CORPORATE BENEFITS OF TRAINING AND DEVELOPMENT

Cole (2002) mentioned that the main purpose of training is to acquire and improve knowledge, skills, and attitudes towards work-related tasks. It is one of the most important potential motivators that can lead to both short-term and long-term benefits for individuals and organizations (Cole, 2002). There are so many benefits associated with training. Cole (2002) summarizes these common benefits as below:

High morale—employees who receive training have increased confidence and motivation;

·         Lower cost of production – training eliminates risks because trained personnel are able to make better and economic use of material and equipment thereby reducing and avoiding waste.

·         Lower turnover – training brings a sense of security at the workplace which in turn reduces labor turnover and absenteeism is avoided.

·         Change management – training helps to manage change by increasing the understanding and involvement of employees in the change process and also provides the skills and abilities needed to adjust to new situations.

·         Provide recognition, enhanced responsibility and the possibility of increased pay and promotion.

·         Help to improve the availability and quality of staff.

Market Growth

Employee development programs are important for any organization to stay solvent and competitive in the market (Greengard, 2000). The American Society for Training and Development identified two important motivations for employee knowledge: first, employees recognize the value of training and are marketable by the organization; and second, CEOs of companies understand how quickly information is transferred in today's business environment (Fenn, 2000). Greengard (2000) described how organizations are required to develop and maintain a learning environment for employees that expand knowledge of the organization and competitive ability. Employee training programs, on the other hand, come at a high cost but have a positive impact on the return on investment. Microsoft and General Electric Companies are both extremely large and effective organizations that see training as an investment (Kleiman, 2000).

For example, Wanger (2000) described in the study that the American Society for Training and Development found an association between financing in employee development programs and higher revenues from the stock market. Companies that spent an average of $1,575 per employee on learning saw a 24 percent increase in gross profit and a 218% increase in revenue per employee when compared to those that spent less on employee training and development (Rosenwald 2000). As a result, employee training and development programs not only increase the profit of organizations but also provide a difference within their native market. Organizations can practice training and development opportunities to make them available to current employees, prospective employees, and clients of the company (Rosenwald 2000).

Organizational Performance

Training has been defined as the main contributing factor to organizational effectiveness (Bartel, 2000). However, there is growing evidence that human resource management practices influence attitudes and work-related behaviors (Allen et al., 2003). To evaluate the effectiveness of training and development programs, it has been advised to check the relationship between training and organizational commitment directly. Further, it has been revealed to be certainly correlated to the efficiency of the organization (Bartlett 2001). The study proposes that constructive work-related performance and attitudes mainly depend on the perception of the employees, as the employees think that their organizations are taking care of them (Allen et al., 2003). Gould-Williams (2007) proposed that social exchange theory originated by organizations when they decided to care for the interests of their employees. However, training can be used to provoke the preferred results that may come with enhanced organizational commitment (Bartlett 2001).

Employee Retention

Employee retention is a challenging notion and there is no particular method to retain employees within the organization (Logan 2000). Several organizations have revealed that one of the characteristics that help to retain employee is to offer them opportunities for improving their learning (Logan 2000). Therefore, it has been confirmed that there is a strong relationship between employee training and development, and employee retention (Rosenwald 2000). Companies should realize that experienced employees are important assets and companies have to suffer the challenge for retaining them (Logan 2000). Therefore, companies that are providing training and development programs to their employees are getting success in retaining them (Logan 2000).

For example, Sears (Sears is a retail store at the Westland Mall in Hialeah, Florida, founded in 1892 by Richard Warren Sears and Alvah Curtis Roebuck) has established that in localities where managers provide help to their employees to develop professionally, turnover is almost 40-50 percent fewer than those stores where association with the managers does not available (Logan 2000). On other side, numerous employees who participate in employee training programs are not assured of a conventional association between programs and employee retention (Rosenwald 2000); several managers found that a positive learning atmosphere directed to higher retention rates (Dillich 2000).

Figure 1: Training and Development Model

(Source: Jehanzeb and Bashir, 2013)

List of References

Allen, D.G., Shore, L.M. and Griffeth, R.W. (2003). The Role of Perceived Organizational Support and Supportive Human Resource Practices in the Turnover Process. Journal of Management, 29, 1, 99–118.

Bartel, A.P. (2000). Measuring the Employer’s Return on Investment in Training: Evidence from the Literature. Industrial Relations, 39, 3, 502–524.

Bartlett, K.R. (2001). The Relationship between Training and Organizational Commitment: A Study in the Health Care Field. Human Resource Development Quarterly, 12, 4, 335–352.

Cole, G.A. (2002). Personnel and human resource management. 5th Edition, Continuum London: York Publishers.

Dillich, S. (2000). Corporate universities. Computing Canada, 26 (16), 25.

Fenn, D. (2000). Corporate universities for small companies. Inc, 21 (2), 95-96.

Gould-Williams, J. (2007). HR practices, organizational climate and employee outcomes: Evaluating social exchange relationships in local government. International Journal of Human Resource Management, 18, 1627–1647.

Greengard, S. (2000). Going the distance. Workforce, 79 (6), 22-23.

Jehanzeb, K. and Bashir, N.A. (2013). Training and development program and its benefits to employee and organization: A conceptual study. European Journal of Business and Management, 5(2), 243-252.

Logan, J.K. (2000). Retention tangibles and intangibles: More meaning in work is essential, but good chair massages won’t hurt. Training and Development, 54 (4), 48-50.

Mel Kleiman, (2000). What happens if you don’t train them and they stay? Occupational Health and Safety, 69 (1), pp. 18, 70.

Rosenwald, M. (2002). Working class: More companies are creating corporate universities to help employees sharpen skills and learn new ones. Boston Globe, H1.

Wanger, S. (2000). Retention: Finders, keepers. Training and Development, 54 (8), 64.