Case: Fashion and Safety at Bloomingdales Bloomingdales is a chain of luxury department stores owned by Macys with more than 10,000 employees in 12 states. Founded in 1872, Bloomingdale’s

Raymond A. Noe

Fifth Edition

Employee Training and Development

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Training, development, and career management are no longer in the category of “nice to do”; they are now a “must do” for companies to gain competitive advantage and meet employee expectations. The Fifth Edition of Employee Training and Development will equip students with a solid background in the fundamentals of training and development in order to meet the demands of today’s global work environment.

Employee Training and Development, 5e retains the lively writing style, inspiring examples, bal- anced approach to research and theory, and emphasis on new technology and strategic training from previous editions.

New to the Fifth Edition:

New and expanded coverage of current topics and issues, such as outsourcing training, business-embedded training functions, intangible assets and human capital, implications of the aging workforce for training and development, new technologies in training, including virtual worlds such as Second Life, and designing programs, courses, and lessons.

New chapter vignettes begin each chapter. For example, Chapter 8 (“E-learning and Use of Technology in Training”) highlights how Dunkin’ Donuts® uses a blended learning ap- proach to help franchises run a successful and profitable business.

Each chapter now includes a brief case featuring a training, development or learning issue a company is facing. The case questions ask students to consider the issue and make recommendations based on applying the chapter content.

For more information, visit Employee Training and Development, 5e online at

www.mhhe.com/etd5e

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Employee Training and Development

Fifth Edition

Raymond A. Noe The Ohio State University

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EMPLOYEE TRAINING AND DEVELOPMENT

Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright © 2010, 2008, 2005, 2002, 1999 by The McGraw-Hill Companies, Inc. All rights reserved. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning.

Some ancillaries, including electronic and print components, may not be available to customers outside the United States.

This book is printed on acid-free paper.

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ISBN 978-0-07-353034-5 MHID 0-07-353034-4

Vice president and editor-in-chief: Brent Gordon Publisher: Paul Ducham Director of development: Ann Torbert Managing development editor: Laura Hurst Spell Editorial assistant: Jane Beck Vice president and director of marketing: Robin J. Zwettler Associate marketing manager: Jaime Halteman Vice president of editing, design and production: Sesha Bolisetty Project manager: Dana M. Pauley Senior production supervisor: Debra R. Sylvester Design coordinator: Joanne Mennemeier Executive producer, media technology: Mark Christianson Cover design: Joanne Mennemeier Typeface: 10/12 Times New Roman Compositor: Laserwords Private Limited Printer: R. R. Donnelley

Library of Congress Cataloging-in-Publication Data

Noe, Raymond A. Employee training and development / Raymond A. Noe.—5th ed. p. cm.

Includes index. ISBN-13: 978-0-07-353034-5 (alk. paper) ISBN-10: 0-07-353034-4 (alk. paper) 1. Employees—Training of. I. Title.

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This book is dedicated to the many who have helped to train and develop me along the way, including My wife: Caroline My kids: Ray, Tim, and Melissa My parents: Raymond J. and Mildred Noe The many close friends who have touched my heart and made me laugh The teachers who have shared their wisdom The graduate students who have worked with me over the years

Raymond A. Noe

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Preface

Traditionally, training and development was not viewed as an activity that could help com- panies create “value” and successfully deal with competitive challenges. Today, that view has changed. Companies that use innovative training and development practices are likely to report better financial performance than their competitors that do not. Training and development also helps a company to meet competitive challenges. Current recessionary economic times have resulted in cuts in training and development budgets. However, com- panies need to continue to rely on efficient and effective training practices to help employ- ees strengthen or increase their skills in order to improve or make new products, generate new and innovative ideas, and provide high quality customer service. Also, development activities and career management are needed to prepare employees for managerial and leadership positions and to attract, motivate, and retain talented employees at all levels and in all jobs. Training, development, and career management are no longer in the category of “nice to do”—they are a “must do” in order for companies to gain a competitive advantage and meet employees’ expectations.

