Impact of Employee Training on Organizational Performance

Table of Content

IMPACT OF EMPLOYEES TRAINING ON ORGANIZATIONAL PERFORMANCE| | | | | MS PROGRAM (SP-2013) Submitted to: Mr. Traiq Mehmood Submitted by: Jwaria Malik (sp13-ES-0020) | INTRODUCTION The research would explore the trends of employee training on organizational performance. I have tried level best to address those factors which could directly or indirectly, can affect the culture of the organization.

It also sheds the light on the culture-performance literature. Factors would be related to training of the employees within the organizational performance. Trend of out sourcing training programs and trainers for conducting trainings would also be addressed during the discussion. Previous researches of creditable sources would also be taken as a guide line to precede the research work.

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Organizational culture can be viewed as the unique pattern of shared values, norms, attitudes, beliefs, rituals, socialization, expectations, and assumptions of the employees in the organization (Hellriegel, Jackson, Slocum, Staude, Amos, Klopper, Louw and Oosthuizen, 2004: 357; O’Reilly, Chatman and Caldwell, 1991: 491; Rowe et al. , 1994: 472; Schein, 1992: 52). As such, organizational performance could be equated with the “personality” of the organization, depicting the manner in which employees behave when they are not being told what to do Hellriegel et al. 2004: 357). Organizational performance classifications have been developed in order to assist in the understanding and analysis of organizational performance and such frameworks include those by Deal and Kennedy (1982: 107-127); Harrison (1972: 121-123); Harison and Stokes (1992); Hellriegel et al. (2004: 365-368); Rowe et al. (1994: 474); and Schein (1992). The ways employees behave with one another at workplace constitute the culture of that organization. Organizational performance is defined by all of the life xperiences, strengths, weaknesses, education, upbringing, and so forth of the employees. While executive leaders play a large role in defining organizational performance by their actions and leadership, all employees contribute to the organizational performance (Bass, 1985). Wallach (1983) categories the organization culture into three self regulating and assessable cultures known as bureaucratic, supportive and innovative culture. There is a misconception of HRM department. People relate it with only recruitment and hiring but it is something beyond it.

Human Resource management is more towards training, rewarding, appraising and understanding the tools and procedures to handle the human resource of an organization which is the main asset of any organization. Human Resource Management deals with the problems related to organizational performance, but it is more towards the relationship building and training the employees. The HR manager has to face so many difficult situations regarding to handling the conflicts between the employer and the employee or between the employee and employee matters.

Organizational performance and the relationship of its stakeholders create many hurdles in balancing the situation in most effective and efficient way. The context of the HRM here plays the most important role in understanding and handling of matters related to labor force conflicts and managing their demands, their training and consultancy according to the culture of the organization. This would increase the margin of the growth of the employees and the organization.

For an HR manager, it is very crucial first to analyze and identify the main problems identified by the context. The context may differ from the traditional thinking and logics of manager’s mind set but the manager should think out of the box to handle the odd situations of labor force problems. The context of HRM is related with all of the factors affecting the internal organizational scenario . it deals with the organizational context, the political context, economic condition and technological context of the organization. The legal issues faced by the organization.

The strategic context through which the organization is proceeding and would be in future also the social context of the organization and social pressure by the society on the organizational performance. This review also attempts to conceptualize training issues broadly. It would have been possible to complete this research by examining only the different types of training approaches utilized. However, such an approach would have excluded many important issues that should affect our understanding of training as a system within a work organization. For example, it is possible to consider training as part of the socialization process.

Also, it is important to consider training and its evaluation as an intervention which affects the lives of people in work organizations. This review attempts to provide such a perspective as well as examine the more traditional topics. RESEARCH PURPOSE: The purpose of this research is to identify the impact of different training programs on the performance of organizations STATEMENT OF THE PROBLEM: To study the impact of employee training programs on organizational performance. SIGNIFICANCE OF THE PROBLEM: The research will elaborate the relationship between organizational performance and training of employees.

