Critical on impact of training and development on employee job performance - Literature review Example

?Critical literature on impact of training and development on employee job performance Table of Contents Introduction 3 Research Question 3 Literature Review 3 Overview of Training 3 The Training and Development Process 4 Methods of Training and Development Programs 6 Impact of Training on employee performance and productivity 8 Conclusion 9 Reference 11 Bibliography 12 Introduction The main purpose of the project is to bring forth a critical analysis of the impact of training and development programs on the performance of employees in organisations. Human Resources have played a major role in the economic development of a number of nations. Nations like Britain, Japan and USA have demonstrated immense economic growth in this regard (Brewster, Mayrhofer & Morley, 2004, p.17). Thus, it implies that nations would attain greater and faster economic development on the grounds that they pay greater attention to train its human resources. The project presents the supporting as well as the opposing views on this subject by using relevant literature. Research Question The present research seeks to find the impact of training and development programs on the performance of employees in organisations. The research question is as follows: Do training and development programs improve job performance of employees in organisations? Literature Review Overview of Training In order to maintain a sustainable economic growth as well as an effective performance, the employees’ contribution towards the goals and objectives of the organisation is required to be optimized. Leading writers have emphasised and recognised the importance and requirement of training as the central role played by the management in organisations. Drucker, (1998), have commented that one of the major contributions expected from the managers is to set the vision for the employees and also enhance their ability to perform (Laing, 2009, p.17). The very first step in the designing of a training and development program includes conducting a needs assessment. It includes assisting the new recruits in the workplace with the necessary skills and responsibilities (Kuther & Morgan, 2009, p.103). It is crucial to identify the need in this regard which can be done in several manners. Generally, it is identified as the gap between the present position and which is needed now and also in future (Miller & Osinski, 2002, p.1). The gaps include discrepancies between what the organisation wants and what actually occurs. It is also determined by the difference between the current and the desired performance of employees. The difference between the present and the desired competencies of employees also gives an estimate about the training needs. Several views were collected pertaining to the identification of the key drivers of the training initiatives like the training quality, inputs, extent of interaction and targets over the last few years. The results revealed that the most important determinants were ‘health and safety’, ‘technical changes’ and ‘customer service’. It implies that organisations were primarily found to be using training and development programs for retaining and motivating employees and also for providing the necessary skills and knowledge to the employees to keep themselves at par with the changes in technology and customer service (Miller & Osinski, 2002, p.1). The Training and Development Process In order to ensure that the new and also the experienced employees have the required knowledge and skills for successful performance of their jobs, organisations undertake investments in training programs. Research reveals that the organisations’ productivity bears a direct relation with the amount of investments it makes on employees (Bohlander & Snell, 2009, p.306). Recently, Merrill Lynch completely overhauled its training program towards the financial advisors to ensure they would be in a better position to serve their clients. The program included training of “Monte Carlo analysis” (Gitman & McDaniel, 2008, p.211), which is a technique in statistical technique which helps to predict the risks associated with any business in reaching its goals. The company is said to encourage its newly recruited employees to obtain training from outside their regular activities (Gitman & McDaniel, 2008, p.211). The following figure depicts the process of training and development undertaken in organisations. Figure 1: Process of Training and Development for employees (Source: Gitman & McDaniel, 2008, p.211) The training of newly recruited employees generally begins with the orientation in which the employees are made ready for performing the job. This is called ‘on the job training’ which provides the candidates with information of the company and its policies. It also involves training the employees at the workplace or at the work station. Off the job training involves training outside the working place. One such training is management development programs that emphasises on the development of communication and leadership. This kind of training is especially helpful in improving productivity and performance of middle managers (Schermerhorn, 2009, “Off-the-job-training”). The performing abilities also differ from individual to individual. Thus, training must also be aimed at individual assessments and requirements (Cascio & Boudreau, 2010, p.229). The process of training is very often left to the employees, who might be very efficient in their job, but might not be equally skilled as trainers. This is the most prominent criticism against on the job training. This is the reason why employers rely more on off the job training (Jacobs, 2003, p.X). Methods of Training and Development Programs Training and development programs may be characterised on the basis of various dimensions. Two of them are the extent of formality in the training and the extent to which is interaction with the others in the training. Creating taxonomy of the training modes on the basis of the above dimensions, there is evolution of four training modes (Danziger & Dunkle, 2005, p.4). This is shown in Figure:2. Most of the modern organisations unanimously agree on the fact that a well trained workforce accounts for the critical success factor of the organisation. Organisations spend