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MAJOR BENEFITS OF EMPLOYEE TRAINING AND DEVELOPMENT FOR DEVELOPING ECONOMY
Jayadatta S
1, Syed Ameen Ahmed
2, Abhinaya Honnappa
3, Ankita Naik
41,2Assistant Professor, Department of Management Studies, AITM, Bhatkal
3Assistant Professor, Department of MBA in Rural and Tribal Management, Karnataka Folklore University, Gotagodi, Shiggaon
4Faculty lecturer, Department of Commerce, GFGC Honnavar
ABSTRACT
Today for sustainable development and act in any business training and development is very vital as it acts as a continous process for improving and nurturing the competence and caliber of the employees to meet the present and future performances. Employees certainly are valuable resource (asset) of the organization. Organizations find it very difficult to stay competitive and adapt to the environment in recent global economy. As such importance of employee development program is growing for organizations those pursuing a sustainable competitive advantage among competitors. Truly success or failure of an organization relies on performance of employees as employees are esteemed resource of any organization. Employees provide a competitive advantage at any level: Organizational, individual and society. Most of the organizations today are financing large amount on employee training and development programs. Training programs are very much supportive for companies to emphasize on expertise, knowledge as well as ability of employees. Also substantial discussion among researchers and professionals are underway to access the affect that development program has on both employee and organization. With efficient training and development programs, organizations would be more flourished and employee performance would also increase. As such this paper attempts to study the benefits associated with training and development at different levels imparted by organizations
Keywords: Training And Development, Competence, Organization, Employee Performance, Caliber
Background
Efforts of career planning and development were initiated by organizations in 1970’s which was directed and dedicated on young employees those who demonstrate to have a high potential. Suggestions were given for organizations to make plan for future and also provide training and development to fresh employees for the high ranking designation in future (Moses 1999). However, career path model certainly develops very well through conservative commitment which employees would readily offer to their organization. This commitment is defined as emotional agreement by which employees are commonly guaranteed the loyalty and continued dedication with organization which results in the form of providing employees work safety, training opportunities and chances for advancement in career (Feldman 2000). During 1980’s the proficiency to acquire
482 | P a g e on the commitment promptly on top of organizations reduced when most of the organizations were trying to move a flat hierarchy where fewer opportunities for promotion was meant. Also in 1950’s particular number of organizations adopted similar way to train their employees. However in 1950 Crotonville Management Development institute was developed by General Electric Company to impart training to its employees (Gerbman 2000). In 1960’s MacDonald also followed this trend and started Hamburger University for training their employees. Hence maximum number of organizations emphasized on training and development programs of the employees.
I. INTRODUCTION
Accomplishment of tasks and goals for any organization relay on its employees irrespective of the sector.
Besides there are different other aspects also which perform a major part wherein organizations need to ensure efficient employees in line with financially dominant and competitive market. Skilling staff is good for business and also good for workforce, in a developing economy like ours where uncertainty is the only certainty, training and development are truly becoming a reliable source of sustained competitive advantage. Hence imparting training skills is becoming basic capital and also trigger of development for countries like India. Workers at all levels need to be lifelong learners, adapting continuously to changed opportunities and technologies, work practices, various business models and other forms of economic and social organization. To sustain and retain valuable human resource, organizations today require being conscious about job satisfaction and also retention of employees. Most of the organizations think and feel that employees are looking for only financial profits from their works. Today’s market condition has changed due to new era of customer orientation. Firms constantly need to revise their product and service mix, managerial methods for sustainable growth. These conditions certainly actualize human capital as strategic resource of every organization. An optimal answer to complex business challenges is employee training and management of human capital is truly taking central role in modern management. To reduce errors in such high-risk settings such as emergency rooms, military and aviation training has successfully been used. Training however is also important in more conventional organizations. Training in general refers to planned efforts by a company to facilitate employees learning of job related competencies. One of the several possible solutions to improved performance is training. Training, development and skill oriented activities allow the organizations to adapt, excel, compete, innovate, be safe, produce, improve service and reach goals. To accumulate knowledge, update knowledge, use knowledge as well as transfer knowledge to other people in the organization employee training is one of the best ways. By instilling confidence and knowledge an organization can convert a manual worker into a white collar worker and later into a knowledge worker. It certainly requires that employees should have the ability to manage themselves, ability to solve problems, decision making as well as continuing learning consciousness. The importance of training and development for employees is growing tremendously and organizations of today are using this tool to compete with competitors in the market. In order to remain competitive and be a successful part of the
organization today most of the companies are investing lot of money on training and development.
