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The Corporate University: Measuring the Impact of Learning

  • ID: 41844
  • Report
  • November 1999
  • 137 pages
  • American Productivity & Quality Center, APQC
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This benchmarking study represents the first attempt to understand how the impact of a corporate university is measured, monitored, and reported in some of the best corporate universities. It represents the key trends in human resource development all over the globe. These trends make for a convincing case to measure the impact of a corporate university beyond actual improvements in knowledge and skills.

Growth of Corporate Universities

Organizations around the globe continue to adopt the corporate university concept. The corporate university concept involves a process—not necessarily a place by which all levels of employees (and sometimes customers and suppliers) participate in learning experiences necessary to improve job performance and enhance business impact. Although the actual number of corporate universities is difficult to pinpoint, some estimate that more than 2,000 exist in the United States. More importantly, the trend continues to grow. It began in North America and has spread to Europe, Asia, and the rest of the world in a limited manner. Organizations have invested heavily in this concept, sometimes with a price as high as 5 percent of payroll compensation.

This heavy investment has brought increased concerns and demands for account-ability. Consequently, a corporate university must show how it impacts the organization. If its value is questionable and it is not perceived as an important part of the strategic and operational framework of the organization, it could very well disappear. Growth of Investment in Learning and Performance Improvement The budgets allocated to training, development, and learning solutions continue to grow. In the United States, the direct expenditures for training and development exceed $100 billion in medium to large organizations, including the government sector. Data shows that budgets have increased each year, and similar trends have evolved in other countries. This growth in expenditures increases the need for accountability as funds
are taken away from other functions to support the corporate university. The critics, as well as the champions, of the corporate university often ask for better evidence of the connection between the investment and the payoff.

Increased Emphasis on Measurement and Evaluation

Training, development, and performance improvement functions—particularly in
corporate universities—involve a systematic and methodical approach to the overall evaluation of programs and services. This approach involves developing evaluation goals and timetables, using standardized data collection processes, defining roles and responsibility, and applying consistent approaches for analyzing and reporting data. With appropriate planning, a systematic and methodical approach ensures that measurement and evaluation (M&E) receives proper emphasis throughout the design and development
process.

The return on investment (ROI) is a routine part of the evaluation. Senior executives require results in terms they understand and appreciate. An ROI calculation quantifies the value of training by comparing benefits with the cost of, or investment in, programs. Because the actual number of ROI calculations is small relative to the total number of possibilities, a convenient sampling process is used to select the appropriate programs for this objective M&E.

Shift of Training and Development to a Performance Improvement Role The focus of training and development functions in organizations is shifting to
performance improvement. The implementation of training and nontraining
solutions to improve job performance represents a tremendous change in the way
training and development functions are organized, managed, and operated. Training and development’s roles, skills, and outputs drastically change as staff members transform from their current roles into a group of capable performance improvement specialists and consultants.

Conversion of the Training and Development Function to a Profit Center Concept
Many organizations are converting the operation of the corporate university from a cost center to a profit center. Under the profit center arrangement, the corporate university charges for products and services and uses a competitive fee schedule. Its clients, the managers in the organization, have the option of purchasing programs and services from the corporate university or from external suppliers. Revenues generated from program fees offset operating expenses. Revenue that exceeds the operating cost translates into profit for the organization. Collectively, these important trends form the basis of this important and unique study to explore the impact of the corporate university on an organization. The study also determines the extent to which best-practice organizations achieve success with each trend.

STUDY SCOPE

The following areas of focus define the content and structure of the impact of
learning benchmarking study. Sponsors spent a day-and-a-half with the study team from subject matter expert Dr. Jack Phillips to refine this scope.
Align employee learning with corporate strategy by:
- ensuring training goals are aligned with corporate strategy and
- communicating goals throughout the business.

Identify and report the impact of learning measurements by:
- incorporating a variety of methods to measure the impact of learning.

Effective measurement programs incorporate: interviews, focus groups, questionnaires, action plans, contract performance, pre- and post-tests, on-the-job assessments, and per-formance results. (The most difficult aspect of training measurement is deciding on which method to use and when to use it.)
- using a variety of performance improvement tools. Companies have hundreds of
methods and tools to choose from.
- setting up evaluation programs to measure each learning activity. Every organization measures the impact of learning differently. Find out how successful organizations use a variety of methods to measure the impact on the employee, and see how they aggregate this information to understand the impact on the entire organization.

