Training A Key Ingredient For Company Success Management Essay

Training And Development is a subsystem of an organization that ensures randomness is reduced and learning or behavioral change takes place in structured format. Employee development and training helps companies invest in their people so that they will be ready for the challenges of the future.”

Determine the Impact of Employee Development and training on the Success of an organization by taking examples of big dominating companies in all over the world.

Training a Key Ingredient for Company Success

Customer service, productivity, safety, employee retention and growth, the downturn in the economy, coping with the retirement of skilled employees-these are some of the issues affecting companies in all industries and sizes and influencing training practices.

Four companies-Boston Pizza, Seattle City Light, Starbucks, and US Airways- provide examples of how these concerns have affected business and how training has helped them succeed.

Boston Pizza International, a casual restaurant chain, recognized that most of its managers understood the Boston Pizza concept but lacked the soft skills needed to be successful managers. At Boston Pizza College, managers learn and practice skills needed for successful store management. Reports from secret shoppers and quality assurance visits have improved, and the restaurant chain has increased retention in an industry in which turnover can approach 300 percent.

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Seattle City Light, the city’s municipally owned electric company, expects more than a quarter of its work force to retire within the next five years. Seattle City Light is using training courses and interactions with more experienced employees and mentors to help employees learn new and innovative technologies as well as the electrical system’s history to prevent electrical demand from overloading aging dams and power tunnels. Final exams and hands-on field tests are administered after training to ensure that new employees have acquired the knowledge and skills needed to be successful operators. The company also uses apprenticeship programs to develop technical employees to ensure they understand how their role and their interactions with other employees contribute to the effective and efficient operation of the utility.

Starbucks believes that the key to company success is its employees or partners. Every new U.S. employee starts his or her job in paid training called “First Impressions.” Store managers serve as trainers. The training focuses on coffee knowledge and how to create a positive experience for customers. Training specialists from headquarters work with store managers to ensure that training is consistent across all stores. The training courses are also frequently updated. Managers and assistant store managers take a 10-week retail management training course. Most corporate employees begin their careers with Starbucks in immersion training. Immersion training involves working in a Starbucks store and learning the business by experiencing making beverages and interacting with customers. Baristas are also encouraged to promote the company’s new discounted pairing of coffee and breakfast for $3.95.

US Airways Group provides extensive training for flight attendants and pilots. Newly hired flight attendants receive five weeks of training, including an introduction to the aviation industry, and Airbus cabin simulators include “door trainers” to practice opening emergency exits under difficult evacuation conditions, such as total darkness and billowing smoke. Training also includes jumping into a pool and inflating a life raft and helping passengers into and out of a raft. Training for flight attendants and performance drills every two years. Pilot training includes practicing skills in a simulator that presents many different scenarios, such as both engines failing, and recreates the feelings and sounds experienced in flight, including turbulence. Forced landings and water ditching are taught in the classroom.

Boston Pizza, Seattle City Light, Starbucks, and US Airways illustrate how training can contribute to companies’ competitiveness. Competitiveness refers to a company’s ability to maintain and gain market share in an industry. Although they are different types of businesses, these four companies have training practices that have helped them gain a competitive advantage in their markets. That is, the training practices have helped them grow the business and improve customer service by providing employees with the knowledge and skills they need to be successful.

Companies are experiencing great change due to new technologies, rapid development of knowledge, globalization of business, and development of e-commerce. Also, companies have to take steps to attract, retain, and motivate their work forces. Training is not a luxury; it is a necessity if companies are to participate in the global and electronic market- places by offering high-quality products and services! Training prepares employees to use new technologies, function in new work systems such as virtual teams, and communicate and cooperate with peers or customers who may be from different cultural backgrounds.

WHAT IS TRAINING?

Training refers to a planned effort by a company to facilitate employees’ learning of job- related competencies. These competencies include knowledge, skills, or behaviors that are critical for successful job performance.

The goal of training is for employees to master the knowledge, skill, and behaviors emphasized in training programs and to apply them to their day-to-day activities.

For a company to gain a competitive advantage, its training has to involve more than just basic skill development. That is, to use training to gain a competitive advantage, a company should view training broadly as a way to create intellectual capital.

Training is used to improve employee performance, which leads to improved business results. Training is seen as one of several possible solutions to improve performance. Other solutions include actions such as changing the job or increasing employee motivation through pay and incentives.

