Search results

Given the rapid changes in economies, labour organisations and production processes and technologies, investment in training and in developing human resources becomes more important than ever. One of the core issues in the present debates, however, concerns the issue of the funding. The increasing pressure on public funds clearly delineates that expanding investments should not be expected from this side. Governments are already seeking alternative funding mechanisms for education to decrease costs and increase individual responsibility for one's own human resources. An increased investment should therefore come from enterprises and individuals. Disparities in investment between different categories of enterprises and in participation between different groups of (un)employed indicate, however, that there are still market imperfections. This raises the issue of the adequacy of existing instruments for stimulating investment in human resources and actually raising the level of investment.

The purpose of this paper is to provide a better methodology for evaluating the value of corporate training to make it easier to compare with other organizational investments. The paper also seeks to propose and demonstrate how “time value of money” and “hurdle rate”, which are significant components of traditional investment valuation methods, can and should be incorporated into the valuation of organization training.

The training investment evaluation methods most commonly used by the training professionals were identified and compared to investment evaluation techniques used to measure the value of other investments made to improve and expand business activities.

The survey of training investment evaluation literature showed that there are two major problems in the methods utilized by the training professionals. One of the problems was associated with the measurement and monetization of costs and benefits of the training activity. The other was the non‐comparable return values’ generated by the non‐uniform methodologies used by the training professionals. Both of these issues were addressed and shortcomings of the currently used methodologies where changes should be made to improve this process were identified. A new methodology, which will make the evaluation process more acceptable to the company management, was developed and its use was demonstrated.

Unfortunately, the issues associated with monetization of costs and benefits could not be fully addressed. This is much more organization specific and specific to the type of training provided. However, some examples were provided of how this activity could be uniformly applied.

The paper provides a new and more acceptable methodology for the use of training professionals and organizations to evaluate the value of training.

This paper applies a “financial analyst” or a Chief Financial Officer perspective to organizational investment in training and provides a tool for evaluating its value the same way organizations evaluate their other investments (e.g. acquisitions, factory expansions, product development).

Measuring the Return on Investment (ROI) in training and development has consistently earned a place among the critical issues in the human resource development (HRD) field. Leadership educators may soon find that program sponsors and administrators asking for ROI information as well. This paper reports the ROI of the Southern Extension Leadership Development (SELD) program as implemented at The University of Georgia. To calculate the return on investment, the ROI model proposed by Phillips (2002) was used. New extension agents hired between 1995 and 2001 who completed the probationary period with the Cooperative Extension Service formed the population for this analysis. Analysis of the data indicated that the employee turnover rate for the participant group was significantly lower than for the non-participant group. Based on the ROI model calculations, every one-dollar spent in the SELD program returned $3.86 in benefits and $2.86 (286%) in net benefits were returned on Investment.

Addresses the question of whether a high turnover of staff is accompanied by lower investment in company‐training. By means of a written questionnaire, data were collected from 223 companies in four different sectors: the food sector, the wholesale trade, the printing industry and the software sector. Besides the turnover of staff, introduces the degree of contractual flexibility and the existence of an internal labour market as explanatory variables in the discussion. In contradiction to most labour economic thinking on training, finds a positive relationship between fluctuations in the number of employees and the investment in training. The findings indicate that company training is particularly concentrated on inflow and replacement problems. Therefore, concludes that financial support measures of governments might benefit more the recruitment policy of companies instead of the high ideal of “lifelong learning”.

Increasingly, training professionals are being asked to justify whether training is a worthwhile investment. Following on from part one, describes four practical methods for determining the cost‐effectiveness of training. Presents details and examples on how to use each method. Also identifies the advantages and disadvantages of each method. Ends with a skill check which provides an opportunity to apply the content covered.

This chapter discusses key training challenges that organizations need to confront with the objective of building a robust human resource management system. Given the dynamics of the current business environment, training and development has become an indispensable function in global organizations. Building an effective human capital that contributes to continual organizational growth has become the established norm to survive in a competitive business landscape. However, the training and development function is often rendered ineffective, on account of various bottlenecks existing in the organization. Addressing these bottlenecks is quintessential in ensuring the creation of a performance-driven human capital. The goal of this chapter is to draw attention to the training impediments that hinder organizational growth and to diagnose the underlying causes for the same. This chapter concludes with recommendations that organizational decision-makers can leverage in their quest to strengthen the human capital, by utilizing their training and development infrastructure optimally.

