chap#14 what’s special about t&d

8/2/2019 Chap#14 WHATS SPECIAL ABOUT T&D

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Rab`s Centre forCreative Leadership

Catalysts & Transformers

WHATS SPECIAL ABOUTTRAINING & DEVELOPMENT

BUDGETS?:

CHAPTER 14


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What is Budget?

What is HR budget?

General Estimating Policies Ways to Absorb Estimation Fluctuation

Computing the cost of performance deficiencies.

Computing The Cost Of Training .

How budgeting help the Go/ No-Go Decisions.

Summary

Agenda


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Catalysts & TransformersBudget

A budget is a financial plan.

List of all planned expenses and revenues.

It is a plan for saving, borrowing and spending.

Provide a forecasted revenues and expenditures, Financially

performance in the execution of certain strategies, plans &

trainings.

Actual financial operation measurement against the forecast.3Business Communication Today, 9e


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Catalysts & TransformersHR Budget

Overhead Cost

Payroll, including

Salary

Overtime

Allowances -

Attendance, Meal

or Others

Bonus

Increment

Recruitment Cost

4Business Communication Today, 9e

Welfare CostTraining Cost

Transportation

Hostel

Uniform

Medical

Group Insurance

Allowances - Car,

Petrol, etc Family Day /

Annual Dinner

Sport Club

External Programs

Registration Fees

Travel Expenses

Certification Exam

cost

Consulting Fees

Trainer Salary

Program material

Food & Beverages

Supplies for

attendees


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General Estimating Policies

How Much should be invested in T&D activities by

Organization?

For normal operations 1.5% to 2.5% of the totalemployee salary cost to T&D.

T&D Director is a Strategic planner.


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Needs to educate more to its own staff and some

times its take time because of work load.

People with T&D experience can be rotated into

managerial positions and at peak they can be

reassigned to T&D project.


T&D helps to reduce EstimationFluctuation


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Outside Resources can be hired during heavy

workload.

Temporary staff member can be employed for single

or a limited number of projects which will lighten the

workload


T&D helps to reduce EstimationFluctuation cont.


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Catalysts & TransformersComputing the cost ofPerformance Deficiencies

Determine the unit.

Determine the cost of that unit.


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Catalysts & TransformersCost Estimation


Three elements for Cost Estimation

Auditor time

Supervisory time

Clerk time


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Catalysts & TransformersPerformance Error Estimation

Per day 20 errors

Annual days 365

Annual mistakes(20*365)=7300


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Catalysts & TransformersCalculation

Multiply the unit cost to the number

of defective units


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Catalysts & TransformersReview of steps

Identify single unit of defective

performance.

Calculate cost of unit.

Calculate number of defective units.

Multiply the units cost to defective units.


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Computing The Cost OfTraining

Other solutions for performance problem instead of

training:

Feedback (Low cost solution)

Job Aids (Guidance for the performer) Job engineering (Expensive but less costly than training)

Contingency management (Time consuming)

Quality Circles (Involves all levels of management and

workers)

Organizational Development (Involves top level members

which finally avoids future performance problems )



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Catalysts & TransformersCost of Training Cont...

Training is expensive but the T & D officer has to control

the costs.

T & D officer must see the training expenditure is

appropriate to the contribution in the training program. Support Expense includes staff, equipment, special

material & travel expenses



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Catalysts & TransformersCost of Training Cont....

Instructors must also prepare to teach.

Training programs require a demo class which increases

travelling and facilities costs.

There is no need for it when feedback mechanism orcontingency management are solutions to performance

problem.

The T & D officers want to charge the salary of trainees

to the production costs of the program

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Catalysts & TransformersTotal Costs Of Training

Divided into three parts

Training Production Costs.

Training Conducting Costs.

Training Evaluating Costs.



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Computing Training ProductionCosts


Item Formula TotalStaff Costs:

Salaries No. of people *salary *No. Of hours

Travelling Ticket charges

Overhead Electricity

Material Costs:

Film Actual cost if purchased

Video discs From $ 35,000 to $ 100,000 per hour

35 mm slides $15 to $50 per slide

Manuals and materials Local figures

Special equipments Total purchase price


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Catalysts & TransformersFormula of Conducting Training


Trainee Costs: TotalNo. Of trainees * median salary * training hours

Travel costs: total from expense reports* No. Of trainees

Student material: Unit costs * No. Of trainees

Lost production: Value per unit * The No. Of lost units.

Faculty Costs:

No. Of trainers * No. Of hours * median salary

Travelling costs

Special equipment or services:

Rental of equipment: Total charges. If purchased, amortize over 10 years.


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Catalysts & TransformersFormula Of Evaluating Training


Item Formula TotalSalaries:

Design:

Selecting criteria No. Of hours * median salary

Data sources:

Interviewers No. Of hours * median salary

Data analysis No. Of hours * median salary

Materials:

Printing Actual local costs

Mailing Units * two way postage

Travelling tickets Actual totals


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How Budgeting Helps TheGo/No-Go Decisions

Budgeting process is decision makinginstrument.

H b d i h l h GO/NO GO


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How budgeting helps the GO/NO GODecision

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Is the

problemcostly?

Is the solutionless costly than

the problem?

Can a costeffective

solution beimplemented?

Seekalternative

solution

Invest energy in a

different

performance

problemProceed with

solution

Yes

Yes

Yes

No

No

No


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Catalysts & TransformersPerformance Problem

Is the problem costing a significant amount ofdollars?

Can we solve the problem by investing fewer dollarsthan the problem is costing us?

The answers sometimes dictates a decision to livewith it or to consider best alternative solutions.


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Catalysts & TransformersSummary


Every Process has a budget

HR budget encompasses the training costs.

Like other calculation performance are to becalculated.

Training cost incurred in training production,

training conduction and training evaluation.

Budgets helps in to go for training decision or for

alternates option.

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