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ROI: in Training and Development: Prepared By: Name: Kumar Anurag R O L L N O .: 8 0 2 0 5 2 0 0 0 0 5

The document discusses calculating return on investment (ROI) for training programs. It outlines how ROI is used to quantify training effectiveness, manage budgets, identify areas for improvement, and measure contribution. It then explains how to calculate ROI using benefit-cost ratio and ROI percentage. Finally, it discusses different ways to measure training effectiveness and importance of evaluating ROI to show management that training is an investment.

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KUMAR ANURAG
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29 views7 pages

ROI: in Training and Development: Prepared By: Name: Kumar Anurag R O L L N O .: 8 0 2 0 5 2 0 0 0 0 5

The document discusses calculating return on investment (ROI) for training programs. It outlines how ROI is used to quantify training effectiveness, manage budgets, identify areas for improvement, and measure contribution. It then explains how to calculate ROI using benefit-cost ratio and ROI percentage. Finally, it discusses different ways to measure training effectiveness and importance of evaluating ROI to show management that training is an investment.

Uploaded by

KUMAR ANURAG
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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ROI: In Training and

Development
P R E PA R E D B Y:

NAME: KUMAR ANURAG

ROLL NO.: 80205200005


RETURN ON INVESTMENT
OVERVIEW
With ROI, decision makers evaluate investments by comparing the magnitude and timing of
expected gains to the magnitude and timing of investment costs.
A good ROI means that investment returns compare favourably to investment costs.
Return on investment (ROI) has become one of the most challenging and intriguing issues facing the
human resources development (HRD) and performance improvement fields.
ROI is used for:

◦ Quantify the effectiveness of training.


◦ Manage the training budget.
◦ Identify areas for improvement.
◦ Sets Priorities
◦ Measures Contribution
◦ Alters Management Perceptions of Training
◦ Focuses on Results
WHY MEASURE ROI OF A TRAINING
PROGRAMME?

ROI calculations of training aim to answer two broadly similar questions: 


•Are trainees gaining new knowledge and skills so that they can increase efficiency and/or reduce
costs in the workplace?  
•Can we measure the cost of this training against the benefits to both the individuals and the
organization?  
CALCULATION OF ROI

Benefit/Cost Ratio:

ROI (%):
HOW CAN WE MEASURE THE EFFECTIVENESS
OF TRAINING AND DEVELOPMENT?

Reaction
Learning
Transfer
Evaluation
CONCLUSION
Any organization wanting to improve systems, procedures, or even attitudes must plan
accordingly. This planning must be integrated and aligned with the business. The effort to use
training as a tool to help balance an organization in a dynamic environment must be continuous.
There must be constant matching of individual and organizational needs in a system which is
biased towards neither. Once this matching is completed and training programs carried out, it is
then not only important to evaluate the training but to realize how much it has boosted the
bottom line. Here is where the ROI comes to the fore possibly on helping management realize
that training is truly an investment and not an expense.

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