The Success of an Organisations Training Functions - Case Study Example

Introduction Human resource management (HRM) function is concerned with human resource planning, recruitment, selection, training of staff, human resource development, compensation, and labour relations and other emerging aspects of human resource management (Noe, 2002). The human resource function is also engaged in offering employee welfare services such as counseling programs, recreation opportunities, safety programs and human resource research. Human resource practices must consider the business strategy, the changes in demography within the workforce, the talent shortages in the market and talent requirements in implementing an effective human resource strategy (Bentley, 1990). Global competition, advances in information communication technologies and new methods of production has made human resources as the reliable source of competitive edge in modern organisations. Changing in production methods, shifts in consumer tastes and preferences require human resources to undergo training on new production and working methods. Evaluation of the impact of human resource investments such as training or human resource development helps in justifying the costs incurred. However, the success of an organisation’s HRD/training functions can not be judged purely by the economic performance of the organisation. There are different metrics that can be used to gauge the success of human resource investments in training the employees. Some of the common indicators of the success of human resource training include the rate of employee retention, the number of positive comments from clients and reduction in the rate of absenteeism. However, the leading indicators may have little impact on the economic performance or profitability of the organisation. The common models of evaluating the success of human resource training emphasize on the entire business objectives such as the efficiency of internal processes, the financial impact of the training, the perception of customers and impact on the employees. Generally, the success of employee training and development in the organisation cannot solely be measured by the economic performance of the organisation (Slims, 1998). Human resources can be viewed as the key source of organisational competitive strength and success in the industry. Thus, contemporary organisations have invested heavily in employee training and development in order to meet the complex business challenges. Employee training and development benefits both the individual employee and the entire organisation through increased individual productivity that enhances the total output of the organisation. Employee training and development is not solely geared at improving knowledge and skills, but also the attitudes and abilities that foster entrepreneurship spirit, team work, innovation and cordial relationships within the organisation. Currently, most of the global organisations such as Coca Cola, General Electronics and Cisco have been branded learning organisations due to continued emphasis on new knowledge creation and development through their training and human resource development initiatives. Ideally, employee training and development should be conducted on an ongoing basis when the performance appraisals indicate the need of training and closing of the skills gap in the organisation. Training and development is also used in succession planning in order to ensure subordinates are able to competently undertake high level management tasks and responsibilities effectively in the future. Training and development can also be based on an emerging work issue such as new technologies and systems that improve work efficiency (Blanchard and Thacker, 1998). Training and development improves the morale of employees by ensuring job satisfaction and job security. Satisfied employees will increase their loyalty to the organisation thus leading to low employee turnover and decline in absenteeism rate. Employee development opportunities make employees feel appreciated and valued by the organisation thus leading to higher job satisfaction. It also reduces the need of work supervision in the organisation since employees become experts in their field. The reduction in need of supervision will also reduce the costs of hiring supervisors and time wastage. Another notable Impact of employee training is reduction in work related accidents that occur due to semi-skilled workforce. Training will improve employee efficiencies resulting to more productivity and financial gains for the organisation. Additionally, it enhances the corporate reputation of the organisation through reduction court cases such as in instances of discrimination and sexual harassment. The development of employees will ensure the individual goals and interests are aligned with the overall business objectives and goals thus facilitating the creation effective and motivated working teams in the organisation. Training of employees will also create opportunities for more innovative business ideas and individual creativity (Gennard & Judge, 2005). Organisations are constantly looking for measurement metrics that can judge the success of the training investments. Although traditional human resource practitioners and training managers thought that eventually the training and development activities should result to positive economic returns on the bottom line, modern organisations have implemented other non-economic measures of the success of HRD/training activities. Organisations measure the success of training activities in order to demonstrate the linkages between the human resource strategy with the overall business objectives, to gain feedback on the success of the training activities, to meet professional and government regulations, and to justify the financial investments in the training and development of the human capital (Khatri, 2000). One of the perspectives of measuring success of HRD/training is assessing the business process outcomes after the training. The development programs should also enable the employees work effectively with new information systems and new production processes. The employees should also fully understand their roles and responsibilities in new positions within the organisation. The internal business process measurements include the rate of innovation and creativity of the employees. The human resource managers should also measure the quality of products, the reduction in material wastage and the length of the cycle time after the training. Additionally, the human resource managers should not ignore the post sale services convenience such as the warranties to the customers and time taken to make repairs to goods with defects. The second perspective of measuring the success of human resource training according to the balanced scorecard model is the financial perspective. In this approach, the human resource managers will measure the