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The Effects Of Training And Developing The Workforce On The Organization Performance

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Autor:  anton  26 December 2010
Tags:  Effects,  Training,  Developing,  Workforce,  Organization,  Performance
Words: 2061   |   Pages: 9
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The environment in which most organizations operate today is continuously changing, and the rate of change is increasing. Almost most organizations are now involving in tremendous increase in international business and foreign assignments. Training and developing the workforce offer an interesting case of change for any organization in light of uncertain and rapidly changing environment. Many researches argue that training and development programs increase the organizations' performance and effectiveness. Toward a better understanding of the effects of training and development in the workplace, this research points out the importance of training and development the workforce, determines the major types of training and development programs, discusses the relationship between training and the overall organizational performance, and offers some guidelines for HR managers to design effective training and development programs.

Table of Contents


Training and Development Major Areas

Training and the Organization Strategy

Training and Productivity

Training and Work Behavior

Training and Workforce Diversity

Cross-cultural Training

Training and Organizational Change



The Effects of Training and Developing the Workforce

on the Organization Performance

Many researches indicated significant relationship between HR activities and managers perform a significant set of activities that affect and influence employees' behavior. Theses activities include planning, job analysis, selection, recruitment, placement, career management, training and development, designing performance evaluation and compensation systems, and personnel relation.

The skills and performance of employees and managers must be upgraded continually. Meeting this requirement involves training and development process and evaluating performance for the purposes of providing feedback and motivating employees to perform effectively. Large firms spend an average of $63 million each on formal training annually. Add in informal education and development exercises and the total amount firms spend exceeds $200 billion; that's slightly more than spending on public and private elementary and secondary education combined in the U.S. (Bateman & Snell, 2004, p.312).

Training can include every thing from teaching employees basic reading skills to advanced courses in leadership. Organizations, in aggregate, spend billions of dollars on training and development. Companies invest in training to enhance individual performance and organizational productivity.

The most training and development popular areas include: (1) basic literacy skills, (2) computer applications, (3) developing management and supervisory skills, (4) technical skills,(5) interpersonal skills, (6) problem-solving skills, and (7) communication skills.

An organization's philosophy and strategy are inextricably linked with its approach to improve the current or future performance of its employees. Some organizations seek to hire skilled employees from outside instead of training its workforce. Many organizations prefer to train and develop their own employees. The process of training and developing employees is both costly and time-consuming. However, to make the training and development process more effective, it must be tied to the overall strategic goals of the organization and to other HR systems. For instance, due to tight labor market conditions and the need to reduce costs as a part of cost-leadership strategy, many organizations may need to train and develop their nonmanagerial workers for managerial jobs. This could be reached by having them work with and learn from current managers. Existing manager should be rewarded for their help to train and develop others, if not, they probably will consume a very little time and effort to the task. Moreover, development effort will be counterproductive unless promotional opportunities are surface for those who successfully complete the program.

If employees cannot implement what they have learned in their organization and/or not rewarded for doing so, the best of them will tend to leave for attractive opportunities in other organizations (Show, 1999, p.80).

Having formulated a new strategy, an organization may find that it needs to either hire new employees or retrain the current employees to implement the new strategy. A study of 51 firms in the United Kingdom found that 71% of leading companies rated staff learning and training as important or very important compared to 62% of other companies. Another study of 155 U.S. manufacturing firms revealed that those with training programs had 19% higher productivity than those with out such a program. Another study indicated that a doubling of formal training per employee resulted in 7% reduction in scrap. Training is especially important for a differentiation strategy emphasizing quality or consumer service. For instance , Motorola, with annual sales of $17 billion, spends 4% of its payroll on training by providing at least 40 hours of training a year to each employee. There is a very strong connection between strategy and training at Motorola. For example, after setting a goal to reduce product development cycle time Motorola created a two-week training source to teach its employees how to achieve that goal. It brought together marketing, product development, and manufacturing managers to create an action learning format in which the managers worked together instead of separately.

The company is especially concerned with accomplishing the highest quality possible in all its operations. Recognizing that it couldn't hit quality targets with poor parts, Motorola developed a class for its suppliers on statistical process control. Motorola estimates that every $1 it spends on training generates $30 in productivity gains within three years. Fortune 500 companies such as General Electric and General Motors have invested heavily on training. IBM annual training costs have at times exceeded Harvard University's annual operating expenses (Wheelen & Hunger, 2004, p.219).

Training and development programs can influence work behavior in two ways. The most obvious is by the improvement of the skills needed for the employee to successfully accomplish his or her job duties. An increase in ability in abilities improves the employee's potential to perform effectively. Undoubtedly, whether that potential becomes realized is largely an issue of motivation. The second benefit from training and development is that it increases an employee's self-efficiency. Employees with high self-efficiency have strong expectations about their ability to perform successfully in different situations (Robbins, 2005, p.539).

Most companies send their new sales representative (reps) into the field almost immediately, armed with samples, order books, and a description of their territories. Much of their selling is ineffective.

