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OVERVIEW Throughout this book we have referred to the empirical research linking particular human

resource practices to corporate financial performance. The last chapter emphasized the

critical role of performance measurement and management as characteristics of “high-

performance work practices.” 1 This same body of research also points to the importance of

training and development as contributors to the “bottom line” of corporate performance.

Training has evolved substantially in recent years with evidence indicating more organi-

zational investment in training and development. Those leaders who understand how to

drive business results in an increasingly competitive, global environment recognize that

a better-trained workforce improves performance and that investing in employee learning

O B J E C T I V E S

After reading this chapter, you should be able to

1. Define what is meant by training and explain why it is a critical function

for corporations today.

2. Explain how to conduct a needs assessment, including performing

organizational, task, and person analyses and deriving instructional

objectives for a training program.

3. Know how to design a training program to facilitate learning.

4. Identify the critical elements related to transfer of training.

5. Compare and contrast the various techniques available for training,

including their relative advantages and disadvantages, with particular

emphasis on e-learning.

6. Identify criteria used to evaluate training effectiveness.

7. Understand different experimental designs that can be used for evaluating

training programs.

8. Understand the components of training programs for employee orientation

and onboarding, teamwork, generational issues, diversity awareness, sexual

harassment, and international assignments.

Training and Development

Chapter

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3 / Developing Human Resource Capability

and development is critical to achieving success. 2 See Figure 8-1 for current trends in the

workplace shaping human resource development (HRD) systems. Given the intense pressure to compete, improve quality and customer service, and lower costs, leading Amer-

ican companies have come to view training as a key to organizational survival and success.

In fact, ASTD’s 2010 State of the Industry report noted that despite the uncertain economic conditions affecting companies, there was still a continued dedication to workplace train-

ing in firms worldwide. By their investments in learning, executives highlighted their

belief that employee learning and development is critical to the survival, recovery, and

future growth of their firms. 3 In another review, it was found that “many organizations are

more likely to include training solutions as part of a systemwide change to gain competi-

tive advantage.” 4

Many employers throughout the world view the skill level of their workforce as the

top priority for planning. According to the Society for Human Resource Management’s

workplace forecast published in 2011, one of the top 10 trends is global competitiveness

and the need for an educated and skilled workforce. This suggests the need for continual

training for employees, especially given the fact that large numbers of Baby Boomers are

expected to leave the workforce around the same time. As a result, many HR professionals

are worried about a skills shortage in the U.S. labor force. 5 Another survey of those firms

planning to hire new employees indicated that 39 percent of them said they expected to

encounter some difficulty in finding qualified individuals for their new positions. Even

though there are several workers available for every open position in the United States, HR

professionals are still having trouble finding the right people to match the skills required for their job openings. 6

Organizations with exceptional training opportunities and programs often make Fortune magazine’s list of the “Best Companies to Work For,” an honor that also translates into financial success. One study found that companies that made Fortune ’s list had 50 percent less turnover than their peers and returned about three times more money for stockholders. 7

Increase in diversity in the workplace

Changes brought about by global network and

communications

Faster work pace requires more flexibility

Security concerns on a global scale

Impact of technology on work and home life

Concept of work changing

Importance of ethics

Economic climate dictates how

companies operate

Trends in the

Workplace

Figure 8-1 Trends in the Workplace

Employee skill-level a top priority

Training and Fortune’s “Best Companies”

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To become a leading-edge company, a firm will need to be more concerned with the types

of programs it uses to improve workplace learning and performance, not simply with

how much money it spends on training. A transformation of a firm’s training efforts and

other practices and systems that support training may be needed. For example, successful

firms align their training with high-performance work practices (e.g., self-directed work

teams, access to business information), innovative compensation practices (profit sharing,

group-based pay), and innovative training practices (e.g., mentoring or coaching programs,

training information systems). According to ASTD’s 2010 review of the industry, top com-

panies expect their employees to allocate a meaningful amount of time to formal learning

and development activities. 8

Not only must firms invest in the continual learning of workers in order to be competi-

tive, but many companies are providing training to workers who are new to the workforce.

