ABSTRACT The study focused on the effect of employee training on organizational performance. The process and procedure of identifying employee skill gap in most organizations pose a big challenge to the Human Resource Department (HRD). Employee training is based on various reasons which could be detrimental to the overall objective of the organization. The HRD ensure that sending an employee on training will translate to increase in productivity. Thus, adequate consideration should be taken by the HRD when selecting a candidate for training. The ability to manage and work around the challenges faced when carrying out this HR function will ensure a better training objective that will affect the productivity of the employee and the organization. Since the effect of these factors brings with it some negative implications and consequences of low productivity, high rate of employee turnover and high cost; this study therefore was aimed at identifying the effects of employee training on organizational performance with special emphasis on the process and procedure of selecting employee for training. Pursuant to this, some objectives were formulated by the researcher and these were to ascertain the extent to which unsystematic approach of employee training affects organizational productivity; to determine the extent of effect of training design on employee productivity; to ascertain the extent to which training delivery style affects employee productivity; to determine the relationship between employee perceptions of training and organizational productivity; and to determine the extent to which employee training affects organizational performance. In pursuit of the objectives, a survey research was carried out in Enugu State, Nigeria. The population used for the study was 694 staff of Nigerian Bottling Company and 7UP Bottling Company. Sample size was determined using Yamane (1964) formula. A sample size of 254 was drawn. The study made use of data from primary and secondary sources which were collected using questionnaire administered to the 254 staff of the selected Organizations. Personnel records and annual reports of the selected Organizations were used for secondary data. The data analyses was carried out using the Statistical Package for the Social Sciences (SPSS), while the person product moment correlation coefficient and the one-sample test were used to test the hypotheses formulated in the study. Findings from the study reveal that the extent to which unsystematic approach of employee training affected organizational productivity was high. This was statistically supported by the one-sample test at 0.05 (Zc = 8.246 < Zt = 0.000). Again, the extent of effect of training design on employee productivity was high. The one-sample test (Zc = 0.679 < Zt = 0.730; α= 0.05) confirms this assertion. The extent to which training delivery style affected employee productivity was high as attested to by the result of one-sample test (Zc = 0.681 < Zt = 0.762; α= 0.05). Similarly, there was a very strong positive relationship between employee perception of training and organizational performance. This is confirmed with the Pearson Correlation coefficient value of 0.948 at 0.05level of significance. The extent to which employee training alone affected organizational performance was low, however, when other variables like training design, training delivery style were considered, its effect became significant. This is confirmed by the one-sample test at 0.05 (Zc = 0.705 > Zt = 0.665). Based on the finding, the study concludes that if the right employees are sent on training through the systematic training procedure of identifying and selecting employees for training, there would be a significant improvement on the organizational performance. Finally, it is recommended that a mechanism should be created for proper assessment and evaluation of employee performance after training as this will ensure that only employees who require training are sent on training. TABLE OF CONTENTS Declaration ii Approval iii Dedication iv Acknowledgements v Abstract vii Table of Contents viii List of Tables xii List of Figures xiv Chapter One 1 Introduction 1 1.1 Background of the Study 1 1.2 Statement of the Problem 3 1.3 Objectives of the Study 4 1.4 Research Questions 5 1.5 Hypotheses 5 1.6 Significance of the Study 6 1.7 Scope of the Study 6 1.8 Limitations of the Study 7 1.9 Operational Definition of Terms 7 References 8 Chapter Two 9 Review of Related Literature 9 2.1 Overview of the Effect of Employee Training on Organizational Performance 9 2.2 Conceptual Framework 10 2.2.1 Purpose of Training 11 2.2.2 Types of Training 13 2.3 The Concept of Psychological Contract 14 2.4 Theoretical Framework of Employee Training 152.5 Theoretical Models Linking Training to Organizational Performance 16 2.6 Successful Models of Training and Development 18 2.6.1 ADDIE Instructional Design Model 18 2.6.2 Human Performance Technology (HPT) 21 2.6.3 Performance-Based Instructional Design (PBID) 22 2.6.4 Total Quality Management (TQM) 23 2.7 Learning Theories 23 2.8 Identification of Training Needs in an Organisation 242.8.1 Training Needs Assessment 25 2.8.2 Benefits of Training Needs Assessment 262.9 Training Design and Organizational Performance 26 2.10 Implication of Training Delivery Style on Employees Performance 28 2.10.1 Methods of Training 28 2.11 Difference between Training and Development 32 2.12 Human Resource Management (HRM) Process vis-à-vis Employee Training 34 2.13 Non-Systematic Approach of Training 35 2.14 Systematic Training Process 36 2.15 Empirical Framework of Training on Organizational Performance 38 2.16 Effects of Employee Training on Employee Motivation vis-à-vis