An intriguing HR thought - Does every initiative need to have an ROI? How does one validate social learning in an enterprise platform?

Does every initiative need to have an ROI? Revenue spent on an initiative needs to be rationalized with benefits. In the light of this thought , how does one validate social learning in an enterprise platform?

Every initiative or every learning has direct or indirect ROI...
If I am introducing new techniques or maybe new policy in place, the organisation will benefit from it either in monetary terms (direct) or through employee satisfaction / motivation (indirect) which will lead to more productivity in terms of achieving organisation goals.
Even if i do PQ analysis for my employees, i would impart training and learning to those employees who would give me and my organisation high and good ROI rather than my average employees. In this way, i would reduce my attrition rate of the best talent in turn giving my organisation the ROI of the best employees as an asset..
The basic funda is, the ROI not only depends on the learning part but also on the implementation part. If i have knowledge on 1 field of HR but i do not implement it then the company nor i can have any returns on my knowledge.

ROI of HR initiative, A really nice response Mr. Ankit thanks for this.

Well Ms (Cite Contribution), thanks to you too for raising this really a good and important topic.

The question is why it is important and the benefits of ROI are well known and good questions. And as we all know that ROI is a method we used to measure the BENEFITS GAINED as a function of the cost of program and this numeric comparison of the total business result to the learning program (intervention) costs. It is actually a representation of the value added by a program and ties the program’s success to a financial result.

We all know and used to talk about the biggest challenge for us today, is to find new ways to both reward top performers and to motivate all employee /workers to improve performance and maintain or increase business value—and this needs to do both as Cost-Effectively as possible, where we found this method really effective.

Today every organization implementing ROI as part of their training and performance improvement evaluation process/program. And the most critical part of this exercise is probably management training. It can be divided into two parts - managing people and processes. Managing people needs talent and is more of an acquired skill. Done properly, employee training and development can provide a company with an unexpectedly huge ROI, or Return on Investment. After all, the biggest asset any business could have is its people. If the untapped potential locked inside employees is unleashed and channeled effectively, it will surely boost the company's performance a great deal.

If employee training and development can help improve the people management skills of a company's managers, it will be a huge accomplishment. Every manager's team will start providing better results and working smoothly as a team under their newly improved manager. The best part of this kind of exercise is that the ROI is noticeable and measurable. This means that the company will know exactly how much they have gained from an HR exercise like this, and it can be broken up right down to the ROI obtained from each department or team.

When measuring learning we generally determine the business result through discussions with the stakeholders about the project objectives and likely outcomes, or based on noticeable changes in behavior which impact the business e.g. longer hours worked, better teamwork etc etc.

The more effectively our HR initiatives support and propel the strategic objectives of the entire organization forward, the more valued the HR function will be--as long as we can prove our successes with ROI measurement.

I found it really effective and important method today for organizations in many ways...

ROI = [(Earnings/Savings)/ Cost of initiative ]*100
Simple.
If HR and L&D people need to be taken seriously by CEOs and CFOs then this equation needs to be explained. Not by theoretical terms but by specific examples compared to what was earlier being done or not done.

Greetings,

Thank you for the responses. I agree that every effort contributes to learning, hence bring in benefits, depending on its implementations.

Each area of an initiative can be calculated and measured on standard parameters.

Social learning by its definition gets fueled by modeling of a desired behavior. In an organization, even a large-scale training which contributes to collective learning, such as 5S, can be easily be tracked on dashboards, thereby reflecting the ROI.

On-The-Job training, with definite parameters to measure, may signify social learning on a smaller scale. Here, the assessment gets supported by the fact that the trainees deliver on the exact set of tasks on which they have been trained upon.

In the light of this thought, how does one measure ROI on 'Shadowing' in leadership development? Man hours and traveling expenses if any, can be calculated. However, there may not be a direct interning on the skills learnt, hence offering, almost no assessment. The contributing factors to the performance of the trainee may bear no resemblance to the guidance received from the mentor. In such a situation, how can ROI be calculated?

I share an incident where a group of business managers was groomed to work in a new business center at a different geographic location. They shadowed best of the leaders in the organization. The ramp-up in the new center failed due to several reasons beyond the control of these leaders or managers. So, how does one calculate the ROI on social learning, indepedent of this situation?

Greetings,

I started this thread to understand the social learning in an enterprise platform. Earlier, I met a gentleman who had worked for decades in SBI L&D and training department and then retired to run his own consultancy for training. He asked me how are we tracking the social learning in our community.



Its impossible to track learning on the scale we have, I am not sure whether Wikipedia or Khan Academy would have any such system or not. So I started the discussion in terms of social learning within an organization , to keep it limited and measurable.

Here's a report, that I came across , hope you would like it too Social learning Survey



My discussion with Gautam Ghosh, on this, brought in the following points:

• Every learner will have a different ROI, as the point of reference is entirely different
  
• ROI can be calculated only when we know what the learner couldnt have gained had they not been in our community in other words, their opportunity costs
  
• 
  
• The time spent in our community needs to be tracked over a period, with a view of the changing profile of the member, if applicable tangible areas, including time, infrastructure ie computer and internet are measurable
  
• The delta difference in the learning of the member, realized over a period of time, with any gain, if recognized
  

The question which the gentle man raised with me, seemed quite valid to me. His point was, analytic will drive learning with data specific results.



Whereas, learning metrics would help to moderate the growth of the knowledgbase since we are a social learning community, so social learning metrics



I havent found it all, but I am sure it must be there in some organization. Please share if you have heard or known about any such practices.

Here's a beautiful description of CoP and Social learning. I believe, we are an intersection of both Social Learning vs Community of Practice

Hi (Cite Contribution),

This is a great discussion.

When it comes to social learning, there are two important parameters:

1. Defining the degree of learning: It is very important to understand how you define learning. Typically, there is a critical 'amount' of knowledge and a critical 'mass' of employees that are required to drive the desired behaviour. Both these, from a learning perspective, are difficult to determine.

2. Ability to measure the required to determine the ROI: Again, it is difficult to have all the required values to determine the degree of change and the benefits of change. Most organizations do not have these systems in place.

Of course, the second parameter is situation dependent and handles most of the 'situational specifics' for you.

In your posts, you haven't actually spoken about how to do it. At an abstract level, it only seems like a cost centre, that doesn't actually drive business results. The trick is to make it SMART!

And yes, to be unequivocal, every initiative must have a ROI.

Reg,

Nikhil

As far as a community like CiteHR is concerned, I would say it is nearly impossible to determine the 'learning' component. To be honest, it is more of a repository of knowledge rather than a learning platform.
Reg,

Hi Ngurjar,
You are right, CiteHR and many other such communities, are more about the people and their problems - a repository of discussions - although at most times it's in a very raw and spoken language format.
It's like speaking to a group of mentors. Would be quite difficult to measure an ROI on your mentor's value, and possibly wrong. :)
Regards,
Sid

Greetings,
I look forward to understand the community based learning. This is purely experiential learning, which is live and evolving. On that note, CiteHR provides a similar learning. The measures for each problem is unique so are their solution. No two appraisal solutions can be similar, neither would be their implementation.
An FAQ or an article repository remains point of reference. Where as a live discussion brings out a solution which custom fit to the need of the one who is raising the question.
Every troubleshooting brings in a learning. I am sure, these are measured in the enterprise domain. Looking forward to find how it is done there.