Industrial and Commercial Training

Valuing the investment in organizational training

L.W. Murray Alev M. Efendioglu
Article information:
To cite this document:
L.W. Murray Alev M. Efendioglu, (2007),"Valuing the investment in organizational training", Industrial and Commercial Training, Vol. 39 Iss
7 pp. 372 - 379
Permanent link to this document:
http://dx.doi.org/10.1108/00197850710829085
Downloaded on: 11 February 2016, At: 05:41 (PT)
References: this document contains references to 19 other documents.
To copy this document: permissions@emeraldinsight.com
The fulltext of this document has been downloaded 3694 times since 2007*
Users who downloaded this article also downloaded:
Piyali Ghosh, Jagdamba Prasad Joshi, Rachita Satyawadi, Udita Mukherjee, Rashmi Ranjan, (2011),"Evaluating effectiveness
of a training programme with trainee reaction", Industrial and Commercial Training, Vol. 43 Iss 4 pp. 247-255 http://
Downloaded by University of Pittsburgh At 05:41 11 February 2016 (PT)

dx.doi.org/10.1108/00197851111137861
Piyali Ghosh, Rachita Satyawadi, Jagdamba Prasad Joshi, Rashmi Ranjan, Priya Singh, (2012),"Towards more effective
training programmes: a study of trainer attributes", Industrial and Commercial Training, Vol. 44 Iss 4 pp. 194-202 http://
dx.doi.org/10.1108/00197851211231469
T. Brad Harris, Wonjoon Chung, Holly M. Hutchins, Dan S. Chiaburu, (2014),"Do trainer style and learner orientation predict training
outcomes?", Journal of Workplace Learning, Vol. 26 Iss 5 pp. 331-344 http://dx.doi.org/10.1108/JWL-05-2013-0031

Access to this document was granted through an Emerald subscription provided by emerald-srm:121184 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service
information about how to choose which publication to write for and submission guidelines are available for all. Please visit
www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than
290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional
customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE)
and also works with Portico and the LOCKSS initiative for digital archive preservation.

*Related content and download information correct at time of download.

 Valuing the investment in organizational
training
L.W. Murray and Alev M. Efendioglu

L.W. Murray and Abstract

Alev M. Efendioglu are both Purpose – The purpose of this paper is to provide a better methodology for evaluating the value of
at the University of San corporate training to make it easier to compare with other organizational investments. The paper also
Francisco, San Francisco, seeks to propose and demonstrate how ‘‘time value of money’’ and ‘‘hurdle rate’’, which are significant
Downloaded by University of Pittsburgh At 05:41 11 February 2016 (PT)

California, USA. components of traditional investment valuation methods, can and should be incorporated into the
valuation of organization training.
Design/methodology/approach – The training investment evaluation methods most commonly used
by the training professionals were identified and compared to investment evaluation techniques used to
measure the value of other investments made to improve and expand business activities.
Findings – The survey of training investment evaluation literature showed that there are two major
problems in the methods utilized by the training professionals. One of the problems was associated with
the measurement and monetization of costs and benefits of the training activity. The other was the
non-comparable return values’ generated by the non-uniform methodologies used by the training
professionals. Both of these issues were addressed and shortcomings of the currently used
methodologies where changes should be made to improve this process were identified. A new
methodology, which will make the evaluation process more acceptable to the company management,
was developed and its use was demonstrated.
Research limitations/implications – Unfortunately, the issues associated with monetization of costs
and benefits could not be fully addressed. This is much more organization specific and specific to the
type of training provided. However, some examples were provided of how this activity could be uniformly
applied.
Practical implications – The paper provides a new and more acceptable methodology for the use of
training professionals and organizations to evaluate the value of training.
Originality/value – This paper applies a ‘‘financial analyst’’ or a Chief Financial Officer perspective to
organizational investment in training and provides a tool for evaluating its value the same way
organizations evaluate their other investments (e.g. acquisitions, factory expansions, product
development).
Keywords Training, Return on investment, United Kingdom
Paper type Research paper

