Measuring the ROI of Coaching
There are several reasons to evaluate the validity and ROI of a coaching program.
- Fiscal responsibility. Coaching comes at a price of not only money, but time and energy. All have a cost to the bottom line.
- Coming off a tight economy that has not fully recovered. Therefore closer scrutiny and tougher decisions are in order.
- Since, as this paper mentions, coaching is still beset with doubters, it is essential to prove the effectiveness of coaching to the bottom line.
- It is imperative to distinguish effective from non-effective coaching
Bearing these essentials in mind, there are many variables and items to measure and these variables are not always numeric. In addition, many coaching experts suggest that only about 5% of coaching programs should be measured in terms of ROI. Further, no two coaching assignments are the same and no two coaches approach coaching from the same perspective. Nevertheless, it is important to review effectiveness and quantify impact of coaching. Ways to help measure coaching consist of evaluating some of the following:
- Hiring and sales management skills
- Sales skills
- Relationship building skills
- Improving technological skills
- Improving leadership skills
- Improving management skills
- Ability to get things done
- Ability to communicate and listen
- On-the-job application
- Business results
- ROI (if applicable)
- Skills as a revenue generator (Bernard, 2006)
- Administering a 3600 assessment both before a coaching program begins and upon completion of the program is sufficient measurement of coaching effectiveness (American Management Association/Institute for Corporate Productivity, 2007).
In measuring the value of coaching, it is well to remember that many events can affect coaching in both a negative and positive fashion. Some events that might affect coaching in a negative manner, are if a life changing event occurs for the coachee, external events such as 9/11, or the market crash. These types of events can slow or impact coaching. A positive change can include something as “mundane” as the Hawthorne Effect. This is where people improve their performance when they know they are being measured (Bernard, 2006).
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