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Chapter 1: Introduction
Organisations get established, businesses survive and thrive because they sell products and services to customers and earn revenue. Globalization and increased competition have increased the demand for organizations to continually provide excellent products and services. Business performance depends largely upon how well the product or service is. Only satisfied, motivated and trained employees can produce quality products or provide quality service.
1.2 Research question:
Determine how training can improve the skills of employees which in turn help in increasing employee and customer satisfaction, productivity and eventually business performance.
1.3 Background: Research Significance and Problem Identification:
Although many organisations provide their employees training opportunities to progress within the organisation structure, little has been focused upon employee training for organisations' efficiency and performance. Performance oriented market; constantly changing environment and globalisation are influencing the workplace structure and leading to increased reliance on employee skills for providing better products and services. Employees not trained to deal with the advanced management methods and techniques cannot work towards the better business performance. This issue is one of the most important topics in business management studies. This concept is now well established and is increasingly affecting the field of management. It has proved particularly valuable for those organisations who seek better performance.
1.4 Aims and objectives:
The main aim of this paper is to study the value and importance of training and development of employees in terms of overall organisation performance.
- Determine how training can improve the skills of employees.
- Analyse published data/existing literature on human resource management and related subject areas.
- Identify training related issues such as environmental factors and their effect.
- Examine current organisational structure and working practises (such as procedures, policies, and standards followed by the company for its human resource/ workforce) in the company.
- Explore training methods available for the organisations.
- Access the impact of training on workforce satisfaction.
- Summarize the main themes of the findings and place them in the context of business performance.
- Provide recommendations.
The organisations can increase their performance and productivity by providing their staff with appropriate skills through training and continuous development. If suitable training and proper care is given to development of employees, they can prove beneficial by working more effectively and efficiently.
Organisations tend to apply those outdated and inadequate techniques and methods which although have been proven successful, those cannot work on their business situations. While doing so, they often ignore more advanced procedures and their business environmental and cultural requirements. In order to improve or increase their business performance, organisations will need to adapt new ways that can impact training and development of employees efficiently and successfully.
1.7 Theoretical Framework:
The main purpose of this dissertation was to find out the effect of training on organisation performance. This dissertation discussed and critically analysed training and development of employees, its demand in changing nature of the organisation and impact of environmental and other important factors on training and development. Detailed explanations on training methods and types of skills (hard and soft) are also considered. The final section focused on training evaluation and its need. The writer has also taken several authors' views on training and development of employees and linked them with organisation performance and other related factors, and evaluated all the data gathered. The writer has also debated and provided arguments and counter arguments on above mentioned issues argued by professionals.
As the researcher progressed through this research project, limitation arose that included bias, unavailability of relevant data, resource and time allocation, etc.
Chapter 2: Literature Review
In order to survive and compete in the ever growing competitive and changing environment, it is critical for any organisation to perform better by satisfying the needs of the customers (Mullins, 2007). Globalization has increased the demand for organizations to provide excellent products and services as business performance depends largely upon it. Only satisfied, motivated and trained employees can produce quality products or provide quality services. Increased competition and changing nature of technical jobs and services made employee training very crucial for the survival of any business. The requirements of skills development of employees differs from business to business and industry to industry (Bratton and Gold, 2001). This issue is one of the most important topics in business management studies. This concept is now well established and is increasingly affecting the field of management. It has proved particularly valuable for those organisations who seek better performance.
2.2 Training and Development:
In Bramley's (2003) words, training involves learning and educating employee to do something to result in things being done differently. He explains that training is a process that is planned to facilitate learning so that people can become more effective in carrying out aspects of their work. According to the CIPD, Training is expected to equip employees to help them become ‘strategically unique, in addition to the provision of skills, knowledge and attitudes needed to achieve operational efficiency.
‘Training is a planned process to modify attitude, knowledge or skill behaviour through learning experience to achieve effective performance' (Wilson, 2006).
‘Employee Development is a process for preparing employees for future job responsibilities. This may include formal and informal training, education, mentoring, coaching etc' (Armstrong, 2008).
Although the terms training and development are often linked, these address slightly different needs. Training focuses on learning the necessary skills and acquiring the knowledge required to perform the job. It deals with the design and delivery of learning to improve organization performance. On the other hand, development focuses on the preparation needed for future jobs; it should be considered investment in the work force since its benefits are long term (Armstrong, 2006).
Effective training is paramount for survival and growth of a business. Training is not just about developing people but helping them to become more confident and capable in their jobs as well as in their lives (Wilson, 2006). The significance and value of training has long been recognized. The need for training is more prominent given today's business climate and the growth in technology which affects the economy and society at large. Employee is trained to assure that current or future needs of the organisation are met.