A vice president of a major food company once spent a week watching 50 sales presentations to a busy buyer for a major supermarket chain. Here is what he discovered:

The majority of salesmen were ill prepared, unable to answer basic questions, uncertain as to what they wanted to attain during the call. They did not think of the call as a studied professional presentation. They did not have a real idea of the busy retailer's needs and wants.

These days, customers expect salespeople to have deep product knowledge, to create ideas to improve the customer's operations, and to be efficient and reliable. These demands have required companies to make much higher investment in training salespeople. One of the most critical problems is that sales people give in too often when customers demand a discount. One company pinpointed this as a problem when it identified that its sales revenue had gone up by 25% but its profit had remained flat. The company decided to retrain its sales people to "sell the price," rather than "sell through the price." Sales reps were given richer information about each customer's sales history and behavior. They received training to identify value-adding opportunities rather than price-cutting opportunities. As a result, the company's sales revenue climbed further and so did its margins.

Today, new salesmen may spend from a few weeks to several months in training. The median training period is 28 weeks in industrial-products companies, 12 in service companies, and 4 in consumer-products companies. Training time varies with the complexity of the selling task and the type of person recruited into the sales organization. At IBM, for instance, new reps receive extensive initial training and may spend 15% of their time each year in additional training. (IBM has now switched 25% of the training from class room to

e-learning, saving a great amount of money in the process.)

Sales training programs have several objectives (1) sales reps need to know and recognize with the company, (2) sales reps need to identify the company's products, (3) sales reps need to know customers' and competitors' characteristics, (4) sales reps need to know how to make attractive sales presentations, and (5) sales reps need to understand field practices, procedures, and responsibilities.

New training programs are continually emerging, such as role playing and sensitivity training; the use of cassette tapes, videotapes, and CD-ROMs; and programmed learning, films of selling, and distance learning (Kotler, 2003, p.644-645).

Undoubtedly, training for cross-cultural interactions is critical. The researches indicate that up to 40% of expatriate managers end their foreign assignment early because of poor performance or an inability to modify to the local environment. Moreover, about half of those who do remain function at a low level of effectiveness. The direct cost alone of a failed expatriate's assignment is estimated to be from $50,000 to $150,000. The indirect cost may be far greater, depending of the expatriate's position. In most countries, however, the success of the expatriate's assignment is not left so much to chance. Foreign companies offer considerably more training and development for expatriates. Cross-cultural training is complex and involves with deep-rooted behaviors. The actual process of cross cultural training should result in the expatriate learning both skills and content that will improve interaction with host-country individuals by decreasing misunderstanding and any inappropriate behaviors. Trainers should apply social learning theory to this process by using the behavioral since techniques of incentives until the trainee internalizes the desired behaviors. The result is a state of adjustment, representing the ability to effectively interact with foreign assignments in host nationals (Deresky, 2006, p.362-363).

Organizational change is the process by which organizations move from their current state to achieve desired future to increase their effectiveness. Simply, change is making things different. The main goal of organizational change is to find new or improved ways of using resources and capabilities in order to increase an organization's effectiveness to create value and improve its returns. Planned organizational change is normally targeted at improving performance at one or more of four different areas: human resources, functional resource, technological capabilities, and organizational abilities. IBM and General Motors, for instance, experienced falling demand for their products in the 1990s and have been looking for new ways to use their resources to improve their performance and attract customers.

Change occurs constantly and unpredictably. Organizations are now facing dynamic and changing environment. This, as a result is requiring organizations to adopt. For instance, almost every organization has to modify to a multicultural environment. HR policies and practices have to change to reflect the needs of an aging labor force. Typical kinds of change efforts managed at human resources include (1) new investment in training and development activities so that employees acquire new skills; (2) socializing employees into the organizational cultures; (3) changing organizational norms and values to motivate a multicultural and workforce diversity; (4) ongoing examination of the way in which promotion and reward systems operate in a divers workforce; and (5) changing the composition of the top-management team to improve organizational decision making (Jones, 2001, p.389). In conclusion, Training and development programs influence the overall organizational performance and effectiveness. Many organizations have to spend large amount of money on training and development to upgrade employees' skills. Managers and employees need to learn new skills and develop new abilities. The goal of training and development is to improve the organization's performance by improving the productivity and efficiency of its employees.

An organization's training and development programs should be designed to enhance the organization's response to continuously and rapidly change in business environment. Eventually, Organizations that are willing to change must upgrade their employees' ability and skills continuously, and they must have reward systems that encourage learning new skills and abilities.


Bateman, T. S., & Snell, S. A. (2004). Management: The new competitive landscape (6th ed.). Boston: McGraw-Hill

Deresky, H. (2003). International management: Managing across borders and cultures (4th ed.). NJ: Pearson Prentice Hall

Jones, G. R. (2001). Organizational theory (3rd ed.). NJ: Prentice Hall

Kotler, P. (2003). Marketing management (11th ed.). NJ: Prentice Hall

Robbins, S. (2005). Organizational behavior (11th ed.). NJ: Prentice Hall

Shaw, F. (1999). Human resource management (4th ed.). Boston: Houghton Mifflin Company

Wheelen, T., & Hunger, J. (2004). Strategic management and business policy (9th ed.). NJ: Prentice Hall

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