Many companies also include an assessment of workforce trainability as part of their anal-

ysis for expansion and plant openings. Unfortunately, recent evidence indicates that many

U.S. workers are not competing well on the trainability criterion. In 2005, Toyota selected

Ontario, Canada, over the United States as the place for a new plant for its mini-SUVs.

Toyota chose Canada over several U.S. states offering substantial financial incentives

based to some extent on the relative trainability of Ontario’s workforce. The president of

the Automotive Parts Manufacturers’ Association stated that the educational level in parts

of the United States was so low that trainers for Japanese plants have to use “pictorials” to

teach some illiterate workers how to use high-tech equipment. Other reports support the

contention that auto companies with plants in parts of the United States are disappointed in

the trainability of the U.S. workforce. 9

Many firms provide life training in addition to skills training. When Marriott Hotels

hires new workers, it enrolls them in a 6-week training course with classes on hotel duties

and self-esteem and stress. At Burger King, basic training for starting restaurant jobs also

includes Life 101 (e.g., teaching employees how to balance a checkbook, the importance of

getting to work on time). Ecolab established partnerships with welfare-to-work community

groups and started a training program at a Wisconsin plant to teach entry-level employees

math, basic physics, and blueprint-reading skills. 10

This chapter provides an overview of employee training. We will discuss the impor-

tance of training in the context of the organization’s competitive strategy and the need to

link training needs with the mission and goals of the organization. You will learn how to

design and evaluate a training program and to tailor the training to particular situations.

DEFINING TRAINING AND DEVELOPMENT Training is defined as any attempt to improve employee performance on a currently held job or one related to it. This usually means changes in specific knowledge, skills,

attitudes, or behaviors. To be effective, training should involve a learning experience, be

a planned organizational activity, and be designed in response to identified needs. Ideally,

training also should be designed to meet the goals of the organization while simultane-

ously meeting the goals of individual employees. The term training is often confused with the term development . Development refers to learning opportunities designed to help employees grow. Such opportunities do not have to be limited to improving employees’

performance on their current jobs. At Ford, for example, a new systems analyst is required

to take a course on Ford standards for user manuals. The content of this training is needed

to perform the systems analyst job at Ford. The systems analyst, however, also may enroll

in a course entitled “Self-Awareness,” the content of which is not required on the current

job. This situation illustrates the difference between “training” and “development.” The

focus of “development” is on the long term to help employees prepare for future work

demands, while “training” often focuses on the immediate period to help fix any current

deficits in employees’ skills.

The most effective companies look at training and career development as an integral

part of a human resources development (HRD) program carefully aligned with corporate

U.S. workers are not competing well on trainability

Training should be aligned with strategy

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business strategies. This is a critical factor for those firms rated as ASTD’s Best

Companies. 11 It is also important for individual employees. In fact, in a survey reported

in 2010 by the Corporate Executive Board, 20,000 high-potential employees revealed

that being connected to their firm’s corporate strategy was top on their list as something

that drove or engaged them. 12 During tough economic times, it is especially important

for training to be aligned to corporate strategic business objectives. This can be done by

(1) aligning efforts with the organizational mission and business goals, (2) using train-

ing to address skill gaps, (3) designing job-focused instructional objectives, (4) creating sound

training programs that promote learning and transfer to jobs, and (5) collaborating with

sponsors and others outside the training department to promote transfer of training to

jobs. 13 The American Society for Training and Development (ASTD) award winners for the Very Best Learning Organizations are those that strike a balance between training and other types of learning efforts (e.g., performance analysis, organizational develop-

ment, talent management, process improvement). In 2010, the ASTD listed 31 firms

that were successful in creating a valuable learning culture despite tough economic

times and budget cutbacks. These firms were able to create engaged learning environ-

ments, use new ways of delivering learning via social media tools, and create innovative

cultures. These included 22 from the United States, 6 from India, 2 based in Turkey,

and 1 from Singapore. The top 10 winners included firms from all around the world in

diverse industries, such as Intercontinental Hotels Group, Datatel, NIT Technologies

