Capturing the ROI of Coaching Worksheet

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Instructions: This worksheet is designed to serve as an interview guide for evaluators to

assist coaching clients in evaluating the monetary impact of coaching. While not an exact

science, this worksheet follows a well-established, conservative, and credible approach to

evaluation. Estimation is a necessary and accepted part of the ROI process.

1. Describe the performance improvements that you have realized as a result of coaching.

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

2. Identify the potential sources of impact of these improvements. (Please check all that

apply.):

a. Increasing your personal productivity _______________

b. Increasing the productivity of your work group _______________

c. Increasing sales _______________

d. Reducing cost _______________

e. Increasing product quality _______________

f. Reducing cycle time _______________

3. For each item checked above, please complete one of the benefits calculations on the

following page. Use one letter code for each response. Identify currency used in the

analysis: _______________

Determine/use the standard values of the client organization. If these are not known

or available, use the following values in calculating the monetary benefits. If the

benefits are not in $US, then convert the values to the appropriate currency. All

benefits must be recorded in annualized numbers (i.e., a benefit that is recorded in

monthly terms will be multiplied by 10.5 months to get to the annualized number).

Compensation rate = $75 USD

Hours per week = 40 hours

Weeks per year = 46 weeks

Months per year = 10.5 months

Sales margins = 20%

Cost of money = 10%

respondent for each letter code checked in question 2. The

calculations are done by the evaluator (or coach) either during

the discussion with the respondent or after the discussion. The

entire response series is repeated for each letter code selected

by the respondent.

The five response elements for Question 3 are as follows:

1. Letter code. The participant enters a letter code from Question

2. Only one letter code is entered for each set of

responses. If two letter codes are checked in Question 2, then

Figure 12.2 Continued

Benefit Calculations: Please describe the benefit in the left margin.

Letter Estimate Monetary Estimate % of State Confidence

Code Value of Improvement in This Estimate (on a

Performance Due to Percentage Basis:

Improvement Coaching 0% = No Confidence;

100% = High Confidence)

______ $ ____________ ¥ ______ % ¥ ______ % = $ _________

Based Daily Est. Monetary

On: Weekly Benefit

Circle Monthly ¥ (______________) = ______________

One Quarterly Annualizing multiplier Annualized benefit

Yearly

Letter Estimate Monetary Estimate % of State Confidence

Code Value of Improvement in This Estimate (on a

Performance Due to Percentage Basis:

Improvement Coaching 0% = No Confidence;

100% = High Confidence)

______ $ ____________ ¥ ______ % ¥ ______ % = $ _________

Based Daily Est. Monetary

On: Weekly Benefit

Circle Monthly ¥ (______________) = ______________

One Quarterly Annualizing multiplier Annualized benefit

Yearly

Letter Estimate Monetary Estimate % of State Confidence

Code Value of Improvement in This Estimate (on a

Performance Due to Percentage Basis:

Improvement Coaching 0% = No Confidence;

100% = High Confidence)

______ $ ____________ ¥ ______ % ¥ ______ % = $ _________

Based Daily Est. Monetary

On: Weekly Benefit

Circle Monthly ¥ (______________) = ______________

One Quarterly Annualizing multiplier Annualized benefit

Yearly

the entire set of responses illustrated in Question 3 is completed

twice, once for each letter code.

2. Estimate monetary value of performance improvement. The

participant estimates a monetary value, expressed in U.S.

dollars or another currency, of the improvement in performance

for the letter code category that was checked.

3. Select the appropriate time frame. The respondent then

selects the appropriate time frame (e.g., daily, weekly) for

the monetary benefits.

4. Estimate percentage of improvement resulting from coaching.

The participant estimates, on a percentage basis,how much of

the monetary value can be attributed to performance

improvements that were made as a direct result of coaching.

This item is intended to isolate the effects of improvements

realized through coaching. This approach to isolation has

proven to be both effective and credible (e.g.,Phillips,1997).

5. State confidence in this estimate. The participant expresses,

on a percentage basis, his or her confidence in the previous

estimate of how much of the monetary value was attributed

to coaching. This item is intended to determine the error

factor for the estimate of benefits.

The two sets of calculations are as follows:

1. Calculate the estimated monetary value. Multiply the first

three values in the equation to produce the estimated

Figure 12.2 Continued

4. Determine the cost of the coaching.

_______ Professional fees

_______ Cost of client’s time to participate in coaching (hours ¥ $75 or standard value)

_______ Materials

_______ Travel expenses

_______ Telecommunications

_______ Administration costs (includes cost of evaluation)

= _______ TOTAL

5. Calculate the ROI

Tally the annualized benefits (A through F) = ____________

Enter the values into the formula:

ROI = ((Benefits - Cost) / Cost) ¥ 100

ROI = (( - ) / ) ¥ 100 = ____________

6. Identify the intangible benefits.

A. __________________________________________________________________

B. __________________________________________________________________

C. __________________________________________________________________

D. __________________________________________________________________

E. __________________________________________________________________

monetary value of the benefit (e.g., multiply estimate of

monetary value ¥ % attribution ¥ % confidence).

2. Calculate annualized monetary benefit. Record the appropriate

annualizing multiplier provided by the respondent. For

example, if the respondent said that coaching reduced costs

by $5000 per month, then the interviewer would select 10.5

months to annualize the benefits ($5000 ¥ 10.5 = $52,500).

Note that 10.5 is used rather than 12 months per year to

account for time away from work (e.g., holidays). Multiply

the estimated monetary benefit by the annualizing multiplier

to produce the annualized benefit. These calculations

are based on what are called standard values. Standard values

may be estimated and/or supplied by the organization’s HR

department or finance group. These values are posted on the

first page of the interview guide:

Compensation rate = $75 USD (fully loaded)

Hours per week = 40 hours

Weeks per year = 46 weeks

Months per year = 10.5 months

Sales margins = 20%

Cost of money = 10%

It is important to apply these values consistently throughout

the analysis to avoid comparing apples and oranges. For

example, if the compensation rate is higher for the numerator

(benefits) than the denominator (cost) of the ROI equation,

then the results of the ROI can be viewed as tainted or biased.

Note too that the compensation rate is fully loaded with salary,

benefits, and other employment costs.

_ Question 4. The cost of the coaching initiative is then tallied

according to the listed categories. The cost for coaching all

clients is included in the cost total, whether or not these clients

produced any monetary benefits or whether they responded to

the survey. In other words, if a total of 10 people were coached

and only three of the seven people who responded to the survey

Demonstrating the ROI of Coaching 215

were able to document benefits, then the benefits of these three

people would have to cover the costs of the 10 people who were

coached.

_ Question 5. If you are calculating the benefits of more than one

coaching client, the qualified benefits of all participants are

tallied. The values are entered into the ROI formula and

calculated.

_ Question 6. Qualitative data are captured in the form of written

comments by the participants. These comments add insights

into how participants perceive that coaching created value for

the business.