Managing the Training Function or Human Resource Development - Case Study Example

 Managing the Training Function Introduction In a world where technology is cheap and nearly every company can have access to the same development and organisational tools as the competition, the value of human resources becomes extremely important. Theoretically, two companies can have the same computers, the same quality of raw materials, even the same machinery used for production but if one of the companies has better human resources, then that company will come across as having a clear advantage over the other. Unlike the other factors involved in production, labour and human resources have the advantage that they can grow with the company. With effective training they can improve their skill set to play larger roles for the organisation and take on more responsibility. While this is recognised by many HR related professionals, there is a significant investment involved in training and developing human resources which may not turn out to be as loyal to the company as expected by the managers. For example, a company can lay significant amounts of money on training and teaching individuals towards becoming mangers for a company yet the same individuals can leave the company soon after their training is complete. Effectively, what the company has done is to provide trained professionals to the competition which may not be in the best interest of the company. Additionally, any time which the human resources spend in training is time which is taken away from their other functions. These other functions have a direct impact on the bottom line but training is something which will only present results after a certain amount of delay. These issues and many others are just a representative of why training and HR development needs to be mainstreamed into the functions of an organisation rather than to keep them externalised as outside activities. To show the importance of internalising the training function and some of the ways to include it as a part of management, the example of GE Australia is used since GE is one of the most admired companies in the world in terms of its management systems. GE Australia GE’s first venture into Australia happening in 1882 when the company installed the electric motors to operate the Pyrmont Bridge over the Darling Harbour in Sydney. In more recent terms, GE took over the credit card business of Coles Myer in 1995 and brought GE Capital Global Consumer Finance to Australia. The company now operates six different businesses in the country in the finance, power generation, aviation, consumer goods, media and industrial sectors. The company has offices located in Perth, Sydney, Melbourne, Brisbane and Adelaide (GE, 2006). The selection of GE as a focused company for this paper is important because GE has been used as an example of how a company should operate by many different analysts. Both Colvin (2006) and Demos (2006) show that it is one of the most admired companies in the world and it owes a lot of its admiration to the way it treats its employees. Jack Welch, the long time CEO of the company has stated clearly in his book titled Winning that training, “Motivates people by showing them a way to grow, that the company cares, and that they have a future (Welch, 2006, Pg. 109)”. Clearly, these ideas agree with the theoretical concepts outlined by Wilson (1999) who suggests that training is a fundamental part of human resource development and mentions it at the top of the list amongst other functions of the human resource management department at any given company. By making training the primary function of HR, both Wilson (1999) and Welch (2005) show how the agreement between theory and practice helps a company become stronger than the competition. Wilson (1999) also adds to the comments given by Welch by saying that training can become a part of the strategic objectives of a firm if the training is internalised and added to the process by which promotions are made within the company and when the time comes to earmark those individuals who are likely to be the future stars of the organisation. At the same time, Welch (2005) suggests that along with monetary rewards, training can be used to reward those individuals who show improved performance. Training can be conducted by professionals coming from the outside but both Welch (2005) and Wilson (1999) agree that a company should have internal training facilities if they can be afforded as an expense. Internalised Training Theoretically, there are hundreds of skills a person working for a company like GE could need training for. From the simplest communications skills training to advance training in financial analysis, GE Australia could find applications for different training classes for the thousands of individuals who work for the company. However, in the case of internalised training GE may not serve as the best example to begin with. This is because GE can afford to outlay a huge amount of money on recruiting, training, developing, rewarding, and retaining their best performers. They already have a competitive advantage by being one of the bigger names in the business and they are known for being one of the best companies to work for (Morris & Colvin, 2006). These things position GE to gather the best human resources from around the world which permits GE to maintain its position. Additionally, with the resources available, GE has created a training center which is dedicated to train and improve the HR with the company (Welch, 2005). Of course many smaller companies and other organisations simply would not have the resources which GE can summon to establish their own training centres. In such cases, external training programs and consultants can be brought in to train the company personnel. GE themselves used the same process in some cases. For example, when they needed to train some of their senior management personnel in the field of computer technology, they used fresh graduates working in the same departments and the same location to help in the training (Welch, 