Businesses today must compete in the global marketplace, and the diversity of the work force continues to increase. As a result, companies need to train employees to work with persons from different cultures both in the United States and abroad. New technologies such as Web-based training and iPods reduce the costs associated with bringing employees to a central location for training. At the same time, the challenge is how to ensure that these training methods include the necessary conditions (practice, feedback, self-pacing, etc.) for learning to occur. Also, through the blended learning approach companies are seeking the best balance between private, self-paced, technology-based training (such as online learning), and methods that allow interpersonal interaction among trainees (such as class- room instruction or active learning).

The role of training has broadened beyond training program design. Effective instruc- tional design remains important, but training managers, human resource experts, and trainers are increasingly being asked to create systems to motivate employees to learn, cre- ate knowledge, and share that knowledge with other employees in the company. Training has moved from an emphasis on a one-time event to the creation of conditions for learning that can occur through collaboration, online learning, traditional classroom training, or a combination of methods. There is increased recognition that learning occurs outside the boundaries of a formal training course.

Also, the employee-employer relationship has changed. Due to rapidly changing busi- ness environments and competition that can quickly cause profits to shrink and skill needs to change, companies are reluctant to provide job security to employees. At the same time, as employees see downsizing take place (or experience it themselves!), they are reluctant to be fully committed to company goals and values. As a result, both employees and com- panies are concerned with developing future skills and managing careers. Companies want a work force that is motivated and productive, has up-to-date skills, and can quickly learn new skills to meet changing customer and marketplace needs. Employees want to develop skills that not only are useful for their current jobs but also are congruent with their

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Preface v

personal interests and values. Employees are interested in developing skills that can help them remain employable with either their current employer or a future one. Given the increasing time demands of work, employees are also interested in maintaining balance between work and nonwork interests.

The chapter coverage of Employee Training and Development reflects the traditional as well as the broadening role of training and development in organizations. Chapter 1 intro- duces the student to the role of training and development in companies. Chapter 2, “Strate- gic Training,” discusses how training practices and the organization of the training function can support business goals. Because companies are interested in reducing costs, the amount of resources allocated to training is likely to be determined by how much training and devel- opment activities help the company reach business goals. Topics related to designing train- ing programs are covered in Chapters 3 through 6. Chapter 3, “Needs Assessment,” discusses how to identify when training is appropriate. Chapter 4, “Learning: Theories and Program Design,” addresses the learning process and characteristics of a learning environ- ment, and it provides practical suggestions for designing training to ensure that learning occurs. Chapter 5, “Transfer of Training,” emphasizes what should be done in the design of training and the work environment to ensure that training is used on the job. Chapter 6, “Training Evaluation,” discusses how to evaluate training programs. Here the student is introduced to the concepts of identifying cost-effective training; evaluating the return on investment of training and learning; and determining if training outcomes related to learn- ing, behavior, or performance have been reached. Chapters 7 and 8 cover training methods. Chapter 7, “Traditional Training Methods,” discusses presentational methods (e.g., lecture), hands-on methods (e.g., on-the-job training, behavior modeling), and group methods (e.g., adventure learning). Chapter 8, “E-Learning and Use of Technology in Training,” introduces the student to new technologies that are increasingly being used in training. These technol- ogy-based training methods include Web-based instruction, distance learning, e-learning, iPods, simulations, virtual worlds, and blended learning. Chapters 7 and 8 both conclude by comparing training methods on the basis of costs, benefits, and learning characteristics.

Chapter 9, “Employee Development,” introduces the student to developmental methods (assessment, relationships, job experiences, and formal courses). Topics such as 360-degree feedback and mentoring are discussed. Chapter 10, “Special Issues in Training and Employee Development,” discusses cross-cultural training, diversity training, school-to-work programs, and skill-based pay. Chapters 11 and 12 deal with careers and career management. Chapter 11, “Careers and Career Management,” emphasizes the protean career and the career management process. Chapter 12, “Special Challenges in Career Management,” deals with special issues that trainers, employees, and managers face. These issues include skills obsolescence, plateau- ing, career breaks, employee orientation and socialization, work-life balance, downsizing, out- placement, and retirement. Last, Chapter 13, “The Future of Training and Development,” looks at how training and development might be different 10 or 20 years from now.