According to Edwin B Flippo “Training is the act of increasing knowledge and skill set of an employee for doing a particular job”
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1.1 Development oriented
To meet specific objectives employee development programs are designed which contribute to both organizational and employee effectiveness. There are also several steps in the process of management development. These include reviewing organizational objectives, determining individual needs, evaluating organization’s current management resources, designing and implementing various development programs and finally evaluating the effectiveness of these programs as well as measuring the impact of training on participant’s quality of work life. Training and development program as such is a planned education component and with exceptional method for sharing the culture of an organization, which necessarily moves from one job skills to understand the workplace ethics, skills, innovative thinking, developing leadership and problem resolving. Thus in simple terms it can be denoted as per the following formula below.
Employee development = Employee education + Employee Skills + Training effectiveness + Employee quality of work life
1.2 Major objectives of the study
1. To study the current position of training in India
2. To study how training and development helps for a developing economy like India 3. To study the benefits of training at various levels
II. RESEARCH METHODOLOGY
The research paper is truly based on exploratory research based on secondary data, wherein sources are collected from journals, various articles, magazines and media reports. Keeping in mind the requirements of the objectives of the study, research design employed for the study is of descriptive type. Also keeping in mind research objectives, descriptive research design was adopted to have a greater accuracy and also in depth analysis of research study. Readily available secondary data was extensively used for the study. Various news, websites, articles, books were used which were enumerated and recorded.
2.1 Current Scenario of training in developing economies like India
Today most of the organizations are facing deficiency of sufficient budgets for purchasing various training programs for the workers from consulting firms or other business consultants or outsourcing organizations like Mafoi Ranstad. Indian organizations on an average spent US $331 per employee on training and development in 2011, according to study conducted by learning and development trends in India by the American Society for Training and development (ASTD) and Harward Busine
ss Publishing (HBP)
2.2 Corporate Training Initiatives in India
Indian organizations have made exceptional progress in the last few years in terms of their training initiatives.
Some of the major highlights of training initiatives are as follows:
1. Training and development is considered as more of a retention tool than a cost to the organization mainly due to increase in competition and also because of entry of multinational companies in India, which has forced many organizations to look for various alternatives to develop organizational effectiveness and efficiency
484 | P a g e 2. Today not only have organizations increased their investment and efforts in training and development
activities, but have also systematized training policies and practices right from the training need analysis to training evaluation and feedback. To create a smarter workforce and also yield better results training system in India has been looking for innovative ways.
3. Optimum utilization of human resources is the target of any business concern and training is a tool to increase business outcomes. In 2008 four organizations from India were able to get entry in the winner list of 40 best organizations. These organizations were Reliance industries limited, nagothane manufacturing division having strength of 2,157 employees, Wipro limited having 60,000 employee strength, Infosys technologies limited having 79,016 employees and ICICI Bank Limited with employee strength of 40,880.