Organizational Performance 412.17 Measuring the Impact of Training on Organizational Performance 42 2.17.1 Organizational Performance Measurement 43 2.17.2 Employee Performance Indicators 44 2.18 Productivity 47 2.18.1 Measures of Productivity and Profitability48 References 51 Chapter Three 57 Research Methodology 57 3.1 Research Design 57 3.2 Sources of Data 57 3.2.1 Primary Source 57 3.2.2 Secondary Source 57 3.3 Population of the Study 57 3.4 Determination of Sample Size 58 3.5 Sampling Method 59 3.6 Validation of the Research Instrument 603.7 Reliability of the Research Instrument 60 3.8 Data Analysis Techniques 603.8.1 Decision Rule 61 References 62 Chapter Four 63 Presentation, Analysis and Interpretation of Data 63 4.1 Presentation of Data 63 4.2 Hypotheses Testing 88 4.3 Discussion of Findings 95 References 98 Chapter Five 99 Summary of Findings, Recommendation and Conclusions 99 5.1 Summary of Findings 995.2 Conclusion 99 5.3 Recommendations 100 5.4 Contribution to Knowledge101 Bibliography 103 Appendices 111 Appendix A: Questionnaire 111 Appendix B: Interview Schedule 115 Appendix C: Calculation of the Reliability of the Research Instrument 117
LIST OF TABLES Table 1: Comparison of principal characteristics of training and development 33 Table 2: Population of the study 58 Table 3: Stratum representation of sample size 59 Table 4: Respondents’ Age 63 Table 5: Sex Distribution of Respondents 64 Table 6: Respondents Educational Qualification 65 Table 7: Respondents’ Job Position 66 Table 8: Respondents Duration of Employment 66 Table 9: Reasons for sending employee on training 68 Table 10: Immediate supervisors and the HR influence on the selection of an employee for training 69 Table 11: Effect of discrimination in selecting employees for training 70 Table 12: Extent to which unsystematic approach of employees training affect organizational productivity 71 Table 13: Good training design ensures that identified employee skill gaps are properly captured 72 Table 14: Extent to which training design affects organizational performance 73 Table 15: Importance of training design on employee performance 75Table 16: Bad training design results to waste of resources on employee training 76Table 17: Training delivery style ensures that the objective of employee training is achieved 77 Table 18: Extent to which training delivery style affects employee performance 78 Table 19: Employee poor performance as a result of poor training delivery style affects organizational performance 79 Table 20: Employee perception of training is correlated to organizational performance 81 Table 21: Level of correlation between employee perception of training and organizational performance 82 Table 22: Post training performance and organizational performance 83 Table 23: Degree of post-training performance confidence 84 Table 24: Employee training affects organizational performance 85 Table 25: Extent of employee training effect on organizational performance 86 Table 26: Relationship between employee training and employee performance 87
LIST OF FIGURES Figure 1: ADDIE Model, Diagram by: Steven J. MCGriff, Instructional Systems, College of Education, Penn State University 20 Figure 2: Human Performance Technology (HPT) Model 22 Figure 3: Human Resource Management (HRM) Process 35 Figure 4: Systematic training process 38 Figure 5: Respondents’ Age 63 Figure 6: Sex Distribution of Respondents 64 Figure 7: Respondents Educational Qualification 65 Figure 8: Respondents’ Job Position 66 Figure 9: Respondents Duration of Employment 67 Figure 10: Reasons for sending employee on training 68 Figure 11: Immediate supervisors and the HR influence on the selection of an employee for training 69 Figure 12: Effect of discrimination in selecting employees for training 70 Figure 13: Extent to which unsystematic approach of employees training affect organizational productivity 71 Figure 14: Good training design ensures that identified employee skill gaps are properly captured 73 Figure 15: Extent to which training design affects organizational performance 74 Figure 16: Importance of training design on employee performance 75 Figure 17: Bad training design results to waste of resources on employee training 76 Figure 18: Training delivery style ensures that the objective of employee training is achieved 77 Figure 19: Extent to which training delivery style affects employee performance 78 Figure 20: Employee poor performance as a result of poor training delivery style affect organizational performance 80 Figure 21: Employee perception of training is correlated to organizational performance81 Figure 22: Level of correlation between employee perception of training and organizational performance 82 Figure 23: Post training performance and organizational performance 83 Figure 24: Degree of post-training performance confidence 84 Figure 25: Employee training affects organizational performance 85 Figure 26: Extent of employee training effect on organizational performance 86 Figure 27: Relationship between employee training and employee performance 87 Figure 28: Employee Systematic Training Model 101
CHAPTER ONE INTRODUCTION
