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Process Model

RE/MAX Advanced Realty


Diane Olsen EME601 Fall 2012Error! Bookmark not defined. December 13, 2012

Table of Contents
Introduction ........................................................................................................... 1 Setting .................................................................................................................. 1 Organizational Characteristics .......................................................................... 1 Competition ....................................................................................................... 2 Business Strategy ............................................................................................. 2 Problem Analysis .................................................................................................. 3 Current Approach to Training ............................................................................ 3 Gaps in Current Education/Training Process .................................................... 3 Ideal Condition .................................................................................................. 4 Recommendations: New Model ............................................................................ 5 New Model ........................................................................................................ 5 Explanation of New Model ................................................................................ 7 Evaluations ..................................................................................................... 10 Staffing Implications ........................................................................................ 10 Conclusions ........................................................................................................ 11 Rationale for Implementing the RAID Model ................................................... 11 Cost/Benefit Analysis ...................................................................................... 12 Benefits of the New Model .............................................................................. 13 References ......................................................................................................... 14

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EME601 Fall 2012 December 13, 2012

Introduction
RE/MAX Advanced Realty is a medium sized real estate brokerage firm headquartered in Columbia, Maryland. The company is going through a period of rapid growth and expansion. At the present time no formalized process exists to address the companys training and educational needs. This paper describes the current training methods being utilized and illustrates a newly created situated instructional design model designed to meet the companys current and future training needs.

Setting
Organizational Characteristics
RE/MAX Advanced was founded in 1990 as a single office real estate brokerage operating as an independently owned franchise within the RE/MAX International organization. Since then they have grown to seven offices and are the largest and most profitable brokerage operating within the RE/MAX Central Atlantic region. Senior management includes the Chief Executive Officer, Senior Vice President, and the Chief Financial Officer, all of whom hold ownership stakes in the company. In addition, there is a Vice President of Operations and a newly hired Vice President of Technology whose position was created to update the companys current technology infrastructure in order to improve operations. The VP of Technology is also responsible for training all personnel in the use of new technologies. Seven managers and nine fulltime administrative personnel staff the companys offices. The agents, who are the primary target population for training and instruction, are all licensed real estate agents in the state of Maryland and work with RE/MAX Advanced Realty under an Independent Contractor Agreement. As such, each agent operates his or her business independently. Each agent pays a monthly management fee of approximately $1200 per month to the brokerage. In general, management treats
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agents as customers rather than as employees. However, under Maryland law it is the brokers responsibility to supervise, train, and oversee each agent.

Competition
Almost all real estate brokerage firms offer some sort of agent training. However, the extent and scope of training varies widely. At a minimum, brokers train agents on company policies and procedures and current changes in law in order for agents to remain in compliance with current laws and regulations. In addition, agents are required to obtain a minimum of 15 credit hours of state mandated continuing education every two years in order to maintain their license to practice. Additionally, agents seek out professional development courses in areas such as marketing, technology, and business planning. Many larger brokerages offer a complete curriculum of continuing education classes and professional development courses for their agents. They also open these classes to the general agent population for the purpose of recruiting. These classes give agents from competing companies a chance to visit a competitor, see their offices, and get to know the staff and management. As individual agents are responsible for obtaining their own continuing education credits and professional development, companies with well-developed educational opportunities are at a competitive Advanced.

Business Strategy
Over the past two years, through a merger and an acquisition of two additional brokerage firms, RE/MAX Advanced Realty has expanded from four offices to seven offices -- with a proposed 8th office set to open in the next 6-12 months. Their agent population has grown from 290 agents to 395 agents. They expect to add another 35 agents with the opening of a second Baltimore office. Their goal is to grow the company to 500 agents by the end of 2013 with a longer-term goal of expanding the company into neighboring Mid-Atlantic States. Senior management understands that developing a high quality educational program will be essential if they are to remain competitive and continue to grow and expand the company.