Shift the focus to performance improvement consulting by:
- using current data to build M&E systems. Discover how best-practice organizations tap into current M&E practices to build a business case for their training and development functions. Learn how to tie your M&E system into the goals of the organization, and see how training and development can become an integral part of your organization’s success.
- ensuring the continuation of the process. Learning to use effective M&E systems in conjunction with business goals is only the first step in a successful training program. Find out how world-class organizations continuously improve their M&E programs to meet the obstacles and challenges they continually encounter.

STUDY KEY FINDINGS

The findings of this study are reported in terms of the three categories of the study scope: aligning employee learning wiht corporate strategy, identifying and reporting the impact of learning measurements, and shifting the focus to performance improvement consulting. Within these three categories, 13 key findings have emerged.

1. Needs assessments clarify the purpose of M&E activities and are critical to deliver a comprehensive program.

2. Aligning the whole organization and building an appropriate support system will yield a comprehensive and effective evaluation program.

3. Best-practice organizations maximize the use of automation to present different types of evaluation data to a variety of target audiences.

4. Best-practice organizations recognize that although evaluation is a micro-level activity, there is a strong need to combine evaluation data to develop a macrolevel view of the impact on the corporate university.

5. Best-practice organizations are moving up the corporate chain of impact to use the profit center to measure the contribution of the corporate university.

6. Most best-practice organizations have made progress measuring the application and impact of learning but are struggling to find a consistent, routine process.

7. Best-practice organizations continually benchmark internally and externally.
Some organizations join communities of practice to monitor M&E development

8. Successful corporate universities use evaluation data in a variety of ways.

9. Organizations want to use ROI but are struggling with how to calculate it and what to do with the results.

10. Best-practice organizations commit significant resources to evaluation programs. A variety of skill sets and roles that complement evaluation teams are included in these resources.

11. M&E programs must accomodate an organization’s changing needs.

12. Best-practice organizations continuously communicate the assessment activities and results to their constituents.

13. Best-practice organizations have begun to shift toward performance consulting to identify skill gaps and find solutions to fill these gaps outside of the traditional training model.

BENCHMARKING METHODLOGY

Benchmarking: The Systematic Transfer of Best Practices The past decade has involved significant changes for many organizations. As firms and institutions looked for ways to survive and remain profitable, a simple but powerful
change strategy called “benchmarking” evolved and became popular.
Benchmarking can be described as the process, modeled on the human learning
process, organizations use to learn. A good working definition is “the process of identifying, learning, and adapting outstanding practices and processes from any organization, anywhere in the world, to help an organization improve its performance.” The underlying rationale for the benchmarking process is that learning by example, from best-practices cases, is the most effective means of understanding the principles and the specifics of effective practices.

The most important factors of benchmarking are twofold. First, benchmarking
is not a fixed technique imposed by experts, but rather a process driven by the participants who want to improve their organizations. Second, it does not use prescribed solutions but is a process through which participants learn about successful practices in other organizations and then draw on those cases to develop solutions that are most suitable for their own organizations.
Benchmarking is not copying, networking, or passively reading abstracts, articles, and books. It is active learning, as demonstrated in the following description of the consortium methodology. Benchmarking is not simply a comparison of numbers or performance statistics. Numbers are helpful for identifying gaps in performance, but true process benchmarking identifies the how and why for performance gaps and helps organizations learn how to perform at higher levels.

Summary of Consortium Benchmarking Methodology

This consortium benchmarking methodology was developed in 1993 and
serves as one of the premier methods for successful benchmarking in the world. It is a powerful tool for identifying best and innovative practices and for facilitating the actual transfer of these practices. This four-phased approach is presented here.

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- Sponsor and Partner Organizations

A listing of the sponsor organizations in this study, as well as the best-practice (“partner”) organizations that were benchmarked for their innovation and advancement in measuring the impact of learning within a corporate university.

- Executive Summary

A bird’s-eye view of the study, presenting the key findings discovered and the methodology used throughout the course of the study. The findings are explored in detail in following sections.

- Key Findings

An in-depth look at the 13 key findings of this study. The findings are supported by quantitative data and qualitative examples of practices employed by the partner organizations.

- Partner Organization Profiles

Background information on the partner organizations, as well as their innovative performance measurement practices.
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