Employee Training and Development is based on my more than 20 years of teaching training and development courses to both graduate and undergraduate students. From this experience, I have realized that managers, consultants, trainers, and faculty work- ing in a variety of disciplines (including education, psychology, business, and indus- trial relations) have contributed to the research and practice of training and

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development. As a result, the book is based on research conducted in several disci- plines while offering a practical perspective. The book is appropriate for students in a number of programs. It suits both undergraduate and master’s-level training courses in a variety of disciplines.

DISTINCTIVE FEATURES This book has several distinctive features. First, my teaching experience has taught me that students become frustrated if they do not see research and theory in practice. As a result, one distinctive feature of the book is that each chapter begins with a vignette of a company prac- tice that relates to the material covered in the chapter. Many examples of company practices are provided throughout the chapters. Each chapter ends with a case and related questions that give students the opportunity to apply the chapter’s content to an actual training or development issue.

A second distinctive feature of the book is its topical coverage. The chapters included in Part 2 relate to training design (needs assessment, training methods, learning environ- ment, transfer of training, and evaluation). Instructional design is still the “meat and pota- toes” of training. Part 3 covers the more exciting part of training and development, that is, training and development methods. But as the role of managers and trainers broadens, they are increasingly involved in understanding career issues and career management. For example, managers and trainers need to be concerned with understanding generational differences in employees’ career needs, career paths, cross-cultural training, diversity, outplacement, skills obsolescence, and succession planning—topics that fall outside the realm of instructional design. These topics are covered in the chapters included in Part 4 of the book.

The book begins with a discussion of the context for training and development. Part 1 includes chapters that cover the economic and workplace factors that are influencing trends in the training profession. In addition, these chapters discuss the need for training, develop- ment, and learning to become strategic (i.e., to contribute to business strategy and organiza- tional goals). Why? In successful, effective training, all aspects of training—including training objectives, methods, evaluation, and even who conducts the training—relate to the business strategy. More and more companies are demanding that the training function and training practices support business goals; otherwise training may be outsourced or face funding cuts. Although students in business schools are exposed to strategic thinking, stu- dents in psychology and education who go on to become trainers need to understand the strategic perspective and how it relates to the organization of the training function and the type of training conducted.

Not only has technology changed the way we live and the way work is performed, but it also has influenced training practice. As a result, one chapter of the book is devoted entirely to the use of new technologies for training delivery and instruction, such as online learning, blended learning, iPods, virtual worlds, and personal data assistants (PDAs).

The book reflects the latest “hot topics” in the area of training. Some of the new topics discussed in the book are corporate universities, outsourcing training, developing and measuring human capital, learning management systems, competencies, knowledge man- agement, e-learning, the use of mobile technology (such as iPods and PDAs) and virtual worlds (such as Second Life) for training. Each chapter contains the most recent academic research findings and company practices.

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Preface vii

FEATURES DESIGNED TO AID LEARNING Employee Training and Development provides several features to aid learning:

1. Each chapter lists objectives that highlight what the student is expected to learn in that chapter.

2. In-text examples and chapter openers feature companies from all industries including service, manufacturing, and retail, and nonprofit organizations.

3. Discussion questions at the end of each chapter help students learn the concepts pre- sented in the chapter and understand potential applications of the material.

4. Important terms and concepts used in training and development are boldfaced in each chapter. Key terms are identified at the end of each chapter. These key terms are impor- tant to help the student understand the language of training.

5. Application assignments are useful for the students to put chapter content into practice. Most chapters include assignments that require the student to use the World Wide Web.

6. Cases at the end of each chapter and part help students apply what they have learned to training and development issues faced by actual companies.

7. Name and subject indexes at the end of the book help in finding key people and topics.

WHAT’S NEW IN THE FIFTH EDITION I want to personally thank all of you who have adopted this book! Based on the comments of the reviewers of the fourth edition and training research and practice, I have made sev- eral improvements. Some important changes in the fifth edition of Employee Training and Development stand out:

• Each chapter has been updated to include the most recent research findings and new best company practices. New examples have been added in each chapter’s text.

• All the chapter opening vignettes are new. For example, the opening vignette for Chapter 8, “E-Learning and use of Technology in Training,” highlights how Dunkin’ Donuts® is using a blended learning approach to help franchisees run a successful and profitable business.

