Abstract: Impact of Employee Training on Firm Performance In
Transcript of Abstract: Impact of Employee Training on Firm Performance In
Abstract: Impact of Employee Training on Firm Performance in
Pakistan (Small and Medium Enterprises)
Companies today are forced to function in a world full of change and
complexity, and it is more important than ever to have the right employees in order to
survive the surrounding competition. This study aims to exploring and understanding
dimensions of employee training program on job satisfaction in Pakistan,
Like Small and Medium Enterprises. As the primary focus of the study is on exploration
so the proposed study will use sequential exploratory design based on the mixed method
approach in which first phase is qualitative in, HRM Practices and
job satisfaction whereas the second phase is quantitative.
Introduction and Background
Over the past one and half decades, various arguments have been made that firm’s human
resource may be its sole source of sustainable competitive advantage (Ferris et al, 1999).
We extend this idea by arguing that if innovation is the education and, especially, training
is the ammunition that renders it useful and effective. Research indicate that inadequate
and inefficient management of employee in small firms has resulted in low productivity
and high turn over rate and one of the leading causes of small firm failures (Mc Evoy,
1984). The resource based approach contends that organizations can develop a sustained
competitive advantage only if its activities create value in a unique way, one that
competitors cannot easily copy (Barney, 1991; 1995).Employee Training Program
increase performance of both organization & individuals. This study will address one
specific aspect of human resource management, training, to see if the presence and type
of training offered by Pakistan SMEs impact operations and profitability.
Purpose Statement
This Proposal is designed for the purpose of investigate the impact of training on firm
performance for registered, private, manufacturing SMEs in Pakistan. No studies
currently exist on the relationship between SME firm performance and employee training
practices in Pakistan. The results of this study should help Pakistani managers determine
whether tight financial resources should be expended on training programs or if the funds
could be better utilized elsewhere within the company.
The aim of the study is implementing HRM practices like Training Program in Small and
Medium Enterprises for the purpose of employee’s development as well as firm
performance. Therefore, purpose of this two phase, sequential mixed methods study will
be, to explore viewpoint about Training Program and performance of the firm using
Semi-structured interview. This will be better to understand a research problem by
converging both quantitative and qualitative data.
Objectives of the study:
The main objective is to increase the understanding regarding employee’s training and
development in relation to firm's performance.
1. To explore the importance of employees training program in small and medium
enterprises in Pakistan and see as good, bad or acceptable performance.
2. To explore the perception of employers in small and medium enterprises about the
training program.
3. To explore the employee training contributes to their performance. To explore why
training is important for employees and firm performance.
Significance of the Study
The present study will be significant in number of ways. It will contribute to the body of
knowledge by:
1. Firstly, since the present area is highly under
researched in Pakistan. No study has been found to
explore the employees training in Small and Medium
Enterprises of Pakistan. Therefore, the present study
assumes that the findings of the present study will help in
implementing that study in SMEs Sector of Pakistan and
those in developing countries in general to answer the
long standing question of how to enhance employee and
firm performance.
2.Secondly, no research has been found on employee
training and firm performance in Small and Medium
Enterprises in Pakistan. Therefore, the present study will
prove to be a significant contribution in this area with the
assumption that employee training program is important
for the individual and firm over all performance.
Employing mix methods research which has not been
used in this area and hence this will be a significant
methodological advancement.
3. Examining the applicability of the discussed Western
concepts and theories in an Eastern developing country
(Pakistan) in order to develop of these concepts.
Research Question:
For the first phase which is qualitative in nature following are the proposed research
questions.
(Main question)
Impact of Employees Training on Firm Performance in Pakistan
(In Small and Medium Enterprises).
(Sub questions)
1. What are the employee experiences about relevant training and development
program and how they feel about that?
2. How do employees perceive about their own performance and what they perceive
as good, bad or acceptable performance?
3. What are the employee’s opinions about firm that contribute to their
performance?
In a two-phase, sequential study in which second phase (quantitative) depends on the
result of the first phase (qualitative), it is difficult to specify the questions asked in second
phase at the time of proposal writing.
Impact of training and development on firm's performance
Literature Review My study is about impact of training and development on
Firm's performance.. What will be effect of training and development on employee's on
Firm's performance? If the organization provides training and development to his
employee's then employees will satisfy with organization or not. This topic should be
added to the pool of research knowledge available on this topic. It will include the
knowledge with more research. Purpose of the literature is actually reviewing the other
study. It will provide the stage to check the importance of the study.
