Ch 12 - done

Question 1

Calculating the costs and benefits of training programs is necessary because ?

Answer 1

for viewing training as an investment.

Question 2

In order to calculate the effect of training on the bottom line, you must first calculate… ?

Answer 2

the costs and benefits of training

Question 3

what is the definition of costing ?

Answer 3

• the process of identifying all the expenditures used in training
  
  • Important procedure in both the design and evaluation of a training program

Question 4

what are two types of calculations ?

Answer 4

1. Categorize the costs of training according to the stages of the training process (cost of needs analysis, training design, delivery, evaluation)
   
   2. Categorize the costs according to the nature or kind of cost (direct costs, indirect costs, development costs, overhead costs, trainee compensation cost)

Question 5

Definition of Direct costs

Answer 5

costs that are directly linked to a particular training program ex. Trainer salary, equipment

Question 6

Definition of indirect

Answer 6

costs that support training activities and are not directly linked to a particular training program ex. costs that support training activities and are not directly linked to a particular training program

Question 7

Clerical/administration, materials sent to trainees, marketing are examples of indirect costs ? true/false

Answer 7

true

Question 8

Definition of development costs

Answer 8

costs that are incurred in the development of a training program ex. Needs analysis

Question 9

Definition of trainee compensation

Answer 9

the cost of the salaries and benefits paid to trainees while they are attending a training program

Question 10

Once the costs of a training program have been calculated they can be used for two purposes, what are they ?

Answer 10

1. Be used to prepare budget for a training program and compare and contrast the costs of different programs
   
   2. Be used along with benefit information to calculate a training program’s net benefit, benefit cost ratio, return on investment

Question 11

a comparison of monetary cost of training to the benefit of training in monetary terms is the definition of cost benefit evaluation ? t/f

Answer 11

f. cost effectiveness evaluation

Question 12

Cost benefit evaluation: is the comparison of … ?

Answer 12

a comparison of the cost of training in monetary terms to the benefits of training in non-monetary terms ex. Rate of turnover, absenteeism, customer satisfaction

Question 13

definition of net benefit ?

Answer 13

the estimated value of the benefit minus the cost of the training program

Question 14

what is the equation for benefit cost ratio ?

Answer 14

the benefit divided by the cost of the training program

Question 15

ROI is the comparison of…?

Answer 15

a comparison of the cost of a training program relative to its benefits

Question 16

ROI equation …?

Answer 16

= Benefits - cost of the program/ cost of the program

Question 17

When the ROI is above 1 it indicates …?

Answer 17

that the return of a training program is greater than the investment, the higher ratio of results to costs indicates a greater financial benefit to the organization

Question 18

When the ROI is less than 1 it indicates… ?

Answer 18

that the investment or cost is greater than the return

Question 19

What does the utility analysis method forecast ?

Answer 19

the financial benefits that result from human resource programs such as training and development. The effectiveness of the programs is translated into dollars. See text book for equation

Question 20

what are the 4 factors that need to be considered when calculating the utility of a training program

Answer 20

1. Effect size - what’s the difference in the performance in trained employees vrs non trained. The larger the effect size the more effective a program will be
   
   2. Standard deviation of job performance - how much difference the job performance and untrained employees and the monetary value of this difference
   3. Number of employees trained - the more trained the higher the utility
   4. Length of time that the training benefits will last - longer = higher utility

Question 21

Definition of break even analysis ?

Answer 21

finding the value at which benefits equal costs and utility is equal to zero, helps reduce the uncertainty associated with the estimates of the various parameters used to calculate utility.

Question 22

is Calculating costs, benefits, ROI, utility is not an exact science? yes/no

Answer 22

no, assumptions and judgements are made when estimating the monetary benefits. Only works if managers and clients except the assumptions

Question 23

Credibility is a major issue in cost effectiveness evaluation t/f ?

Answer 23

true, data must be accurate and the process believable

Question 24

what should the trainer do to gain credibility on training programs ?

Answer 24

ensure that their clients and managers agree on the cost factors and the measurement and estimation benefits. They must view the estimates as credible, believable, acceptable

Question 25

what is another method a trainer can do to gain credibility ?

Answer 25

Use external and internal experts to assist in making benefit estimates, because they are experts and they may be perceived as credible by management