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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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Catalysts & Transformers
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
8/2/2019 Chap#14 WHATS SPECIAL ABOUT T&D
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Rab`s Centre forCreative Leadership
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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Rab`s Centre forCreative Leadership
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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Rab`s Centre forCreative Leadership
Catalysts & Transformers
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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Catalysts & Transformers
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.
6Business Communication Today, 9e
T&D helps to reduce EstimationFluctuation
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Rab`s Centre forCreative Leadership
Catalysts & Transformers
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
7Business Communication Today, 9e
T&D helps to reduce EstimationFluctuation cont.
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Rab`s Centre forCreative Leadership
Catalysts & TransformersComputing the cost ofPerformance Deficiencies
Determine the unit.
Determine the cost of that unit.
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Rab`s Centre forCreative Leadership
Catalysts & TransformersCost Estimation
9Business Communication Today, 9e
Three elements for Cost Estimation
Auditor time
Supervisory time
Clerk time
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Rab`s Centre forCreative Leadership
Catalysts & TransformersPerformance Error Estimation
Per day 20 errors
Annual days 365
Annual mistakes(20*365)=7300
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Rab`s Centre forCreative Leadership
Catalysts & TransformersCalculation
Multiply the unit cost to the number
of defective units
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Rab`s Centre forCreative Leadership
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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Rab`s Centre forCreative Leadership
Catalysts & Transformers
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 )
13Business Communication Today, 9e
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Rab`s Centre forCreative Leadership
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
14Business Communication Today, 9e
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Rab`s Centre forCreative Leadership
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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Rab`s Centre forCreative Leadership
Catalysts & TransformersTotal Costs Of Training
Divided into three parts
Training Production Costs.
Training Conducting Costs.
Training Evaluating Costs.
16Business Communication Today, 9e
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Catalysts & Transformers
Computing Training ProductionCosts
17Business Communication Today, 9e
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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Rab`s Centre forCreative Leadership
Catalysts & TransformersFormula of Conducting Training
18Business Communication Today, 9e
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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Rab`s Centre forCreative Leadership
Catalysts & TransformersFormula Of Evaluating Training
19Business Communication Today, 9e
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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Catalysts & Transformers
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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Catalysts & Transformers
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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Rab`s Centre forCreative Leadership
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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Rab`s Centre forCreative Leadership
Catalysts & TransformersSummary
23Business Communication Today, 9e
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.