Limited (India), University Health System, Yapi ve Kredi Bankasi A.S. (Turkey), Barilla

America, Inc., CaridianBCT, Farmers Group, Inc., ESL Federal Credit Union, and

Wipro Technologies (India). 14

EXTENT OF TRAINING AND DEVELOPMENT In the United States, ASTD estimated that companies spent $125.88 billion on employee

learning and development in 2009 with a slight increase in the dollar amount spent on

training per employee. 15 In 2009, ASTD’s BEST organizations reported an average of 47

hours of learning content for each employee, a 15.9 percent increase from 2008. The BEST

award winners were defined as those organizations honored for demonstrating a clear link

between learning and performance in their firms. Common characteristics of BEST win-

ning organizations were :

■ Evidence that learning has an enterprise-wide role or linkages from the executive team

to the organization’s strategy.

■ Evidence that learning has value in the organization’s culture (e.g., learning opportuni-

ties for employees, C-level involvement, learning for growth of the organization, and

innovation).

■ Evidence that learning links to individual and organizational performance (e.g., align-

ment with the business, efficiency, measurement of the effectiveness of learning, and

success with non-training solutions for business needs).

■ Evidence of investments in learning and performance initiatives. 16

The ASTD BEST Award winner Datatel, an information technology and consulting

firm, averages about $3,000 per employee annually on training and employees average

about 80 hours a year in training. As the chief financial officer, Kevin Boyce, says “our

philosophy is to take care of our people. If our people are prepared, knowledgeable, and

have the right skills, they will take care of our customers.” 17 Farmers Group, Inc., a finance

and insurance company, invests upwards of $106,000 to hire, train, and develop new em-

ployees in its University of Farmers program, which includes both classroom and online

education. 18 Training has been viewed positively among employees. Approximately two-

thirds of employees, regardless of age or gender, view the training they have received from

their employers to be useful in helping them perform their current job duties. They were

less enthusiastic about how well it has prepared them for higher-level jobs (about half were

ASTD’s BEST organizations

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8 / Training and Development

satisfied). They also viewed the training their employer provided as critical for determining

whether or not they would stay with their current firm. 19

Corporations are offering a variety of training programs to meet their organizational

needs. Figure 8-2 lists the most frequent types of learning content offered by ASTD’s

Best organizations as rated in 2011. 20 The importance of training is likely to continue in

the future given recent trends in the workforce. As the United States shifts from manufac-

turing to service jobs, more workers are needed in service-based industries. In addition,

increasing technology demands that current employees enhance their skills and technical

sophistication. For example, U.S. Steel (USX) invested money in training for workers so

that they would be able to use the new technology they implemented in its production pro-

cesses. Similarly, Xerox spent about $7 million on its training center to assist its sales staff

in gaining additional training to better meet customers’ needs for handling documents. 21

Employees at RJR Nabisco who have been confronted with new technology in their jobs

are given the option of receiving retraining or early retirement. 22 Employees themselves are

asking for additional training in using new technology. 23

Learning Content Area Percentage of all Training

Managerial and supervisory training 13% Profession or industry-specific training 11% Processes, procedures, business practices 10% Mandatory and compliance training 10% Other (quality, product knowledge) 10% IT and systems training 7% Customer service training 7% New employee orientation 7% Interpersonal skills training 7% Sales training 6% Executive Development 6% Basic skills training 4%

Source: ASTD 2011 State of the Industry Report . www.astd.org.