economic performance of the company that can be attributed to human resource training and development. Some of the economic metrics that can be used to measure the training outcomes include the return on training investment, economic value added in the organisation and the sales growth. The objective of human capital training and development is to decrease the operating costs, increase the sales revenues, increase the return on investment and also increase the market share. The productivity of employees can be measured by the net added value per each number of hours worked, though this value may be affected by other factors such as the increase in compensation and other non-monetary rewards such as promotions and job rotation. The human resource managers will assess how the employees are efficiently utilizing the assets of the company to generate sales revenues. However, some practitioners suggest that benchmarking between companies is the best method of measuring the success of human capital training since profit per employee is more effective in benchmarking (Slims, 1998). The third perspective of measuring the success of human resource training and development according to the balanced scorecard model is the customer perspective. The main goals of training according to this perspective are to increase the level of customer service and attain customer loyalty. Some elements that should be evaluated include the ability to develop new products, responsive supply of goods to customers, and the customer relationships. Some of the important customer service skills that employees should have include negotiation skills, interpersonal skills, persuasion skills, communication skills and empathy. The human resource managers should calculate the percentage of sales from the new products, the number of positive comments from satisfied customers, the number of customer complaints and the time taken to serve a single customer in the organisation (Slims, 1998). The fourth perspective of measuring the success of human resource training in the organisation is learning and growth perspective. This approach of assessing the success of training and development entails several objectives such as the time taken to enter a new market, leadership in modern technology, and competitive edge in the industry. The aim of organisational innovation and learning is to maintain the competence of the staff, and to maintain the strategies needed for the long term career growth of all employees. Training and development should lead to employee satisfaction, higher responsibilities and more competencies in work. The training should also be aligned with the unique personal needs and interests of each employee in order to ensure high work motivation and personal satisfaction with the job (Ahmad & Schroeder, 2003). Another model that can be used to assess the success of employee training and development without emphasizing purely on economic performance is the Donald Kirkpatrick’s 4 levels model. The model offers four levels that consist of reaction, learning, behavior and the results level. Accordingly, the success of training programs can be assessed in all levels. For instance, at the reaction level, the human resource managers should focus on the initial reaction of the employees towards the training and development programs. This level focuses on the employee perceptions towards the programs. The measure of reaction helps the human resource managers understand how the employees perceived the training and also improve the training programs for future trainees by identifying the gaps in the current training program. The managers should identify the weaknesses and strengths of the current training program through employee satisfaction surveys and questionnaires (Mathis & Jackson, 2011). The manager can also observe the body language and level of employee motivation during the training. There should be relationships between the perceptions of employees on the training program and the improvement in employee performance. A negative perception about the training programs is an indicator is failure in the final training outcome and thus low productivity of employees. This is the common method of evaluation since it is easy to administer. The second level of evaluating the success of training programs is the learning level. The human resource managers should measure the results of learning through judging the increase in knowledge and skills by administering tests at the end of the training programs. The third level of assessing the success of training is the behavioral level whereby the human resource practitioners’ measure extends of behavior change and how the new behavior contributes to the attainment of the overall objectives of the organisation (Mathis & Jackson, 2011). The last level of measurement is the results whereby the overall impact on the organisation is assessed. Some of the metrics considered include an increase in the work efficiency, reduction in operating costs and the level of customer service in the organisation (Goldstein, 1993). Although the four-level training evaluation model is popular, several considerations must be taken in to account before the use of the model. For instance, it is expensive and time consumption to assess the learning and outcomes levels of the model especially in the case of one-off training programs. The model assumes that are the four levels are linked and the preceding level is more important than the predecessor. Some aspects of changes in the organisation such new management may also affect the productivity and retention of employees, thus training alone is not responsible for the entire increase in output and employee satisfaction in the organisation (Lepak & Snell, 1999). Another model that can be used to evaluate the success of training in the organisation is Kaufman’s five levels of training and development evaluation. This model is similar to Kirkpatrick’s four levels approach but adds a fifth level that is concerned with societal outcomes. The fifth level concentrates on the impact of training in terms of client responsiveness, consequences and the payoffs of the training. This level is mainly geared at assessing the participation level of the employees on social and environmental awareness issues. For instance, the human resource managers should evaluate the impact of training on ethics and need to ensure proper utilization of the natural resources like water in the organisation. The success of the training should ensure employees are aware of emerging issues surrounding the environment such as the need to reduce pollution of the environment. This model clearly demonstrates that economic performance is not purely the measure of success in employee training and development (Byran, 2006). Another model that can be used in evaluating the training and development outcomes of employees is the CIRO approach. This method deals with the context, input, reaction, and