No action items are required here in terms of decision-making, as the initial cost of slow learning is quickly returned upon reaching the high-efficiency phase. However, if the rest of the data shows that the task should not take very long for employees to learn, this graph indicates that you should modify your employee training methods. The revenues of the first batch will not cover the expenses if the unit price is set in terms of cumulative average unit cost.
- The fact that both metrics changed exponentially can be nicely seen in this chart because both axes are logarithmic.
- The learning curve is the correlation between a learner’s performance on a task or activity and the number of attempts or time required to complete the activity.
- The learning curve also is referred to as the experience curve, the cost curve, the efficiency curve, or the productivity curve.
- Something that’s easy to learn, with rapid progression to proficiency before plateauing at the expert level is defined by the diminishing returns learning curve.
- This means that if you are unaware that a technology follows Wright’s Law, you can get your predictions very wrong.
- To shorten the learning curve, you must establish a time frame for achieving the set of desired outcomes to understand whether or not your training methods are providing the expected results.
In the graph below, the learning curve shows that more time is needed to generate more tasks. This means that every time we double the cumulative quantity, the process becomes 20% more efficient. In this model of a learning curve, it states that the rate of progression is high at the beginning and later starts decreasing over time. Diminishing-Returns Learning Curve says that the rate of increase will then subside until it reaches zero and the person has achieved maximum skills. The concave learning curve is also famous by the name positively accelerated curve. It depicts slow improvement at the onset with the learning increasing with time to show mastery.
He mostly was focusing on memory studies and developed a forgetting curve theory. This theory helps us to understand how our memory works, and retains information, relating to specific things people attempt to learn. Most technologies do not follow Wright’s Law – the prices of bicycles, fridges, or coal power plants do not decline exponentially as we produce more of them.
The decision on pricing in terms of future costs
This model of the learning curve is one of the most popular ones and is also known as the S-curve model. It measures the rate of progression of an individual who is new to the task at hand. The bottom of the curve represents how learners are slow to perform a new task initially and have slow improvement progression. This represents an overall plateau that has been reached in terms of maximum task efficiency or a new challenge has emerged acting as a barrier to improvement. The slope of the learning curve represents the rate in which learning translates into cost savings for a company.
The learning curve theory
A learning curve is measured and calculated by determining the amount of time it will take to perform a task. Then, a learning curve assigns an improvement value to identify the rate of efficiency the task performer will incur as they learn and become more proficient at the task. The learning curve also is referred to as the experience curve, the cost curve, the efficiency curve, or the productivity curve. This is because the learning curve provides cost-benefit measurements and insight into all the above aspects of a company.
Moore’s Law, however, is not given in the same way that we just looked at for solar prices. In the example of solar technology we looked at price changes not as a function of time, but of experience – measured as the cumulative amount of solar panels that were ever installed. To shorten the learning curve, you must establish a time frame for achieving the set of desired outcomes to understand whether or not your training methods are providing the expected results. For example, new hires should be able to create and manage leads and accounts on a company’s CRM platform after completing a 3-week CRM training program. Once a learner obtains full proficiency in a task, the progression levels off (called a plateau), and the learner no longer improves his time-to-completion rates.
Key areas of employee development
However, the graph above fails to demonstrate how the process is becoming more efficient. Because of the graph’s upward slowing curve, it appears it takes incrementally more time to perform more tasks. However, due to the nature of the learning curve, the x-axis is doubling and incrementally taking less time per unit. For example, consider the graph below that demonstrates the approximate average time needed to perform a given number of tasks. In this model of a learning curve, it states that the rate of progression is a bit slow at the onset but gradually picks up momentum and starts to rise until the time it reaches full proficiency.
There are four primary types of a workplace learning curve that impact company decision-making. Enable your employees with in-app guidance, self-help support, process changes alerts, pop-ups for department announcements, and field validations to improve data accuracy. Set long and short-term measurable outcomes to evaluate employee performance, training effectiveness, and task mastery. Make the purpose of your training program clear by identifying what employees are expected to accomplish by the end of training. For instance, surgeons may take longer to perform a particular procedure initially, but their speed and efficiency improve as they repeat it, often leading to better patient outcomes.
A prime example of Increasing-Returns Learning Curve is a challenging, new and complex task where the learner is slow in learning at the initial stages but picks up speed as soon as he starts understanding the basic concepts. A comprehensive understanding of the application of learning curve on managerial economics would provide plenty of benefits on strategic level. Demeester and Qi [20] used the learning curve to study the transition between the old products’ eliminating and new products’ introduction. Their results indicated that the optimal switching time is determined by the characteristics of product and process, market factors, and the features of learning curve on this production.
Wright noted that the cost of building airplanes decreased as production performance and efficiency increased. While many variations of the learning curve model exist today, this is the original formula’s foundation. It is present in numerous tasks and activities, for example, in learning the inner working and control of video games. The learning curve model helps monitor various aspects of company performance and identify areas that need improvement.
Impactful Strategies to Improve User Engagement
The organization could track and analyze the repetitive practice of this initiative over time to determine if indeed customer complaints decreased over time. The learning curve can be used to predict potential costs when production tasks change. For example, when the pricing of a new product is being determined, labor costs are factored in. An example of where a learning curve can be applied could be a measurable task like a factory worker learning to operate a new machine that requires specific, repeatable steps.
With Whatfix, REG reduced its time-to-proficiency for its CRM and ERP by 50%, equally a 3-month faster onboarding time for new employees. It also reduced daily IT support tickets by 600% by deflecting issues with in-app support. REG’s L&D and IT team faced challenges training employees to its highly customized Salesforce CRM and JD Edwards ERP instances.
The idea here is that the more an employee practices a task, the better they become at it, which translates to a lower cost of training and higher output over time. The learning curve model helps track training progress, improve productivity, and predict learners’ performance and improvement over time. The learning curve theory is a well-known concept still used today by learning and development teams to drive knowledge retention and skill development. The learning curve mathematical formula provides organizations with a measurable way to understand how long it takes to acquire a skill or master a task. It may also be described as the ‘experience curve’, ‘cost curve’, ‘efficiency curve’, or ‘productivity curve’.
Hitesh Bhasin is the CEO of Marketing91 and has over a decade of experience in the marketing field. He is an accomplished author of thousands of insightful articles, including in-depth analyses of brands and companies. Holding an MBA in Marketing, Hitesh manages several offline what is learning curve ventures, where he applies all the concepts of Marketing that he writes about.