Learning and Development: Peoples Bank of China - Case Study Example

LEARNING AND DEVELOPMENT Executive Summary In the contemporary world, continuous learning and development has been critical for the attainment of personal, professional and corporate goals. With this in mind, organisations nowadays, are looking for new and comprehensive ways to stay updated and focussed on their mission and long term objectives. A learning and development strategy for a company must be inline with its corporate business strategy and goals, and should be pursued consistently. This report presents an analysis of how a comprehensive framework can be developed for a company to provide effective training and learning opportunities to its employees. The company that will be treated as case study in this report is the People's Bank of China which is the central bank of the country. The report presents an account of learning, training and development opportunities and strategies that could be followed to implement a comprehensive learning and development system at the People's Bank of China. Both formal and informal learning methodologies and strategies are discussed which could equip the employees of the People's Bank of China to keep pace with the cutting edge advancements in all fields of interests for central bankers including finance, IT, banks' supervision, monetary policy, foreign exchange policy and payment system stability in the country. The report aims to develop and recommend a set of methodologies with time bound plans for the implementation of a comprehensive learning and development framework for the People's Bank of China. This learning and development plan addresses the latent learning needs of almost all employees of the bank. Introduction of the Organisation People's Bank of China is the central bank of China which has been entrusted with the tasks to ensure proper functioning of the country's banking sector. People's Bank of China does not operate as a commercial bank and hence, there is somewhat unique set of goals and objectives for Bank of China than all other banks in the country, as noted above. In line with these specific goals, the bank has to keep itself updated in order to be not only a role model for others to follow but to be able to ensure that a constant quality control mechanism for conduct of other banks is provided on which the commercial banks are evaluated by central banks of world. Towards this end, the People's Bank of China requires that its employees must be trained for best practices in banking, risk management, and supervision etc. The current training system of the bank is old and outdated. It consists of virtually no formalised training process which is the main reason why the People's Bank of China is unable to provide support and guidance to commercial banks in the country. Since the employees of central bank are not aware of international best practices, they can not guide others in the country which is the main reason for declining performance of Chinese banks in recent times. In addition, the central bank has no formal training and learning function as such. All trainings are identified by individual division heads and section heads and are approved by department heads. All departments are provided a very small training budget. There is no centralise control on the training programmes and no effort is made to ensure that the identified trainings conform to the overall goals and objectives of the organisation. As a result, people are found to have been trained on a number of areas not related to the central banking field. This ultimately results in loss of revenue to the bank as all training and development expenses are to be borne by the bank. Hence, though the bank ends up paying high bills for training expenses each year, the net impact on the employees after receiving these trainings is not very visible and thus, most part of the training budgets are wasted on non-productive activities. Moreover, the general environment of the People's Bank of China does not support sharing of ideas and information; so for example, there are instances where two people end up getting the same training in different times, where as it would have been sufficient if one of them would have got the training and then share knowledge with others to educate the entire team. This would have reduced the unnecessary expenditure that was incurred to train two resources for similar skills. The above problems in the current system of training and development at the People's Bank of China necessitate a requirement to develop a comprehensive framework for learning and development for them that should encompass all the required characteristics of a world class training function. Proposed Learning Framework Paul Ryan from University of Cambridge refers to the quote from Becker (1975) in his article 'Economics of Training', 'Economics of training has been dominated by human capital theory, in which training is treated as an investment' (Ryan, n.d.). This shows that companies view manpower training and development as an investment rather than being an expense. This view is further endorsed by Prais (1995) in the paper 'Productivity, Education and Training' and Huselid (1995) in 'The impact of human resource management practices on turnover, productivity and corporate financial performance'. Both of them are of the opinion that vocational training, which is also a part of manpower development, has a definite contribution towards enhancing economic performance of companies. Huselid (1995) argues that higher the provision by employers for manpower training and