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LMS is Performance management software

Evaluate Your Training ROI with Performance Management Software


If your organization is like the majority, you probably use your performance management software such as an LMS (learning management system) to track and manage the progress of learning in your organization. With the recent advancements in e-learning, savvy organizations are recognizing that they can use their performance management software to make training more accountable and to determine a training return on investment (ROI).

Before implementing a ROI methodology on training programs, the LMS must meet certain operating standards to help ensure that there is consistency in the evaluation process and that a conservative approach is taken. When utilizing your LMS to make training more accountable, there are some guiding principles to use as operating standards.

Don’t rely solely on ROI – Although ROI is a critical measure, other levels of evaluation are necessary to fully explain the complete impact of training programs. For example, an organization should also measure the extent to which participants improved their knowledge and skill levels, how well people are applying the new learning on the job and the overall business impact.

Be Conservative – When analyzing data from the performance management software, select the most conservative alternative for the calculations. This conservative approach will lower the ROI, but it helps build credibility with management and other decision makers.

Account For Other Factors – While a business LMS can provide for excellent data to calculate ROI, you do have to account for other factors when determining e-learning and training effectiveness. At least one method should be used to isolate the effects of the program. Without some method to isolate the effects of the training, the evaluation results could be highly inaccurate and overstated. For example, you could compare forecasts of anticipated results without the training program to the actual post training results.

Omit the Extreme Data – When evaluating the data from your performance management software, remember that extreme data will skew results so it is best to omit that data from the analysis.

Tabulate All Program Costs – To truly get an accurate ROI, your ROI methodology must include all the costs associated with the training and performance improvement programs. These costs include:

  • Initial needs assessment

  • Development

  • Delivery costs (including facilitator)

  • Facility and participant costs

  • Opportunity costs (associated with employees being absent from their jobs during the training)

  • Evaluation costs

Omitting or minimizing costs will spoil the credibility of the ROI results!
Collectively, these five principles can help your organization ensure that the ROI methodology is credible and that it produces accurate values and consistent outcomes when using an LMS tool.

If you’d like to learn more about how you can use performance management software to improve your employee training and determine the return on investment for that training, turn to the LMS solution professionals at Learn.com.

The consultants at Learn.com will work with you to understand your unique business needs and challenges and to help you develop a sound e-learning foundation roadmap that leverages the available resources within your organization to minimize project risks, maximize business results and maximize your return on investment. Contact Learn.com today to find out more about a custom LMS solution for your business or organization!