It will also provide a clear reflection of what my selected sample perceives about the relationship between the variables. On the other hand the research will also provide me a better picture of organizational performance in contrast with employee training program. The research methodology will be based on two sections. The first part is based on exploratory research and the second part is based on descriptive research. RESEARCH QUESTION: Which employees training program is more influenced on organizational performance, in different sectors. LITERATURE REVIEW

The growing economies and globalization push organizations in competitive environment to sustain their repute to retain employees and increase firm performance. On the other side interchange culture, multinational environment, increase expectation of employees toward their organization. The traditional HRM practice cannot satisfied the employees and unable the organization to compete in global environment. Now the organizations are seeking a system which can satisfy their employees to enhance retention, organization commitment and can contribute in firm ultimate objective that is firm productivity and performance.

The manager needs effective tools and techniques which will help out and can inter link the problems and their solutions. Most of the time mangers use the technique of metaphor. Because it easily inter linked the coiled issues and their origins which should be treated to remove that loose aspect of the organization. This method of interlinking the events and the perspectives related to specific issues will enable the manager to interpret and communicate the solutions for the basic problem.

To understand and interpret the context of training of employees and its impact on organization, for HRM department it is necessary to think rationally and irrationally. From all the aspects and through all the point of views to critically analyze the conflicts that the organization is facing due to the differences between the minds sets and the demands of the labor force. The effective human resource practices provide organization their best way for establishing vigorous competitive advantages (Barney, 1995). The debate is still going on which practices constructed HPWS as single entities.

However as explained by (Chaudhuri, 2009) various HR practices like targeted selection and recruitment ,training, internal promotion, employees participation programs, team as fundamental unit of organization, formal performance appraisal, development appraisal, performance based pay system, merit based promotion, formal communication programs to keep employees informed about the firm, reduce differential status between manager and employees egalitarian, formal grievance or complaint resolution system ,employees job security policies such as no compulsory redundancies In phase of commitment, employees show a strong desire to maintain the membership in organization that influence the satisfaction with alliance performance, market share and firm profitability (Mowday, Steers, & Porter, 1979; Pansiri, 2008). The literature reveals that the success or failure of HPWS entirely depend upon the perception of employees regarding these practices which lead to various outcome like, Organization commitment, job satisfaction and firm performance. Employees show high level of commitment with their organization when the organization provide them opportunities for growth, helped them to increase skill and knowledge (Zaleska & de Menezes, 2007).

Organizational performance has been viewed as a form of social control that operates when members of a group or organization share values and expectations about appropriate behavior (O’Reilly & Chatman, 1996). Members who uphold strong cultural values are rewarded with their colleagues’ acceptance; those who deviate from such values are rejected. Those emphasizing independence, or individualism, place a high priority on pursuing and maximizing individuals’ goals; members are rewarded for and derive satisfaction from The society’s values and beliefs can affect the obligation of employees to remain with organization (Wiener, 1982). The organizational behavior study of attitudinal variable showed that personal, demographic and some situational factors like age, gender and tenure in organization can affect the organization commitment.

So keeping in view above mentioned literature we can assumed that training can contribute in organization commitment but it need to be test under different culture and economic condition. Organizational performance has been viewed as a form of social control that operates when members of a group or organization share values and expectations about appropriate behavior (O’Reilly & Chatman,1996). Members who uphold strong cultural values are rewarded with their colleagues’ acceptance; those who deviate from such values are rejected. The extent to which organizations or groups emphasize independence or interdependence is central to characterizing how work is conducted (e. g. , Earley, 1994).

Those emphasizing independence, or individualism, place a high priority on pursuing and maximizing individuals’ goals; members are rewarded for and derive satisfaction from. In the present scenario where the HR department of the company appoints the employee on the basis of their specialized skills, then they have to manage the things keeping in view all the contexts. They have to analyze and build up understanding about the context in Human Resource Management. Managers should understand that context is not a single concept. It is something very complicated and technical. It contains many layers of concepts and is divided in to many dimensions.

