CHAPTER ONE 1.0. Introduction
Chapter 8: Conclusion and Recommendations
3.1. Theoretical Background in Training and development
Holton (1996), whose model this study is partially based on, is a Professor of Human Resource Development. His work built on that of Baldwin and Ford (1988, p. 63) who posited that for trainees or employees to use their new competences, what they learn must be relevant to their job requirements and for a reasonable lenght of time on the job. Holton (1996) and Holton et al. (2008) presented a conceptual evaluation and research model which posits that HRD outcomes are a function, ability, motivation and environmental influence at three outcome levels: learning, the individual and the organisation. A secondary variable in the form of individual characteristics influences motivation. His model indicates that the primary outcome of training interventions is learning, which helps to improve individual and organizational performance (Alaweh, 2008). Holton, Bates, Seyler, & Carvalho (1997) pointed out that improving performance is an important objective of T&D; they proposed that learning is of little value to an organisation until it transferred to performance. Thus, skills and knowledge learnt from training lead to value creation and are a function of many factors example, the extent to which employees are motivated to transfer their skills. Is the training designed in such a way that it is transferable by relating it to the organisation‘s strategic goals and objectives? How ready are employees to learn and utilise learning on the job and is there a favourable environment that encourages trainees to transfer such learning? It is important
to note that the best way to improve training transfer is by accurately analysing the factors influencing transfer and making efforts to remedy the inhibiting ones. This model was adopted for the study because it provides a theoretical basis to discuss the association between skills and knowledge learned during T&D programmes, and organisational performance. This chapter also discusses other theories that indirectly connect T&D and organisational performance.
HRD Evaluation Research and Measurement Model
Figure 3.1: Adapted from Holton (1996) HRD Evaluation Research and Measurement Model.
Used with permission.
Senge (1999) highlighted the importance of continuous learning for both the individual and the organisation. He pointed out that organisations that desire to do well in a competitive marketplace will undoubtedly depend on learning and that all barriers to the continuous development of knowledge and new ideas should be eradicated. A learning organisation, according to Senge (1999), continuously develops its employees, acquires new ideas and is open to innovation. His learning organisation model is based on the assumption that
knowledge learned leads to ―greater motivation, flexibility, more creativity, improved social interaction‖. Effective teams/groups share knowledge and are mutually dependent. The benefits to organisations include increased production, more efficient products, greater advantage over competitors and an increase in profit margins (Vermic, 2009). Senge‘s (1999) hypotheses are indirectly related to the present study in the sense that they do not detail how the new skills and knowledge learned can be transferred or utilised in the workplace; this is a major concern of this study. However, Senge (1999) does discuss T&D‘s impact on organisational performance; this partly supports Holton‘s assertions (1996). The shortcoming of Senge‘s work is the lack of empirical evidence to support his suppositions. The only well- known study was carried by Bates and Khasawneh (2005, p. 106) in which it was indicated that ―learning organisation culture can predict learning transfer climate and that both of these factors can account for significant variance in the perceived innovative capacity of an organisation‖.
The human capital theoretical framework did not explicitly demonstrate a link between T&D and workplace performance, but did so indirectly. The theory was based on the assumption that investment in T&D programmes enhances gains in employees‘ lifetime earnings. Human capital can be referred to as the knowledge, skills, competencies and attributes embodied in a person that will help him/her to improve his/her performance and effectiveness. The skills or competencies embodied in human capital generally pay off in the form of enhanced productivity, which, when valued by the labour market, results in positive outcomes, e.g., promotion. In the same manner, companies train their employees to acquire skills that enhance their productivity (Rita, Dobbs, Sun & Roberts, 2008). Therefore, the main contention of human capital theory is the supposed association between training and skills and knowledge acquisition, an increase in productivity and the ability to compete favourably in the labour market which eventually results in higher earnings for employees (Dobbs et al., 2008). Therefore, training policy which depends on human capital theory and is resource- based will have a significant influence on organisational performance (Garcia, 2005).
Equally important is Becker's (1993) classic study which explained how investment in a person‘s education and training is similar to business investment in equipment. He also considers education and training to be the most important investment in human capital.
Becker (1993) indicated that human capital emphasises the knowledge, expertise, and skills of an individual accumulated through education and training. The fundamental assumption of
this theory lies in the belief that education and training bring about increased learning. This enhances individual and organisational performance as well as business earnings (Marimuthu, Arokiasamy & Ismail, 2009).
A resource-based view of a firm is a theoretical model that deals with training and firm performance (Swanson & Armold, 1996). This model suggests that for a firm‘s resources to sustain competitive advantage or become a source of competitive advantage, they must have four attributes: be valuable, rare, imperfectly imitable, or be replicated by other organisations in the industry (Swanson & Armold, 1996). These primary sources necessary for sustained competitive advantage are imbedded in human capital. Tacit knowledge learned through T&D cannot or will be difficult to replicate by other competing organisations. Thus, T&D can be seen as an investment in human capital that provides workers with exceptional knowledge, skills and ability that can add value to the organisation and improve performance (Ostroff & Bowen, 2000). While they did not explicitly link training to improved organisational performance, they indirectly indicated that T&D initiatives can impact on trainees‘ tacit competencies thereby enhancing their job performance and ensuring the survival of the organisation.