development, the higher is the impact on productivity and financial bottom line of companies in general. Huselid explains that the human resource management practices by an organization has direct impact on the productivity of the employees, the turnover of employees from organisation, and the general efficiency and effectiveness standards of the work. Research conducted by Mark (2001) shows that such training influences the performance of employees at personal levels. Becker (1975) has defined two types of trainings that employees receive, vis--vis, a general training that 'raises productivity by equal amounts in the firm where it was provided and in other firms' and specific training that 'only raises productivity in the firm providing it'. This implies that firms find it in vain and costly to provide general training both in terms of financial as well as other factors. The proposed learning and development framework for People's Bank of China is built around international best practices and benchmark processes. The proposed strategy consists of two main components: Developing an informal learning environment and corporate culture Developing a formal training and development function for the company A detailed discussion around these two broad components is provided below with recommendations for strengthening the learning atmosphere for the company. Informal Learning Informal learning is concerned with the organisation environment that promotes mutual learning and sharing of ideas, information and knowledge. This requires implementing an organisation wide culture where people are influenced in a way that make them believe the benefits of having an informal learning atmosphere suitable for sharing their knowledge with peers and colleague. For this to happen, the senior management at the People's Bank of China needs to sponsor the initiative of implementing an informal learning culture in the organisation. This would be achieved through developing a high level understanding of the benefits of informal learning across the organisation. The organisation needs to support information sharing and knowledge management concepts. This can be further strengthened by providing rewards and recognising the efforts of those personnel who show commitment towards sharing information across their peers and colleagues. These champions of change should be nurtured and their contributions need to be praised at the organisation level. This would result in more personnel becoming interested in sharing information with the objective to achieve the same level of recognition and reward. Once this practice is started, it will gradually be spread out across all function of the organisation and would ultimately result in development of a culture and organisation norm where people start sharing knowledge with each other. The end result is an organisation tone where employees will be sharing information unknowingly, learning and developing self and others in the process of even a daily discussion with peers. In this way, the learning and development culture can be integrated in the basic operation methodology of the People's Bank of China. Yet another way to ensure that all employees, including relatively new comers, and senior employees share the knowledge with each other, the company can foster a culture where both juniors and seniors get to meet each other in non-work settings where they could meet, discuss areas of mutual interest and develop relationships. These relationships are very important not only from the learning and development point of view but also to create a team work based culture in the company where each employee will be willing to share the workload of other employees. This can only be achieved if there are good relations among the employees and there is a general sense of respect towards each other. The research carried out by Black and Lynch (1996) showed that off the job training contributes significantly towards the enhanced productivity at the workplace Tony Karrer (n.d.) has proposed the following to the companies to support informal learning and development culture: "Provide time for informal learning on the job. Create useful, peer-rated FAQs and knowledge bases. Provide places for workers to congregate and learn. Supplement self-directed learning with mentors and experts. Set up help desks 24x7 for informal inquiries. Build networks, blogs, Wikis and knowledge bases to facilitate discovery. Use smart tech to make it easier to collaborate and network. Encourage cross-functional gatherings". Formal Learning The formal learning environment at the People's Bank of China can consist of a number of modes and mediums of learning and development for the employees, depending on their skill sets, seniority, position in the bank, the requirements and needs of the position at which they operate and a variety of other factors. Hence a more detailed and formal framework is required to be developed to address the issue of formal learning and development at the People's Bank of China. Framework for Formal Learning and Development at the People's Bank of China. The formal framework for human resource development at the People's Bank of China will be composed of the following: A learning and development policy in line with organisational strategic objectives A comprehensive training plan for employees of the bank including initiatives for the improvement of bank's employees, processes, systems and overall effectiveness and gaols' achievements A monitoring and appraisal system to measure the effectiveness of the strategic investment in learning and development of bank's