The manager’s thinking, the ongoing events, the capability of a manager to interpret results from the situations which are going on in the organization and the behaviors of the workers has wide impact in understanding the context. What is Training? For the purposes of this paper training means: • Transferring information and knowledge to employers • Equipping employers to translate that information and knowledge into practice with a view to enhancing organization effectiveness and productivity, and the quality of the management of people. Usually training should be considered along with education policies and systems which are crucial to the development of human resources.

However, the influence employers ‘organizations as well as employers can and should have on education will not be covered, though a passing reference will be made to it. Training role in organizational performance: Developing a national role in training is important for an employers’ organization for several reasons. First, it enables the organization to contribute to the development of a country’s human capital, through its influence on education policies and systems and training by public training institutions, to better serve business needs. It also enables it to influence employers in regard to the need for them to invest more in training and employee development – which employers should recognize as one key to their competitiveness in the future.

Second, it provides an important service to members, especially in industrial relations in respect of which sources of training for employers in developing countries are few. Third, it is an important source of income provided the organization can deliver relevant quality training. Fourth, it compels its own staff to improve their knowledge without which they cannot offer training to enterprises through their own staff. Fifth, the knowledge required for training increases the quality of other services provided by the organization – policy lobbying, advisory and representation services. Sixth, it contributes to better human relations at the enterprise level and therefore to better enterprise performance, by matching corporate goals and people management policies.

Finally, it improves the overall image of the organization and invests it with a degree of professionalism, which can lead to increased membership and influence. RESEARCH METHODOLOGY EXPLORATORY RESEARCH Exploratory part will lay down the foundation and concepts of training impact on organizational performance. This part will be taken from secondary data which includes previous researches and work that has been done in context of training of employees and its impact on organizational performance. DESCRIPTIVE RESEARCH: The second part is based on personally administered data collection through questionnaire. It will provide credible responses from the respondents.

The collected data would clarify the concepts and relationship of organizational performance and training of the employees. SAMPLE SELECTION I would select random sampling to carry out the research. Sample size: 100-150 VARIABLES HYPOTHESIS H1a: Organizational performance and employees training are correlated. H1o: There is no correlation between organizational performance and training of employees. H2a: There is a correlation between organizational performance and internal training program. H2o: There is no correlation between internal training program and organizational performance. H3a: There is a correlation between external training program and organizational performance.

H3o: There is no correlation between external training program and organizational performance. H4a: There is a correlation between customize training program and organizational performance. H4o: There is no correlation between customize training program and organizational performance. DATA ANALYSIS AND INTERPRETATION Descriptive analysis: | N| Minim| Max| Mean| Std. Deviation| ORGANIZATIONALPERFORMANCE| 90| 1. 25| 5. 00| 4. 1750| . 64308| External training| 90| 1| 5| 3. 27| . 657| Internal training| 90| 2| 5| 3. 60| . 652| Customize training| 90| 1| 5| 3. 62| . 700| Technical training| 90| 2| 5| 3. 97| . 662| Valid N (list wise)| 90| | | | |

Analysis of data shows that almost all the respondents agreed with all the questions asked about different training programs and their impact on organizational performance. Mean values for all the variables are more than standard deviation, and standard deviation value is lesser than one (SD < 1. 0). Questionnaire is attached. The highest standard deviation is of independent variable customize training (. 700), which indicates its highest deviation from mean. Regression analysis: | ORG perf| Ext training| Int training| cut training| Tech training| ORGANIZATIONALPERFORMANCE| Pearson Correlation| 1| . 072| . 376(**)| . 429(**)| . 430(**)| | Sig. (2-tailed)| | . 502| . 000| . 000| . 000| | N| 90| 90| 90| 90| 90| External training| Pearson Correlation| . 072| 1| . 470(**)| . 180| . 18| | Sig. (2-tailed)| . 502| | . 000| . 090| . 270| | N| 90| 90| 90| 90| 90| Internal training| Pearson Correlation| . 376(**)| . 470(**)| 1| . 496(**)| . 375(**)| | Sig. (2-tailed)| . 000| . 000| | . 000| . 000| | N| 90| 90| 90| 90| 90| Customize training| Pearson Correlation| . 429(**)| . 180| . 496(**)| 1| . 610(**)| | Sig. (2-tailed)| . 000| . 090| . 000| | . 000| | N| 90| 90| 90| 90| 90| Technical training| Pearson Correlation| . 430(**)| . 118| . 375(**)| . 610(**)| 1| | Sig. (2-tailed)| . 000| . 270| . 000| . 000| | | N| 90| 90| 90| 90| 90| Correlation values are indicating a positive relationship with substantial significance.

