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

Abstract

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

Introduction

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

Conclusions

References

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