Employee Development Plan: Importance and Applications

Employee Development Plan

Running Head: EMPLOYEE DEVELOPMENT PLAN

Abstract

With the nation’s economic turmoil still lingering it is more important than ever to develop plans that will encourage employees to remain with the company. Employee turnover is a crucial issue when it comes to the current economic standing of America. Each time an employee leaves the company the company loses the money it spent training and developing that employee for the future with the company. The training, classes, and cross skills the company has invested in the employee then benefit the new company. Because this situation costs the company money, a new employee development plan has been designed in the hopes of improving employee retention rates in the future.

Employee development allows for the development of the employee so that they can better equip themselves for their career choices. It is important to support their desire to develop more fully at work, while at the same time not investing money that walks out the door and to the competition. This design allows the company to support and assist the employee desire to develop in career skills and to feel that the company supports the loyalty he or she has shown by years of service while encouraging education as well as cross training. The organizational consultant, per the research information and plan, challenges the organization to embrace the detailed plan to further develop each valuable employee. No matter what, organizational leaders must see the value in employee development and be willing to make the effort to show loyalty to its employees.

Employee Development Plan

With the nation’s economic turmoil still lingering it is more important than ever to develop plans that will encourage employees to remain with the company. Each time an employee leaves the company the company loses the money it spent training and developing that employee for the future with the company. The training, classes, and cross skills the company has invested in the employee are then benefiting the new company. Because this situation costs the company money, a new employee development plan has been designed in the hopes of improving employee retention rates in the future.

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Ebbert Hubbard, the prominent American philosopher and writer, once said, “One machine can do the work of 50 ordinary men, but no machine can do the work of one extraordinary man” (Goldstein, 2003). His statement seems to be more pertinent than ever in the contemporary context of commuting from organizations focused on tangible assets like land or property to organizations relying on intangible assets such as creativity, knowledge, or problem solving. Statistics show that more than 50% of the Gross Domestic Product generated by developed economies is based on knowledge—information technology (IT), education, and pharmaceuticals being the key sectors that account for the impressive percentage (www.yourpeoplemanager.com). This means that humans have become the major resource for modern companies. Consequently, their development and education are the major levers conditioning the organizational growth. For that, leaders must understand the value of their employees and develop them for organizational and employee benefit. This research defines employee development and addresses why organizational leaders need it. The research proves the link between employee development and company growth while sharing the benefits of employee training and development. Then the research outlines a plan that addresses hiring, training, development based on time, promotion, and education. Lastly, the conclusion calls leaders to action to realize the importance of, and build the plan for, developing their employees.

What is employee development and why do we need it?

Before starting to analyze the correlation between these two aspects, a clear picture of what employee training and development mean could prove extremely useful. First, a clear delimitation should be made among three concepts that people often confuse. These are education, training, and development. The first one consists of preparing an individual’s mind in a framework that is different from the organization. The second refers to attending courses aimed at improving skills, knowledge or attitudes for appropriately achieving a certain task within an organization, while the third is the natural result of the first two and is represented by the growth of the individual in terms of ability, understanding and awareness (www.accel-team.com). This triangle proves to be indispensable to company performance as it allows employees to account for more tasks that are difficult. In addition, it accommodates newcomers to the organization’s performance standards and helps them act within the same competitive pattern responsible for the company’s success. Further, it enhances the organization’s efficiency and effectiveness, it responds to legislative requirements regarding health or safety, and sets an adequate framework for informing employees on changes that have been made and the courses they have to attend in order to cope with modifications.

Detecting the personnel’s needs requiring employee training and development programs is very difficult. However, task as managers can rely on various sources such as common sense (for instance, the implementation of new technologies undoubtedly represents a solid reason for training) and negative aspects that statistics reveal (the decrease of output per employee, lower performance indices, behavioral problems like absences, sickness, lateness etc.). Furthermore, government recommendations, predictions, specialists’ advice, alarm triggers pulled by specialized journals or confessions made by other organizations which have encountered a certain problem also are other sources on which task managers can rely.