Introduction
In today’s ever-changing business climate, as organizations seek ways to remain
competitive they have significantly increased their efforts to develop the knowledge, skills,
and capabilities of each employee to maximize their organizational impact. According to the
latest report from ASTD (a national professional organization for trainers), organizations
spend $109.25 billion annually on workplace learning and performance (WLP). The average
annual expenditure per employee in the ASTD’s Benchmarking Forum (BMF) sample of large
organizations increased to $1,424 per employee in 2005, an increase of 4 percent from
2004, and the average expenditure per employee in ASTD BEST organizations increased 3.7
percent to $1,616. These figures show that BMF and BEST organizations continue to allocate
substantial resources to employee learning. In calculating these figures, ASTD uses

PAGE 372 j INDUSTRIAL AND COMMERCIAL TRAINING j VOL. 39 NO. 7 2007, pp. 372-379, Q Emerald Group Publishing Limited, ISSN 0019-7858 DOI 10.1108/00197850710829085
 expenditure per employee, percentage of the organization’s payroll, learning hours per
employee, and the cost per learning hour. The average number of hours of formal learning
per employee in BMF organizations increased from 35 hours per employee in 2004 to 41
hours per employee in 2005. In BEST organizations, the average number of learning hours
per employee rose from 36 in 2004 to 43 in 2005 (Ketter, 2006).
There has also been a significant shift in who the trainers are and what is being measured as
the outcome of organizational training efforts. The companies have become more cautious
and concerned about the value of competitive intelligence and have caused organizations to
significantly curtail outsourcing of the training activities. According to ASTD, the average
percentage of external expenditures in BMF organizations have fallen from 40 percent in
2001 to 24.8 percent in 2005 and in BEST organizations from 27.5 percent in 2004 to 23.9
percent in 2005 (Ketter, 2006). The measurement of the learning function has also shifted
from a focus on program-level evaluation to the aggregation of data across the organization
that covers learning investments and the value those investments ultimately bring to the
organization. Organizations have or are in the process of developing dashboards and
scorecards to monitor the results of the enterprise-wide learning function.
Unfortunately, in spite of the best efforts of organizations and the professional trainers’
associations, there are significant problems in evaluating the true impact of training. The
published results of the survey administered to the delegates of the 2006 conference and
Downloaded by University of Pittsburgh At 05:41 11 February 2016 (PT)

published by the British Learning Association in May 2006 found that 72 percent of a
representative sample of Britain’s leading learning professionals considered that learning
tends not to lead to change, and only 51 percent of respondents said that the learning and
training programs they delivered were actually evaluated after the learning or training took
place (The Great Training Robbery, 2006).
Various organizations and researchers have tried to value training as an organizational
investment and have used simple valuation methods to calculate a Return on Investment
(ROI) for their training activities. However, when we look at these valuation attempts, it is
apparent that there are two major problem areas associated with this effort and significant
amount of controversy surrounding these valuation efforts. The controversy is caused by the
problems with the assessment of benefits, and the simplicity of the methodology used in
calculating the ‘‘ROI’’. Even though it seems relatively easy to identify and assign monetary
value to most of the costs associated with training, this does not seem to be the case for the
benefits, which some of them are tangible (e.g. reduced number of errors in completing a
task, etc.) and others which are not (e.g. improved morale, etc.). What value do you place on
improved morale? Reduced stress levels? Longer careers? Better qualified staff? Improved
time management? All of these can be benefits – returns – on training investment.
Therefore, one can make an argument that, attaching a value and relating this to a single
cause (i.e. training) is often impossible and many training ROI assessments are ‘‘best
estimates’’.

