Brianna: October 2012

ROTI – Return on Training Investment

Research indicates that the 'transfer of learning' from management and executive training programmes to the workplace hovers in the pitiful range of 10-30%. Even so, the amount of resources in time and money invested in such training continues to grow.

This begs the question : are orgaisations addressing the issue of Return on Training Investment (ROTI) adequately ? If not, why not ? Why are training investments not assessed for accountability and returns, as other investments ?

This question is particularly timely for organisations in India. The market for management and executive training in India is primed for explosive growth, propelled by the arrival of top-ranked institutions such as Harvard, Duke, and Wharton.

Indian organisations will soon be blitzed with marketing efforts from these top-ranked providers of executive training, and we can expect to see increasing numbers of Indian managers and executives receiving premium-priced training from these and other institutes.

The key question : Will organisations attempt to address the issue of ROTI from these programmes ? Most probably, they will not, offering the stock argument that ROTI is a complex and nebulous idea, and that they don't have the capability to do so. This argument has only limited merit; even if organisations don't have the capability to measure ROTI comprehensively, some of the steps involved could be assessed, providing insights into the value of training programmes.

ROTI: Steps Involved

It is important to recognise that the end goal of a typical training programme is not simply learning, but rather, the application of learning in the workplace. To understand why some managers successfully "act" on their learning after attending a programme and why others don't, organisations must appreciate that a training programme is part of a process, rather than a discrete event.

This process includes at least two steps before the training programme :

Recognition (recognition of the need for training), Matching (matching the right managers to the right programme), and at least three steps after the training programme: Application (application of the learning in the workplace), Impact (assessment of the impact made by the application of the learning), and Return (measurement of RoI based on impact to the organisation, taking into consideration all relevant costs).

Thanks & Regards,

Vishal Thakkar

Director

Brianna Knowledge Resources Pvt Ltd

Handphone: +91 932 000 7891

Board Line: +91 22 3910 99 99 Extn: 025

Fax: +91 22 3910 99 97

Email: vishal@brianna.co.in URL: www.brianna.co.in

Linked In: http://in.linkedin.com/in/vishalthakkar1405

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GDP Growth Rate

1. The Gross Domestic Product growth rate measures the increase in value of the goods and services produced by an economy.

2. Economic growth is usually calculated in real terms or inflation-adjusted terms, in order to net out the effect of changes on the price of the goods and services produced.

3. The Gross Domestic Product can be determined using three different approaches, which should give the same result. These different methods are the

a. product technique,

b. the income technique , and

c. the expenditure technique.

4. In sum, the product technique sums the outputs of every class of enterprise to arrive at the total.

5. The expenditure technique works on the principle that every product must be bought by somebody, therefore the value of the total product must be equal to people's total expenditures in buying products and services.

6. The income technique works on the principle that the incomes of the productive factors must be equal to the value of their product, and determines GDP by finding the sum of all producers' incomes.

7. The real GDP per capita of an economy is often used as an indicator of the average standard of living of individuals in that country, and economic growth is therefore often seen as indicating an increase in the average standard of living.

8. However, there are some problems in using growth in GDP per capita to measure the general well-being of a country´s population. In fact, GDP was first developed by Simon Kuznets for a US Congress report in 1934, who immediately said not to use it as a measure for welfare.

a. First, GDP per capita does not provide much information relevant to the distribution of income in a country.

b. Second, GDP per capita does not take into account negative externalities such as pollution consequent to economic growth.

c. Third, GDP per capita does not take into account positive externalities that may result from services such as education and health.

Finally, GDP per capita excludes the value of all the activities that take place outside of the market place such as free leisure activities or less positive activities like organized crime.