Training and development may be achieved in both formal and informal ways. The former category implies attending courses held by internal or external managers who usually combine impersonal lectures with interactive activities like role-playing or simulation, forums, tests, case studies presented with the help of video and computers. The latter category is a non-official one, and is mainly based on the employees’ ability to draw their own conclusions after observing other workers, participating in meetings, rotating jobs within the organization or temporary assisting employees from another company, autodidactic teaching by reading texts or viewing video tapes, being a member of a research team and so on (www.accel-team.com).

Measuring the outcome of such training and development initiatives is a very difficult thing to do because results are rather qualitative than quantitative. Still, managers may observe if the effectiveness and efficiency of their employees have increased by analyzing the number of customer complaints or the time in which a certain task has been performed. They can also notice a faster accommodation of new employees, more effective use of machinery, a higher job satisfaction reflected in performing more qualitative services to the client (and thus attracting new customers), fewer accidents etc. Managers can also draw some conclusions concerning the employees’ loyalty or the improvement of their qualification allowing them to contribute to tougher tasks or other positions within the organization (www.accel-team.com).

Researches proving the link between employee development and company growth

Undoubtedly, employee development has a significant impact on the customers’ satisfaction and the employees’ ability and willingness to solve crisis encountered by the organization or to adapt to changes occurred in the business environment. Through training and development, a company’s personnel may gain the necessary expertise for approaching new markets or technologies, thus inducing cost savings in the end. Additionally, employees value trainings because these are seen as strategic investments that the organization accepts to make because of the huge trust it has in its personnel’s potential. Therefore, employees will embrace a positive and enthusiastic attitude towards the organization concerned about their intellectual evolvement and will work harder for helping it achieve its mission and goals (Gross, 2000).

The link between employee satisfaction, customer satisfaction, and financial performance has also been outlined by AC Nielsen through its market researches or by Sears through surveys carried out on its retail stores (Goldstein, 2003). Another research survey, carried out by Sirota, Mischkind, and Meltzer (2005), on a sample of 2.5 million employees, highlighted that companies boasting high morale had the tendency to outperform competitors. Moreover, the research emphasized that out of 28 companies having almost 920,000 employees, the share price of 14 (known as high morale firms), had an average increase of 16% in 2004, while the share price of 6 (known as low morale firms) had an average increase of only 3%. The results were significant when compared with the industry average of 6%, calculated for 9,240 companies (http://knowledge.wharton.upenn.edu). In conclusion, higher morale and enthusiasm lead to increased financial performances. As employee development and training are said to be rewards boosting the personnel’s positivism and satisfaction, they may be considered inherently linked to company growth.

Benefits of employee training and development

A major benefit of employee development is increased productivity. Because of the courses he or she attends, an employee may learn advanced techniques that lead to higher efficiency and effectiveness in performing tasks. For instance, if a company’s bookkeeper is sent to an Excel course, this will be taught several shortcuts that will help him or her comply faster with his job requirements. On one hand, this means that he or she can perform other activities that would have otherwise required hiring new employees, and spending more money. On the other hand, increased efficiency results in prompt accountancy reports and ledgers that may be timely consulted by managers in order to make operative decisions. This means shorter time, and consequently, less money spent.

A second benefit of employee development refers to reducing turnover. Researches that have been carried out with regard to this issue have emphasized that an employee’s trajectory within an organization has the form of a parabola. In the beginning, he is enthusiastic about his new job and learns everything he needs in order to live up to the company’s expectations and gain recognition for his well-done work. This ascending trend (or honeymoon as Sirota calls it) lasts five or six months until the individual reaches a climax where routine comes into the limelight. Thus, he continues to do his job for a certain period, but as nothing new appears, the employee decides to leave the company and try something different or look for another challenge. Yet, Sirota’s (2005) research shows that 10% of the companies surveyed succeed in ensuring a prolonged honeymoon throughout the entire career to their employees because they understand the difficulty of “being enthusiastic about an organization that is not enthusiastic about you” (http://knowledge.wharton.upenn.edu). Consequently, they implement development programs that help employees seize opportunities and prepare for complex tasks that might reveal numerous latent skills or abilities. Additionally, employee development may be presented as a supplementary path to job security that has become a top need after the collapse of high-tech companies and September 11, 2001. A perfect example of a high-morale company in these terms is Southwest Airlines, which, after the terrorist attacks in September, stated: “We will take a hit in our stock price and not lay off anybody” (http://knowledge.wharton.upenn.edu).

