Gamification Challenge: Dollarize It! - ROI vs. ROE

It’s probably no surprise to you, but investing in employees pays off.
Learning opportunities result in higher levels of employee promotion, retention, satisfaction, skills and knowledge, and this translates to better organizational performance. In fact, research shows the more a company invests toward developing employees, the higher its stock value goes the following year.

Yet demonstrating a real, bottom-line, Return on Investment (ROI) remains a continued challenge for those of us in Learning and Development fields.

As a gamification strategy designer, it is important for you to work with senior leaders to mutually identify ROI measures (beyond smiley sheets) that are linked to the organization’s key strategic objectives. Successful evaluation starts at the beginning of the planning (e.g. Sententia LV1 Strategy Design begins this process in Level 1: The Lost Lagoon), well before the learning design and delivery occurs. In fact, it should begin at the needs assessment stage, as the organization explores existing and anticipated skills gaps and identifies ways to close those gaps.

What are the critical behaviors that lead to desired results?

In other words, if employees engage in these behaviors, the organization will achieve its goals and complete its mission.

At this stage, it is critical to have a mutual agreement on what criteria will be used to evaluate your training program or talent development initiative. As a gamification strategy designer, it is at this point that you want critical conversations with senior leaders to answer the question, “What does success look like for this learning initiative?” and “What connections will be made to measure ROI?”

You should then determine how these behaviors impact the mission and goals of the organization. In other words, how will people who engage in these behaviors benefit the organization as a whole?

For example, if you are designing an executive leadership development program targeting high performing work teams and strategic change, will you measure turn-over and retention rates, or employee engagement survey scores as your proof of concept?

In addition, if part of the evaluation of your program will be before and after measurements, baseline numbers should be documented at this time so that you can begin the trending process. For example, if you have a goal to improve knowledge sharing in our sales teams, a baseline assessment among participants from each department can occur before the program and again at appropriate intervals afterward (three months, six months, and one year) to determine the level of improvement.

The challenge is how to capture the less tangible benefits of learning, such as revenue generation or cost-savings, through application exercises built into the program. Because leadership programs often focus on the development of skills such as emotional intelligence, accountability, innovation, communication, conflict management, creative thinking, and leading change, the intangible benefits are more difficult to measure using conventional metrics.

When you write program goals, begin with a clear vision of the desired end result.

While this should be a standard practice, many learning professionals begin the design and development phases without a clear vision of what is expected or what qualifies as a result for the program. (Often referred to as ROE or Return on Expectations.)

Ultimately, if learning is occurring, but behaviors aren’t changing, there will not be a Return on Investment.

Instead of measuring knowledge, we should measure behaviors. Then, when a metric falls below an established standard, we can apply a solution that will help an employee achieve the standard.

If we are measuring in this way, we can also chart the progress of our programs. At specific intervals, you can check to see if outcomes are happening, and adjust or modify your program to get the desired results.

In the end, we should think like a CFO when it comes to determining outcomes and setting up measurements for our programs. By attaching desired behaviors to organizational missions and goals, we will be able to demonstrate the value of a specific program. As behaviors change, we will also have mechanisms is place that will demonstrate the Return of Investment for that program.

This may seem foreign to those of us who went into Learning and Development to change lives, and it certainly doesn't sound like FUN! But in the end, fundamentals are the building blocks of fun. And helping our organization to achieve their strategic objectives... well, what could be more fun then that?!