500-Word Business Memo

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that invest in training want to achieve a high return on investment —the monetary benefits of the investment compared

to the amount invested, expressed as a percentage. For example, Mayo Clinic provided training for its managers after it

discovered that employees were quitting because of dissatisfaction with their managers. After the training, employee

turnover rates improved. To determine the return on the investment in the training, Mayo’s human resource department

calculated that one-third of the employees retained (29 employees) would have left if the training had not occurred.

The department calculated the cost of an employee leaving as 75% of average total compensation, or $42,000 per

employee. Multiplied by the number of employees ($42,000 times 29), that is equivalent to lowering costs by

$609,000. The training cost $125,000, so the company saved $484,000 by providing it. The return on investment

would be $484,000 divided by $125,000, or an impressive 387%.

Even if some of the estimates were wrong, Mayo’s

HR department could feel confident in making a case that the training was beneficial.

For any of these methods, the most accurate but most costly way to evaluate the training program is to measure

performance, knowledge, or attitudes among all employees before the training and then train only part of the

employees. After the training is complete, the performance, knowledge, or attitudes are again measured, and the

trained group is compared with the untrained group. A simpler but less accurate way to assess the training is to conduct

the pretest and posttest on all trainees, comparing their performance, knowledge, or attitudes before and after the

training. This form of measurement does not rule out the possibility that change resulted from something other than

training (for example, a change in the compensation system). The simplest approach is to use only a posttest. Use of

only a posttest can show if trainees have reached a specified level of competency, knowledge, or skill. Of course, this

type of measurement does not enable accurate comparisons, but it may be sufficient, depending on the cost and

purpose of the training.

Applying the Evaluation

The purpose of evaluating training is to help with future decisions about the organization’s training programs. Using

the evaluation, the organization may identify a need to modify the training and gain information about the kinds of

changes needed. The organization may decide to expand on successful areas of training and cut back on training that

has not delivered significant benefits.

A major producer of packaged foods has identified both successes and needs for improvement after analyzing its

training programs. The company began conducting management training for supervisors and treated the first 12

months as a test of the program. After a year, the company determined that turnover rates were much lower among

supervisors who had received training. That difference was strongest among more recently hired supervisors and

persisted even after the company made statistical adjustments for other possible influences on turnover. The company

therefore recommitted to its training goals for supervisors, especially targeting those hired most recently. In contrast,

training had a minimal impact on safety performance at the company’s facilities. The training department concluded it

would have to improve the safety component of the training program or replace it with a new approach to safety

training.

Applications of Training

Two training applications that have become widespread among U.S. companies are orientation of new employees and

training in how to manage workforce diversity.

LO 7-8

Describe training methods for employee orientation and diversity management.

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Orientation of New Employees

Many employees receive their first training during their first days on the job. This training is the organization’s

orientation program—its training designed to prepare employees to perform their job effectively, learn about the

organization, and establish work relationships. Organizations provide for orientation because, no matter how realistic

the information provided during employment interviews and site visits, people feel shock and surprise when they start

a new job.

Also, employees need to become familiar with job tasks and learn the details of the organization’s

practices, policies, and procedures.

Orientation

Training designed to prepare employees to perform their jobs effectively, learn about their organization, and establish

work relationships.

The objectives of orientation programs include making new employees familiar with the organization’s rules, policies,

and procedures. Table 7.5 summarizes the content of a typical orientation program. Such a program provides

information about the overall company and about the department in which the new employee will be working. The

topics include social as well as technical aspects of the job. Miscellaneous information helps employees from out of

town learn about the surrounding community.

Table 7.5: Cotent of a Typical Orientation Progra m

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SOURCE: J. L. Schwarz and M. A. Weslowski, “Employee Orientation: What Employers Should Know,” Journal of

Contemporary Business Issues , Fall 1995, p. 48. Used with permission.

Orientation for servers at restaurant chains includes how to look for clues to the kind of service diners are expecting

and the actions that could boost sales and satisfaction. Blue Smoke’s orientation program includes seven days of

formal training, five days of following an experienced waiter, and two days of working under the observation of an

experienced waiter. Each day’s training focuses on one area of learning, such as how to greet guests, and ends with a

quiz on the day’s lesson. At Cheesecake Factory, new employees spend slow periods discussing how to interact with

diners who are with children or having a celebration. They learn to look each customer in the eye when moving

through the dining room and to notice behavior that signals disappointment with the food—for example, pushing food

around the plate or removing an ingredient from a dish.

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