about $62 billion each year on the formal training of employees. Trainings may be characterized according to various dimensions (Danziger & Dunkle, 2005, p.4). The two most important ones are the extent to which interaction occurs between the personnel and the extent of formality in training (Danziger & Dunkle, 2005, p.4). Four of the most popular kinds of training modes have been identified as presented in the following table. Figure 2: Training methods followed in organisations (Source: Danziger & Dunkle, 2005, p.8) Since the formal methods of training involve greater investments than the informal ones, it is also expected that they would lead to greater fostering of skills development, performance and productivity. Organisations emphasising on skills development have demonstrated a larger proportion of their employees participating in the organised training programs. This may occur either within the setting of a classroom or along with the supervisors and co-workers (Danziger & Dunkle, 2005, p.8). In fact, organisations demonstrating lower skills enhancement and development seem to be using more of informal training like self-training by the use of manuals or using the trial and error methods. The following graph depicts the association of skill development with the different training modes. Figure 3: Association of skill development with the different training modes (Source: Danziger & Dunkle, 2005, p.8) Impact of Training on employee performance and productivity Traditionally, the training and development programs have been the most effective when organisations required change in its employee’s knowledge, abilities and skills. This has predominantly reflected in the healthcare industry. Also training has been considered to be the ideal solution in case of lack of task related skills. Training programs can address different and wide spectrum of the organisational challenges and needs. Leaders who are able to understand the entire spectrum of training, can enhance their personal success and hence the success of the organisation (Hernandez, 2009, p.209). Development of quality of the employees through training programs forms a basic determinant of long term productivity and the optimum performance of organisations. Companies investing in the development and implementation of training programs have demonstrated greater organisational productivity through the enhanced skills, knowledge and abilities of employees. According to Evans and Lindsay (1999), organisations which committed to quality invest hugely in training and development programs. They also said that the “Xerox Business products and Systems” make investments of over $125 million for the implementation of quality training (Laing, 2009, p.39). The employees’ job performance gets enhanced through the motivation that he or she achieves in the process. Training provides employees with new opportunities of using his skills and abilities (Grant, 2004, p.7). Many of the services firms have been increasingly spending money for training. One of the best examples worth mentioning is that of the company named Randstad in North America, which showed significant improvement in productivity and growth by revising and improving its training program (Mathis & Jackson, 2008, p.264). The firm has more than 500 branches with as many as 2000 employees. It provides significant efforts towards training both its current and new employees. The company had been confronting huge employee turnover at a certain point of time. But reinvention of the training and development program was able to curb the problem to a substantial extent (Mathis & Jackson, 2008, p.264). Conclusion Thus, it is clear that training and development program is a crucial factor for the progress of an organisation. Training is the primary component which accounts for the success and the enhanced performance of the employees. Moreover, in the world of globalisation and changing technology, firms have become increasingly competitive in the market. This accounts for one of the major factors in implementing such programs. Reference Brewster, C., Mayrhofer, W. & Morley, M. 2004. Human resource management in Europe: evidence of convergence?. Butterworth-Heinemann. Bohlander, G. & Snell, S. 2009. Managing Human Resources. Cengage Learning. Cascio, W. F. & Boudreau, J. W. 2010. Investing in People: Financial Impact of Human Resource Initiatives. FT Press. Danziger, J. & Dunkle, D. 2005. Methods of training in the workplace. [Pdf]. Available at: http://www.crito.uci.edu/papers/2005/DanzigerDunkle.pdf. [Accessed on March 17, 2011]. Gitman, L. J. & McDaniel, C. 2008. The Future of Business: The Essentials. Cengage Learning. Grant, P. C. 2004. The law of escalating marginal sacrifice: explaining a plethora of heretofore unresolved motivation phenomena. University Press of America. Hernandez, S. R. 2009. Strategic Human Resources Management in Health Services Organizations. Cengage Learning. Kuther, T. L. & Morgan, R. D. 2009. Careers in psychology: opportunities in a changing world. Cengage Learning. Laing, I. F. June, 2009. Commonwealth executive masters of business administration. [Pdf]. Available at: http://dspace.knust.edu.gh/dspace/bitstream/123456789/1197/1/THE%20IMPACT%20OF%20TRAINING%20AND%20DEVELOPMENT%20ON%20WORKER%20PERFORMANCE%20AND%20PRODUCTIVITY%20IN%20PUBLIC%20SECTOR%20ORGANIZATIONS.%20A%20CASE%20STUDY%20OF%20GHANA%20PORTS%20AND%20HARBOURS%20AUTHORITY.pdf. [Accessed on March 16, 2011]. Mathis, R. L. & Jackson, J. H. 2008. Human resource management. Cengage Learning. Miller, J. A. & Osinski, D. M. July, 2002. Training needs assessment. [Pdf]. Available at: http://www.ispi.org/pdf/suggestedReading/Miller_Osinski.pdf. [Accessed on March 26, 2011]. Schermerhorn, J. R. 2009. Management. John Wiley and Sons. Bibliography Bauder, H. 2006. Labor Movement: How Migration Regulates Labor Markets. Oxford University Press US. Britton, J. N. H. 1996. Canada and the Global Economy: The Geography of Structural and Technological Change. McGill-Queen's Press – MQUP. Chevalier, R. 2007. A manager's guide to improving workplace performance. AMACOM Div American Mgmt Assn. Kinicki. Organizational Behavior 3E. Tata McGraw-Hill Education. Shader, K. K. 1990. An investigation of the possible impact of training and organizational culture on technical employee job performance. Florida State University. Read More