Chapter 12 - Cost & Benefits of Training Programs Flashcards
What is costing?
The process of IDing all the expenditures used in training.
How is costing done?
Categorizing the costs according to:
- the stage of the training process
- the nature or kind of cost
What are the five categories of costs?
Direct Indirect Developmental Overhead Trainee Compensation
What are direct costs?
Cost directly linked to a particular training program.
eg. needs analysis, surveys, course design, purchase, travel expenses, equipment/hardware, evaluation.
What are indirect costs?
Cost incurred by supporting the training activities; not directly linked to a particular training program.
eg. loss of productivity while trainees attend training, missed opportunity costs, replacement staffing, managers times to assist in application of training.
What are developmental costs?
Cost incurred in the development of a training program.
What are overhead costs?
Cost incurred by the training department; not associated with a particular training program.
What are trainee compensation costs?
Salaries and benefits paid to trainees while they are attending a training program.
What are the two categories of possible training benefits?
Tangible and Intangible
What are examples of tangible benefits?
increases in sales, improved quality, improved competitiveness, increased job satisfaction, increased motivation, improved safety record.
What are examples of intangibles benefits?
improved understand of new tech, improved staff morale/org culture, increased staff flexibility, increased self confidence in EEs, decreased stress for EEs.
What is the Return on Training Investment (ROTI) Model?
An accounting-based method of comparing the costs to the benefits of training.
What is the equation for ROTI?
ROTI = Training Benefits/Cost X 100
What question does ROTI address?
“For every dollar invested in training, how many dollars does the employer get back?