ADVANTAGES OF TRAINING

Training emphasis on the following points:

Providing educational opportunities for all employees. These educational opportunities may include training programs outside the company, self-study, and learning through job rotation.

Performance improvement as an ongoing process that is directly measurable rather than a one-time training event.

Demonstrating to executives, managers, and trainees the benefits of training.

Learning as a lifelong event in which senior management, trainer managers, and employees have ownership.

Training being used to help attain strategic business objectives, which help companies, gains a competitive advantage.

DESIGNING EFFECTIVE PLANNING

The training design process refers to a systematic approach for developing training programs.

The Training Design Process covers 7 steps:

Step 1 is to conduct a needs assessment, which is necessary to identify whether training is needed.

Step 2 is to ensure that employees have the motivation and basic skills necessary to master the training con- tent.

Step 3 is to create a learning environment that has the features necessary for learning to occur.

Step 4 is to ensure that trainees apply the training content to their jobs. This step involves having the trainee understand how to manage skill improvement as well as getting co-worker and manager support.

Step 5 is to develop an evaluation plan. Developing an evaluation plan includes identifying what types of outcomes training is expected to influence (for example, learning, behavior, skills), choosing an evaluation design that allows you to determine the influence of training on these outcomes, and planning how to demonstrate how training affects the “bottom line” (that is, using a cost-benefit analysis to determine the monetary benefits resulting from training).

Step 6 is to choose the training method based on the learning objectives and learning environment. This step may include a traditional training method of face-to-face interaction with a trainer or e-learning using CD-ROM or Web-based training.

Step 7 is to evaluate the program and make changes in it or revisit any of the earlier steps in the process to improve the program so that learning, behavior, change, and the other learning objectives are obtained.

LIMITATIONS OF EFFECTIVE TRAINING PROCESS

Training design is effective only if it helps employees reach instructional or training goals and objectives.

Measurable learning objectives should be identified before the training program begins.

Evaluation plays an important part in planning and choosing a training method, monitoring the training program, and suggesting changes to the training design process.

THE EVOLUTION OF TRAINING’S ROLE

As more companies such as McCormick & Company recognize the importance of learning for meeting business challenges and providing a competitive advantage, the role of training in companies is changing.

Training will continue to focus on developing programs to teach specific skills; however, to better relate to improving employees’ performance and to help meet business needs and challenges (and be considered strategic), training’s role has to evolve to include an emphasis on learning and creating and sharing knowledge.

Learning refers to the acquisition of knowledge by individual employees or groups of employees who are willing to apply that knowledge in their jobs in making decisions and accomplishing tasks for the company.

Knowledge refers to what individuals or teams of employees know or know how to do (human and social knowledge) as well as company rules, processes, tools, and routines (structured knowledge).

MOVEMENT FROM TRAINING AS AN EVENT TO LEARNING

At Walt Disney Company, over the last 10 years training has evolved to include flexible learning delivery, customized learning experiences, and collaborative development with internal training customers. Disney has moved from an instructor-led training approach to an approach that uses face-to-face instruction (classroom, on-the-job) combined with online instruction (game simulation, e-learning). This matches Disney’s business strategy, which has always emphasized matching the appropriate technology and methods to the audience regardless of whether the audience is a guest or an employee (cost member).

As companies recognize the value of training and development and view them as part of a broader learning strategy, seven key capabilities are needed. These capabilities are:

Alignment of learning goals to the business goals.

Measurement of the overall business impact of the learning function.

Movement of learning outside the company to include customers, vendors, and suppliers.

A focus on developing competencies for the most critical jobs.

Integration of learning with other human resource functions such as knowledge management, Performance support and talent management.

Training delivery approaches that include classroom as well as e-learning.

Design and delivery of leadership development courses.

TRAINING AND DEVELOPMENT AS SOURCE OF COMPETITIVE ADVANTAGE

Companies derive competitive advantage from training and development. Training and development ­programs, as was pointed out earlier, help remove performance deficiencies in employee. This is particularly true when – (1) the deficiency is caused by a lack of ability rather than a lack of motivation to perform, (2) the individual(s) involved have the aptitude and motivation need to learn to do the job better, and (3) supervisors and peers are supportive of the desired behaviors.

Training & Development offers competitive advantage to a firm by removing performance deficiencies; making employees stay long; minimized accidents, scraps and damage; and meeting future employee needs.