2.3 Hard vs. Soft Skills Training:
There are two basic categories of skills training: hard and soft skills (Armstrong, 2008). Hard skills are technical or administrative procedures related to an organization's core business while soft skills are attitudes and behaviours exhibited by employees while interacting, which affect the outcomes of such interactions. It is easy to train and identify the need for hard skills training, while soft skills relate to personal, individual development and are most difficult to define and measure. Some types of training have both hard and soft skills components. Sales training for example, may encompass hard skills such as product knowledge and price negotiation, and soft skills such as empathy and listening (Smith and Mazin, 2004). The best way to develop skills is to practice doing the thing what an employee is trying to do, under the expert guidance of someone who knows how (Redman and Wilkinson, 2006) (Muir, 2004) (Beardwell et al, 2007).
2.4 Reasons for Training:
There are many motives for training and developing employees. It can be initiated for a variety of reasons e.g. it can be carried out as part of an overall professional development program or performance improvement (Rae, 1999). Training is not only essential to create skilled force but also needed to maintain a high level of skills required by the constantly changing work environment and to equip employees to meet future demands (Stewart, 1996) (Pont, 2003).
2.5 Training Benefits:
Leading writers have recognised the importance of training as fundamental for management (Bratton and Gold, 2003). Keep (1989 cited by Redman and Wilkinson, 2006) describes training and development as litmus test against which other characteristics of management practice can be measured. Advantages of training and development include: increased job satisfaction and morale among employees, employee motivation, increased efficiency and effectiveness, increased capacity to adopt new technologies and methods, increased innovation in strategies and products, reduced employee turnover, enhanced company image, risk management. The right employee training at the right time provides big pay offs for the employer in increased productivity, knowledge, loyalty, and contribution (Web 1). Training allows the organisation to develop and promote its own culture. Training also allows organisations to adapt to changes in the business environment and can be used as a change agent to change organisational culture (Wilkinson et al. 2006). Training is a tool that can improve organisational effectiveness, especially in fiercely competitive markets. Training and development helps in optimizing the development of human resource that helps the employee to achieve the individual as well as organisational goals (Benson, 2006). It increases the job skills and knowledge of employees at all levels and expands the horizons of their intellect and their personality. Training and development helps in indicating the sense of team work, team spirit, and inter team collaborations. It also aids the organisations to get more effective in decision making and problem solving. It also helps in developing leadership skills, motivation, loyalty, better attitudes, and other aspects that successful workers usually display (Armstrong, 2008) (Bratton and Gold, 2003) (Pont, 2003) (Price, 2007).
2.6 Training Process:
Training process takes place within the context of the internal and the external environment of the organization. The basis for most training remains the traditional training process system. This involves: 1. identifying the needs for training and development of the company; 2. Planning training or devising a learning plan; 3. Carrying out or delivering training and 4. Assessing and evaluating outcomes/results. A training need analysis is the first step in identifying the types of programs that will further organisation's goals, which helps to decide whether training is appropriate at all. The organisations have to assess why they need training (Smith and Mazin, 2004). Then plans are made on how to deliver the program and by which method. Armstrong (2008) places a great importance on the design of training policy because of its significance of effects on the business. It is an important issue and requires close attention to the organisation's mission, ethical stance and strategic vision. All the policies should be aligned to the company's mission and objectives.
2.7 Training Methods:
Learning and development can focus on different components of employees as proposed by Lee (1996). Organisations can adapt different techniques of training for their businesses and according to their requirement. Some techniques consist purely on acquisition of knowledge, some focus on skills development of its staff, some even focus on sentimental aspects of the employees and their relationships with others. Few activities seek to integrate all the above. Staff training can be conducted on the job, which is carried out at the trainee's workplace, and off-the-job which is carried out away from employee's work place (Mullins, 2007). Training methods include observing, questioning, interpreting, reviewing, coaching, e-learning, workshop, induction, job-shadowing, mentoring, seminars, classes, open learning, project work, workshop and simulation.
2.8 Why Training Fails
Training is not always the answer to performance problems. Some training analysts (Rosner, 1999 cited by Smith and Mazin, 2004) believed that training could be a good investment or could be a waste of resources. Training is indeed a waste of money when the desired behaviour does not occur. That's why training and development doesn't succeed all the time to achieve desired results and in obtaining aims and objectives of the organisation. There could be many other reasons for the failure but most common are (Web 2): Training is often implemented for the wrong reasons and seldom aligns to a business measure. It fails because of lack of objectives to provide direction and focus. Sometimes the solution proves too expensive for the desired outcomes. Other important reason for failure is lack of management reinforcement and support (Mullins, 2007). Some businesses invest little in training because they don't have enough funds.