• This edition offers new and expanded coverage of such topics as outsourcing training, business-embedded training functions, knowledge management, blended learning, learning management systems, intangible assets and human capital, implications of the aging work force for training and development, new technologies in training, (including virtual worlds such as Second Life), and how to design programs, courses and lessons.

• Each chapter ends with application assignments, including new and updated Web-based exercises. These assignments are also found on the book’s Web site.

• Each chapter concludes with a brief case that illustrates a training, development, or learning issue faced by a company. The case questions ask students to consider the issue and make recommendations based on the chapter content.

• To help students better understand the connections between topics, the book is now organized into five different parts. Part 1 focuses on the context for training and devel- opment and includes a chapter devoted to strategic training. Part 2 includes coverage related to the fundamentals of designing training programs. Chapters in Part 2 focus on

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needs assessment, learning theories and program design, transfer of training, and train- ing evaluation. Part 3 focuses on training and development methods and includes chapters devoted to traditional training methods, e-learning and the use of technology in training, employee development, and special issues in employee development, such as managing diversity, succession planning, and cross-cultural preparation. Chapters in Part 4 cover career issues and how companies manage careers as well as challenges in career management, such as dealing with work-life conflict, retirement, and socializa- tion. Finally, Part 5 provides a look at the future of training and development.

• New to this edition, BusinessWeek cases at the end of each of the five parts of the book look at training and development issues companies are facing and encourage students to critically evaluate each problem and apply what they have learned in that part of the text.

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Acknowledgments The author is only one of many important persons involved in writing a textbook. The fifth edition of this book would not have been possible without the energy and expertise of several persons. Editor Laura Spell gave me free rein to write the training book I wanted to write and provided helpful ideas and suggestions regarding how to improve the book. Jolynn Kilburg, developmental editor, and Michelle Gardner, project manager, both deserves kudos for ensuring that my ideas made sense and my writing was clear, concise and easy to understand.

I take full responsibility for any errors, omissions, or misstatements of fact in this book. However, regardless of your impression of the book, it would not have been this good had it not been for the reviewers. Special thanks to the manuscript reviewers who provided me with detailed comments that helped improve the fifth edition of the book for students and instructors. These reviewers include

Linda Matthews University of Texas Pan American

Shumon Johnson Columbia Southern University

Cindy Simerly Lakeland Community College

John Knue University of North Texas

Richard Wagner University of Wisconsin—Whitewater

Dwight Frink University of Mississippi

Raymond A. Noe

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About the Author Raymond A. Noe The Ohio State University

Raymond A. Noe is the Robert and Anne Hoyt Designated Professor of Management at The Ohio State University. He has taught for more than 20 years at Big Ten universities. Before joining the faculty at Ohio State, he was a professor in the Department of Manage- ment at Michigan State University and the Industrial Relations Center of the Carlson School of Management, University of Minnesota. He received his B.S. in psychology from The Ohio State University and his M.A. and Ph.D. in psychology from Michigan State University. Professor Noe conducts research and teaches all levels of students—from undergraduates to executives—in human resource management, managerial skills, quanti- tative methods, human resource information systems, training and development, and orga- nizational behavior. He has published articles in the Academy of Management Journal, Academy of Management Review, Journal of Applied Psychology, Journal of Vocational Behavior, and Personnel Psychology. Professor Noe is currently on the editorial boards of several journals, including Journal of Applied Psychology, Personnel Psychology, and Journal of Organizational Behavior. Besides Employee Training and Development, he has co-authored two other textbooks: Fundamentals of Human Resource Management and Human Resource Management: Gaining a Competitive Advantage, both published with McGraw-Hill/Irwin. Professor Noe has received awards for his teaching and research excellence, including the Herbert G. Heneman Distinguished Teaching Award in 1991, the Ernest J. McCormick Award for Distinguished Early Career Contribution from the Society for Industrial and Organizational Psychology in 1993, and the ASTD Outstanding Research Article of the Year Award for 2001. He is also a fellow of the Society of Indus- trial and Organizational Psychology.

