This document discusses a case study involving Global Industries, which has seen sales decrease 40% and its first loss in 25 years. It needs to cut expenses. The President wants to justify the HR budget and is considering abolishing the HRD department or requiring it to prove its value. The CFO recommends cancelling all training programs unless HR can show direct payback. As the VP of HR, Karen believes training is important but must be linked to business goals. The case examines stakeholders' views and whether training is a luxury during an economic downturn.

1. CASE STUDY
A MATTER OF COSTS
CHAPTER: 9 HUMAN RESOURCES
DEVELOPMENT (HRD)

2. NAME STUDENT ID
Epeli Ravula S96007701
Ropate Veremalua S98001709
Miliana Vulakouvaki S99001396
Ruci Nadavolana S96001515
Catherine Grey S98000347
Elenoa Lalabalavu S02001219
Marica Naulu S99006318

3. Presentation Outline
Brief on the Case Study
• Global Industries Organization structure
• Facts on the Case
QUESTIONS
1. Identify the major stakeholders involved. What will
their likely views be?
2. Is training a „luxury‟ that cannot be afforded in
times of economic downturn?
3. What are the arguments for and against
outsourcing training and development activities?
4. If you were Karen, what would you do?

4. Organization Structure
Global Industries

5. • Views the HR
• Sales ↓40% budget as • Claims to
• 1st loss in “unrealistic” understand the
25yrs • Current training situation
• Need to cut
program does not • Adjusted
add value to the budgeted
back on business
expenses expenses by 15%
• Recommends ↓
• Wants HR that HRD dept be
budget to be abolished, or its • Stresses the
justified in existence be importance of
financial justified HRD dept
terms • All Training (understaffed)
programs to be • Current training
cancelled, unless programs are
Rachel HR can show Karen
(President)
successful and
(VP/HR)
Andrew payback”.
“direct popular
(CFO)
• Not all programs

6. 1. Identify the major stakeholders
involved?
Stakeholders – Any individual group or organisation that
is affected by or has a vested interest in organisation
policies and decision

7. 1. Identify the major stakeholders
involved?
1. MANAGERS
 Karen Saunders – Vice President,
Human Resources
 Rachel Razak – President , Global
Industries
 Andrew Lam – Chief Finance Office
(CFO)
2. EMPLOYEES

8. What will their likely views be?
 They will have different views altogether.
1. MANAGERS
 Rachel Razak – President, Global Industries
 Supports CFO‟s recommendations
 May support Karen if cost is justified
 Need to cut back on expenses
 Wants budget to be justified in financial terms
 Karen Saunders – Vice President, Human Resources
 Stresses the importance of HRD dept. (understaffed)
 Current training programs are extremely popular with all the
participants (employee satisfaction)
 Not all programs should have monetary returns.
 Andrew Lam – Chief Finance Office (CFO)
 Abolish the HRD department and get rid of all the people [HRD
Manager, Graduate Trainee & Secretary]
 Outsource any training needed.

9. What will their likely views be?
 Forget about growing internal talent in this difficult time
 Headhunt the best from the competitors
 Cancel the recommended training programs:
 - Since they don‟t add value;
 - Employees are not doing their jobs better;
 - They are not making company money
2. EMPLOYEES
 Job security for the HRD department staff
 Working condition
 Job satisfaction
 Opportunities for advancement
 Fair treatment

10. 2. Is training a “luxury” that cannot be
afforded in time of economic downturn?
 NO
Systematic Training & Development Model
REASONS:
 It helps maintain overall performance, keeping the company
competitive.
 However, training should be positioned to either support employees in
generating revenue for the company or help to lower costs.

11. 2. Is training a “luxury” that cannot be
afforded in time of economic downturn?
 Should be linked to SBO of the company, with a clear
assessed return to give purpose to the training
program and justify its existence.
 It needs to be tied back to the company goals and
objectives, both short-term and long-term.
 Good training that is objective and performance-based
will empower employees to perform to expectations,
supporting defined business goals and objectives.
 In competitive markets, training is a matter of survival
when there are gaps in skills and capabilities there is
an immediate increase in ineffectiveness and money
is lost.

12. 3.What are the arguments for and against outsourcing
training and development activities?
OUTSOURCING TRAINING & DEVELOPMENT ACTIVTIES
FOR AGAINST
Focused on other core HR activities Loss of essential HRD personnel's
Quality of training and development Reduced services provided since it
provided will be based on cost charged
Access to improve training & Security of Employee data;
development technology Excessive cost
Lose out on HRD tools like the
implementation of policy and
strategy; the effecting organisational
change and culture

13. 4. If you were Karen, what would you do?

14. 4. If you were Karen, what would you do?
 Firstly in order to justify training and development
program, I will have to show how they contribute
to the achievement of Organisations Objective.
 Strategically HRD can be a platform for
organisational transformation being a powerful
tool:
 Meeting a major change in the external environment
(40% loss of sale)
 Implementing strategy
 Implementing new policy
 Effecting organisational change
 Solving particular problems

15. 4. If you were Karen, what would you do?
Cont’d
 Assessment of training needs for those proposed training
programs (this answers What, When and Where)
-organisation variables (environmental influences, objectives,
organisation culture, measures of (sales, production, costs, safety))
-task variables (job analysis, job description)
-person variables (job specification, appraisal, customer feedback,
sales and production, safety records)
 Evaluation of the training programs – may draw from past
programs (this answers „Why‟)
 To show the effectiveness of training through evaluation on measure
of:
 Reaction
 Learning
 Behaviour
 Results
s

16. Measure Indicators How Measured
Reaction Satisfaction Questionnaire
Enjoyment Interview
Focus groups
Learning Knowledge Pencil and paper test
(eg.OHS Oral examination
regulations, EEO) Work sample
Skill (computer or Observation of
machine operation) performance
Performance rating
Behaviour Changes in Observation of
attitudes , performance
behaviour, Performance rating
motivation Third party feedback
Results Productivity Production Statistics
Sales Sales Statistics
Quality HR Statistics
Absenteeism OHS Statistics
Labour turnover
Accident frequency

17. THANK YOU