Figure 8-2 Average Percent of Learning Content for ASTD’s Best Award Winners

A SYSTEMS VIEW OF TRAINING The basic process of training is illustrated in Figure 8-3 . Three major steps are involved:

assessment, development, and evaluation. The goal of the assessment phase is to collect information to determine if training is needed in the organization. If it is needed, it is then

important to determine where in the organization it is needed, what kind of training is

needed, and what specific knowledge, abilities, skills, or other characteristics (KASOCs)

should be taught. This information is collected by conducting three types of analyses: at

the organizational, job, and individual levels of analysis. After the information is com-

piled, objectives for the training program can be derived. The goal of the development phase of training is to design the training environment necessary to achieve the objec-

tives. This means trainers must review relevant learning issues, including characteristics of

adult learners and learning principles as they apply to the particular training and potential

trainees under consideration. Also, trainers must identify or develop training materials

and techniques to use in the program. Finally, after the appropriate learning environment

is designed or selected, the training is conducted. The goal of the evaluation phase is to examine whether the training program has been effective in meeting the stated objectives.

The evaluation phase requires the identification and development of criteria, which should

include participants’ reactions to the training, assessments of what they learned in the

training program, measures of their behavior after the training, indicators of organizational

results (e.g., changes in productivity data, sales figures, employee turnover, accident rates),

Needs assessment phase

Development phase

Evaluation phase

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and return on investments (ROI) or, as discussed in Chapter 6, utility analysis. An experi-

mental design is chosen to assess the effectiveness of training. The choices of the criteria

and the design are both made before training is conducted in order to ensure that training will be properly evaluated. After the training is completed, the program is then evaluated

using the criteria and design selected.

Research in training is needed now more than ever before as the demand for training in-

creases in organizations. 24 In addition, since much of the literature on training comes from

a variety of scientific fields (e.g., industrial and organizational psychology, human re-

source development, cognitive psychology, anthropology, education, human factors, com-

puter science), it is increasingly important to integrate the findings across those disciplines.

Various fields in psychology even define training differently. 25

Compared to other areas of HRM, practitioners have a fairly strong knowledge of

some areas of training research. 26 A recent survey of training processes used in corporate

America revealed some discrepancies between the academic recommendations regard-

ing training program development and evaluation and the current state of the practice. 27

While larger companies were more likely to have done formal needs assessments , written

Identify needs for training by conducting needs analyses:

• Organization • Task or job • Person

Identify or develop criteria to evaluate training outcomes:

• Reactions • Learning • Behavior change • Organizational results

Derive instructional objectives Choose evaluation design

Design a learning environment by examining:

• Characteristics of adult learners • Learning principles

Identify or develop training materials and methods

Conduct training

Conduct evaluation and cost-effectiveness of

training program

NEEDS ASSESSMENT DEVELOPMENT EVALUATION Figure 8-3 A Systems Model of Training  

Discrepancies between Research and Practice

Majority of U.S. companies do not do formal needs assessment

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specific instructional objectives, and evaluated the training with something other than a

simple, post-training reaction questionnaire, the majority of all classes of respondents did

none of these things. Small businesses rarely did any of these things as part of their train-

ing. Over 60 percent of all surveyed companies, regardless of company size, relied only on

trainee reactions to assess the training, taken upon completion of the training, and had no

systematic follow-up to further evaluate the training. Less than 10 percent of companies

used any form of control group to evaluate the effects of the training. Over 50 percent of

companies admitted that managerial training programs were first tried because some other

company had been using them. As one training director put it, “A lot of companies buy

off-the-shelf training programs just because they had heard or knew that a competitor was

using the same training. Shouldn’t we expect more data to determine training needs?”

Other scholars also have noted the gaps between research and practice in the training

field. Practitioners 28 point out that research findings are often ignored and faddish pro-

grams are adopted with little proven utility. In addition, training needs assessments and

evaluations are often rare despite their importance, and most training is informal even

though this is not the best approach to use.

