Chapter 2: Return on Investment of Training Program Essay

Chapter 2: Return on Investment of Training Program Essay

Length: 2151 words (6.1 double-spaced pages)

Rating: Better Essays

Open Document

Essay Preview

Chapter 2: Return on Investment of Training Programmes
When you can measure what you are speaking about and express it in numbers, you know something about it; but when you cannot measure, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely in your thoughts advanced to the state of science, whatever the matter may be.
—Lord Kelvin (1824–1907
Nowadays, a company’s human capital is accepted as one of their most valuable assets. In the ever increasing competitive and globalised business environment, a company’s people are ever increasing accepted as the foundation of their competitive advantage. A study by the American Society for Training and Development (ASTD) showed that through a study conducted between 1996 and 1998, on 575 US companies, that investment in training and education provided a direct link in increased profitability and share price performance. The study ranked companies by how much they spent on training per employee, it was found that the companies that spent the most on training per employee were the highest performing companies. Companies in the top 50 percent of training spend were found to have a 45 percent higher Total Shareholder Return (TSR) that the weighted average of the S&P 500, and 86 percent higher than the firms in the bottom half of the study (Bassie, McMurrer and Van Buren 2000).
In another ranking carried out by the US publication ‘Training Magazine’, which ranked the Top 100 best companies in terms of Human Capital, it was found that the most highly regarded US companies spent 4 percent of payroll on training which is twice the industry average. In addition, it was also discovered that the top...

... middle of paper ...

...of 1,000 or more, the training team often consists of a very small staff, these must then function as training coordinators and instructors as well as being the overall managers, this is the case in ChinaHR, where despite the organisation having over 2,500 staff, the training team is relatively small with 4 staff in Head Office and one trainer in each regional office.
In such situations, the training manager’s priority is towards the more actionable parts of the job, i.e. the visible, human relations, content creation, aspects of training. In small training departments, management gears more towards building up the visibility of the courses and programmes as opposed to record-keeping. Measuring accountability and return on investment, is viewed more as a back-office, number-crunching, time-consuming task that can be left until a slow time, which often never occurs.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Essay on Liars Poker by Michael Lewis

- The novel Liars Poker by Michael Lewis is very interesting firsthand account of an inside look into the investment banking world, in particular bond trading at the firm Solomon Brothers in the 1980s. Lewis took an interesting and roundabout way to end up on Wall Street, studying art history at Yale and bombing his interview with Lehman Brothers but he eventually found himself at Solomon Brothers through a lucky encounter with two managing directors wives. Through his book Michael Lewis conveys the inner workings of investment banks in the 1980s to the average person using his own experience at Solomon Brothers....   [tags: investment banking, trading]

Better Essays
736 words (2.1 pages)

Return On Investment ( Roi ) And Training Essay

- Return on Investment (ROI) and Training Return on Investment (ROI) is the most recognized form of measure used by business to determine the worth of that business. Return on Investment is the analysis of total benefits minus the total cost divided by total cost multiplied by 100 to give you a percentage. This indicator then tells the organization if the investment was worthwhile. Trainers and training department use ROI as a justification for their existence. This paper will look at return on investment and what factors are used in the calculation of ROI by the trainers, training department and the organization, in turn by section, with a conclusion to end....   [tags: Rate of return, Investment, Profit, Costs]

Better Essays
1475 words (4.2 pages)

Essay about Evaluation Of The Customer Service Training Program For Binz, Inc.

- The design and the implementation of the customer service training program for BINZ, Inc. have been completed. The next step in the process is for us to evaluate the training program that has been created. The reason that it is important to evaluate training is mostly because companies invest in training programs and depend on them to increase positive performance outcomes. “Because companies have made large dollar investments in training and education and view training as a strategy to be successful, they expect the outcomes or benefits related to training to be measurable”(Noe pg....   [tags: Skill, Training, Evaluation]

Better Essays
939 words (2.7 pages)

Essay on Description Of A Training Program

- Description of this training program The National Personnel Authority (NPA), which is one of the ministries in the government of Japan and in charge of human resource management for public officers, plans and carries out "Joint Initial Training" for the entry-level employees of the Cabinet Office and all ministries. The trainees are all entry-level at that year, around 600 members who are selected by some examination and interviews. The trainees ' goal for the next 2-3 years is to become national policy-makers....   [tags: Training, Skill, Practice, Learning]

Better Essays
1420 words (4.1 pages)

Resistance Training Program Essay

- Director, thank you for the opportunity to provide recommendations for the facility’s new Resistance Training Program. This is sure to be a great addition to our current walking program and will be an opportunity for the residence to progress even further. There is compelling evidence of these type programs being used and their effectiveness with the population of our residence. (Haggis 2013) Adding this aspect to our current offerings may appeal to other residence who may not be participating in the walking program and keep them from being further inactive....   [tags: walking program, yoga fitness program]

Better Essays
1149 words (3.3 pages)

Essay on Training The Unemployed

- Unemployment, such a simple word, but a terrifying thought to those impacted by it. How does one react to such a thing when their skills are no longer needed. Is there any hope for them to re-enter the workforce. There is a solution. The government provides job training for unemployed workers . Job training for the unemployed is supposed to be set up in a way that aims at future job forecasts. They try to predict what sectors, they believe, will be expanding in the future and try to train unemployed workers in those fields....   [tags: Job Training Programs, Unemployment Essays]

Better Essays
1420 words (4.1 pages)

Essay on Investments in Training Are Assumed to Have Positive Returns

- Investments in Training Are Assumed to Have Positive Returns For years, companies have been operating under the assumption that they are reaping positive benefits from their training efforts. They train workers because they believe it strengthens the organization and serves as a retention tool (Lachnit 2001). They accept training as a given expense, showing human capital investments as expenditures on their corporate balance sheets, not as assets that are expected to generate income. However, because intuition and casual estimates have formed the basis of many of their training investment decisions, many companies have little evidence to verify that they are realizing positive returns on t...   [tags: Work Job Training Essays]

Better Essays
2014 words (5.8 pages)

Designing an Orientation and Training Program Essay

- Designing an Orientation and Training Program By designing and implementing an orientation and training program, a company can expect to receive benefits. These benefits may include improved communications, knowledgeable employees, increased productivity, and improved employee satisfaction levels. This training could also have impact on employee retention, thus lowering turnover rates, which can cause a company valuable time and money. In designing these types of programs, a company should assess the needs of itself and employees....   [tags: Employee Management Training]

Better Essays
1748 words (5 pages)

Training And Education Program For Employee Essay

- Training and Education Programs for Employees Today, most of organizations attempt to develop the outlook and performance of its employees by using training and educational programs. In comparison to this, several academician's, researches and professionals hold that the personality of employees is generally developed when they learn several dimensions of job while working. Similarly, it is also believed that proper development of the personality of an employee by exercising ‘on the job’ will be more useful when the organization simultaneously gets related mission to enhance emp...   [tags: Employee Training Organization]

Better Essays
1933 words (5.5 pages)

Developing A Training Program Essay

- Abstract Throughout the United States, private and public-sector companies are facing the problem of a workforce severely lacking in basic workplace skills: More than 40 percent of the U.S. workforce and more than 50 percent of high school graduates do not have the basic skills to do their job. What makes these statistics even more disturbing is that employee skills are becoming increasingly important in the face of globalization, technological change, trade liberalization, deregulation and other external pressures on organizations today....   [tags: Employee Training Human Resources]

Better Essays
1240 words (3.5 pages)