Cost Benefit Analysis for Training
February 12, 2025
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Training is an expensive process not only in terms of the money spent on it but also the time and the other resources spent on the same.
The most important question therefore is determining whether or not a need for training actually exists and whether the intervention will contribute to the achievement of organisational goal directly or indirectly?
The answer to the above mentioned question lies in ‘training needs analysis’ which is the first step in the entire process of training and development.
Training needs analysis is a systematic process of understanding training requirements.
It is conducted at three stages -
Each of which is called as the organisational, individual and job analysis. Once these analyses are over, the results are collated to arrive upon the objectives of the training program.
Another view of the training need is that, it is the discrepancy between ‘what is’ and ‘what should be’. Taking cues from this the world bank conducted a needs analysis and arrived upon the conclusion that many of its units in eastern regions of Europe required transformation from state owned business to self sustaining organisations. A number of universities were then contacted to develop the necessary modules and conduct the training upon the same.
Although each step in the entire training process is unique in its own, needs analysis is special in that it lays the foundation for the kind of training required.
The assessment gives insight into what kind of intervention is required, knowledge or skill or both. In certain cases where both of these are present and the performance is still missing then the problem may be motivational in nature. It thus highlights the need and the appropriate intervention which is essential to make the training effective.
As mentioned earlier, the needs analysis/assessment is carried out at three levels - organisational, Individual and Job. We now take up each one of them in detail.
The organisational analysis is aimed at short listing the focus areas for training within the organisation and the factors that may affect the same.
Organisational mission, vision, goals, people inventories, processes, performance data are all studied. The study gives cues about the kind of learning environment required for the training. Motorola and IBM for example, conduct surveys every year keeping in view the short term and long term goals of the organisation.
The job analysis of the needs assessment survey aims at understanding the ‘what’ of the training development stage. The kind of intervention needed is what is decided upon in the job analysis.
It is an objective assessment of the job wherein both the worker-oriented approach as well as the task-oriented approach is taken into consideration. The worker approach identifies key behaviours and ASK for a certain job and the task-oriented approach identifies the activities to be performed in a certain job. The former is useful in deciding the intervention and the latter in content development and program evaluation.
As evident from the name itself, the individual analysis is concerned with who in the organisation needs the training and in which particular area. Here performance is taken out from the performance appraisal data and the same is compared with the expected level or standard of performance.
The individual analysis is also conducted through questionnaires, 360 feedback, personal interviews etc. Likewise, many organisation use competency ratings to rate their managers; these ratings may come from their subordinates, customers, peers, bosses etc.
Apart from the above mentioned organisations also make use of attitude surveys, critical Incidents and Assessment surveys to understand training needs which will be discussed in detail in other articles.
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