In order to address some of the gaps between research and practice, the American Society for Training and Development has initiated and published its ASTD 2006 Research-to-Practice conference proceedings. In this extensive report, it has included

almost 20 articles examining a variety of training issues such as evaluation efforts, learning

transfer, and web-based and classroom instruction. The intent of the proceedings was to

share knowledge that will affect practice in the field. 29

NEEDS ASSESSMENT The first step in training is to determine that a need for training actually exists. An organi-

zation should commit its resources to a training activity only if the training can be expected

to achieve some organizational goal. The decision to conduct training must be based on

the best available data, which are collected by conducting a needs assessment. This needs

analysis ideally should be conducted in the context of a human resource planning (HRP) program and timely and valid performance data. Companies that implement training pro-

grams without conducting a needs assessment may be making errors or spending money

unnecessarily. For example, a needs assessment might reveal that less-costly interventions

(e.g., personnel selection, a new compensation system, job redesign) could be used instead

of training. Despite the importance of conducting needs assessments, few employers con-

duct such an analysis in the context of their strategic plans or any form of strength, weak-

ness, opportunity, or threat analysis (SWOT analysis).

A needs assessment is a systematic, objective determination of training needs that involves conducting three primary types of analyses. These analyses are used to derive

objectives for the training program. The three analyses consist of an organizational analysis , a job analysis , and a person analysis. 30 After compiling the results, objectives for the training program can be derived.

Many trainers suggest that a training need is any discrepancy between what is desired

and what exists. Thus one of the goals of the needs assessment is to note any discrepan-

cies. For example, the World Bank determined through a needs assessment that many of its

constituents from Eastern Europe required training in transforming state-owned businesses

into self-sustaining businesses. The organization contracted with a number of universities

to develop and provide the necessary training. Comparisons between the expected level

of performance specified (from the job analysis) and the current level of performance

exhibited (evident in the person analysis) may indicate performance discrepancies. The

Sheraton Corporation, for example, specified that all hotel managers must be familiar with

the implications of the 1990 Americans with Disabilities Act (ADA) for hotel operations

(see Chapter 3). A test on the law was administered, and scores on the test were used as a

basis for identifying those managers who needed training on the implications of the law.

Performance discrepancies, however, should not be automatically interpreted as a need for

Research findings often ignored

Three primary types of analysis

Performance discrepancies

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training. The analyst must determine whether the discrepancy is a skill or knowledge defi-

ciency, thus requiring training. If, however, the required skill is present and performance is

still lacking, then the problem may be motivational in nature and thus require some other

type of organizational intervention (e.g., new reward or discipline system). One study

noted that organizations that conducted needs analyses were better able to use the results in

the design and evaluation phases than organizations that did not. 31

An organizational analysis tries to answer the question of where the training emphasis should be placed in the company and what factors may affect training. To do this, an ex-

amination should be made of the organizational goals, personnel inventories, performance

data, and climate and efficiency indexes. This examination should ideally be conducted in

the context of the labor supply forecast and gap analysis. Organization system constraints

that may hamper the training process also should be explored. Training does not exist in

a vacuum, and the context in which it occurs has an impact on whether individuals will

learn. 32 Many companies rely on very detailed surveys of the workforce to determine train-

ing needs as part of the planning effort. Motorola and IBM, for example, conduct annual

surveys that assess particular training needs in the context of the company’s short- and

long-term goals.

The review of short- and long-term goals of the organization and any trends that may

affect these goals is done to channel the training toward specific issues of importance to

the firm (e.g., improved customer satisfaction, increased productivity). For example, after

Merrill Lynch pleaded guilty to a number of fraudulent business practices, the chief execu-

tive officer (CEO) ordered training in business ethics for all employees. To reduce layoffs,

IBM retrained hundreds of employees to be sales representatives. Not only was IBM able

to minimize layoffs, but the larger sales staff was able to attack another corporate goal: to

improve customer satisfaction.

Data from a human resource information system (HRIS) can reveal projected employee

mobility, retirements, and turnover. The more sophisticated inventories also can indicate

the number of employee

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