Measuring and monetizing benefits and costs of training

Much of the literature on training costs and benefits identifies the costs and benefits directly
and indirectly related to the training efforts undertaken. There is some disagreement on
which costs should be included. For example, Campbell (1994) argues that expenses,
which are necessary for an organization, should be excluded from the valuation, where as
Phillips et al. (2007) suggest that training indirect costs should be treated as an allocation of
the organization’s general overhead expenses.
It is in the recognition and measurement of the benefits of training that the divergence of
opinion appears to be widest. At the extreme of simplicity, Chang (2003) suggests that for
employees directly involved with producing sales revenue it is the change in revenues that is
the appropriate measure of benefits. Farrell (2005) recommends instead focusing on
employee turnover because the benefits of training will be felt most notably in the
measurement of this organizational outcome.

j j
VOL. 39 NO. 7 2007 INDUSTRIAL AND COMMERCIAL TRAINING PAGE 373
 ‘‘ Since almost all investments result in benefits received
months and/or years afterwards, those benefits received
sooner than others are valued more highly. ’’

At the other extreme Campbell (1994), Phillips et al. (2007), Lengermann (1996), and Tobin
(1998) suggest that the benefits of training must be measured in by identifying changes in
key operating activities directly related to an organization’s goals and objectives. Campbell
suggest that these ‘‘hard to quantify’’ variables include employee morale, workforce stability,
lower absenteeism, job satisfaction, supervisory skill development and improved customer
relations. Phillips adds to those activities changes in:
B the organization’s commitment;
B teamwork; and
B customer complaints.
Downloaded by University of Pittsburgh At 05:41 11 February 2016 (PT)

Lengermann argues that benefits need to be measured in terms of changes in a firm’s

productivity net of changes in employees’ salaries that are result of training. Tobin narrows
the focus even more by suggesting that the benefits be measured in terms of changes in
business outcomes that are evidenced in improved job performance.
ASTD reports that their BEST organizations use employee and customer satisfaction, quality
of products and services, cycle time, retention, revenue, and overall productivity as their
measures. Further, almost all of these organizations reported improvements during 2006 in
these categories, as well as increases in their training budgets (Ketter, 2006).

Calculating return on investment

Methods used by training professionals

A survey of recent literature on training shows that the training professionals use four
different methods to define and calculate a ‘‘training ROI’’ (Rowden, 2005; IOMA, 2004).
Three of these methodologies generate a ratio and the fourth produces a numerical value.
Additionally, one of the three ratio based methods calculates ROI based on a forecasts
whereas the other two are determined by a review of benefits actually realized from the
training.
These different, but commonly used, valuation methodologies present significantly different
returns/outcomes for the training in organizations, even when one uses the exact same
figures in each case. To demonstrate we will use an example that is presented as the
‘‘Federal Information Agency’’ example by Phillips et al. (2007, p. 199). This agency spent
$3,931,957 to train 1,500 communications specialists and the value of the enhanced job
skills and reduction in employee turnover was estimated to be $9,945,000. Following
presents what the organizational benefits (return on training investment) would be under
each of the valuation methods.
The most widely used means of defining and calculating ROI uses the cost-benefit analysis
(CBA) method. Users of this method define and calculate ROI as the ‘‘ratio of the benefits’’.
The organization identifies the monetary value for the skills and other outcomes received by
the employees that are trained and the costs associated with the training effort. The ratio is
generated by dividing the monetary value of the benefits by the monetary cost of the
training. Measured in this manner, the training is thought to be successful if the ratio exceeds
1; i.e. the benefits derived are greater than the costs incurred. The ratio is represented as:

ROI% ¼ ðBenefits=CostsÞ £ ð100Þ: Federal Information Agency ROI ¼ 253%

j j
PAGE 374 INDUSTRIAL AND COMMERCIAL TRAINING VOL. 39 NO. 7 2007
 A second model, widely attributed by trainers to the result of research on this subject by
Phillips (1997), defines ROI as the percentage return of the net benefits derived from the
training on the costs incurred in providing such training. Schriver and Giles (1999), Business
Wire (2005), Swanson and Gardous (1988) and Pangarkar and Kirkwood (2003) provide
illustrations of the use of this model to evaluate the monetary value of training for an
organization. Because this model calculates net benefits by subtracting training costs from
total value of received benefits before generating the cost-benefit ratio, is different than the
CBA method and will always result in a lower ratio than that calculated using the CBA
method. This ratio is determined by:
ROI ¼ ððBenefits 2 costsÞ=costsÞ £ 100: Federal Information Agency ROI ¼ 153%:
A third model is used to forecast the ROI for training designed to improve performance
management. (IOMA, 2004) This method expands the net benefit percentage return
calculation by adjusting the benefits and moderating it by the percent of trainees who
actually use or apply the training to their job related tasks. Further, it tries to forecast
organization-wide impact of such training based on the percentage of employees who
participated in the training. Except when 100 percent of the employees are trained and all
are able to apply their training to their jobs, the return ratio calculated under this method will
always be lower than the non-moderated net benefit bases ratio identified as model two.
The ratio is represented as:
Downloaded by University of Pittsburgh At 05:41 11 February 2016 (PT)