There is greater stability, flexibility, and capacity for growth in an organization. Training contributes to employee stability in at least two ways. Employees become efficient after undergoing training. Efficient employees contribute to the growth of the organization. Growth renders stability to the workforce. Further, trained employees tend to stay with the organization. They seldom leave the company. Training makes the employees versatile in operations. All rounder’s can be transferred to any job. Flexibility is therefore ensured. Growth indicates prosperity, which is reflected in increased profits from year to year. Who else but well-trained employees can contribute to the prosperity of an enterprise?

Accidents, scrap and damage to machinery and equipment can be avoided or minimized through training. Even dissatisfaction, complaints, absenteeism, and turnover can be reduced if employees are trained well.

Future needs of employees will be met through training and development programmers. Organizations ­take fresh diploma holders or graduates as apprentices or management trainees. They are absorbed after course completion. Training serves as an effective source of recruitment. Training is an investment in HR with a promise of better returns in future.

A company’s training and development pays dividends to the employee and the organization. Though no single training programmed yields all the benefits, the organization which devotes itself to training and development enhances its HR capabilities ­and strengthens its competitive edge. At the same time, the employee’s personal and career goals are furthered, generally adding to his or her abilities and value to the employer. Ultimately, the objectives of the HR department are also furthered.

FACTORS INFLUENCING WORKING AND LEARNING

The factors that influence working and learning are Globalization of business, demographic changes, new technologies, and economic changes, etc. these factors influence all aspects of our lives: how we purchase products and services, how we learn, how we communicate with each other, and what we value in our lives and on the job. These forces are affecting individuals, communities, businesses, and society. To survive, companies must address these forces-with training playing an important role. Some of them are:

ECONOMIC CYCLE

The poor economy means more companies are downsizing their work force, delaying plans for new operations and growth, and revisiting training and development and human resource budgets to cut unnecessary programs and costs. For example, just in January 2009 more than 70,000 job cuts were announced, impacting employees from Pfizer, Texas Instruments, Home Depot, General Motors, Boeing, Alcoa, Andersen, and World Wrestling Entertainment. Employees are delaying retirement and newly retired employees are returning to work out of necessity because of losses affecting their retirement assets.

One estimate is that companies plan to cut their training budgets over 10 percent in response to the economic crisis. However, such economic times also provide an opportunity for companies to take a closer look at training and development to identify those activities that are critical for supporting the business strategy as well as those mandated by law (such as safety training or sexual harassment training). Also, training technologies using iPods and online learning will likely receive more serious consideration to reduce training and development costs (travel costs, instructor costs) and increase employees’ access to training. For example, Philips Electronics is cutting its training budget but will continue to offer its Inspire program for high potential employees, emphasizing business strategy and personal leadership topics. Philips believes that investing in leadership development will help the company weather the recession and prepare for economic recovery.

INCREASED VALUE PLACED ON INTANGIBLE ASSETS AND HUMAN CAPITAL

Today more and more companies are interested in intangible assets and human capital as a way to gain an advantage over competitors. Training and development can help a company’s competitiveness by directly increasing the company’s value through contributing to intangible assets. A company’s value includes three types of assets that are critical for the company to provide goods and services: financial assets (cash and securities), physical assets (property, plant, equipment), and intangible assets

Intangible assets have been shown to be responsible for a company’s competitive advantage. A study by the American Society for Training and Development of more than 500 publicly traded U.S.-based companies found that companies that invested the most in training and development had a shareholder return that was 86 percent higher than companies in the bottom half and 46 percent higher than the market average.

Training and development have a direct influence on human and social capital because they affect education, work-related know-how and competence, and work relationships. Training and development can have an indirect influence on customer and social capital by helping employee’s better serve customers and by providing them with the knowledge needed to create patents and intellectual property.

For example, John Chambers, CEO of Cisco Systems, has transformed the company from one with one or two primary products, in which the most important decisions are made by the top 10 people in the company. Business unit leaders now share responsibilities for each other’s success. Cisco’s directory is designed to help anyone inside the company find answers to questions, a product demo, or the right person to speak to a customer in any language, anywhere in the world. As a result of its improved face-to-face and electronic collaboration, Cisco Systems has been able to get products to market faster.

The value of intangible assets and human capital has three important implications:

A focus on knowledge worker,

Employee engagement, and

An increased emphasis on adapting to change and continuous learning.

NEW TECHNOLOGY

Technology has reshaped the way we play (e.g., games on the Internet), communicate (e.g., cell phones, personal digital assistants), and plan our lives (e.g., electronic calendars that include Internet access) and where we work (e.g., small, powerful personal computers allow us to work at home, while we travel, and even while we lie on the beach!).