Technical training is having a strong positive correlation (r = . 430) with organizational performance and positive (r = . 429) customize training. Likewise internal training is having strong positive correlation (r = . 376). External training has no correlation with organizational performance, according to the responses from respondents. (r=0. 072). All these values are significant at (p = . 01). ANOVA: | R square| ? | F| t| sig| External training| . 005| . 072| . 454| . 674| . 502| Internal training| . 141| . 376| 14. 489| 3. 806| 000| Customize training| . 184| . 429| 19. 890| 4. 460| 000| Technical training| . 185| . 430| 19. 982| 4. 470| 000|

Regression analysis of organizational performance as dependent variable is indicating that all the tested variables are significantly contributing towards organizational performance except external training. Internal training (? = . 376, R2 = . 141 and p = . 000), customize training (? =. 429, R2= . 184 and p=. 000), technical training (? =. 430, R2=. 185 and p=. 000) are significantly contributing towards organizational performance. Therefore hypotheses H1a, H2a, H4a, are fully accepted as all the tested variables affect organizational performance. External training is tested as independent variable (? =. 072, R2= . 005 and p=. 502). It explains that the independent variable external training has no correlation with organizational performance. Hence H3a is being rejected and H30 is accepted. The fitness test (F? ) shows that the, only independent variable, external training is not model fit with F=. 454. The independent variables, internal training (F=14. 489), customize training (F=19. 890) and technical training (F=19. 982) are model fit, having F-test values > than 5. T-test shows that the dependency of the independent variables on dependent variable. As the significant value of t-test is ? 2. 5, therefore only external training has negative impact on organizational performance with t=. 674. The dependent variable organizational performance have dependency on independent variables, customize training (t=4. 460), internal training (t=3. 806), technical training (t=4. 470) CONCLUSION:

Organizational performance is dependent on the training programs, because employees prefer those organizations which provide better opportunities to the employees to grow and enhance the skills of the employees. Training programs which include customization training programs, technical training program, external training program and internal training program moderately affects the organization performances. External training is highly effective on organizational performance according to the research. Therefore external training and organizational performance is negatively correlated. Customize training is highly deviated from mean whereas internal training is less deviated from mean. RECOMMENDATIONS:

According to the research I recommended that customization training program is highly expensive and companies should concern with their finance department to analyze the margins of profitability and risks related to the training. Internal training is more recommended from all other training programs due to less risk of failure of training program. External training is moderately recommended according to the type of business and market. MOHAMMAD ALI JINNAH UNIVERSITY DEGREE PROGRAM (SPRING 2013): MS (HR SUBJECT: RESEACH PAPER QUESTIONNAIRE SD NAME: JWAIRIA MALIK (sp-13-ES-0020) QUESTIONNAIRE TOPIC: “IMPACT OF TRAINING OF EMPLOYEES (IN Human Resource) ON ORGANIZATIONAL PERFORMANCE” Designation: Organization:

NOTE: Please tick mark the option you feel is most appropriate as per the following: Rate on a scale of 1-6 to indicate your option, 1 being strongly disagree and 6 being strongly agree. Strongly disagree| Dis Agree| Neutral| Agree| Strongly agree| 1| 2| 3| 4| 5| * Organizational performance 1. Organizational performance is increased when employees are well trained in their respected field. 1| 2| 3| 4| 5| 2. Employees give preference to those organizations which provide training opportunities to their employees to improve their knowledge and skills. 1| 2| 3| 4| 5| 3. Training programs can increase the organizational performance by improving skills of the employees in most efficient way. 1| 2| 3| 4| 5| 4.