outcomes of training and development. The context level deals with the training needs as demonstrated by the recent operational conditions in the organisation such as decline in motivation or sales. The input level of the model is concerned with gathering information about the possible topics or inputs that can be included in the program in order to meet the training needs. The reaction level deals with how the trainees reacted to the training process. The outcome deals with the findings on whether the training program met the pre-determined training and development goals. Some the training goals include the need to improve the level of customer service in the organisation, the need to learn new technologies and need to improve working relationships with peers in the organisation (Gennard & Judge, 2005). The Input, Process and Output approach can be used to determine the success of training. This approach is not solely aimed at attaining superior economic performance but meeting the objectives of the training. The outputs refers to the short term benefits of the training while the outcomes are the long term benefits that accrue to the whole organisation due to effective human resource training and development. According to this framework, the inputs include the qualifications of the trainers, the training resources and competency of the trainees and trainers. Some of the processes include the nature of the training program and the delivery modes such as lecturers, mentoring and coaching. The outputs are the short term benefits and include increase in knowledge, skills, trainee perceptions and improved job efficiency. However, the outcomes of the training will outweigh the expenditure since the organisation will benefit from better customer service, increased profits and retention of employees in the long term. Some outcomes such as increase in customer service and change in organisational culture are difficulty to quantify thus economic performance should not be used purely to judge the success of training and development function in the organisation (Gennard & Judge). A common model of evaluating the success of training and development functions in the organisation is the Return on Investment (ROI) framework. Return on investment method determines the success of the training programs by measuring the outcomes of training against the inputs. Though the method cannot be useful in measuring some aspects of training such as the reaction of the trainees and extend of attainment of individual objectives, it can be used to quantify the costs incurred in training and the monetary aspects of the training outcomes. Although the human resource managers can quantify the inputs of training upfront, the benefits of training usually accrue over a long period of time after the training (Bassi & McMurrer, 1998). Training and development objectives should not ignore the behavioral perspective of the organisation. Human resource managers have a duty of ensuring the employees’ behaviours are aligned with the strategic objectives of the organisation and the corporate culture. Training and development practices should reinforce the behaviours that support the organizational strategy thus leading to positive organisational outcomes like enhanced customer service and collaboration in work processes. Additionally, the cybernetic systems model suggests that inputs to the training should lead to outputs like increased productivity, high customer service level and enhanced motivation of the employees. The success of the training programs cannot be purely judged from that perspective since the enablers like higher motivation, legal compliance and increased work efficiency are more important that the improved economic performance. Human resource development and training functions are interdependent and complimentary in such as manner since individual skills in the organisation ultimately contribute to organisational effectiveness. For instance, training outcomes such as higher motivation of employees and superior behaviours will enhance the organisational performance expectations such as higher individual productivity thus leading to better economic performance like higher profits, higher return on assets and high return on investments. However, superior economic perspective of the organisation can only accrue in the long term and after numerous training and re-training of the employees (Islam, 2006). Economic performance as a measure of the success of human resource training and development cannot be used as an objective measure of soft skills in the organisation. For instance, soft skills in the organisation will facilitate teamwork and ensure proper leadership styles in the organisation. Some training programs that focus on change management, leadership skills development and motivation cannot be evaluate using the economic performance perspective. Professional development programs like project management skills training and legal training may not lead to enhanced economic returns, but their success can be evaluated using other measures like the level of work efficiency and motivation of the employees (Gennard & Judge, 2005). Additionally, training programs in the organisation may cover internal working processes such as information, procedures and policies of the organisation. For instance, the training may be geared at policies of orientating new employees, compensation policies or employee performance appraisal procedures (Saks, Haccoun and Belcourt, 2010). Training programs may also focus on procurement policies, accounting policies or even information technology use policies in the organisation. Depending on the nature of the training program and training needs, the organisation should choose an appropriate method for evaluating the success of such training programs. For example, the organisation can evaluate the level of compliance with the policies through reviewing the rate of non-compliance and complaints in the organisation. The human resource managers should also review the compliance rate with legal requirements such as the need to prohibit discrimination and sexual harassment in the workplace. The management should identify the reported instances of sexual harassment in the workplace and also the number of work related accidents in the organisation in order to evaluate the success of human resource training on policies and procedures in the organisation (Gubbins & Garavan, 2005). The objectives of HRD/training should be relevant and aligned with the mission of the organisation. For instance, in technology companies, the objective should be to ensure continuous innovation and new product development in the organisation. The criteria of evaluating the success of training and development of human capital should also be based on the expected outcomes. The objectives of training should also be achievable. For example, professional development such as training on project management skills should