A Systems Approach to Cost-Benefit Analysis. Training & Development Research Report.

Training managers increasingly are being asked to document the cost effectiveness of their programs. A cost-benefit analysis program was implemented at the Anchor Hocking Corporation that may be useful for other organizations. The cost-benefit analysis at Anchor Hocking is part of the training system design. The complete training system design model includes the following: (1) needs identification/forecasting; (2) needs analysis; (3) anticipated cost-benefit evaluation; (4) performance objectives and savings base design; (5) data gathering; (6) course design; (7) implementation of training; (8) data gathering; (9) on-the-floor follow-up; (10) actual return-on-investment calculation; and (11) retraining/revision. Although these steps are listed chronologically, they are often performed simultaneously. This approach has worked well for Anchor Hocking, and components of the model can be used by other organizations to develop their own cost-benefit analysis. (KC)