ROI is a measure of the financial benefits received by a firm over a period of time in return for the costs incurred on a training activity. One way of computing ROI is by comparing the resulting benefits to the costs incurred. Some of the benefits that may result include labor savings, increased productivity and other costs savings. Some of the costs incurred include design and development, administration, and materials/facilities costs. Using this method, percentage ROI is obtained by dividing the total benefits by the total costs times 100%.
Another way of measuring ROI is by using the payback period method which entails the determination of the period taken for the benefits received to cover the costs incurred on the programme. The shorter the payback period the more attractive the training programme (Phillips & Phillips, 2008).
The initial basic approach to evaluation is to determine the current performance levels and the skills of the members. This is done before the training so that it can be used as a benchmark after the activity. A structured questionnaire can be used to assess the skills and the performance levels of the participants. This tool is the most suitable since it is accurate and it gathers specific information that is required in the evaluation of the participants after the training (Phillips, 2010).
Measuring the reactions of the participants during and after the training, is another useful approach. This is used to assess the appropriateness of the training to the learners, how well the subjects were covered and how they intend to apply the acquired skills. Open discussions can be used as a tool for measuring this parameter. This tool is advantageous since direct responses are received from the participants. It would be easy to tell if they liked the training or not, and if they learned new skills (Bramley, 2003).