1.1 Background of the Study The history of training in business organizations is as long as the entire history of business organizations (Miller, 1996:3). This is because the knowledge base or skills of the normal employees in the labour market is not sufficient for the specialized tasks within the organizations. However, the academic study of various forms of training did not start until about a century ago, when researchers started a branch of research under the name of “vocational training” (Salas and Cannon Bowers, 2001). The beginning of the twentieth century and especially after World War II saw the widespread of training programs among organizations, involving more and more employees and also expanding in content ( Luo, 2000). In the 1910s, only a few large companies such as Westinghouse, General Electric, and International Harvester had factory schools that focused on training technical skills for entrylevel workers. By the end of 1990, forty percent of the Fortune 500 firms in America had a corporate university or learning center (Meister, 1997). Training in Nigeria could be traced back to 1960 when it was discovered that most of the top government and business positions were occupied by expatriates (Olalere and Adesoji, 2013). The departure of the whites after independence gave rise to a big vacuum of capable indigenous human capital. This prompted the Federal Government of Nigeria to set up a Manpower Board in 1962 following the Ashby Commissions Recommendations (Olalere and Adesoji, 2013:83). Consequently, the Federal Government of Nigeria established complimentary institutions like the Centre for Management Development ( CMD), Administrative Staff College of Nigeria, Industrial Training Fund (ITF), and Federal Training Centre to train and retrain employees as well as give orientation to fresh graduates of formal academic institutions (Olalere and Adesoji, 2013). Today, we are witnessing an overwhelming number of research studies from both descriptive and prescriptive traditions, focusing on several characteristics of training programs as well as their costs and benefits for business organizations (Becker and Gerhart, 1996). At the same time, organizations have come to better understand the significance of training for their survival in knowledge-intensive and volatile markets of this era, and thus have increasingly acknowledged the profitability of developing their human resources through various forms of training (Berge, 2001; Salas and Cannon-Bowers, 2001). Human resource capital of any organization plays an important role, thus training and retraining helps in fortifying employees (Khan, Khan and Khan, 2011). Despite the obvious significance of training, the enormous expansion in the content of training programs over time has largely been taken for granted. Some Human Resources Departments rarely question the necessity and appropriateness of training a particular employee at a particular time. Often times, there are ulterior motives why employees are sent on training. Mourdoukoutas (2012) found out that some of those organizations that neglect employee training do so because of the huge cost of training and the fear of losing those employees after training them. To show the importance attached to employee training, Nigerian Bottling Company has a training school and 7UP Bottling Company conducts on-the-job and off-the-job training for employees from time to time. This notwithstanding HR Departments in these organizations still face challenges in the selection of employees for training. To assist in the possible improvement of employee training in Soft Drinks Bottling Companies in particular and manufacturing companies in general, the research was embarked upon to investigate the effect of employee training on organizational performance vis-à-vis the processes of employee training and the challenges faced by the Human Resource Department in the selection of employees for training with reference to the employees of Nigerian Bottling Company and 7UP Bottling Company, 9th Mile Corner, Ngwo, Enugu. 1.2 Statement of the Problem The perception of employees on training has a greater impact on the success of any organization. If the employees are satisfied with the training policies of the organization, this will have a positive impact on the organization’s productivity. The perception or attitude of employees is transformed into positive or negative behaviour. How do the employees see employee training policies of the organization? How seriously does the Management take the Training Policy of its organization? Some see training and development as a waste of time and resources that would have been employed in the production of goods and services that will yield profit to the organization. Sometimes, the fear that an employee could leave the organization after training affects the employees training and sometimes makes it unplanned and unsystematic. The procedure and process usually adopted by some Human Resource Departments in the identification of those employees that require training are worrisome. Employees sometimes go for training for personal reasons which include enriching themselves; preparing themselves for other positions in other organizations; power play/politics; because he/she knows the person in-charge of training and not necessarily because there is an identified skill gap which needs to be filled through training. Often times, the HR Department does not conduct training needs assessment. Employees’ training selection criteria ought to be systematic and free from bias. It must follow a lay down procedure to ensure that the right candidates are sent for training for positive effect on organizational performance. It is found that previous researchers have concentrated on the importance and benefits of training and no study has been carried out on the challenges faced by the HR departments of Soft Drink Bottling Companies in the selection of employees for training. In order to fill this gap, the researcher is compelled to conduct a study on the effect of employee training on organizational performance with focus on processes and procedures of identifying skill gaps, training design and delivery style and employee perception towards training in Soft Drinks Bottling Companies in Enugu State.