ROIFORECASTED ¼ ½net benefitÞ=costs
£ ð100Þ £ ð%AÞ £ ð%PÞ

where %A is the percentage of the training participants who are expected to be able to use
what they learned in the training to produce the benefits expected from the training and %P
is the percentage of employees that participated in the training program. Federal
Information Agency ROI ¼ 45:9%
The fourth model defines ROI as the difference between benefits and costs. In this case, the
monetary value of training costs is subtracted from the monetary value of the training
benefits. As the difference between benefits and costs increase, the value of the calculated
training ROI increases. Cipolla (2005) provides a short discussion of why this model results
in a correct evaluation of the return on investment to human capital (hROI). The value is
represented as: hROI¼ Benefits minus Costs. Federal Information Agency
hROI ¼ $6,013,043

Valuation methods used for other corporate investments

The various methodologies employed by trainers to estimate ROI are somewhat close
approximations of two standard models for evaluating organizational investments;, e.g.
acquiring a firm; purchasing a new machine; entering a new market. There are two major
differences between how trainers calculate ROI and how organizations value their
investments. These differences flow from the time value of money and what is assumed as
the ‘‘return from the investment’’.
The Internal Rate of Return (IRR) of an investment is a percentage return on an investment
(e.g. the cost of purchasing a new machine) where the net benefits are expressed not as a
monetary value but as a rate of return. The method compares the cost of the investment to
the net benefits expected to be received by the organization, based on the after-tax cash
flows (CFAT) resulting directly from the investment that continue over a number of years (n).
The annual compound rate of return is calculated by equating the present value of the
benefits to its costs, and solving for IRR.

Present Value BENEFITS ¼ CFAT 1 =ð1 þ IRRÞ1 þ CFAT 2 =ð1 þ IRRÞ2 þ ::: þ CFAT n =ð1

þ IRRÞn

where:
Present Value BENEFITS ¼ Costs of the Investment

j j
VOL. 39 NO. 7 2007 INDUSTRIAL AND COMMERCIAL TRAINING PAGE 375
 ‘‘ The published results of the survey administered to the
delegates of the 2006 conference and published by the
British Learning Association in May 2006 found that 72
percent of a representative sample of Britain’s leading
learning professionals considered that learning tends not to
lead to change. ’’

A second model, Net Present Value (NPV), is also widely used to evaluate investment
projects. This model calculates an investment’s net benefit in monetary terms and
incorporates an ‘‘expected rate of return’’ (k) into the valuation. The Net Present Value (NPV)
is calculated using the ‘‘Present Value’’ equation above and substituting the ‘‘expected rate
of return’’ (k) for the ‘‘internal rate of return’’ (IRR). If the net present value of the benefits
exceeds that of the investment’s cost, the organization would undertake the investment; i.e.
NPV . 0.
Downloaded by University of Pittsburgh At 05:41 11 February 2016 (PT)

Applying methods used for corporate investments to training investments

In traditional methodologies used to evaluate investments, the percentage returns (or
expected return) on an investment reflect the time value of money; i.e. money spent now is
more valuable than money spent in the future. Since almost all investments result in benefits
received months and/or years afterwards, those benefits received sooner than others are
valued more highly. In the methodologies used by the training professionals, discussed
above, the time value of money is omitted from the analysis. Thus, training expenditures
should be evaluated in terms of their overall contribution to the organization’s value by using
either internal rate of return (IRR), if using ratios for comparison, or net present value (NPV), if
monetary comparisons are preferred (by the organization).