Technology continues to have a large impact on all sectors of the economy. Robotics, computer-assisted design, radio frequency identification, and nanotechnology are transforming manufacturing. Technology has also made equipment easier to operate, helping companies cope with skill shortages and allowing older workers to postpone retirement.

Influence on Training

Advances in sophisticated technology along with reduced costs for the technology are changing the delivery of training, making training more realistic, and giving employees the opportunity to choose where and when they will work. New technologies allow training to occur at any time and any place.

New technologies include the Internet, e-mail, CD-ROMs, DVDs, satellite or cable television, etc. The Internet and the Web allow employees to send and receive information as well as to locate and gather resources, including software, reports, photos, and videos. Technology has many advantages including reduced travel costs, greater accessibility to training, consistent delivery, etc. While trainer led classroom instruction remains the most popular way to deliver training, companies report that they plan on delivering a large portion of training through learning technologies such as CD-ROMs, intranets, and even iPods!

For example, consider how training at Kinko’s, the world’s leading supplier of document solutions and business services with 1,100 locations in nine countries, has adopted a blended learning approach including Internet instruction, job aids, virtual classroom training, and mentoring. Cost savings and greater efficiency occurred as a result of the blended approach. The approach has also resulted in increasing staff skills and reducing their time to competence and in increasing the speed with which new products and services can be brought to market.

MODELS OF ORGANIZING THE TRAINING DEPARTMENT

There are five models that are used to organize the training department: faculty model, customer model, matrix model, corporate university model.

FACULTY MODEL

Training departments organized by the faculty model look a lot like the structure of a college. The training department is headed by a director with a staff of experts who have specialized knowledge of a particular topic or skill area. For example, sales trainers are responsible for sales skills training and computer experts provide training on topics such as using e-mail and the World Wide Web as well as software design language.

The faculty model has several strengths.

First, training staff is clearly experts in the areas in which they train.

Second, the training department’s plans are easily determined by staff expertise.

The content and timing of programs are determined primarily by when they are available and the expertise of the trainers.

Organizing by the faculty model also has several disadvantages.

Companies that use the faculty model may create a training function that has expertise that does not meet the needs of the organization.

Trainers in a faculty model may also be unaware of business problems or unwilling to adapt materials to fit a business need.

This can result in de-motivated trainees who fail to learn because course content lacks meaning for them-that is, it does not relate to problems or needs of the business.

CUSTOMER MODEL

Training departments organized according to the customer model are responsible for the training needs of one division or function of the company. This model overcomes a major problem of the faculty model. Training programs are developed more in line with the particular needs of a business group rather than based on the expertise of the training staff. Selection, training, compensation, and development are all based on a common set of knowledge, skills, abilities, or competencies. That is, training is integrated with other human resource responsibilities. Trainers in this model are expected to be aware of business needs and to update courses and content to reflect them. If needs change such that training is no longer available from a source inside the company, the trainers may use out- side experts

There are several disadvantages to this model.

First, trainers have to spend considerable time learning the business function before they can be useful trainers.

Second, a large number of programs covering similar topics may be developed by customers.

For example, Transamerica Life Companies has identified skills that are needed companywide. These skills include communications, accountability, initiative, and collaboration. Transamerica Life also has identified technical knowledge that is needed only in certain business units of the company. These skills and this knowledge are used to make hiring, promotion, and compensation decisions. All employee training and development activity focuses on knowledge and skills that are needed companywide or within a business unit.

MATRIX MODEL

In the matrix model, trainers report to both a manager in the training department and a manager in a particular function. The trainer has the responsibility of being both a training expert and a functional expert.

Advantage of Matrix model:

It helps ensure that training is linked to the needs of the business.

The trainer gains expertise in under- standing a specific business function. Because the trainer is also responsible to the training director, it is likely that the trainer will stay professionally current (e.g., up-to-date on new training delivery mechanisms such as the Internet).

A major disadvantage of the matrix model is that trainers likely will have more time demands and conflicts because they report to two managers: a functional manager and a training director.

COPERATE UNIVERSITY MODEL

The corporate university model differs from the other models in that the client group includes not only employees and managers but also stakeholders outside the company, including community colleges, universities, high schools, and grade schools. Training functions organized by the university model tend to offer a wider range of programs and courses than functions organized by the other models. Important culture and The university model centralizes training to make sure that “best training practices” that may be used in one unit of the company are disseminated across the company. Also, the corporate university enables the company to control costs by developing consistent training practices and policies.

