A Case for Training and Development ch 2.ppt.ppt
- 1. © 2002, Educational Institute Chapter 2 Training and Development as an Investment Training and Development for the Hospitality Industry First Edition (354T or 354)
- 2. 2 © 2002, Educational Institute Competencies for Training and Development as an Investment 1. Explain how training is an investment in an organization. 2. Differentiate the budgeting process for training in today’s organizations from the past. 3. Identify the variables to consider when calculating the costs of training and the costs of not training. 4. Describe how training directors develop cost-benefit analyses for training and development activities. 5. Explain how training directors calculate an ROI (return on investment) for training and development activities.
- 3. 3 © 2002, Educational Institute Labor Shortage Factors Demographics Competition from better paying industries Low perception of service culture Perceived lack of education needed Perceived lack of advancement opportunities
- 4. 4 © 2002, Educational Institute Absenteeism Causes Management’s insensitivity Management’s lack of response to the critical needs of employees Low morale, prompting lack of motivation Low morale, causing increased levels of stress Low morale, causing increased accidents and illnesses
- 5. 5 © 2002, Educational Institute Turnover Rates Hotels 60 to 240 percent Restaurants 100 to 300 percent Clubs 75 percent Retail grocery 35 percent All U.S. businesses 12 percent
- 6. 6 © 2002, Educational Institute Reducing Turnover Through Training Increased job satisfaction Involvement in corporate culture Involvement in decision making Information about their jobs and the organization Organizational stability Predictable work environments
- 7. 7 © 2002, Educational Institute Types of Turnover Costs Separation costs Replacement costs Training costs
- 8. 8 © 2002, Educational Institute Recruitment Costs Advertising Management’s time in selection Application forms Testing Interviewing Reference checks Management’s time in hiring decisions (continued)
- 9. 9 © 2002, Educational Institute Recruitment Costs Maintaining legal advice Management’s time working the floor filling in Human resource knowledge Record keeping (continued)
- 10. 10 © 2002, Educational Institute Times to Increase Training Budgets During the first six months of operation At the introduction of a new product At the introduction of a new system During a period of increased growth that results in increased hiring When implementing management development programs
- 11. 11 © 2002, Educational Institute Elements of Proposals Clear Concise Professional Organized Objective Complete
- 12. 12 © 2002, Educational Institute Types of Costs Labor costs Materials costs Delivery costs Replacement costs Overhead costs Pre-program costs Follow-up costs Indirect costs Cost of cost analysis Opportunity costs
- 13. 13 © 2002, Educational Institute Standard Costing Practices Use a systematic approach Consider the entire life of the project Start accumulating costs early Know when to estimate a cost
- 14. 14 © 2002, Educational Institute True Training Costs Labor Material s Delivery Other
- 15. 15 © 2002, Educational Institute Other Costs Replacement Overhead Pre-program Follow-up Indirect Cost of cost analysis Opportunity cost
- 16. 16 © 2002, Educational Institute Indirect Costs Maintenance Support services Equipment Depreciation of equipment Repair of equipment Custodial Utilities Telephone Use of training space
- 17. 17 © 2002, Educational Institute Intangible Costs of Not Training Opportunity costs Development of ineffective training
- 18. 18 © 2002, Educational Institute Sources of Benefits Guest comments Time cards Check-in-time efficiency data Rooms cleaned per hour data Plate waste analysis On-the-job accident reports Employee turnover rates Employee absenteeism rates Other productivity records
- 19. 19 © 2002, Educational Institute Cost Savings Areas Labor Materials Equipment
- 20. 20 © 2002, Educational Institute Intangible Benefits to Training Increased guest satisfaction Increased employee motivation Increased employee achievement Employee recognition Employee interest Employee responsibility Reduced tardiness Reduced alcoholism (continued)
- 21. 21 © 2002, Educational Institute Intangible Benefits to Training (continued) Reduced unacceptable behavior Reduced drug abuse Increased potential value of the employee Increased payback to the profession Increased level of advancement
- 22. 22 © 2002, Educational Institute Benefits of Cost-Benefit Analyses Calculate whether a program is financially beneficial Determine whether a program is worth its cost Demonstrate return on investment Help justify the program to top management Identify what priorities exist in developing training Determine whether training will be the solution to the problem Determine if benefits are consistent over time (continued)
- 23. 23 © 2002, Educational Institute Benefits of Cost-Benefit Analyses Avoid inefficient training methods Produce better objectives and goals Define clear goals and objectives Identify overly costly training methods (continued)
- 24. 24 © 2002, Educational Institute Cost-Benefit Analysis Steps 1. Calculate costs 2. Calculate benefits 3. Calculate results
- 25. 25 © 2002, Educational Institute Measuring the Impact of Training Profit Productivity Performance
- 26. 26 © 2002, Educational Institute ROI Tools Cost-benefit analysis Cost-effectiveness ratios Cost-feasibility analysis
- 27. 27 © 2002, Educational Institute Measurements of Effectiveness Dollars Time Productivity Injuries per month Rooms prepared per hour
- 28. 28 © 2002, Educational Institute When NOT to Measure Performance standards are not clearly defined Training problem is not clearly defined It is uncertain that the performance problem is a training problem It is only a performance problem of the person doing the job The problem is not worth trying to fix Nothing would change in workplace performance