Using ratios to value training return of investments

There is almost no recognition in the training literature that training must ‘‘earn’’ an
anticipated rate of return. However, several authors suggest rules-of-thumb rates of return
from their experiences with training projects. Phillips et al. (2007, p. 29) reports that training
whose outcomes directly related to an organization’s operating goals or strategic initiatives
should earn at least 20 percent as compared to the cost of the training; i.e. the organization’s
investment in training. Rowden (2005) concludes that training benefits should improve job
performance by at least the rate of inflation. IOMA (2004, p. 7) estimates that the return to
training to be in the range of 40-70 percent.
Inwood (1993) notes that training for the highly-skilled worker (e.g. software professionals)
takes a great deal of time before productivity gains are recognized and that up to 75 percent
of training information is forgotten after one week. Therefore, he suggests that as a substitute
for using the actual cost of training organizations should double the fully-burdened
employee costs and then add an additional 25 percent. If the benefits then exceed the costs,
the training should be economical; i.e. the ROI ratio exceeds 100.
An opposite approach to applying a standard discount rate to training is offered by Earley
(2001). In an attempt to improve the auditing skills of young accountants she tested a
training program that featured self-explanation through which the trainees improved the
correctness of their judgments of the appropriate discount rate to be used given the
circumstances provided by the training. If applied to the general field of training this
methodology would result in the use of panels of professional trainers to assign the discount
rate that was ‘‘appropriate’’ for correctly evaluating specific kinds of training.

j j
PAGE 376 INDUSTRIAL AND COMMERCIAL TRAINING VOL. 39 NO. 7 2007
 Using net present value to assess training return of investments
Net Present Value (NPV) can also be used to evaluate investments in training. In this
methodology, the net present value of an investment in developing the job skills of
employees is similar to the ‘‘net benefits’’ model discussed above, with one major exception.
In the case of NPV the same net benefits from training are ‘‘charged’’ with earning an
expected rate of return, k; the training is successful only if the ‘‘net’’ benefits remain positive
after deducting the costs of training.

Comparative application of valuation methods: a case in point

When we calculate the internal rate of return (IRR) and net present value (NPV) of training
investments using both the methods employed by the training professionals and the
corporate investment analysts, we see significant differences between the results generated
by these two groups. These differences come from excluding the impact of timing the costs
and benefits of the training. To demonstrate the differences between the two approaches we
will generate IRRs and NPVs using the traditional investment analysis methods and compare
them to the values we generated earlier in the paper, when we used the methods employed
by the training professionals.
To ensure uniformity in the training costs and benefits, we will use the same figures we have
Downloaded by University of Pittsburgh At 05:41 11 February 2016 (PT)

used above (the case of ‘‘Federal Agency’’). Unfortunately, the example case does not
include any time related information. Therefore we must make some assumptions about
timing: the costs of employee training ($3,931,957) was made now (t ¼ 0) and the benefits
realized through improved job performance ($1,580,000) and the reductions in employee
turnover ($8,365,000) were realized over a four year period. To demonstrate how the
concept and formula may be applied to evaluating training activities, we substituted the
monetary benefit of training (improved job performance and reduced employee turnover)
and changed the traditional formula (substitute monetary benefit from training for cash flow
after taxes) (see Table I).
The impact of timing of costs and benefits on the IRR and the NPV can be easily seen as we
look at the three scenarios we developed, each of which show realization of benefits at
different amounts and at different time periods. Scenario 1 assumes equal benefits for each
of the four years in the sample, as compared to Scenario 2 and 3, which assume diminishing
returns on benefits from training. As we can see, greater the value of training benefits in the
shortest time, greater the IRR of training. In generating the NPV, in addition to the timing of
benefits realized, we used, as examples, 20 and 30 percent as the discount rates and
generated two sets of NPVs for each scenario. Once again, as we look at the results, two
conditions impact the NPVs. The NPV values are directly correlated to the timing of costs and

Table I Calculating training ROI (IRR and NPV): methods used by financial analysts
Scenario 1 Scenario 2 Scenario 3

Training cost ($) (3,931,957.00) (3,931,957.00) (3,931,957.00)

