Page 60 - DMGT518_TRAINING_AND_DEVELOPMENT_SYSTEM

Unit 4: Training Design

Self Assessment Notes

Fill in the blanks:
1. The vital considerations for designing of the effective training programme is suitable
…………………… for training.

2. Expertise and ………………. types of climate in the training institute are vital requisite for
the good quality of training programs.
3. The success or failure of any training programs depends on the type of ………………...
prevailing in a training institution.

4.2 Budgeting

The top management always looks at the loss and profit of any activity. The objectives of the
strategies are only divided on the basis of cost justifications or viability aspect of the activities
in terms of resources. Though the return on investment of Human Resources Development is
still controversial in view of time variable in achieving desired change and effectiveness in the
employees, management does want some portion of the cost format and its return pattern to
decide how much to be invested and what will be the benefits to the organisation in terms of
rupees or increase in profitability or reduction in wastage, etc. Otherwise it may jeopardize the
entire organisation.
No doubt, HRD is the key area in bringing out excellence in organisation and in fact this has
been observed in Five Year Plan. Also as this costs to the organisation, it should be viewed
carefully in relation to the organisation’s size, turnover, total budget and the percentage or part
of budget used for HRD.
General Considerations on Budget

Generally 1.5 to 2.5% of the total employees salary (with few exceptions) could be allotted for
HRD activities as per the various studies and researches done in this context. However, the new
establishment do need much higher allocation for few months and for which the justification or
viability report can be put up to the management with expected benefits (in terms of rupees) in
coming years like ROI (Return On Investment) plan for new establishment. Unusual circumstances,
when office or entire plants may be shut down for T & D to implement, new technology, etc.
cannot be overruled. In such cases the costs may vary as high as 100% during this period.

4.2.1 Budget Allocation

Basically there are two methods of allocating the budget on HRD/T & D activities:
(i) All cost on HRD/T & D activities observed by HRD department are recorded at one place
in the corporate office.

(ii) All the costs are assigned to HRD department who has to record and control it.
Though both the methods may have the same results; the method used may greatly influence
the decision-making process. There may be pros and cons of both the methods but within the
framework of the organisational policies and philosophy, the methods are decided for acceptable
input-output ratio. Depending upon the organisational objectives, future plans and the priorities
of the programmes; the budget are allocated for HRD activities.

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