Social exchange theory Hormans (1958) posits that people enter into a relationship with the aim of making the best use of the benefits they will obtain (Cook & Rice, 2003, p. 54; Devan, 2006; Dysvik & Kuvas, 2008). The relationship between social exchange theory and T&D and employees‘ performance can be explained in this manner. Employers provide training as an opportunity for employees to develop and be productive. Employees, on the other hand, endeavour to work hard on a given task and other related duties as a way of reciprocating the gesture from management; hence improved performance (Dysvik & Kuvas, 2008). Thus, a give-and-take formal obligation between employer and employees is moderated by the expectations of both parties in relation to the T&D offered by the employer. Therefore, providing T&D for employees may be regarded as a social exchange between the workers and management. This process starts when an organisation signals its readiness to accommodate its employees‘ interests by offering T&D opportunities. Employees reciprocate by showing positive attitudinal and behavioural responses that assist the company in fulfilling its business objectives (Newman et al., 2011; Kavaas & Dysvikm, 2010). Numerous studies have shown that employees regard a T&D opportunity as sign that their organisation desires to enter into a social exchange with them (Newman et al., 2011).
Furthermore, according to Malhotra et al. (2007) cited in Newman, Thanacoody and Hui (2011) individuals increase their organisational commitment if the organisation meets their expectations in relation to the fulfilment of their various individual needs. Employers want employees to be more productive and loyal, while employees, on the other hand, want a better career, job security and self-development (Bulut & Osman, 2010). Social exchange theory does not directly demonstrate that T&D will improve organisational performance per se. Rather, it suggests that T&D can serve an incentive or motivating factor for employees to become more committed to the organisation in exchange for future rewards. Thus, more committed employees are more productive. Nonetheless, this theory does help to establish the link between T&D and improved organisational performance.
This assumption is further be explained by the reinforcement theory Skinner, F. Frederic (1957 and Joseph T. Klapper (1960), which posits that behaviour is controlled by its consequences (Ellis & Johnson, 2014; Heath, 2007). That is to say, individuals will repeat behaviour which seems to produce good results or pleasant consequences, for instance, a wage increase or promotion (Jonck, 2001). Employees expect that attending training programmes will enable them to acquire skills. They believe that these new skills will enable them to perform better in their jobs, which will lead to pleasant consequences like an increase in salary. Those who believe in the above assumptions will put more effort into the training itself. They will also be motivated to make better use of the knowledge and skills learned during training, hence the increase in performance. Furthermore, output/productivity increases because the perceived interest shown in employees by offering them training suggests that management has a special interest in their future career; this will motivate them to perform better as a way of reciprocating the favour.
Guest (1987) developed a theoretical framework to demonstrate how HRM policies can affect human resources and organisational outcomes. The importance of Guest‘s model is the fact that it is an analytical framework for studying the relationship between HRM policies and firm performance. He acknowledged that commitment is a vital outcome, concerned with the goal of associating employees with organisational performance. This theory implies that T&D can play a role in HRM and contribute to improved strategic integration, employee commitment, and quality. Invariably these HRM outcomes lead to high job performance, high problem-solving ability, high cost effectiveness, low turnover intention and reduced
absenteeism (Guest, 1987). Again this theory did not explicitly show that T&D impacts or leads to organisational performance. Training is simply treated as one element of the HRM bundle which impacts on positive organisational outcomes.
Goal-setting is a motivational theory that enables us to analyse and understand the relationship between transfer of training and organisational performance. Goal-setting theory posits that ―conscious behavior is purposeful and it is regulated by goals‖ (Johnson, Garrison, Hernez-Broome, Fleenor & Steed, 2012, p. 557). Generally when people set goals they are more likely to achieve them, as goal setting increases the obligation and enthusiasm to fulfill that goal. The bottom line of this theory lies in the relationship between consciously set goals, intentions and task performance. According to Gyatso (2007) ―a goal is a behavioural intention that channels efforts in a certain direction through the setting of, and striving for a specific standard of proficiency of behaviour within a specified time limit‖. Performance goals target improvement relative to an individual‘s past job performance (e.g. increased ability to perform a major task). To apply this theory to T&D and organisational performance, this study posits that an individual puts more effort into T&D with the goal of gaining more skills and knowledge to enable him/her to become more efficient in the workplace and improve job performance. In becoming more efficient, he/she becomes more productive and this can earn him/her promotion or an increase in earnings. In other words, a performance goal will encourage an employee to transfer what was learned to the work situation in order to achieve his/her goal of participating in training (Tharenou et al., 2007).
Goal-setting is a motivational theory and does not directly explain the relationship between T&D and increased performance, but it can indirectly explain how T&D can motivate employees to be more committed to the organisation. There is no theory that demonstrates that T&D can directly influence individual and organisational performance. Nonetheless, the theories considered above indicate how T&D initiatives can motivate employees to learn and to apply their learning on the job, which eventually leads to an increase in individual and organisational performance.