Year 1 benefit ($) 2,486,249.75 3,480,749.65 4,972,499.50
Year 2 benefit ($) 2,486,249.75 2,486,249.75 2,983,499.70
Year 3 benefit ($) 2,486,249.75 2,486,249.75 1,491,749.85
Year 4 benefit ($) 2,486,249.75 1,491,749.85 497,249.95
Total benefit ($) 9,944,999.00 9,944,999.00 9,944,999.00
IRR (%) 51.10 61.17 81.79
NPV
Discount rate of 20 percent is
used in calculating the NPV under
each scenario ($) 2,504,283.67 2,853,432.94 3,386,748.86
NPV
Discount rate of 30 percent is
used in calculating the NPV under
each scenario ($) 1,453,858.34 1,870,656.21 2,511,522.10

j j
VOL. 39 NO. 7 2007 INDUSTRIAL AND COMMERCIAL TRAINING PAGE 377
 benefits and the expectations regarding what those net benefits should earn: the sooner the
benefits are received, the higher the NPV; as the discount rates rises, NPV decreases.
In comparison, as we saw earlier, the three ROI methodologies using the same costs and
benefits would have generated 253, 153 and 45.9 percent. The fourth hROI, which is similar
to NPV, would have generated $6,013,043.00 (in our scenarios, we would have generated
this same ratio or numeric values if we had assumed both the costs of training and the
benefits of training were realized at the same time, without any time delays or timing
differences.)

Summary and conclusions

Statistics generated by the national professional organization for trainers show continual
increases in monies spent by the organizations to train their employees and improve the
contribution to the organizational effort. However, our study shows that there are significant
problems in evaluating the true impact of training. These attempts encounter significant
challenges in measurement of the costs and benefits and use valuation methods, which will
not be acceptable for valuation of other organizational investments.
A review of the training literature suggests that while there appears to be much more rigor in
assigning direct and indirect costs of training, and that major inroads are being made to
determine the true value of benefits (valued in terms of the organization’s goals and
Downloaded by University of Pittsburgh At 05:41 11 February 2016 (PT)

objectives), there is no consideration for the time value of money. The omission of how ‘‘time
value of money’’ and ‘‘hurdle rate’’, which are significant components of traditional
investment valuation methods, impact valuation of training efforts make the currently used
training valuation methods unreliable and incorrect. Because there is no one method
uniformly accepted and used by training professionals, the results of currently used
methods do not lend themselves to comparative analysis. Thus, the training’s ROIs not only
be compared to one another but, they are also cannot be used for a direct comparison with
the ROI results of alternative investments that organizations are considering – thereby
increasing the likelihood those investments in training will be more likely to be rejected by the
organization’s senior management.

References
Campbell, C. (1994), ‘‘A primer on determing the cost effectiveness of training – part 1’’, Industrial and
Commercial Training, Vol. 26 No. 11, pp. 32-8.

Chang, J. (2003), ‘‘More bank for your buck: create clear goals to determine the return you are getting on
your training investment’’, Sales and Marketing Management, June, available at: www.
salesandmarketing.com (accessed on 16 October 2006).
Cipolla, V. (2005), ‘‘HR ROI means metrics CEOs want’’, Canadian HR Reporter, October, Vol. 18,
October 10.
Earley, C. (2001), ‘‘Knowledge acquisition in auditing: training novice auditors to recognize cue
relationships in real estate valuation’’, The Accounting Review, Vol. 76 No. 1, pp. 81-97.
Farrell, D. (2005), ‘‘What’s the ROI of training programs?’’, Lodging Hospitality, Vol. 48, May.

Inwood, C. (1993), ‘‘Project training is critical – and costly’’, Computing Canada, Vol. 19 No. 9,
September 13, pp. 26-7.
Ketter, P. (2006), ‘‘Investing in learning; looking for performance’’, TþD Magazine, December, pp. 30-4.
Lengermann, P. (1996), ‘‘The benefits and costs of training: a comparison of formal company training,
vendor training, outside seminars, and school based training’’, Human Resource Management, Vol. 35
No. 3, pp. 361-81.
Pangarkar, A. and Kirkwood, T. (2003), ‘‘Systematic strategies: measuring the return on investment of
your training programs, beyond the classroom and the bottom line, creates a learning environment that
can make any company stronger’’, CMA Management, Vol. 76 No. 9, January, pp. 36-8.
Phillips, J. (1997), Return on Investment in Training and Performance Improvement Programs, on
Investment in Training and Performance Improvement Programs, Houston, TX.

j j
PAGE 378 INDUSTRIAL AND COMMERCIAL TRAINING VOL. 39 NO. 7 2007
 Phillips, P.P., Phillips, J., Stone, R. and Burkett, H. (2007), The ROI Fieldbook: Strategies for
Implementing ROI in HR and Training, Elsevier, Amsterdam.

