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In this article Bo Hansson (2006) had put a light on 'Company based determinants of training and the impact of training on company performance. The research was done in a good manner by choosing one of the best methodologies in the world but it was very confusing type of research. The argument will be developed through critically analyse of Bo Hansson' paper, discussing the method of research, main findings and the main concept.
Bo Hansson article depict a study to inspect some factors to determine training from an organisational perspective and to search the training effects with the help of studying the connection between training and profitability. The over all research was based on the Cranet international human resource management survey. In this survey the data has been taken from more than 5000 private organisations and 34 universities with having some business schools are in a network of this survey from all over the world. They got 8,487 responses by 26 countries and the average rate of the responses by participating countries was 20 percent (approximately).
As it can be seen that the data was collected in a very huge quantity from more than 5000 organisation in 26 countries. In this survey the author has raised very good questions with all the relevant data and evidence but somewhere he put himself in confusion because he was not in a flow of discussing the questions in a correct order completely and he continued the same questions again in the middle of the article. And he also did not focused much on an important topic ''the performance of the company'' and how training enhance the company performance''? By the help of Cranet survey the author has analysed some of the questions what influences training decisions. Training policy, employee training needs, staff turnover and whether the innovation is important for the firm.
Bo Hansson has investigated and said that HRM research has mainly focused on company and organisational effects. The two recent study he had evaluated that the general training point out towards the productivity earned for the company (Barrett and O' Connell, 2001, Dearden et al, 2000). He means to say that firms gain more from general training than specific training. The author has also compare labour economics with HRM research; he declared that labour economics is more suitable for individual effects where HRM research is largely focused on company and organisational effects. Labour economics is very good for individual based measures related to training. The result came out of this training is that the individual pays for general training and the company pays for specific training. After a lot of study the conclusion was that the firms gain more from general than specific training. But later on in the survey he himself shows a drawback of the specific and general training.
Bo Hansson discussion of the literature and identification has made us understand the training and its determinants but in the end of the article the author has just highlight only four paragraphs that were only about profitability rather than focusing on performance of the company. He has discussed about the prior profitability of the company in that also he has mentioned a drawback that they work with perceptions of performance and not on actual performance.
The author has used the best methodology in his research. The Cranet survey which was established its network in the year 1989 by 5 countries that is Germany, United Kingdom, Spain, France and Sweden. In this survey he has raised many of the good questions which relate to training and training investments, some of the questions are very important to argue.
In the selected question survey, the first question he introduced about the wage bills spent on training (intensity). Relating to this, the author has already showed brief information in the beginning and detailed in the middle of this article, he said that company based training make a contribution to all investment in the employees. A large amount has been invested on company training, after having a survey it came around 3 percent wage bills spent on training each year.
And the second one was the ratio of employees trained annually (incidence) this question is interdependent to the first one, after such investment that is 3 percent wage bills spent results around 45 percent employees trained in each year. He has clearly mentioned in the survey and made those points clear with the help of table 1 descriptive statistics. Furthermore, BO Hansson has also said that high proportion of young employees or graduates plays an important role in the firm for having a positive impact on intensity as well as incidence. Incidence and Intensity are the constantly used measures of training. But later on the author himself has announced one drawback in the Cranet survey that ''he has a lack of knowledge about the respondents regard as training'' and also having a doubt about general training and specific training. After seeing this drawback it is important to go in a deep study and get knowledge of training and its methods. It is also mentioned in the paper that the companies with a written policies will more comfortable to know the employee needs. The policies can be made if the company can think about the training and its methods. According to Luthans et al (2004:45) In the most organisations training is the centre stage for achieving performance in the organisation.
Luthans et al (2004:45) said that human resources have been recognised for the competitive advantage in the global economy. Some are recognised that training is contributing to fill the gap between employer's competencies in high performance organisations. Training is a systematic way of learning skills, technology, attitude and good behaviour that will result to performance in different environment (Goldstein, 1993:3). There is no doubt in this that the main aim of the training is to achieve performance on the job (1997:2). According to Analoui (1993) the training can be effective with two conditions, first is the criteria of transfer and the second one is the strategic nature of the training.
The first criteria show the effectiveness of the training if it can be transfer to the workplace. But lack or absence of positive transfer affects the performance of the individual to their potential; this will show that they are facilitating to achieve the objective of the organisation and unable to secure competitiveness. The second criterion is also closely related to the first one because if training is not focused than resources cannot be utilised fully and the performance of the company will be only for the sake of performance instead of feeling the aim of the company.
According to Dessler Gary (2005) training methods are important for development of employees. Employers can perform much better if the method of training is followed properly. Some of the methods are mentioned below:
On the job training
Job instruction training
Computer based training
Audiovisual based training
It is a process of learning which involves skills, behaviour, and personality of the employees and help to mould them towards the performance.
The third question arises when the author was thinking about whether the firm's previous performance influences the provision of training. He raises the question to reduce the mutuality of training and profitability. Are profitable firms can afford training or training makes profitability for the firm? To support this question he has taken an example of top 10%, the measurement of this variable is at three levels: (a) The top 10 percent
(b) The upper half; (c) The lower half of all firms in the sector. To estimate the determinants of the provision of training they made a dummies of the industries to make differences amongst industries and to control the countries heterogeneity and they have organised the dummies of countries for the regression of profitability determinants and training as well.
To the certain extent all the arguments the author has talked about in the paper was relevant and it does make sense but the main argument is missing. Bo hansson' research strategy therefore appears very confusable to meet his own thinking regarding the importance of company performance and how training enhances the performance of the company.
To conclude, Bo Hansson has explored his research and the strength of this article was a good data used in the research by various companies and he made it clear to the questions with the evidence which he raised in the cranet survey. The graphs he has used was little bit complicated to understand. This was a worthy endeavour. Unfortunately, the weakness of this article was that the author has not given much information about how training investment enhances the performance of the company which was the base of this article.