Furthermore, training and development can exert a positive influence in the recruiting process. First, managers may wish to hire an elitist who does not correspond to job requirements because of a certain skill. If the company is ready to offer trainings for developing the missing feature, it could win a valuable employee who may be responsible for future performances. The following is an example: A person applying for the PR executive position may be rejected because he or she does not correspond to a single requirement such as updating the company’s website. Although he or she is a performer and a fast learner, the organization prefers to hire a less brilliant candidate who poorly meets all the requirements instead of investing some courses in the first one. Such a decision may greatly affect the company’s performance and image.

Secondly, development programs may prove enticing enough to potential employees. Therefore, the company can use them in order to attract the desired staff capable of inducing the organization’s growth. Thirdly, if existing employees are trained for different or more complex tasks, these may become eligible for vacant positions or may handle a wider range of activities. In this context, the company saves money by reducing its need to hire. Fourthly, development consists of rewarding loyal employees who after learning new skills are promoted to higher positions. This also accounts for a company’s performance. Lastly, development strategies allow employees to be more independent or, in other words, they give them wings to fly. This autonomy cuts off the supervision costs, thus increasing the company’s efficiency, and inherently, performance (Gross, 2000).

Employee training also plays a major part in maintaining a work/life balance. This is essential for the organization’s health because the employee burnout phenomenon can decrease productivity or can have other negative consequences like: sickness, lateness, absenteeism as a result of the unusual stress; lower efficiency and morale because of their exaggerate workload; higher turnover rates. Consequently, employees should be helped to handle both work and life commitments through trainings teaching them how to better manage time and priorities or how to recharge batteries after projects or seasons involving an unusual amount of work. In response to the company’s concern, an employee may prove unexpectedly grateful and may voluntarily contribute to a future project, essential to the organization’s success (Gross, 2000).

Employment Development Plan

Hiring

The first step to employee development is the hiring process. When there is an opening the department head will meet with human resources and determine exactly what the new job requirements will be. In addition, at this time there will be a discussion about where the position may lead in the future and what type of education or skills will be important to have for the path to be followed (Bass, 1985). Hiring in the future will involve a careful screening of applicants to cull the most qualified for the particular position in question. In the past, it has been accepted as a practice to hire the first one who was qualified in order to get the position filled. In the future, this will change and improve the retention rate of employees to the company. The applicants will be carefully examined so that the candidate who is most likely to advance within the company is selected. Hiring will happen by way of Internet sources, employee referrals, recruiters, and job fairs. When an opening occurs it will be publicized in several publications so that the company will have a diverse applicant pool from which to select those who will be interviewed (Steines and Kleiner, 2003).

Training

Employee development is an expensive process. The company invests funds to train the employee, and then further train and then possibly invest in the employee’s college education as well. All of this is done with the hopes that the company will eventually reap the benefits of the investments made on the employee’s behalf (Liggett, 2007). The company’s employee development plan has changed to be more cautious about fund investments at the front end of the employee history with the company, but on the back end as time moves forward, the benefits are increased from previous years. When an employee is first hired, there will be a three-day training period by which the employee will view the videos and company policies, be given tours of the company, and will engage in a discussion about future possibilities. After the three days have passed, the employee will begin working along side someone in their chosen department who will assist with their acclimation (Liggett, 2007). While this will cost time and money because the training or supervising peer will have to slow down their own work when the new employee needs help, it is still less expensive than paying for the new employee to spend time in a training institution. The training will initially for nothing more than the job the employee was hired to do. At the first three-day session however, the employee will be told of the entire development package so the employee has an understanding of what the future holds and what staying with the company can mean to them. There will also be an employee suggestion box outside the cafeteria from which ideas for development will be read and discussed quarterly (Liggett, 2007).