employees and to develop new ways to enhance efficiency of the processes and systems With above objectives of the strategy, there can be many initiatives that the bank can take to improve upon the status of learning and employee development. With the view to provide optimal solutions for the bank, following strategic alternatives have been proposed. The core objectives behind these proposed learning alternatives are: To develop the employees' capabilities that can enhance their outputs on all job functions To enhance the efficiency and effectiveness of the employees in discharging their responsibilities To help the employees become better equipped with up to date knowledge To play key role in the development of human resource in order to act as the central bank of the company that provides help and guidance to all commercial banks The central bank needs to be equipped with all the skills and resources necessary to guide the functions of the commercial banks. Hence, it is of utmost importance that all employees of the bank are well versed in their specific fields in order to provide better suggestions to commercial banks and carry out other assigned responsibilities efficiently. Having defined a broad strategy for the development of human resources, the People's Bank of China can use any combination of the following proposed alternatives to develop a formal learning and development environment in the bank for enhanced productivity: Bank financed education programme for the bank's employees Training calendars and regular training programmes E-learning system A description of each of these alternatives is provided below with a discussion around the intended objectives of these strategies. Bank financed education programmes for bank's employees Introduction The People's Bank of China, with an aim to become an institution rather than simply being an organisation, might develop a bank financed higher education programme for its employees. The programme will be fully funded by the bank and will be offered to the employees only. Purpose The purpose of this programme is to enable the bank's employees to address their shortcomings and to enable them to take higher education in specified sectors and areas like economics, finance, information technology, banking, accounting, human resource management, treasury, payment systems etc. Benefits John T. Delaney and Mark A. Huselid (1996) conducted National Organisations Survey and gathered views from 590 organisations including profit and non-profit companies in United States. The research was targeted to provide empirical evidence of any relationship of training with organisation's productivity levels. Their research shows positive correlations between companies' human resource management practices including training and development of employees, and the overall performance increases for these firms. A similar research was carried out by Alan Barrett and Phillip J. O'Connell but for the enterprises located in Ireland. Their research was targeted towards 'estimating the productivity effects of general training, specific training and all types of training combined' (Barrett and O'Connell, 2001). The bank, acting as the sponsor for the higher education, fully paid scholarships, will be able to develop its employees as per the needs and requirements of the bank. In addition to providing them with an easy way to develop their skills, this would also mean that the bank will be able to enjoy the services of a better educated, learned and highly qualified man power. Company sponsored education programmes have a two way affect. Woodward (2005) explains that first it educates the employees of the company and secondly, it enhances the employee relationships with the company and increases their loyalty towards the company. After all, nobody likes to leave an organisation that allows him or her to develop own skills by providing an opportunity to study in best business and science schools around the world for free. Criteria to shortlist employees Of course, some criteria need to be developed to short list the number of requests for the higher education. People's Bank of China does not have endless budget to take care of all the requests. A sample criterion is provided below, though it can be refined to suit to the specific needs of the bank. Employees must be willing to sign bond with the bank that they will not leave the services of the bank for 3 years after getting their degrees or else, the entire expenses on their education will have to be returned. This is to ensure that the bank gets able to use the services of the employees once they obtain higher education The minimum criteria to allow the employee to apply for company sponsored education scholarship can be tied with job nature, number of years of experience in the bank and/ or other factors. This would ensure that employees who go for higher education take it seriously. Similar other factors can also be developed and included in the bank's policies. Areas of Study It is recommended that the fields of study should be decided as per the requirements of the central bank. It serves little purpose to finance higher studies in the areas of arts and literature as these are not the mandates for a central bank. Instead, the subjects and areas should be covered that should allow the individual to develop skills to better equip him/ her in discharging their job responsibilities. Hence, subjects like business administration, IT, economics, statistics etc. are better than others, for central banking jobs. Measuring the effectiveness of programme It is critical for the People's Bank