Impact of Training Programs Its Effect on Roi of Banking Sector

Topics: Net present value, Rate of return, Cost-benefit analysis Pages: 12 (2980 words) Published: May 12, 2013
Impact of Training programs its effect on ROI in banking industry in Jaffna in Sri Lanka 2.INTRODUCTION :
Training & Development is the field which is concerned with organizational activity aimed at bettering the Performance of individuals and groups in organizational settings. There is currently a great deal of discussion on calculating the return on investment (ROI) in Training. ROI is important because it helps to understand whether the training has had an effect on the bottom line of the business—and it helps us to convince decision makers that they should invest in training.

Training and Development efforts are big business in the world, with the amount of money spent increasing yearly. However, changes in the economy and declining profit margins are prompting many businesses question the value of their training investment.

Now a day, In Jaffna there are more banks available to provide financial services for people competitively. So banks provide training and development programs to improve the workers’ skills and abilities. An important problem is that return on investment from training programs is typically unknown. More specifically, the results of training and development programs are not evaluated in terms of their effect on business results. The impact of training and development on organizational profitability is difficult to evaluate and often not attempted. The benefits of programs are often subjective and difficult to quantify in monetary terms. Benefits also accrue over time and the optimal point of time to evaluate is ambiguous. Because of the lack of evaluation, the effort put into developing human capital is often seen as an expense and not an investment.

This study will establish a direct link among investment in training, employees and organization performance.

Training Evaluation is a very important stage for a successful Training and Development program, this activity is the most neglected and problematic. As a result, Training and Development has been considered in many organizations as a waste of money and time, a cost which needs to be minimised and is often perceived as an ineffective process.

So Return on Investment [ROI] has become one of the most challenging and intriguing issues facing the human resources development and performance improvement fields 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.

Basically, the research will investigate how can apply capital appraisal techniques for the appraisal of investment made on development of human capital in way of Training in banking sector. •Research Question:

Whether is an investment made on the training and development of human resources is financially viable or not in for the organization?


To highlight the importance of training for firms and its impact on the productivity and overall performance of the firms.

To provide a guideline regarding all costs associated with the training and scale of measuring the training returns/ outcomes.

At the end to suggest that whether cost is beneficial for the firms or its cost takes over the benefits.


This study will help to identify whether the cost associated with training by firms gives them better results in terms of financial outcome.

This study will provide a tool to the firms to monetize and evaluate the training costs and its benefits and to see whether training was beneficial or not.

This research will tell the outcome in form of tangible and intangible benefits.

Ultimately it will be tools for management to assess the effectiveness of Training by comparing its benefits and costs.

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