enable the employees to improve their work productivity and efficiency. Managing human capital in modern organisations require new perspectives for both HR professionals and human resource managers. Accounting systems have made it difficult to measure the success of human resource training and development in organisations. If the objective of measuring the success of human capital training is efficiency in production, the human resource managers can focus on the training expenditure and improvement in economic indicators such as the sales revenue and profitability in the organisation. However, intangible indicators such as excellent customer service and high employee motivation are the ultimate drivers of the economic performance in the organisation. Customers buying experiences such as the number of loyal customers and positive feedbacks from satisfied customers are the leading indicators of future revenue growth and profitability of the organisation (Gennard & Judge, 2005). Conclusion Human resource function should maximize the quality of human capital in the organisation. Training and development of human capital has been criticized as expensive and not leading to improvement in the economic performance. Effective human resource development and training functions should lead to enhancement of the knowledge, attitudes, skills and behaviours of the employees. The balanced scorecard model offers numerous advantages in assessing the success of employee training since it provide a distinction deliverables and enablers in ensuring the success of the training. The model also enables value creation and cost control. The model also utilizes the leading indicators in measuring the success of training. The four perspectives include the financial or economic perspective, the customer loyalty and satisfaction perspective, the learning and growth and finally the internal processes and procedures perspective that consider the efficiency of work. The economic performance is a lagging indicator since it only considers what has happened in the past. Some of the essential leading indicators include the efficiency of work processes, the level of customer service and feedback from clients and also the learning and growth opportunities such as promotions and succession plans in the organisation. The balanced scorecard also highlights the contribution of training to the overall organisational strategy and enables the human resource managers to effectively execute their roles and responsibilities. The model also encourages flexibility since it ignores the standardised metrics of judging the contribution of HRD/training such as the return on investment that solely concentrates on the bottom line impact. Organisations should establish a clear training strategy that aims at meeting the skills requirement in the organisation. Training is never complete unless the success of the training programs has been evaluated. However, training and development programs are implemented for various reasons other than the economic perspective of the training. Some reasons that are not liked with economic performance include the importance of rewarding and retaining employees, ensuring legal compliance and enhancing the reputation of the organisation. The recruitment and selection methods should be guided by the skills gap in the organisation. Training and development programs should attract and retain talented human capital in the organisation. The training should not ignore the strategic behaviors and attitudes of employees since this directly aids in the implementation of the business strategy. The training should impart new knowledge, skills and attitudes that improve employees’ job performance and meet the organisational objectives. The balanced scorecard model encourages the management to assess the entire impact of employee training and development and not only the financial performance. The balanced scorecard consists of four dimensions that can be used in evaluating the success of employee training programs. According to Kirkpatrick’s four levels of evaluating success of training, the reactions of the trainees will signify the perception towards the human resource development programs. Additionally, the human resource managers should evaluate the learning objectives and behaviours of employees after training. The training should enhance skills, competencies and instill behaviours that support the attainment of organisational goals. Finally, the HR professionals should also evaluate the results or outcomes of training. The outcomes of training are diverse depending on the objective of training. For instance, training should lead to superior customer service, international process efficiencies, learning and growth, increase in compliance with organisational policies and improvement in employee productivity. All the above are short term outcomes that can be objectively evaluate unlike economic performance of the organisation that will accrue over a long period of time usually extending several financial years. Last but not the least; successful training should also factor the social and environmental concerns of the organisation. References: Ahmad, S & Schroeder, R.G. (2003). “The impact of human resource management practices on operational performance”. Journal of operational management. 21: 19-43. Bassi, L.J & McMurrer, D.P. (1998). “Training investment can mean financial performance”. Training and development. 52(5): 40-42. Bentley, T. (1990). The business of training. New Jersey. McGraw Hill. Blanchard, P.N and Thacker, J.W. (1998). Effective training: systems, strategies and practices, New Jersey: Prentice Hall. Byran, J. (2006). “Training and performance in small firms”, international small business journal. 24 (6): 635- 660. Gennard, J & Judge, G. (2005). Employee relations. London: Chartered Institute of Personnel and development. Goldstein, L. (1993). Training in organisations. Brooks: Pacific Grove. Gubbins, M.C & Garavan, T.N. (2005) “Studying HRD Practitioners: a social model”, Human resource development review, 4(2) 189-218. Islam, K.A. (2006). Developing and measuring training the six sigma way: a business approach to training and development. Hoboken: John Wiley & sons. Kaplan, R.S & Norton, D.P. (1993). “Putting the balanced scorecard to work”. Harvard Business review. 71(5): 134-147. Khatri, N. (2000). “Managing human resources for competitive advantage”. International journal of human resource management, 11: 336-365. Lepak, D.P & Snell, S.A. (1999). “The human resource architecture”. Academy of management review, 24: 31-48. Mathis, R.L & Jackson, J.H. (2011). Human resource management. Mason: Thomson. Noe, R.A. (2002). Employee training and development. London: McGraw-Hill. Saks, A.M., Haccoun, R.R and Belcourt, M. (2010). Managing performance through training and development. Toronto: Nelson education. Slims, R.R. (1998). Reinventing training and development. Westport, CT. Quorum. Read More