Rowden, R. (2005), ‘‘Exploring methods to evaluate the return-on-investment from training’’, Business
Forum, Vol. 27 No. 1, pp. 31-6.

Schriver, R. and Giles, S. (1999), ‘‘Real ROI numbers’’, Training and Development, Vol. 53 No. 8,
pp. 51-3.

Swanson, R. and Gardous, D. (1988), Forecasting Financial Benefits of Human Resource Development,
Jossey-Bass Publications, San Francisco, CA.

Tobin, D. (1998), The Fallacy of ROI Calculations, available at: www.tobincls.com/fallacy.htm (retrieved
23 June 2006).

Further reading
Anon (2004), ‘‘Case study: How one company predicted the business impact of PM training programs’’,
IOMA’s Pay for Performance Report, Vol. 4 No. 10, pp. 6-7.

Anon (2005), ‘‘How one trainer developed an eight-step program for ROI’’, HR Focus, Vol. 82 No. 3,
pp. 10-13.

Anon (2005), ‘‘Value is a key result of New Horizons training: quantifiable data proves New Horizons
Downloaded by University of Pittsburgh At 05:41 11 February 2016 (PT)

training has a positive return on investment’’, Business Wire, pp. 36-7, August.

Anon (2006), ‘‘The great training robbery’’, paper presented at the British Learning Organization
Conference, available at: www.british-learning.com/info/olt/oltpast64.htm (accessed 2 August 2007).

Corresponding author
Alev M. Efendioglu can be contacted at: alev@usfca.edu

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

Or visit our web site for further details: www.emeraldinsight.com/reprints

j j
VOL. 39 NO. 7 2007 INDUSTRIAL AND COMMERCIAL TRAINING PAGE 379
 This article has been cited by:

1. Žiedūna Liepė, Algimantas Sakalas. 2014. Evaluation of Human Capital Role in the Value Creation Process. Procedia - Social
and Behavioral Sciences 156, 78-82. [CrossRef]
2. Liaqat Ali, Mohsen Asadi, Dragan Gašević, Jelena Jovanović, Marek Hatala. 2013. Factors influencing beliefs for adoption of
a learning analytics tool: An empirical study. Computers & Education 62, 130-148. [CrossRef]
3. Liaqat Ali, Marek Hatala, Dragan Gašević, Jelena Jovanović. 2012. A qualitative evaluation of evolution of a learning analytics
tool. Computers & Education 58, 470-489. [CrossRef]
4. A. Mohamed, A. Rasli, N.N. Abu Mansor. 2012. Business Impact and ROI: A Proposed Approach to Learning and
Development Investment. Procedia - Social and Behavioral Sciences 40, 596-603. [CrossRef]
5. Mark E. Haskins, George Shaffer. 2011. Assessing professional development program impact. Strategic HR Review 10:1,
15-20. [Abstract] [Full Text] [PDF]
6. Naveed Iqbal Chaudhry, Muhammad Azam Roomi. 2010. Accounting for the development of human capital in manufacturing
organizations. Journal of Human Resource Costing & Accounting 14:3, 178-195. [Abstract] [Full Text] [PDF]
7. Competencies That Drive the Company 173-222. [CrossRef]
8. Xueming Tong, Shuwen ChenAnalysis of System Archetype on Enterprise Training in China 1-6. [CrossRef]
Downloaded by University of Pittsburgh At 05:41 11 February 2016 (PT)

9. 2008. Is training worth it?. Development and Learning in Organizations: An International Journal 22:3, 34-36. [Abstract]
[Full Text] [PDF]