Process Model Diane Olsen

Problem Analysis
Current Approach to Training
Training is currently done on a very informal ad hoc basis. The office manager and staff train agents informally on policies and procedures when they join the company. New policies and legal updates are introduced at monthly office meetings. These meetings are sparsely attended. Continuing education and professional development classes are coordinated and conducted by individual office managers as the opportunity arises. Many classes are offered by outside speakers who offer their services. These training events are generally conducted by title, lending, and insurance companies seeking to develop business relationships with the companys agents. Office managers also conduct classes on topics they feel will be relevant to the agents. Classes are rarely vetted for content or objectives before they are held. No comprehensive class schedule exists and classes are rarely advertised more than two or three weeks in advance.

Gaps in Current Education/Training Process


In the past 12 months the management team has noticed a higher than expected numbers of agents leaving the company. Management noted two issues related to training that came up in exit interviews with agents who had resigned: 1. Agents are unclear on company policies and procedures particularly regarding submission and processing of their contracts and case files. 2. Agents mentioned a lack of quality training and continuing education opportunities as one of their reasons for going to a competing broker. The companys training suffers from a lack of consistency and quality. There is currently no companywide planning or strategy for training and professional development. Each office manager offers classes based on their perceived needs, agent requests for training on a particular topic, or an offer from an outside instructor to conduct a class. Classes offered by each office are open to all agents and could be used as recruiting opportunities by inviting agents from outside of the company. However, most classes are not planned well in advance. Therefore attendance from within the
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company is generally low and the opportunity to invite outside agents is lost. This lack of planning and coordination also prohibits the company from offering continuing education credits for these classes because all continuing education must be vetted and approved by the Maryland Real Estate Commission. This approval process generally takes three to six months. Management believes that the lack of training and educational opportunities for could be a primary cause of the high agent attrition rates. They also believe they are missing a key recruiting opportunity. Management is considering whether a dedicated training department is now needed in order for the company to realize the growth and expansion they hope for in the next several years.

Ideal Condition
The company would first benefit by having a companywide strategy and process for conducting training. By pooling the resources and training opportunities now being undertaken by individual office managers the company would have the ability to: 1. Offer a comprehensive training calendar to the entire agent population both within and outside of the company as appropriate thus increasing attendance. 2. Allow for strategic planning of educational goals and objectives thus remedying the fluctuation in quality of training. 3. Avoid duplication of effort among the individual offices that would allow office managers to maximize their potential as subject matter experts. 4. Afford the opportunity to develop credited continuing education through the MD Real Estate Commission thus preventing agents from seeking out training at competing companies. 5. Plan for and properly vet outside trainers and speakers, which would avoid the current problem of classes which are often merely a sales pitch. 6. Allow for systematic assessment of ongoing training programs.

Process Model Diane Olsen

Recommendations: New Model


New Model
The proposed RE/MAX Advanced Instructional Design (RAID) model (fig. 2) is based on the Diamond systems-oriented model (fig. 1). The Diamond model was originally designed for higher learning institutions. Although RE/MAX Advanced Realty is neither a school nor a large institution, a modified systems-oriented model, such as the Diamond model is warranted for several reasons.

Figure 1. Original Diamond Instructional Model, (Gustafson & Branch, 2002) First, a large part of the companys process will be in coordinating and designing a companywide curriculum. One of the largest gaps in the companys current training is the lack of attendance at many of the classes offered. This is due primarily to the lack of proper planning in time to advertise the classes internally and externally. Additionally, the agents who have been with the company for a longer period of time
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have experienced the variation in class quality and are leary of signing up for classes offered by the company. A more systematic approach to curriculum planning and scheduling is needed. The company will most likely benefit from a system that places emphasis on both the overall strategy and individual course design. Finally, the companys growth and expansion plans indicate a need for a model the company can grow into rather than one that would become insufficient and obsolete if the company were to grow beyond expectations.