2.9 Role of a Training Manager:
It is the role and responsibility of the HR manager to develop and implement training strategies and policies. The HR manager has responsibility for training and development and performance management. Human Resource Managers need to understand the nature and process of training and development in order to be able to facilitate learning and development within the organisation (Watson, 2006). HR managers are involved in planning and implementing programs designed to improve the performance of their employees in order to improve the effectiveness of the organization. It's their responsibility to group together employees' activities during training process in such a way that encourages integration and cooperation (Armstrong, 2008).
2.10 Trainee Employees:
Organization's performance largely depends upon the employees that work in it (Watson, 2006). They are the key resource and considered as capital for any organization. HR scholars agree that an organisation is only as good as the people in. Training is worthless if employees are not involved properly (Armstrong, 2008). Company can achieve and maintain the competitive advantage by regularly upgrading the workforce skills. The development of employee skills is one of the most important tasks in which an organisation can engage (Armstrong, 2006). Adequate supply of technically and socially competent and proficient staff is only ensured by training and development.
2.11 Training Evaluation:
Employees need feedback. It is important for their progress and advancement (Armstrong, 2006). Evaluation is a process of establishing the worth or value of something (Rae, 1999). Evaluation of training is a process of gathering information with which to make decisions about training activities (Sloman, 1999). Organizations apply performance appraisal evaluation to measure employee work performance and effectiveness, which can help in defining and developing training needs for the organisations. Having a well-structured measuring system in place can help determine where the problem lies (Mullins, 2007). Training evaluation may also help in improving quality of training activities which in turn results in greater benefits.
2.12 Other Issues:
While providing training, the manager needs to understand the importance and effects organization structure and design because these define tasks and responsibilities, work, roles and relationships, and channels of communication (Mullins, 2007). The two factors that determine how the organization functions in relation to its eternal and external environment are its structure and the processes that operate within it. Structures are necessary to support the effort of training managers and trainee employees. Culture of an organization also plays an important part in assessing the needs and requirements for training and development. It helps in producing high level of business performance. Training according to structure and culture provides organizations flexibility, adaptability and durability required for growth and survival(Redman and Wilkinson, 2006).
Scholars and writers have emphasised on the importance of training and development of the employees for the better performance of any organisation. It is a main factor of human resource management within organization. It not only benefits organisation by providing them with skilled force, but employees individually as well by increasing their effectiveness and efficiency (apart from other benefits discussed above). Organisations have to take into account all the internal and external environmental and cultural factors and should provide feedback on training. To be successful, organisations have to adapt an appropriate training process with best available training method and professional guidance/management.
Chapter 3: Research Methodology
Research is any type of systematic and arranged study to systematize facts or collect data, and is generally linked to a problem that has to be solved (Zikmund, 2000).
Johnson and Scholes (2008) define methodology as ‘A focused and systematic investigation that goes beyond generally available knowledge to acquire specialised and detailed information, providing a basis for analysis and elucidatory comment on the topic of enquiry'.
Research methodology section also clarifies why the researcher has chosen certain research methods, techniques and approaches, justifying the writer's approach and line of action; and why other methods are not included for this project with detailed reasons and explanations. Arguments and benefits for selected methods are also given. Sampling, research tools and other related issues are also explained in this section. This area ends with discussion of limitations and constraints faced by the writer.
As part of dissertation, the researcher was expected to undertake research into business and management field which should meet the criteria set out by the college and must have enough empirical data for investigation (Quinton and Smallbone, 2006). Searching past dissertation and thesis aadded ideas and assisted in formulating the dissertation design and overall structure that provides a framework for the collection and analysis of data (Quinton and Smallbone, 2006). After organising the ideas, research time scale was set which was focused on targets to meet deadlines for completion of the paper. The researcher has applied Gantt chart (Saunders et al 2007) to help in keeping track of the research. It also assisted in planning and coordinating specific tasks during the research work by providing graphical illustrations of the timetable and key tasks involved in it. Its help in keeping the data sought throughout the research within the scope of the project, proved beneficial (Saunders et al 2007). With the amount of literature, it was time consuming to sort out relevant material to the research. Bell's (2005 cited in Bryman and Bell, 2007) six point's parameters method was applied to narrow down the search materials that were time consuming.
3.3 Data Collection Methods and Approaches
The researcher decided to use fast but cheap methods to obtain maximum information in little time. The researcher also tried to focus on specific but relevant research material to minimize collecting irrelevant data and save time. For these purposes, the research resources were divided into ‘Internal' and ‘External'. In internal research, companies' own business data, records and reports, and previous research studies were analysed. External research consisted of collection of data from other sources like magazines, newspapers, publications, reports, journals and websites. In research there are two broad methods of reasoning often referred as ‘Deductive' and ‘Inductive' approaches. As the social/management research generally necessitates the deductive approach rather than inductive research, the researcher chose this method of reasoning. In deductive approach particular instances were deduced from general inferences. In this type of theory conclusion followed logically from premises or available facts. This approach helped the researcher for collecting the data that defined the problem area (foreground theories).