This study focus on training and development..
organization's performance depends on training and development. Present day companies, just
like the companies in the past, strive to maximize their profit and increase proficiency by
finding the time and resources to train their workforce. The organization shall: a)
determine the necessary competence for personnel performing work effecting product
quality. b) Provide training or take other action to satisfy these needs. c) Evaluate the
effectiveness of the actions taken. d) Ensure that is personnel are aware of the relevance
and importance of their activities and how they contribute to the achievement of the
quality objectives. e) Maintain appropriate records of education, training, skills
andexperience”.This standard requires that the organization identify competency needs
for all personnel whose activities affect product quality. This task will include a large
majority of the organization. Assessments of the training must be conducted and records
must be maintained and easily accessed. These two elements are describing the minimum
requirements for establishing an effective training system.
The main purpose of this study
was to identify a more efficient and effective way to manage the Job Specific Training
and development system. It is very important when developing a team that everyone is
committed to the issue at hand and this will be only when a organization's workforce will
be trained. Without key factors, it would have been difficult to implement the training
and development system in an organization and it may not have been as successful in an
organization.
There were many positive outcomes of training and development. Effective
Implementation was limited, as the training and development were not integrated within
the culture and process of the organization. Staffs generally rate such training as a high
priority (Raynes and Sampson, 1987; Sturmey, 1992). The main purpose is to increase
the understanding regarding organization's performance in relation to training and
development. The other factors are remuneration and elements such as participation,
feedback, fairness, responsibility, the theoretical framework includes training and
development, financial as well as non-financial remuneration and research done in later
years regarding participation, feedback, fairness, responsibility, development and
Work-atmosphere connected to organization's performance.. Companies today are forced to function in a world full of change and complexity, and it
is more important than ever to have the right employees in order to survive the
surrounding competition. New companies and business are blossoming, new technologies
are constantly developed and the knowledge and perception of how much your
employees actually mean to your organization is greater for every day. Most companies
are looking for the right expertise in different areas, and human resources are therefore an
important competitive factor that needs to be taken into consideration while managing
business (Ljungberg & Larsson, 2005).For this most of the companies arrange training
and developments for their employees.Organisations have to balance both production
effectiveness as well as efficient workforce to be successful. Even though a company has
managed to find the right employees, this is not enough. A crucial factor is to make
employees best and reduce the turnover rate.
Talented employees can be a source of
advantage for an organization (Siegler (1999), but how to achieve this may be a major
challenge. What do employees want from their organization in order to feel committed?
The answer is they need security of their future that is only with the training and
development. The primary reason for working is to obtain money (Jackson and Carter,
2007), but could employers do more in order to retain their employees? Or even more
important, what do employees want from their employer in order to feel committed
willing to stay? Since there may be a difference between how employers try to give
employees regarding to how employees actually would prefer to be stay their and satisfy
with the job.
Throughout research we find indications that training and development is a
major element for firm, performance. Job satisfaction is affected by the worker and the
work itself (Chen, 2008). In older literature the focus has been on the relationship
between training and development and job satisfaction as well as remuneration. In the
1940’s, 1950’s and 1960’s several studies were made (Ohio, Michigan and the Hi-Hi
leader).Employee’s satisfaction builds on elements such as a higher participation,
feedback, fairness, responsibility, development and work-atmosphere (Hytter, 2007). It is
important that employers give access to relevant development. The personal need is less
important in this case and rewards is not that necessary, which is quite the contrary to
what Shields (2007) and
Hansson (2002) describes. They say that reward is necessary to make development
function. Could it be that way that employee thinks that development is a kind of reward
itself that Shields (2007) describes as extrinsic reward. They think that training and
development is better for job satisfaction. It is obvious that satisfaction with possible
future career development and satisfaction in current career development are
of importance for employee. The result in relation to previous research adverts at the
importance in giving employees possibility to develop (Tobia, 1999). We could see that if
an employee felt satisfaction with his or hers work, he or she was taking training and
development from the company. Mitchell etal (2001) describes the importance of
satisfaction in relation to training and development. They discovered a connection
between satisfaction and training and development; According to us companies have to
improve their training and development level through making employees feel job
satisfaction. This issue must be one of their main objectives because it increases the
possibility to handle competition in the market. By having competent employees
companies may save a lot of money which also is important throughout business
administration.According to the survey there is a correlation between job satisfaction and
training and development. If the employee feels appreciation because he thought that
company give training and development for the betterment of his career he will satisfy
from the job. Employee development and training are two important elements especially
if combined with performance-related job satisfaction to create a good work group there
has to be a good working envoirment. This arises when group members feel trust and
confidence and as a result they treat each other with respect and this may only because of
training and development.
The training and development applications should be useful to
industrial personnel in preparing them for delivering improved performance on the job.
