Page 63 - DMGT518_TRAINING_AND_DEVELOPMENT_SYSTEM

Training and Development System

Notes 4.2.4 Types of Cost Involved

The cost can be direct cost or/and indirect cost incurring in training of HRD activities.
Direct Costs Indirect Costs
 Consultant’s fee  Cost of Running HRD Organisations
 Honorarium to training faculty  Paper Production Cost
 Refreshments/Lunch/Dinner  TA/DA to Trainees and Trainers
 Hire Charges of Instruments  Leave or Compensation Allowances
 Hire charges of Training Aids  Work suffered due to Employee being
away for Training
 Cost of Writing Materials & Stationery  Cost of running Library
 Managerial/Supervision Cost

Cost Components

“An ounce of analysis is worth a pound of objective” said a performance technologist of UK,
Mr. Joe Harless. The analysis on the cost structure of HRD activities can project a clear picture of
cost components. In a broad sense the following can be considered the cost components (however
some can be added/subtracted according to the need of the programme or the principles of the
organisation):

 Cost of Planning the Programme
 Cost of Training need Identification & Assessment
 Cost of Designing the programme & Deciding Alternative
 Cost of Testing the Programme

 Cost of Trials
 Cost of Retesting and Redesigning the Programme
 Cost of Conducting & Evaluations of Programme

 Cost of Publishing or Rewarding the Programme.
4.2.5 Deriving the Formula

Based on the input to the cost of the activity and the elements of HRD, the formula can be derived
to its nearest accuracy. The formula for the costing of performance deficiency is to first determine
the unit or the element and then work out the cost of that unit or the element. The benefit to the
organisation is profit. Hence the details of cost become most vital for the viability comparison.
The formula to compute the cost of the element/units discussed above can be derived as given
below:

Did u know? Cost of Deficiency
The cost of deficiency is the total loss on the investment.
Cost of planning the programme
CP = CC + CTI + CS + CSO ...(1)

Where CP = cost of planning, CC = cost of consultant

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