1.3 Objectives of the Study The main objective of the study is to investigate the effect of employee training on organizational performance with focus on the processes and procedures of selection employees for training. However, specific objectives of the study are as follows: 1. To ascertain the extent to which selection procedure of employee for training affects organizational productivity; 2. To determine the extent of effect of training design on employee productivity; 3. To ascertain the extent to which training delivery style affects employee productivity; 4. To find out the relationship between employee perceptions of training and organizational productivity; and 5. To determine the extent to which employee training affects organizational performance.
1.4 Research Questions The research questions were drawn in line with the objectives as follows: 1. To what extent does selection procedure of employee for training affect organizational productivity?2. To what extent does training design affect organizational performance?3. To what extent does training delivery style affect organizational performance? 4. What is the relationship between employee perception of training and organizational productivity? 5. To what extent does employee training affects organizational performance?
1.5 Hypotheses To achieve the objectives of this study, the following five hypotheses were formulated for testing. Ho: 1 Selection procedure of employee for training does not have a high effect on organizational productivity. Ho: 2 The extent to which training design affects organizational productivity is not significant. Ho: 3 The extent to which training delivery style affects organizational productivity is not significant. Ho: 4 There is no substantial relationship between employee perception of training and organizational productivity.Ho: 5 The extent to which employee training affects organizational productivity is not significant. 1.6 Significance of the Study The significance of this study cannot be over-emphasized and can be viewed from the following perspectives.1. The study will help the top management in taking strategic decision that affect training and development for the overall growth of the industry; 2. Members of Staff of the two manufacturing industries to be used as case study will have adequate knowledge as to the importance of training and why it is necessary that they are trained from time to time; 3. The study will help the Human Resource Department in proper planning and execution of training and development programmes; 4. Future researchers will also find this work very useful as reference materials for further studies; 5. The study will be useful to the researcher as it will help her in actualizing her dream and lead her to the completion of M.Sc. program in Management.
1.7 Scope of the Study The study focused on the investigation of the effect of employees training on organizational performance. The study was delimited to training and development programmes, employee training design and delivery style, post-training performance evaluation of training on organizational performance. The geographical scope of the work is Enugu State in the South-east of Nigeria. The only two soft drinks manufacturing companies located in Enugu State were chosen for the study. They are: Nigerian Bottling Company Plc and 7UP Bottling Company Plc. The field work for this research was conducted between August and September, 2012.
1.8 Limitations of the Study The following constraints were encountered in the course of this work. 1. Lack of reliable data: The Respondents’ unwillingness to give out available and reliable data was major constrain in the course of the study. 2. Dearth of Research materials: The researcher was constrained in the search of research materials. Most current books and journals on the related area are not free, and so the researchers was limited to those materials she could afford. 3. Measure used to collect data: Secondary data would have been more appropriate for the post-evaluation analysis, but because it was difficult to separate and link percentage (%) increase in turnover to employee training, primary data was used. 4. Self-reported data: Self reported data was a major limitation of the study, because it rarely can be independently verified. The researcher had to take what the respondents said at face value. Nonetheless, with available data and judicious use of the limited resources, reasonable analysis was carried out to ensure that research findings add up to the body of knowledge. 1.9 Operational Definition of Terms Delivery style – This is a set of a systematic processes designed to meet learning objectives related to trainees’ current or future jobs (Simmering, M.J., www.referenceforbusiness.com). Training design – This is the process of creating a blueprint for the development of instruction for a training for positive impact (O’Toole, S., eHow Contributor).
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