This certainly is an optimistic sign which clearly shows that organizations operating in India are also very much serious about their learning and development function
4. In India more than 90 percent of India’s workers are employed at low levels of productivity as well as income, hence employment growth is almost exclusively concentrated in the informal economy. Half of the country’s population is over the age of 25 years who had no education and an additional third have at best primary schooling. Also four out of five entrants to work force have never had any opportunity for enhancing their, skills and development. Meanwhile while enrollment in technical education institutions has increased from 2.1 million in 2000 to some 3.8 million in 2005, there is also a very high drop-out rate in these institutions. Significant skill shortages are reported throughout the formal economy and at the same time there is huge shortage of teaching faculty in both engineering and management colleges. Current deficit of engineers is estimated to be around half a million in Information technology sector alone.
5.
In order to address the above mentioned challenges, India adopted an ambitious National skill development policy in 2009. The aim of this policy is to empower all individuals through improved skills, knowledge and also equip them with internationally recognized qualifications to give them access to decent employment and also promote inclusive national growth. It is envisaged and vision among other things to increase and develop vocational training capacity to over 15 million students over the 11th five year plan period.2.2 Benefits of training and development for a developing economy like India:
Some of the major benefits of training and development for a developing economy are as follows:
1. Optimal and maximum utilisation of available resources: Certainly training and development helps every organization to focus on scientific and technological innovation through research and development which will help to make optimal use of available resources
2. Knowledge Society: It relies on the quality of education, human capital, research and innovation policies which are the key drivers to boost growth
3. Achieving societal prosperity: People centered approach assumes that investment in human capital is very much fundamental for achieving societal prosperity. Also creating a society of flexible, skilled and creative people with opportunities for quality education and also life-long learning available to all and also appropriate mix of both public and private funding
485 | P a g e 4. Employment generation: Young people today with low skill levels are certainly finding it hard to secure
jobs. With effective training and development people will become more skilled and competent leading to employment generation.
5. Sustaining economic growth: India is becoming one of the most competitive and dynamic knowledge based economy in the world, capable of sustaining economic growth with more and better jobs as well as greater social cohesion
6. Equity and inclusive growth: Training certainly contributes to greater social equality between women and men. Skill based training can be a major tool as women face widespread barriers in seeking to achieve the goal of equality of opportunity and treatment in employment. Gaining new, innovative and higher level skills can help more women to enter the employment market and also contribute to lowering gender disparities in the employment market
7. Training mainly helps minority and disabled sector: By providing training to minority and disabled persons organizations can help them to come at par. It will also increase their skills and competitiveness
8. Higher standard of living: Higher levels of training and skillset attainment lead to a more skilled and productive workforce, producing more efficiently higher standard goods and services which in turn forms the major basis for faster economic growth and also rising living standards
9. To develop second carrier/Second career program: People who work after a break can be recruited by organizations as re-training displaced workers. Laid-off workers with training in occupations deemed to be high in demand as in order to meet local needs as well as to avoid duplication of effort across various levels of government. Such programs are already in use with proven track records which were expanded to support workers training for new jobs
10. Impact of GDP: GDP and employment growth always move closely together. Training the workforce in specific skills not only provides them with access out of poverty, but contribute to growth of national GDP 11. Other benefits: Investment in education and training is very much important not only for its direct
contribution to growth but also for the indirect externalities that creates as these eventually feedback into the growth process. Certainly extending benefits are not only economic but they also include improvements to the environment which results in reduced crime rates and better health
2.4 Benefits of training at various levels
Some of the major benefits of training and development in developing economies are:
1. Benefits to Individual/Employee 2. Benefits to organization
3. Benefits to society
2.5 Benefits to Individual/Employee
Competency mapping: This is one of the easiest ways of assessing the strengths and weaknesses of a worker in an organization. It is all about identifying a person’s job skills and strengths in areas like leadership, teamwork and decision making imparted during training sessions. Large organizations may use some form of this technique just to understand how best they can use each worker
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Increased employee satisfaction: Training and development increases organization’s reliability for the simple reason that employees recognize their organization is spending for their future and career (Rosenwald 2000). Companies that which are providing training and development programs for their employees are achieving high level of employee satisfaction as well as low employee turnover (Wagner 2000)
Career Competencies: Employees do get lot of benefits from employee training and development related program. Employees also understand that training program can be directed to superior duties and higher remuneration (Fenn 1999). Training as such is a means of maintaining, satisfying and raising talent.