The applications will help them understand the options and the impact of decisions.These
applications have the potential to improve industry performance by reducing the learning
curves of the workforce.Staffs of the Training and Development Unit are available to assist managers or
individual staff to identify training needs and can advises on appropriate ways to meet
identified needs. These include mentoring, coaching, attendance at an internal or external
course, or completion of a qualification. Any staff member may contact TND staff
directly for confidential advice, and assistance can be provided on a one-to-one basis.
All training must be related to the mission and
performance goals. The selection of employees for training is made without regard to
political preference, race, color, religion, national origin, gender, marital status, age,
disability, and with proper regard for their privacy and constitutional rights as provided
by merit system principles set forth in 5 U.S.C. 2301(b)(2) (1996).
A full range of options may be used to meet mission-related organizational and employee
development needs, such as classroom training, on-the-job training, technology-based
training, distance learning, self-development activities, coaching, mentoring, career
development counseling, details, rotational assignments, cross training, and
developmental activities at retreats and conferences. Government and non-government
training facilities may be used. (Prior regulatory constraints regarding use of non
government training facilities and time restrictions such as 1 year in 10 have been
eliminated. 5 U.S.C. 4107(a) (1996) prohibits training to obtain an academic degree in
order to qualify for appointment to a particular position or for the sole purpose of
providing an opportunity to an employee to obtain one or more academic degrees.
Training for employees who report to them. Training involving the acceptance of a
contribution, award, or payment (in cash or in kind) of travel, subsistence, and other
expenses. Academic degree training to relieve recruitment and retention problems in
occupations in which the agency has or anticipates a shortage of qualified personnel.
An Individual Development Plan (IDP) is a written plan
used to systematically identify and record appropriate training and development activities
that enhance an employee’s performance in a current or projected future assignment. All
employees and supervisors must complete or update an IDP each year within 30 days of
the annual performance appraisal. The IDP should include input from both the employee
and supervisor. Using the IDP form designated by their agency, REE employees and
supervisors should record the following: identified developmental needs, activities
proposed to meet the needs, dates of the activities, and any direct costs required to meet
the needs (tuition, travel, materials, etc.).
Other research demonstrates the impact of training
on outcomes other than job performance or on variables that serve as antecedents to job
performance This study related organizations’ training policies (e.g., functions assumed
by the of training, and how training is valuated) with four types of organizational-level
benefits: employee satisfaction, customer satisfaction, owner/shareholder satisfaction,
Benefits of training have been documented for variables other than organizational
performance training methods. Several studies in each of these two domains provide
information on Research on training design and delivery can be categorized into two
general themes: research on new approaches to engage learners in meaningful learning
processes and research on specific how to maximize the benefits of training. Researchers
are also exploring the impact of novel training technologies on outcomes other than
learning. Research on moderators of the training transfer relationship has focused
primarily on workgroup factors. The organizations that are able to realize the benefits of
training that are documented in this review are able to move away from viewing the
training function as an operational function or cost center to one that is value driven We
take the point of view that training leads to important benefits for individuals and
teams, organizations, and society
Managers and other decision makers in these
organizations prefer information and data on business-related results to make decisions
about how to allocate resources, including resources for training activities (Mattson
2005). Training for the sake of training, an approach that focuses on developmental ideals
and supportive organizational environments, is not aligned with today’s business realities, \including compressed career progression pathways, budgetary cuts and constraints,
highly competitive environments, and market-driven economic philosophies
McGuire et al. 2005). Designing, delivering, evaluating, and clearly documenting the
benefits of training using the information included in this review will allow the human
resource management function to be a strategic, organizational player and to move away
from the negative connotations (e.g., “welfare secretaries”) associated with this function
in the twentieth century (Hammonds 2005, Jacoby 2004, Kraiger et al. 2004
Methodology:
Mixed approach:
The most important thing in the selection of approach is the nature of research problem as my research problem is twofold in nature. So I have decided to choose mixed methods
research approach as to accommodate my first objective of exploring and understanding
the complexity of the variances in of Pakistan. The theoretical framework includes
leadership and leadership style, financial as well as non-financial remuneration and
research done in later years regarding participation, feedback, autonomy, fairness,
responsibility, development and work-atmosphere connected to training and
development.
Furthermore this decision is supported by the availing the merits and overcoming the
demerits of both approaches as discussed by Creswell (2003), methodological changes
that improve the study and strengthen findings as well as collecting diverse types of data
best provides an understanding of a research problem.
Abraham, Rebecca (1999) The relationship between differential inequity, job satisfaction,
intention to turnover, and self-esteem.
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