Figure 2. New RAID Instructional Model

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Explanation of New Model


Phase I: Course Selection and Design
In Phase I a strategic plan for training will be developed. The newly created Training Committee will manage this process. The Training Director, an instructional designer who will be hired to oversee implementation of the new process, will head the committee. The remainder of the committee will be composed of three to four Office Managers who will serve on the committee on a rotating basis. This will not constitute a new responsibility as Office Managers are currently responsible for developing and conducting training. The committee will review past training and generate ideas for new courses and classes. They will develop a set of overall training objectives for the company and create an ideal curriculum of classes that will be offered for continuing education credit and those that will be considered simply professional development. The final step in Phase I will be to review each courses feasibility in terms of the following factors: 1. Research 2. Goals 3. Time How long will it take to develop this course? Will it need to go through the continuing education certification process? How many hours will the course run? What are the goals of this course? Do they match our overall training objectives? Can someone in the company teach this course or will an outside Subject Matter Expert be required? What else needs to be researched about this topic?

4. Resources Human How many company man-hours will be required to develop and conduct this course?

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5. Fiscal

Materials What materials need to be purchased or developed? Facilities Where will the course be conducted?

What resources will be expended? What income might be produced?

6. Students To whom will this course appeal? Will it be offered externally as well as internally? What prerequisite skills or knowledge will be required of students?

Based on this analysis the committee will develop a training calendar for the upcoming year. The committee will meet quarterly to evaluate and revise the current plan and meet annually to assess and revise the training goals and objectives and to create the following years plan.

Phase II: Course Development and Implementation


Each course proposed by the Training Committee will be assigned to an Office Manager who will act as the project manager. These assignments will be based on class location and managers expertise or prior work with the course or subject matter. In coordination with the Training Director, each course will go through the steps of course development and implementation. 1. Determine Objectives The Training Director and Manager will develop a list of learning objectives for the course. Based on these objectives the Training Director will design evaluation instruments and procedures, both formative and summative, for the course.

2. Select Format A determination will be made whether the course will be developed and delivered by a person within the company or whether an outside course or instructor will be utilized.

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3. Content & Materials In House Previous and potential courses and materials will be reviewed and evaluated. Outside Instructor A copy of the speakers syllabus, objectives, and course outline will be obtained and evaluated. Whenever possible a committee member will observe the instructors class.

4. Production, Modification, and Approval In House Instructional materials will be produced or existing materials modified as needed. Outside Instructor The instructors materials will be approved, disapproved, or a request made for modifications to meet the companys needs and standards.

5. Coordinate Logistics for Implementation The Office Manager in charge of the course will coordinate all logistics for the class. Instructional materials including objectives, outline, and syllabus will be sent to the Real Estate Commission for any course seeking to grant continuing education (CE) credits. The Office Manager will also coordinate follow up and logistics for CE certification and the issuance of certificates.

6. Implement, Evaluate, and Revise The Office Manager and the Training Director will implement the course. Whenever possible a course should be offered to a small group of agents within the company as a pilot test (Rothwell & Kazanas, 1992). Based on the pilot test, the course will be evaluated and revised before being offered to the general agent population. Once the course has been fully implemented it will be evaluated and revised as needed.

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Evaluations
Evaluation will be conducted at four levels as described by Rothwell and Kazanas (1992) in order to assess the effectiveness of training.

Level 1 Participant Reactions


Whether being offered for credit or not, all course attendees will be asked to complete a Level I evaluation of student satisfaction at the end of each class.

Level 2 Participant Learning


Summative Evaluations in the form of a written exam will be given at the end of each CE credit granting class. Questions regarding students perceptions of learning will be included in the student satisfaction survey in non-credit professional development classes

Level 3 Job Performance


The effects of training on job performance will be indirectly measured by: 1) increased attendance at professional development classes, 2) reduction in agents attrition, 3) lower numbers of departing agents citing training as a reason for leaving, 4) most importantly, but most difficult to correlate directly to training, increased sales production for agents who attended training.

Level 4 Organizational Impact


Organizational impact will be most easily measured by increased attendance in training classes. Another indicator will be the number of agents joining the company who attended a RE/MAX Advanced training course before joining the company.

Staffing Implications
The biggest staffing change necessary would be the creation of a new Training Director position within the company. At initial implementation, the remainder of the
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instructional team would consist of the Office Managers and their administrative staff. Currently, individual office managers each have their own training budget and conduct their own training. Each Office Managers training budget would be consolidated into one company training budget. As the company grows, the training department would most likely expand to include two to three additional team members. The Office Managers will then be able to delegate daily responsibility to the training department, freeing the managers to act as subject matter experts and advisors.