2005). An internal training centre would only be useful when a company knows that it will continually need the resources provided by the centre to train and educate its workers. Most of the time, a company can discover that professional trainers can effectively learn the proper procedures of a company and quickly teach incoming recruits or current employees various skills which the management thinks are important for them to know. At the same time, current employees can also be effectively used as training mangers for the rest of the company. The Business Case for Training Training can be seen as an unnecessary cost by those who do not believe that individuals should be trained by a company but in fact should have the skills and abilities which allow them to function as productive members of an organisation from day one (Smith & Hayton, 1999). At the same time, the benefits of training can not be denied since it intrinsically increases the level of productivity which improves the overall benefit of training and personnel development for the company as a whole. A worker who is able to produce more and give better quality output after a few training sessions is certainly more valuable to a company than someone who simply knows how to get by with their present skills (Smith & Hayton, 1999). Additionally, a worker who has received sufficient training in various aspect of the business is more likely to be considered for promotions and higher positions within the company when the time comes to make a selection for the top slots. Admittedly, investing in people is a risk which comes with providing training to individuals but the basic point of all business is to take calculated risks. As far as Australia is concerned, several writers including O'Neill and Kramar (1999) as well as Budhwar (2004) have suggested that the government is not doing enough to ensure that a certain number of hours per year should be dedicated by law to training various individuals working for any company in Australia. Budhwar (2004) writes that, “International comparisons of training expenditure generally place Australia below the levels of similar countries (Budhwar, 2004, Pg. 245)” while O’Neill and Kramar (1999) suggest that any benefits which have been gathered by various companies have come from their own initiatives rather than government help. While this situation may demand the government to take a serious look into how the productivity of the Australian worker can be improved, it certainly shows that Australian businesses are very aware of how training functions as a part of the further development of human resources at their disposal. If more companies like GE and others in the same league continue to train and develop their human resource capital, there is no reason why smaller companies would not apply the same lessons (Schmitt, 2001). Visible Improvements Smith and Hayton (1999) suggest that the business case for providing training and managing training as a function of HR is certainly there because by providing sufficient training to various individuals within the company it is entirely possible that the need for certain office positions can be eliminated altogether. Consider the example of an office worker trained for maintaining the office computer network. Since computer networks can run efficiently most of the time without human intervention the company can save on the position of a network administrator if one or more office workers can manage the network if it ever needs corrections or maintenance. While this example does not mean that every person within the company can wear several hats at the same time, it does suggest that investment in training can save a company a lot of money in the long run. Of course this investment also means that the people trained for different functions within the company are retained within the company but that too is a part of the duties which the HR department must perform. Since there is a definite advantage which comes from providing training as a part of the rewards given to performing individuals, there is no reason why training can not give immediately visible benefits for the company (Welch, 2005). A Competitive Advantage In conclusion, it is clear to me that the correct application of the training function is an essential part of the human resource development process at any company which wants to gain and maintain a competitive advantage. While there are clear costs as well as risks associated with the process of training people, the advantages are simply too numerous and broad based to ignore and the most important advantage remains gaining an edge over the competition. The prime example of a company which uses training affectively is GE Australia and the positive reports coming from the company show without a shadow of doubt that GE is certainly on the right track when it comes to developing their people. At the same time, there could be many other companies around the country who do not have the resources or the understanding of how to develop their HR for optimal performance and it becomes one of the duties of future managers to guide these companies on this important HR function which can give a great competitive advantage. Word Count: 2,007 Works Cited Budhwar, P. 2004, Managing Human Resources in Asia-Pacific, Routledge. Colvin, G. 2006, ‘What Makes GE Great?’, Fortune, vol. 153, no. 4, pp. 90-96. Demos, T. 2006, ‘The World’s Most Admired Companies’ Fortune, vol. 153, no. 4, pp. 72. GE. 2006, http://www.ge.com/au/ourCompany/ Morris, B. and Colvin, G. 2006, The GE Mystique. Fortune. vol. 153, no. 4, pp. 98-104. O'Neill, G. and Kramar, R. 1999, Australian Human Resources Management, Allen & Unwin. Schmitt, J. 2001. Welch has a lesson, even for small shops. Contractor Magazine. 48(10): 16. Smith, A. and Hayton, G. 1999, ‘What drives enterprise training? Evidence from Australia’, International Journal of Human Resource Management, vol. 10, no. 2, pp. 251-272. Welch, J. 2005. Winning. Harper-Collins. Wilson, J. 1999, Human Resource Development: Training for Individuals & Organizations. Kogan Page. Read More