Development based on time

The entire foundation of this employee development plan is to reward employees for loyalty and longevity. The plan is based on a staggered schedule that allows the company to provide the best benefits for those who stay with the company (Redling, 2003). The reward is incentive for employees to remain in the employ of the company while offering the company some security that it is investing in long-term workers. It also reduces the loss of funds that occur when a short-term employee goes to a competitor after receiving training at this company. Because the company’s new policy is operated with the bulk of the benefits on the back end of employment they must be made better than they were before so that employees want to stay and reap the rewards of the new package.

After six months of employment the employee may request for a cross training package to be started. In this package, the employee will be trained in other departments so that he or she can work throughout the company in several different capacities. The company will provide a temporary worker to perform the employee’s duties while the employee is cross training for the other department (Redling, 2003). Each six months the employee will be encouraged to choose another department that he or she wishes to be cross trained for and the company will provide an temporary worker so that the employee can devote a full forty hour week to the business of learning the new skill. There will be no limit on the number of departments an employee can be cross trained in as long as there are at least six months worked at the regular position between training sessions. This allows the employee to develop their skills as well as provides additional back up support for the company because the employee can handle multiple tasks within the company (Redling, 2003).

Promotion

It is important that an employee feel they are being treated well and given opportunities to advance in their careers (Solomon, 2002). Any time there is an opening the company employees shall have the first opportunities to apply for it. If there is an employee who is qualified, that employee shall be given the job and the hiring will focus on replacing him or her in the old position.

Education

After one year of employment with the company, the employee can apply for the education package. This will allow the company to reimburse for some costs of education. In years two through four of employment the company will reimburse the cost of tuition following the receipt of a report card that demonstrates a C average in the classes attempted. The classes can be based on any subject but there will be a one hundred percent reimbursement for classes pertaining to work and a seventy five percent reimbursement for classes that do not pertain to the industry. During years five through ten the company will reimburse at one hundred percent not only the cost of the tuition but also the cost of the books for any classes the employee chooses to take. The employee simply needs to provide a report card at the end of the semester to receive reimbursement.

From years ten to 15 not only will the company pay for the employee college but will allow the employee to attend during the work day without docking the pay. This will work up to two hours a day for the duration of employment.

The employment development plan not only allows for the development of an employee in the area of training but also in staff development. The managers of the company will attend annual seminars on staff relations so that they can better understand how to communicate with their subordinates (Dowling, 2001). The company wants to focus on employee retention and part of the reason employees choose to stay with a company or leave it for greener pastures is because they do or do not get along well with their superiors. Staff development and relations is an important aspect of employee development and annual staff relation seminars are targeting problem communications so that the employee will continue to feel loyal to the company.

Conclusion

Employee development can serve to save funds that the company would otherwise have to write off. Employee turnover is a crucial issue when it comes to the current economic standing of America. Employee development allows for the development of the employee so that they can better equip themselves for their career choices. It is important to support their desire to develop more fully at work, while at the same time not investing money that walks out the door and to the competition. This design allows the company to support and assist the employee desire to develop in career skills while at the same time discouraging a cash loss. If the employee stays with the company the development program risks very little of the company’s assets before the employee has proved themselves a long-term investment. This plan allows the employee to fully develop and to feel that the company supports the loyalty he or she has shown by years of service while encouraging education as well as cross training. The organizational consultant, per the research information and plan, challenges the organization to embrace the detailed plan to further develop each valuable employee. No matter what, organizational leaders must see the value in employee development and be willing to make the effort to show loyalty to its employees.

References

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Redling, R. (2003). “Assembling a solid staff: Job rotation, job shaping and cross training help employee retention.” Connexion/Medical Group Management Association. March, Vol. 3, pp. 38-40.

Sirota, D., L. Mischkind, and Michael Meltzer. (2005). The Enthusiastic Employee: How Companies Profit by Giving Workers What They Want. University City, PA: Wharton School Publishing.

Steines, S. R., and B. H. Kleiner. (2003). “Keys to Hiring Employees Effectively.” Management Research News. Volume 26, Issue 2/3/4, pp. 170-180.

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