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Brief Contents Preface iv

PART ONE The Context for Training and Development 1

1 Introduction to Employee Training and Development 2

2 Strategic Training 52

PART TWO Designing Training 101

3 Needs Assessment 102

4 Learning: Theories and Program Design 138

5 Transfer of Training 185

6 Training Evaluation 215

PART THREE Training and Development Methods 257

7 Traditional Training Methods 258

8 E-Learning and Use of Technology in Training 294

9 Employee Development 345

10 Special Issues in Training and Employee Development 389

PART FOUR Careers and Career Management 443

11 Careers and Career Management 444

12 Special Challenges in Career Management 477

PART FIVE The Future 521

13 The Future of Training and Development 522

GLOSSARY 549

NAME INDEX 561

COMPANY/ORGANIZATIONAL INDEX 572

SUBJECT INDEX 576

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Contents PART ONE THE CONTEXT FOR TRAINING AND DEVELOPMENT 1

Chapter One Introduction to Employee Training and Development 2

Forces Affecting the Workplace Make Training a Key Ingredient for Company Success 2 Introduction 4 What Is Training? 5 Designing Effective Training 7 The Forces Influencing Working and Learning 10

Economic Cycles 10 Globalization 11 Increased Value Placed on Intangible Assets and Human Capital 13 Focus on Link to Business Strategy 17 Changing Demographics and Diversity of the Work Force 17 Talent Management 21 Customer Service and Quality Emphasis 25 New Technology 29 High-Performance Models of Work Systems 31

Snapshot of Training Practices 34 Training Facts and Figures 34 Training Investment Leaders 36 Roles, Competencies, and Positions of Training Professionals 38 Who Provides Training? 40 Who Is in Charge of Training? 41 Preparing to Work in Training 42

Organization of This Book 43 Key Terms 44 Discussion Questions 44 Application Assignments 45 Case: Zappos: Facing Competitive Challenges 46 Endnotes 47

Chapter Two Strategic Training 52

McCormick & Company Uses Strategic Training to Spice Up Business Results 52 Introduction 54 The Evolution of Training’s Role 55

Movement from Training as an Event to Learning 57 The Strategic Training and Development Process 58

Identify the Company’s Business Strategy 59 Identify Strategic Training and Development Initiatives That Support the Strategy 62 Provide Training and Development Activities Linked to Strategic Training and Development Initiatives 65 Identify and Collect Metrics to Show Training Success 67

Organizational Characteristics That Influence Training 68

Roles of Employees and Managers 68 Top Management Support 70 Integration of Business Units 71 Global Presence 71 Business Conditions 72 Other Human Resource Management Practices 73 Extent of Unionization 74 Staff Involvement in Training and Development 75

Training Needs in Different Strategies 76 Models of Organizing the Training Department 79

Faculty Model 80 Customer Model 81 Matrix Model 82 Corporate University Model (Corporate Training Universities) 82 Business-Embedded Model 86

Marketing the Training Function 89 Outsourcing Training 91 Summary 92 Key Terms 93 Discussion Questions 93

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Social Learning Theory 143 Goal Theories 145 Need Theories 146 Expectancy Theory 147 Adult Learning Theory 148 Information Processing Theory 149

The Learning Process 150 Mental and Physical Processes 150 The Learning Cycle 151 Age Influences on Learning 153 Implications of the Learning Process for Instruction 154

Instructional Emphasis for Learning Outcomes 164 Considerations in Designing Effective Training Programs 165

Selecting and Preparing the Training Site 165 Choosing Trainers 167 How Trainers Can Make the Training Site and Instruction Conducive to Learning 169 Program Design 172

Summary 177 Key Terms 178 Discussion Questions 179 Application Assignments 179 Case: Plastics Make Perfect 181 Endnotes 182

Chapter Five Transfer of Training 185

Transfer of Training and Knowledge Sharing Are Important for Nonprofits 185 Introduction 186 Training Design 188

Applications of Transfer of Training Theory 188 Encourage Trainee Responsibility and Self- Management 192

Work Environment Characteristics That Influence Transfer 195

Climate for Transfer 195 Manager Support 196 Peer Support 200 Opportunity to Use Learned Capabilities 200 Technological Support 201

Application Assignments 94 Case: Training and Development Help Rubber Hit the Ro

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