Employee training programs appear to be as a competitive advantage by increasing the productivity and performance of the organization. 1| 2| 3| 4| 5| * External training 1. External trainings decrease the net profit of the organization because they are costly. 1| 2| 3| 4| 5| 2. New employees are recommended for external trainings which can increases the organizational performance better than old employees. 1| 2| 3| 4| 5| 3. A huge budget is required get efficient results from external trainings which decreases the opportunity of better performance of organization. 1| 2| 3| 4| 5| 4. Recruited trainee’s behavior directly affects the results of external trainings. 1| 2| 3| 4| 5| 5.

The trainer of external training is recommended to be from the same organization to analyze the exact need of the training. 1| 2| 3| 4| 5| * Internal training 1. Internal trainings are more efficient than external trainings. 1| 2| 3| 4| 5| 2. For internal trainings, it is recommended to hire external trainer, to prevent biasness during training. 1| 2| 3| 4| 5| 3. Internal training leads to effective changes in organizational performance. 1| 2| 3| 4| 5| 4. Internal trainings are less time consuming and more effective than external trainings. 1| 2| 3| 4| 5| * Customize training 1.

Customize trainings are rendered to be most efficient trainings, because they are designed according to the current need of situation of organization. 1| 2| 3| 4| 5| 2. Customize trainings must held on managerial level as well as on executive level to improve the management system of organization, which improves the organizational performance. 1| 2| 3| 4| 5| 3. Customize trainings are more risky, because if the individual or group of specific people failed to achieve the objectives of the training, the organization than has to bear a huge cost. 1| 2| 3| 4| 5| * Technical training of employees 1.

Technical training is essential part of organizational system to enhance the performance of organization. 1| 2| 3| 4| 5| 2. Technical training programs needs updated training techniques to achieve the objectives of training effectively. 1| 2| 3| 4| 5| 3. Technical training programs are widely used to meet the changing environment of the global HR market. 1| 2| 3| 4| 5| 4. HR personals required these trainings to make better policies to achieve the goals of the organization. 1| 2| 3| 4| 5| BIBLIOGRAPHY 1. Arthur, J. B. (1994). Effects of human resource systems on manufacturing performance and turnover. 2. Becker, G. S. 1993). Human capital: A theoretical and empirical analysis with special reference to education (3rd ed. ). 3. Bowling, N. A. (2007). Is the job satisfaction–job performance relationship spurious? A meta-analytic examination. 4. Brum, s. (2005). WHAT IMPACT DOES TRAINING HAVE ON EMPLOYEE COMMITMENT AND EMPLOYEE TURNOVER? 5. Burns, A. C. , Gillet, P. G. , Rubinstein, M. , & Gentry, J. W. (1990). AN EXPLORATORY STUDY OF LOTTERY PLAYING, GAMBLING ADDICTION AND LINKS TO COMPULSIVE CONSUMPTION. Advances in Consumer Researc, 298-305. 6. Calisir, F. (2010). Factors affecting intention to quit among IT professionals in Turkey. 7. Chen, G. (2007).

Training and development of human resources at work: Is the state of our science strong? 8. Chen, T. -Y. (2004). A study of career needs, career development programs,job satisfaction and the turnover intentions of R&D personnel. 9. Chiaburu, D. S. (2005). Individual and contextual influences on multiple dimensions of training effectiveness. 10. Kim, S. (2006). Public service motivation and organizational citizenship behavior in Korea. 11. Owens, P. L. (2006). One more reason not to cut your training budget. 12. Steers, R. M. (1977). Antecedents and outcomes of organizational commitment. 13. Wells, J. E. (2010). Turnover intentions Do leadership behaviors and satisfaction with the leader matter?

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