of China to be able to determine the effectiveness of the company sponsored financial assistance programme for higher education of employees. If no such criteria is developed, then the bank will not be able to measure the benefits and value addition that are provided by this paradigm change in the policies and procedures by the bank. Hence, in order to do that, the bank must develop metrics and performance criteria that can be used to evaluate the performance of this initiative for learning and development of the bank's employees. The learning and development can also be measured from the results of the divisions or departments where the personnel who have achieved higher education on bank's expenses have been assigned. The net results of that specific division have an element of contribution of that particular employee as well, depending upon his/her rank or designation in the bank. Hence, providing bank financed support to employees for achieving higher education is not only a strong motivator but also acts to improve the company's employees and hence the results. The People's Bank of China might be able to provide adequate budget to sponsor, say, 25 employees each year for higher education in reputable universities world wide. Training Calendars and Regular Training Programmes Introduction Another initiative that the People's Bank of China may decide to implement is to establish a corporate training function. The purpose of establishing this function will be to take care of the regular training needs of the employees. Semantics A formal training programme will be developed for each year for each employee. It will show the minimum training hours that the employees should obtain for that year. In order to ensure that the plan is taken seriously by all employees, the bank can link it with the performance management and appraisal system that takes place on yearly basis in the bank. Mechanism for providing trainings The employees will be guided, as per their designations and the level in the hierarchy, about the minimum number of hours that they must spend in trainings for each year and without which they will not be promoted to the next hierarchical grade in the organisation. This would act as the necessary push button for the employees to start taking it seriously and to make them attend the trainings initially. Once they find it interesting, they will start to do it themselves. Training Calendar The formal training calendar can be used to identify the forthcoming trainings in a particular field. This can be used to make a plan before hand about the timings and costs of these trainings. The employees should then be able to take care of their training needs by themselves. Process Whenever a new training is to be attended, the employee would require to get his/ her name approved by the division/ department head. Once approval is obtained, the employee will be able to use bank's resources to attend the training. These will include fees, transportation, etc. Performance Management In order to provide weights of these trainings towards the final appraisal processes, and to determine the efficiency of the process, the number of trainings and the number of employees who attend the training can be recorded and analysed later on. This would help to establish a trend about trainings that will be imparted to the People's Republic of China's employees working in specific departments. Evaluations As noted above, one of the best ways to measure the acceptance and performance of these training programmes can be established by making it mandatory for all employees in officer cadre to complete a specific number of hours of training each year. In addition, they can be asked to make appropriate presentations regarding the trainings that they have attended with a view to provide information to all other employees working in their department, regarding the contents of the trainings. This would allow the other employees who have not obtained a particular training to know the contents and key points of the training programmes. Types of training programmes The training programmes might include both in house and external trainings. These might even consist of foreign trainings. It is solely up to the bank to determine which form of training should be used, and whether it is logical to combine the flavour of all three of these. If all three are used, then another criteria is to be established regarding the rules regarding why should one employee be sent to a foreign training while the other's case is regretted. This might complicate the process a bit, but would certainly enhance the learning and development environment and scope in the long run. A formal training system can be one of the best forms of developing human resource in a company in general, and at the People's Bank of China in particular and it is strongly recommended that the bank should implement this alternative. The Electronic Learning or E-Learning System Introduction This is the age of technology and all processes and systems are being over the electronic media. In this fast moving world, it is critical that the employees of an organisation should keep pace with the new and improved methods of performing duties. As part of this, electronic learning or e-learning has been a key innovation that uses both the technology and the expertise of professionals to provide an easy, classroom like, home based opportunity to self develop one self by taking up self training courses in soft copy form. These are administered or self training courses, and can be taken over the internet and computer systems. Infrastructure