Corporate universities also can help effectively utilize new technology. The University of Toyota, a division of Toyota Motor Sales, oversees external vendors’ development of classroom and e-learning training for employees and dealerships. Trainees were frustrated because there was considerable variability in course navigation and quality. Both large and small companies have started their own universities to train new employees and to retain and update the skills and knowledge of current employees.

OUTSOURCING TRAINING

Outsourcing refers to the use of an outside company (an external services firm) that takes complete responsibility and control of some training or development activities or that takes over all or most of a company’s training including administration, design, delivery, and development. Training experts predict that within 10 years, half of all trainers will work for outsourcing providers. Some companies choose a comprehensive approach, outsourcing all training activities.

For example, consider the outsource providers Accenture Learning and Convergys. Accenture Learning operates Avaya University for Avaya, a global leader in communication systems, applications, and services. Convergys offers corporations either a comprehensive learning outsourcing partnership or selective outsourcing of specific learning-related tasks. Convergys provides a wide range of learning-related functions including planning, content development and delivery, administration, operations, and technology.

COMPETENCY MODEL

In today’s global and competitive business environment, many companies are finding that it is difficult to determine whether employees have the capabilities needed for success. The necessary capabilities may vary from one business unit to another and even across roles within a business unit. As a result, many companies are using competency models to help them identify the knowledge, skills, and personal characteristics (attitudes, personality) needed for successful performance in a job. Competency models are also useful for ensuring that training and development systems are contributing to the development of such knowledge, skills, and personal characteristics.

Competency models are useful for training and development in several ways:

They identify behaviors needed for effective job performance. These models ensure that feedback given to employees as part of a development program (such as 360-degree feedback) relate specifically to individual and organizational success.

They provide a tool for determining what skills are necessary to meet today’s needs as well as the company’s future skill needs. They can be used to evaluate the relationship between the company’s current training programs and present needs. That is, they help align training and development activities with the company’s business goals. They can be used to evaluate how well the offerings relate to anticipated future skill needs.

They help to determine what skills are needed at different career points.

They provide a framework for ongoing coaching and feedback to develop employees for current and future roles. By comparing their current personal competencies to those required for a job, employees can identify competencies that need development and choose actions to develop those competencies. These actions may include courses, job experiences, and other types of development.

They create a “road map” for identifying and developing employees who may be candidates for managerial positions (succession planning).

For example, at American Express, competency models are used to help managers lead their own teams by providing a framework their employees can use to capitalize on strengths and improve weaknesses.

APPROCHES TO EMPLOYEE DEVELOPMENT

Four approaches are used to develop employees: formal education, assessment, job experiences, and interpersonal relationships. Many companies use a combination of these approaches. Larger companies are more likely to use leadership training and development planning more frequently than smaller companies.

FORMAL EDUCATION

Formal education programs include off-site and on-site programs designed specifically for the company’s employees, short courses offered by consultants or universities, executive MBA programs, and university programs in which participants actually live at the university while taking classes. These programs may involve lectures by business experts or professors, business games and simulations, adventure learning, and meetings with customers. For example, Harvard University offers several different programs for executives, high-potential upper-level managers, and general managers (e.g., an advanced management program). Harvard also offers programs on managerial issues such as negotiations and programs for specific audiences (e.g., Senior Executive Program for South Africa).

Many companies primarily rely on in-house development programs offered by training and development centers or corporate universities rather than sending employees to programs offered by universities.

ASSESSMENT

Assessment involves collecting information and providing feedback to employees about their behavior, communication style, values, or skills. The employees, as well as their peers, managers, and customers, may be asked to provide information. Assessment is most frequently used to identify employees with managerial potential and to measure current managers’ strengths and weaknesses. Assessment is also used to identify managers with the potential to move into higher-level executive positions, and it can be used with work teams to identify individual team members’ strengths and weak- nesses as well as the decision processes or communication styles that inhibit the team’s productivity.

For example, Carmeuse North American uses personality assessments in its leader- ship development program. The personality assessments for employees who have been identified as having high potential for top management positions are used to guide employees into development activities such as coaching and formal courses.

JOB EXPERIENCE

Most employee development occurs through job experiences. Job experiences refer to relationships, problems, demands, tasks, or other features that employees face in their jobs. A major assumption of using job experiences for employee development is that developme