Research was conducted utilizing both ‘Primary' and ‘Secondary' methods. Primary data was collected with a focused plan and gathered specifically for this research (Saunders et al. 2007). Secondary data (which was collected from other sources or published data) was used in ‘Descriptive' and ‘Explanatory' research. Examples of primary data that the writer collected were interviews and questionnaires. Primary data was collected specifically for data analysis but secondary data collected was for both literature review and data analysis sections. Both primary and secondary research included ‘Qualitative' and ‘Quantitative' data. As per the requirements of the research, the researcher collected both qualitative and quantitative forms of data and integrated the information in the interpretation of the overall results. Quantitative research involved the use of structured questionnaire where the response options were predetermined by the researcher. Measurement was objective and statistically valid. Qualitative research was subjective in nature and involved collecting and analysing data by interviewing people. Some of the qualitative research was coded quantitatively for the purpose of reaching the conclusion by assigning meaningful scales and numerical values.
Interview is one of the best ways for getting behind the story of the participants' experiences. It is very easy way to gather primary qualitative as found by the researcher during the research process. Interviews were conducted to collect valid and reliable information (Saunders et al 2007). The researcher was aware that questionnaire is the most popular method of conducting scholarly research. It provides a convenient way of gathering information, easy to analyse, and most statistical analysis software can process it easily. It is also cost effective method of collecting data and is familiar to most people. Questionnaire can be circulated easily and response rate is fast (Saunders et al 2007). The writer chose ‘Closed ended Questions' in formulating the questionnaire for timely response. The concept of mixing different methods originates in the realisation that all methods have limitations. Using a multi-method approach reduces bias and increases validity (Saunders et al. 2007).
The findings from the research were then tested on theories for reliability and validity (Saunders et al 2007). Good practice is only possible if the research data is valid, reliable, and sensitive (Johnson and Scholes, 2002). The researcher ensured that appropriate variables, techniques, scales, and assumptions were used. Proper measures were taken while gathering secondary data and information was checked for its validity and reliability while maintaining sensitivity in order to keep facts as original as possible.
It wasn't possible to collect data from all the sources and all the population. Therefore sampling was applied. The accuracy of research depends upon the way the sample is selected. The researcher conducted interviews from managers. Questionnaire was distributed to randomly selected employees.
3.5 Limitations and Constraints
Researcher realized that not all the processes and methods could be used and dropped few methods (like focus groups) of secondary choice due to time limit and minimum resources. The major limitation of the study lies in its relatively small sample size of customers and the limited coverage. This was mainly attributable to the limited time and other resources available for the study.
3.6 Data Analysis Tools
Internet has become the most used method of communication due to its comparative ease and effectiveness. The writer utilized this method to stay in touch with the managers. Spreadsheet program was used to process the data from the questionnaires. This information was quantitative, easily converted to percentages and proved easy to evaluate. Microsoft Word is used as design tool due to its versatility, speed, and accuracy of work along with wide range of pictorial and graphical alternatives to research findings.
Chapter 4: Research Findings and Data Analysis
The company chosen for this research study in order to find out how the training and development of employees can effect the business performance, is …… clothing which is a small and medium size company that deals in manufacturing clothes in small factory and selling these through its small store. Some employees are involved in production while the rest deals in serving customers. The company has recently undergone through organisational changes and trained all its employees in their respective roles.
Interviews were conducted to collect valid and reliable information. The researcher conducted interviews from management and distributed questionnaires among its employees to determine the extent how development has effected the company's efficiency. Survey conducted from employees for satisfaction is a self assessment by staff. Its results explain how well the expectations are met and/or how to improve further. The researcher conducted this survey to study the employees' views about the company performance. This research also explained the reasons behind the findings.
4.2 Analysis: Interviews
There was no formal training for employees before. Growing competition and market demand forced the company to amend its policies and include training in its mission and vision. Training was conducted to raise skills levels and productivity of employees and to offer the hope of increased competitiveness within business environment. The company successfully conducted the training with positive response from employees. The training process was internal and staffs were provided on the job training by the employer. The employees were empowered and felt motivated and passionate in the involvement in training process. The management felt that employee as well as customer satisfaction and relation has improved a lot after employees' training based on the customer/employee responses and company's financial results. The company is quite satisfied of its evaluation process and feedback procedure. The company trained its employees in whole range of skills It boosted confidence and morale of an employee who now is doing the job more efficiently and effectively. It paid off well for the company as its productivity increased and new customers were attracted.