requirements All the employees in the People's Bank of China have access to computers and the internet. Hence, no additional infrastructure will be required as such to implement this option. The only requirement is to find out which e-learning is available where and whether it adds to the skills of the employee who has to take that course. Supervision and monitoring To ensure that the employee does not use unfair means while taking online tests if any, the supervisor of that employee can be asked to verify that all results are provided by the employee without referring to unfair means. Ease of Use It is much easier to manage the electronic sessions as compared to managing sessions that take place in physical environment. Hence, the bank can use the online media to get its employee enrolled into the online courses. Benefits This method is expected to provide the employees with the necessary skill sets that is required for their personal and professional development and will also improve their communication skills implicitly. Performance Measurement In order to measure the effectiveness of these learning and development programmes, feedbacks can be obtained from the individuals who take part in these online and e-learning and training sessions. Their replies can then be used as a yardstick means to enhance the processes and systems. Conclusion Daniel Follette (2002) argues that employee training is a critical step towards strategic personal development and in the long run, it gives dividends in the form of reduction in operational cost to run business. The learning and development of human resources plays a vital role in the development of any organisation. The People's Bank of China has been blessed with quality resources; however it is critical that these human resources continue to update themselves with latest events, information and general knowledge. The targeted employees for the above programs are preferably, the officers and above level of employees in the hierarchy. There is little value addition that clerks, peons and other staff provide in terms of meeting business objectives hence the discussion provided here, is targeted for middle to top level of employees. Similarly, employees at the very senior positions at People's Bank of China are not the target audience for the recommendations provided in this report. The report specifically targets those employees that contribute in forms of teams and individually to develop the repute for the bank in the market. The above plans provide a benchmark set of recommendations that the bank can use to enhance the quality and reach of its employee training and development initiatives. However, it is important to follow the cyclic process of plan-do-check-act as given by Deming, also called the Deming's Cycle. It provides an easy way to obtain feedback on the efficiency of the system and then use it to one's advantages later on. In their article 'Beyond the incidence of employer provided training', Lisa M. Lynch and Sandra E. Black (1998) propose that an easier way to find out if employees are satisfied with the level of trainings they have been provided is to conduct an employee satisfaction survey after periodic intervals. It is expected that the People's Bank of China can reap huge benefits by establishing a formal learning and development system at the organisation. However, the importance of informal channel for learning can not be undermined. It is critical for the existence of the entire organisation that its employees come to a static point where no further development and training takes place. Hence, both the formal and informal methods for fostering learning and development, and hence the organisation growth have been proposed. It is now up to the bank to implement these steps as soon as possible so that the results start to appear soon as well. It is tentatively estimated that a time frame of three months should be enough to devise a general plan around the recommendations provided in this document. References Barrett, A., O'Connell, J. P. (2001) "Does Training Generally Work The Returns to In-Company Training". Industrial and Labor Relations Review, Vol. 54, No. 3. Cornell University. Black, Sandra, and Lynch, L. (1996) "Human Capital Investments and Productivity". American Economic Review, Vol. 86., No.2, pp.263-67 Delaney, T. J., Huselid, A. M. (1996) "The Impact of Human Resource Management Practices on Perceptions of Organizational Performance". The Academy of Management Journal, Vol. 39, No. 4 (Aug., 1996), pp. 949-969. Follete, D. (2002) "How Strategic Personnel Development can Reduce Operations Costs". Daniel Follett Inc. Available from: < http://www.follette.com/whitepaperpdf/WPogjarticleDF2August03run3.pdf> [Accessed August 14, 2007]. Huselid, M.A. (1995). "The impact of human resource management practices on turnover, productivity and corporate financial performance". Academy of Management Journal, 38(3), 635-72. Lynch, M. L., Black, E. S. (1998). "Beyond the Incidence of Employee Provided Training". Industrial and Labor Relations Review, Vol 52, No. 1, Cornell University, pp. 64-81. Mark, D. (2001) Human Resource Management and organisational performance. 3rd Edition of the Institute of Management, Transition: Prentice Hall, New York, pp 120-121 Prais, S.J. (1995) Productivity, Education and Training, Cambridge: CUP. Ryan, P. (n.d.) Economics of Training. University of Cambridge. 1. http://findarticles.com/p/articles/mi_m3495/is_8_50/ai_n14931508 2. http://elearningtech.blogspot.com/2006/02/elearning-20-informal-learning.html 3. http://www.balancedscorecard.org/bkgd/pdca.html Read More