costs. Even if executive sponsors are
satisfied today, they may not be tomorrow. It makes sound fiscal sense to go
beyond smiley sheets and to establish robust measures that capture ROI so that
even the most critical of reviewers can see the value of L&D programs in an
organization.
A recent McKinsey Quarterly report found that only 8 percent of respondents said
they track the return on investment of training and development programs.
Learning and development professionals must be prepared to show at the
planning stage the top and bottom-line impact learning programs will have on
the organization.
Developing the right HR metrics for specific context which support long-term
performance is an area that many organisations struggle with. However, it is
found that it is considered a high priority to get right, as it is through effective
measurement, assessment and evaluation that its possible to provide insights
about past performance and also take the temperature of the organisation at
present.
HR Metrics are too often tactical and fraught with incompatibilities among far too
many measures. Instead, HR measures should be a clearly linked set of a critical
few measures that tie closely to the business strategy rather than scores of HR
benchmark measures that proliferate many best practice data bases
Following are Three levels of Metrics and the questions they help to answer.
1. Impact:- 1. What is the link between sustainable strategic success and
human resource management?
2. Which talent pools are most critical for competitive
advantage?
3. How could improving human capital increase value?
2. Effectiveness:- 1. What unique combination of policies and practices
would best build the necessary human capital?
2. What factors link policies and practices to human
capital enhancement?
3. What attributes distinguish effective from ineffective
policies and practices?
3. Effeciency:- 1. What range of resources (financial and non-financial)
should be considered?
2. What is the appropriate level of
investments?
3. How should investable resources be allocated to maximize
results?

A case study showing how Metrics are valuable in creating a case for
the Learning and Development Department.
According to a recent McKinsey Quarterly report (July 2010), officials with the
Boys and Girls Clubs of America (BGCA) analysed and created a set of metrics
when developing a leadership training program for more than 650 volunteers. In
2007, BGCA management realized that an anticipated wave of retirements
among local club leaders would leave them with a severe leadership shortage.
With the changing demographics, this leadership gap is a consistent theme seen
today in many for-profit and non-profit organizations. BGCA management also
found themselves in a situation not uncommon among non-profit organizations;
donors preferred that their money go directly to those in need and not to
overhead costs like training and development. BGCA quickly understood they
would have to make the business case for the leadership training at the outset
and ensure that they could demonstrate how the training would pay for itself.
First, BGCA officials narrowed the focus of its leadership training down from 50
to 4 key aspects. They accomplished this goal by analysing which leadership
traits contributed the most to job performance. By designing a program based on
leadership aspects tied directly to performance, BGCA officials found that
developing metrics and assessing the success of the program was
straightforward and tied directly to the associations strategic priorities. BGCA
compared the pre- and post-training results of leaders who completed the
training program. The BGCA officials also gathered benchmarking data from a
control set of member organizations that had similar characteristics, such as
budget size and operating revenue; however, the leaders in the control group did
not receive the training. The results for leaders who participated in the training
programs were markedly better than leaders in the control group on every
outcome measured.

Officials estimated that if all 1,100 member organizations matched the success
level of the groups whose leaders participated in the training programs, then the
BGCA would have added 350,000 new members and increased revenue across

all its organizations by $100 millionor approximately a 3 percent increase in

the average local organizations budget.

The BGCA officials also calculated that the training programs generated more
than four times the return on the programs costincluding the cost of time and
travel for all the participants.