Assisting and helping workers to improve their skills and knowledge to cope with future requirements leads to job satisfaction.
Motivational tool: Training certainly is proved to be a tool to motivate employees who further result into better or improved performance. Motivation definitely goes up when people know that they can move up the ladder in a organization. Treating employees like “Human capital” by using motivation strategies and also techniques of management science could help achieve common goals and objectives of management like increasing efficiency, enhancing productivity, boosting quality and morale. Quality and variants provided by companies for employee training is key for motivation
Employee performance: Training positively effects on employee performance. Employees who are trained need lesser supervision than those who are not trained. A trainee during training period acquires new knowledge, attitude, skills and satisfactorily applies them in job situation. Training is regarded as a way to create confidence among employees so that they can operate the tasks without any obstruction with all efficiency and effectiveness
2.6 Benefits to organization
Market growth: Training and development programs are helpful to face the competitive and changing challenging environment. Training programs are specifically tailored to suit to the requirements of each individual and through behavioral changes which is very much required for business success, market share and help increase revenue growth. Training will also provide the client with tools to develop deeper more meaningful bond and relationship with the organization and also with other groups in society
Training as helpful mechanism in competitive advantage: Today’s companies have realized that to survive and sustain in today’s competitive business milieu, quality of employees and people working for organization make all the difference. Training also develops skills and abilities for full fledged performance, career advancement and growth which would lead to increased firms performance in terms of productivity and profitability
Employee retention: High employee turnover may be a serious threat to organizations existence. Thus major benefit and importance of training is that it reduces staff turnover and also helps organization to retain its staff. Also training contributes to employee stability in atleast two ways. Firstly employees become efficient after undergoing training and secondly efficient employees contribute to the growth of organization as growth renders stability to the workforce. By investing in appropriate training for employees, they will feel and develop a greater sense of self worth as they become much more valuable to
487 | P a g e organization. Training thus is a bridge that can lead to employee satisfaction and higher retention rate for any organization
Improved organizational image: Better image in the market will be for those organizations that provide training to their employees. When employees are trained and they have a feel that they can continue to grow with an organization, it gives business a better image, identity in everyone’s eye. It is a well known fact that business will become known if it cares about its employees and ensures that they are not only happy in their job but overall happy in their personal life as well.
2.7 Benefits to society
Effective employee development is based on progression of benefits. These start with improvements in an individual’s overall performance which then transferred to his/her localized workplace, ultimately results in a positive impact on the whole organisation and in turn on the society.
Also global talent mobility certainly provides benefits to society. Many still focus on driving global talent mobility, aiming at efficient movement of high performers all around the world. Long term, goal oriented, sustained growth in new markets is likely to rely on successfully identifying, developing, engaging as well as retaining the local talent. Further progress in the commercial sphere can only come through engagement and enhancement in the process of globalization and also through the development of national human resources by means of education, research and training
III. CONCLUSION
In the present study we take the fact of observation that training leads to important benefits for both individuals and organizations. By analyzing the existing literature we can get to know that benefits vary from individual and organizational performance. Training more importantly is not only cultivating work knowledge and skills, developing productivity for production and services but it rather impacts on modification of employee’s behaviour and attitude for performing work. The prosperity and survival of organizations become explicitly dependent and rely on intellectual capacity of its employees and also their ability to change and adjust to dynamic business environment. Moreover employees are valuable assets (source) of organizations. Training helps to improve and accelerate individual and societal growth as well as increases employee morale and satisfaction, organizational productivity and service quality. Organizations today understand and realize that training helps them to remain competitive by continuously educating their workforce. Organizations also understand that by investing in their employees they can yield better results. Thus a sustained economy relies on equality of training imparted to convert a worker into trained worker which is key to boost growth.
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