This article reinforces the importance of a strategic approach to training as a method of increasing the potential value of training. The strategic approach presented in the article includes timely linkages between the acquisition of training, the application of training, and rewards/compensation associated with training.

The importance of training as an investment is discussed, followed by a summary/illustration of an example of a training program in a financial services organization that did not result in desired returns or value associated with the investment in training.

Time lags between the acquisition of training and opportunities to apply the knowledge, skills, and capabilities developed through the training may have negative implications on employee perceptions and potential value associated with the training.

The article provides interesting insights to leaders, human resource professionals, and others involved in employee training programs. Specific emphasis is placed on the importance of linking compensation and opportunities to apply/transfer knowledge with training acquisition in a timelier manner.

The importance/value of applying knowledge, skills, and capabilities obtained through training is a recurring theme in the literature. The role of rewards in the form of compensation associated with training and knowledge acquisition is also widely noted. This article extends our understanding of these factors by placing emphasis on more closely linking the timing of training acquisition, application, and compensation in an effort to enhance the potential, strategic value of training investments.

Purpose – The purpose of this paper is to investigate the approaches used by leading lodging properties to assess the costs and contributions of training. The study also investigates the barriers to collecting data required for the calculation of return on investment (ROI) and begs the question, “when are hotel companies going to design a system that tracks the value of employee development?” Design/methodology/approach – This study uses a purposeful sampling method and focuses on a small number of hotel companies rather than a large sample. The interview questions were developed through an extensive literature and are based upon Kirkpatrick and Phillips' framework. The qualitative method employed for this study uses Littrell and Dickson's adaptation of Marshall and Rossman's qualitative research cycle. Findings – The paper reveals the haphazard approach to corporate spending and tracking training, one of the major expenses in the lodging industry. It explores the failure of hoteliers to expect accountability for the investment into employee development. Research limitations/implications – This study is exploratory and therefore may not be generalized to the entire population of human resources and training departments within the hotel industry. Practical implications – This exploratory study identifies the barriers of calculating the ROI of training. It also suggests strategies human resource managers can use to develop ROI for training programs and access employee development programs and budgets. Originality/value – This paper explores the unique perspective held by lodging managers on the issue of ROI in training. Very little research has been done on this aspect of ROI in training in the hotel industry.

The purpose of this study is to describe the evaluation of a training programme in a Portuguese family’s small and medium enterprise (SME) in the cosmetics industry. This study addresses the four levels of the Kirkpatrick Model and estimates the return on investment (ROI) of a training programme in sales.

The study follows a case design to address the analysis of the training outcomes. This study uses data from 53 employees and explore the programme’s results.

This study provides evidence on the reactions of the trainees to the programme; the learning which results from it; and on the changes in trainees’ behaviours and the consequent results. This study also estimates the ROI of the programme; it is 5.55.

The limitations to this study may be the use of data from a single training programme.

The research results offer managers some critical information in terms of future options in resource allocation. Training managers become more informed in making future choices on where to invest in training programmes.

The originality of the study regards the ROI estimation for an SME’s sales training programme. SMEs are not often addressed in the training evaluation literature. Because SMEs have limited organisational resources, and they do not invest much in training. Further, this estimation requires data gathering and reporting that is not commonly done, even for large firms.

This study’s purpose is to contribute to literature on training evaluation following Kirkpatrick’s four-levels model and estimating each training program’s return on investment (ROI) using evidence from a small firm.

This case study uses data collected at a logistics company based upon training output indicators like training program evaluation data; individual performance evaluation reports; information on attained objectives; service and productivity levels; quality audit reports; and accounting data.

Results show that all the training programs addressed report evaluation procedures at the four different levels (reactions, learning, behavior and results). ROI for each training program was estimated based upon costs and benefits associated to each program. The two training programs presenting above-average returns address work quality and conditions. The program addressing corporate social responsibility issues produced below-average results.

Limitations to this study may result from collecting data in a single moment in time and using data from a single organization, excluding generalization and extrapolation of results.

This case study should inspire managers in small and medium enterprises (SME) to implement training evaluation practices and ROI estimation. Having the ROI estimation available allows better management of the training budget, as ROI’s presentation is an argument to assign value and progress.

The originality of this study regards the way it reports training evaluation practices at the four levels established by Kirkpatrick’s framework (2005) and complements it with ROI estimation regarding five training courses run at a Portuguese SME logistics firm.