How Budgeting Helps the - Training and Development

By now it should be quite apparent that the budgeting process is another decision making instrument for the T&D manager. To decide whether to pursue a solution to a recognized performance problem to find more economical solutions— these questions can be answered by good budgeting practice.

For every performance problem, the T&D manager asks, "Is this problem costing a significant amount of dollars?" If the answer is a yes, the next inquiry should be, "Can we solve the problem by investing fewer dollars than the problem is costing us?" That answer sometimes dictates a decision either to live with the problem or to consider less costly alternative solutions.

Schematically,the process looks something like Figure below. As the chart indicates, not all performance problems should be solved. The T&D manager has a major consultative responsibility to help management recognize this condition when it is true to help invest the T&D dollars and energy in problems with the highest payoff.

It doesn't necessarily follow that all decisions rest on cost-effectiveness. Sometimes the emotional strain of an unsolved problem is just too great to bear. The human beings involved with the problem cannot go on living with it—even though there is no economic loss from the problem. There may also be legal reasons for proceeding with training which is not cost-effective.

The go/no go decision process.

The go/no go decision process.

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