Conceptual Framework for the Study
4.5. Organisational Outcomes
4.5.1. Increase in Productivity and Performance
The points made in the above paragraph support the social exchange theory which posits that individuals are likely to support issues that they stand to gain from. Employees are happy to work for and identify with an organisation that is prepared to invest money in their career advancement (Wilson, 2000 cited in Shelton, 2001). Companies with highly committed employees can be 200% more productive than low-commitment companies (Flanagan, 2010, citing Harvard Business Review, 2008). The same study found that 80% of employees who received T&D felt strongly committed to their organisation. Bulut and Culha (2010) found that training positively affected employee commitment, while Sunyoung & Hea (2008) demonstrated that HRD programmes like on-the-job training, mentoring, coaching and self- development significantly influence organisational commitment. Abbas and Yagoob, (2009) observed that a leadership development programme influences employees‘ attitude, commitment and trust in the organisation. Natarajan & Dinesh‘s (2011) study of 220 employees in India indicated that workers trained at younger age who stay longer in training, show more commitment than other employees. The empirical evidence has clearly demonstrated the importance of T&D to employees‘ organisational commitment; therefore, there is a need for organisations to engage in T&D as a means to enhance such commitment.
emphasised. This is especially true when the job involved is a complex one (Ng & Feldman, 2009). An improvement in productivity partly depends on how well organisations and their employees can change and innovate. However, innovation is contingent on how well-trained and skilful employees are. Well-trained employees improve the ability of the organisation to be creative and creativity increases production through efficiency and effectiveness. The link between T&D and productivity was substantiated by Holton et al.‘s, (2000) study and can be traced back to Becker's (1993) classic study whose fundamental assumption was that education and training brings about increased learning. In turn, increased learning brings about increased productivity and increased productivity brings about an increase in wages and business earnings. Education and training has been found to increase organisations‘
returns; which ensures their survival (Collier, Gree, Kim & Peirson, 2011, p.352). Other studies have found that T&D results in increased productivity and performance (Khan, Khan
& Khan, 2011; Kyriakidou & Maroudas, 2010, p. 41; Marimuthu, Arokiasamy & Ismail, 2009; ILC, 2008; Aniekwu & Ozochi, 2010; Indradevi, 2010; Olaniyan & Ojo, 2008;
Chiaburu & Lindsay, 2008). Furthermore, it has been established that training enhances organisations‘ ability to achieve a high level of performance and foster better performance outcomes (Ayarkwa, Adinyira & Osei-Asibey, 2012, p. 234; Dysvik & Kuvaas, 2008;
Galanou & Pripora, 2009; ILC, 2008; Karthikeyan, Karthi, & Graf, 2010; Bourga, Stoltzfusa, McManusb, & Fry, 2010). A study carried out by the Centre for Business Research (2003) found that three-quarters of the respondents felt that T&D improved labour productivity.
Furthermore, training was found to have a positive influence on the performance of civil servants in Abia state, Nigeria. Almost half of those who had received any kind of training or manpower development acknowledged that it had improved their performance, compared with 21.2% of those who did not receive any form of T&D (Okereke & Igboke, 2011). In a similar study, respondents reported increased output after T&D (Owusu-Acheaw, 2007).
Approximately 75% of Cosh, Hughes, Bullock, & Potton‘s, (2003) study respondents indicated that training had improved their productivity. Senge‘s (1999) work can be used to explain these results. He argued that learning in organisations (through T&D) leads to knowledge acquisition, which leads to team knowledge sharing, greater motivation, social interaction, flexibility and more creativity; together, these lead to an increase in quality products, productivity and profit.
Furthermore, a study by Farahbakhs (2010) indicated that employees‘ performance in public organisations was higher after training than before training. Rasmussen, (2005) emphasises
that workers who are trained may be 230% more industrious than those who are untrained and doing a similar job. Colombano & Krkoska (2006) and Nguyen, Truong & Buyens (2011) posit that positive organisational performance is closely related to training programmes. Other studies have produced similar results (Knox & Walker, 2004; Maglen, Hopskin & Burk, 2001; Bartel, 1994; Birdi, Patterson & Wood, 2007, Dearden, Reed &
Reenen, 2000; Leimbach, 2010). For instance, Birdi et al., (2007) found that a five percentage point increase in training is associated with a 4% increase in productivity. They also established an average of -7% rate of return for firms that do not provide training and an average of 24% for those that do (Almeiada & Carneiro, 2005). As organisations spent more on training, so ―productivity increased by 47% in the manufacturing sector and by 12% in the services sector‖ among European organisations (Shoesmith, 2008, p.1). Furthermore, Zwick (2003); Nover & Novelis, (2011); Tharenou, Saks & Moore (2007); Mohamad, et al. (2009) and Ng & Siu, (2009) indicated a significant positive association between training and organisational productivity. Becker‘s, (1993) arguments are also applicable here. He argued that individuals accumulate knowledge, expertise and skills through T&D that lead to or bring about increase in productivity. Finally, the importance of T&D is aptly summarised in the following the paragraph:
―Among others T&D increase productivity, improves the quality of work;
improves skills, knowledge, understanding and attitude; enhances the use of tools and machines; reduces waste, accidents, turnover, lateness, absenteeism and other overhead costs, eliminates obsolescence in skills, technologies, methods, products, capital management etc. It brings incumbents to that level of performance, which is needed for the performance for the job; enhances the implementation of new policies and regulations; prepares people for achievement, improves man-power development and ensures the survival and growth of the enterprise‖. (Kayode, 2001 cited in Olaniyan, & Ojo, 2008)
However, not all studies have shown the same association between T&D and productivity enhancement. The impact of T&D on employees‘ performance has not been as straight forward as anticipated; there have been instances where the results have been different. For example, Eikebrokk and Olsen (2009) posit that there is insufficient consistent and definite evidence that training leads to better performance, especially for SMEs. Liao & Martin, (2011) did not find any direct link between T&D and organisational performance, although they found training to have an indirect but insignificant effect on production. Guest, Michie, Conway, & Sheehan, (2003) found no association between training as part of HRM practice
and corporate performance. Lear (2010) found that the T&D on basic supervisory, management and leadership skills was not effective in improving performance. However, he established that T&D on interpersonal and technical skills had a huge impact in driving organisational performance. Furthermore, Rogers and Woodford (1999, p. 67) and Broad and Newstrom, (1992, cited in Buckley & Caple 2004) indicated that the majority of trainees felt that the training they received did not impact on their job performance.
The inconsistency in the literature can be interpreted to mean that some of employees may not have had the opportunity to apply the skills and knowledge they acquired during training effectively. Furthermore, it could mean that the training itself did not address their needs and those of the organisation; therefore, training transfer could not take place. Some companies are not sure if the training they offer is useful to their employees; in some of these companies, training is not effectively linked to the corporate strategy (Wexley & Latham, 1991).
Furthermore, it has been suggested that some organisations may have offered training in the wrong areas because of a lack of evaluation and feedback on previous T&D interventions (Molina & Ortega, 2003). Regular T&D evaluation prior to further T&D interventions is necessary in order to align T&D with organisational strategic objectives. The inconstancies in the findings of various studies are one of the reasons why the present study is important; there is an urgent need to establish whether or not the proper formulation, execution and evaluation of T&D interventions can lead to improved organisational performance.