Conclusions
Rationale for Implementing the RAID Model
The recent economic downturn has led to increased competition and a decreasing agent population. Senior management at RE/MAX Advanced Realty recognizes a need to improve the quality and availability of training and professional development in order to retain their current agents and to attract quality agents to the company. By implementing a systematic training model they can improve their current training and better leverage the knowledge and expertise that exists within the company. The RAID model of instructional design will afford the company the opportunity to utilize or improve upon current courses and programs being offered and to deliver them in an organized and effective way. The initial goal of the model is to develop an overall plan and strategy for a companywide program of instruction. As the model is implemented, emphasis will be placed on utilizing or modifying existing courses and materials. As the company grows and the training program matures the emphasis will shift to creating more proprietary inhouse training courses and moving towards delivering more content online. The biggest obstacle to implementing the model will most likely be resistance to change on the part of the Office Managers. They are each accustomed to implementing their individual training efforts. Some manager may perceive the new companywide training model as a threat. They are also unaccustomed to holding outside instructors accountable for the content and structure of courses. It will be the responsibility of senior management and the Training Director to adequately explain the benefits of the new model.

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Cost/Benefit Analysis
According to Keller (2004), when planning a change a cost/benefit analysis is often used to predict if the results of the change will be worth the resources invested. RE/MAX Advanced has always viewed training as a necessary expense and not as a profit center. Managements goal has always been to minimize training expenses. Costs to implement the model should be minimal and the training produced using the new RAID model should prove to be profitable for the company in the long term.

Costs Associated with Implementing the RAID Model Item


Instructional Designer Training Team Instructional Materials Facilities Technology

Cost
$85,000 (salary & benefits) $0 $0 $0 $0

Source
Agent retention and recruits Office managers From training & recruiting budgets of individual offices Training rooms at offices VP of Technology and team currently support training

The largest upfront cost to implementing a new instructional model will be the creation of the Training Director position. This cost should be easily offset if the objectives of the training program are met. Within the last twelve months, 32 agents left the company with many of them discussing the lack of quality training in their exit interviews. This agent attrition equals a $460,800 loss to the company for a 12-month period. If only 3 of these agents had been retained while another 3 new agents had been recruited through better training opportunities, the cost of hiring an instructional designer would have been more than recouped. These are very conservative estimates and the company will most likely see a profit from implementing a systematic training model. Once the training program has been implemented, a full cost/benefit analysis should be undertaken to determine the economic effects of implementation of the RAID model. The company can also generate additional revenue by charging agents for CE credits and by continuing to solicit affiliate businesses for sponsorships of training events.

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Benefits of the New Model


Agent Benefits Agents will gain new knowledge and skills through professional development courses, which should in turn increase their effectiveness and profitability. Agents will no longer need to look to sources outside of the company to obtain their CE credits. By determining the course calendar in advance, agents will be better able to plan on attending training. Consistency in training quality will make agents more likely to register for training and to recommend the companys training to other agents.

Company Benefits Increased agent satisfaction assists in agent retention. Offering quality professional development and CE credit courses is a cost effective recruiting opportunity. Better-trained agents require less support from management and staff and pose less of a legal liability to the company. By working as a team, Office Managers will spend less time and energy on developing and coordinating training. Potential to create an additional income stream.

In the current competitive market, a brokerage offering a comprehensive training and continuing education program stands the best chance of attracting and retaining the best agents. The RAID model offers RE/MAX Advanced Realty a systematic approach for delivering quality training and education to the local Realtor population in a manner that can over time turn an ongoing expense into a profit center for the company.

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References
Gustafson, K., & Branch, R. (2002). Survey of Instructional Development Models. Syracuse: Syracuse University. Keller, J. (2004). How to estimate the cost-benefit of training: Calculating return on investment. Florida State University. Tallahassee: John Keller Associates. Rothwell, W. J., & Kazanas, H. (1992). Mastering the instructional design process: A systematic approach. San Francisco: Jossey-Bass Publisher.

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