Effective Training and Development Programs – Best Practices

"An organization's ability to learn and translate that learning into action is the ultimate competitive advantage." Jack Welch, ex-CEO, GE

GE is one of the world's leading conglomerates with operations spread across eleven businesses. It has been adjudged as one of the top companies for executive development in the world in recognition of its ability to nurture executive talent.
A strong learning culture was developed at GE through innovative programs like Work-Out. In 2005, General Electric Company (GE) was one of the world's biggest conglomerates with a presence across 160 countries, 11 varied businesses and employee strength of around 307,000. Some of its businesses were large enough to make it to the Fortune 500 list on their own. GE had not only survived successfully for 133 years but had also consistently generated great value for its shareholders, despite its size. GE was the only company with a continuous listing in the Dow Jones Industrial Average since the original index was constructed in 1896. GE had won many accolades as the world's most respected company in appreciation of its people management and sustained profitability.
One of the factors that contributed to the company's success was its ability to train and develop its multinational, diverse workforce in a successful manner.
GE was one of the first companies to establish a management development center to train and develop its employees. During the 1980s, this center put the company on a growth trajectory that very few corporations could match. It inspired many other renowned companies like Boeing Co., Home Depot and Toyota Motors to model their training centers on the one at GE. In the media, GE has been referred to as a "captain-of-industry university" or "the leadership factory" in recognition of its ability to produce exceptional leaders who went on to became CEOs at other Fortune 500 companies. Beyond imparting traditional training, it ‘nurtured talent' to bring out the latent potential in its employees through proper grooming. The Work-Out Program that GE developed to train its employees created such an impact that later other companies began to approach GE to try and develop similar programs for their employees. GE businesses like GE Consumer and Industrial were certified by professional associations as authorized providers of education and training for their respective areas of expertise. GE spent around $1 billion on in-house Training and Development (T&D) every year. In addition, GE invested over $38 million annually for reimbursement of tuition fees for employees who enrolled for outside degree programs.
GE was chosen as the best company for executive development in a survey conducted by Executive Development Associates for the year 2005

The emphasis on Training & development at GE has shown that providing training to its employees not only enables a company to become a market leader but also maintain the position.
Another example are the Technology companies like HCL and Wipro recruit from second- and third-tier colleges all across the country, and also in arts and science schools. India's largest call-center operator, Genpact, has recruiting storefronts in 22 cities, without even requiring a resume. It is also targeting retired bank clerks and housewives.

Companies in India assume new recruits will have to be trained practically from scratch. So they invest substantial time, money and effort in the training function. Most large companies have built dedicated learning centers and some employ hundreds of training staff. The Infosys Global Education Centre at Mysore can train 13,500 people at a time. New recruits attend a 16-week boot camp which strengthens their technical, communications and management skills. For its science recruits, TCS provides seven months of training in computer programming, customer orientation and project management.

Indian companies have to invest in making their employees more productive and rapidly moving them up the skill and management ladder. This increases billing rates and the productivity of employees, and lessens attrition because of the rapid career advancement that employees can achieve.

Employees are typically required to participate in a wide range of education programs, including not only technical and domain training but also soft skills and management skills encompassing training in quality processes; communication; and cultural, foreign-language and personal-effectiveness skills. Career advancement and salary increases are usually tied to the completion of such training.

Shortages in managerial talent have made it necessary to foster talent from within. Managers are typically groomed through fast-track programs that provide management training and mentorship to high-performing employees. The average age of first-line managers in the Indian companies is below 30. Preference is usually given to internal staff to fill management openings.

These companies have implemented sophisticated performance e-management and appraisal systems to create greater transparency and fairness in evaluation and rewards. Managers are evaluated on a variety of non-financial measures, including employee satisfaction, attrition rates and mentoring.

Most companies have achieved dramatic reductions in employee turnover by carefully analyzing recruitment, performance and attrition data to identify patterns. This has led to constant refinements in recruitment, training and development, performance management and other human-resource practices. Corporate communications and employee engagement in the company and its programs are always a priority.

Indian companies appear to have an unusual level of interaction with the private colleges and universities that supply them with talent. This involves working with these institutions in developing customized degree programs; training the educators; creating new curricula and training programs; and negotiating deals to hire graduates in bulk -- without job interviews.

These examples show that opportunities are a pathway through which enterprises develop, grow, and prosper. Failure to explore and exploit opportunities is sure to trap them in a downward spiral of stagnation, decay, decline and eventual extinction. But how may firms create opportunities in a dynamic business environment characterized by overcapacity, saturated markets and fleeting competitive advantages? The answer lies in the firms’ relentless cultivation and development of knowledge for exploring and exploiting opportunities for continuous creation of value.

Knowledge is the key resource for sustained profitable growth
Firms must acquire, organize, develop, and deploy knowledge
Firms must encourage employees to acquire knowledge and realize the benefits
Firms must realize that intellectual capital means to exploit wealth creation opportunities

This paper outlines briefly about the best practices an organization can adopt to enable their employees to learn and develop continuously and there by realize the benefits of learning and sharing.


Integrated to Companies Core Values
Every organization should integrate their core values with learning and sharing. This is because; achieving the highest levels of performance requires a well-executed approach to organizational learning and development. It is a goal of visionary leaders




Fig 1

VisionOrganization Goals

Organization
Core Values
Organizational Learning
Mission
Best Product & Services
















Organizational Learning
The term organizational learning refers to continuous improvement of existing approaches and processes and adaptation to change, leading to new goals and/or approaches. Training needs have to be embedded in the way the organization works. The term embedded means that learning:
Is a regular part of the daily work
Is practiced at personal, work unit, and organizational levels
Results in solving problems at source
Is focused on sharing knowledge throughout the organization
Is driven by opportunities to affect significant change and do better

Sources for learning include employee ideas, research and development (R&D), customer input, best practice sharing and benchmarking. Organizational learning can result in:
(1) Enhancing value to customers through new and improved products and services;
(2) Developing new business opportunities;
(3) Reducing errors, defects, waste, and related costs;
(4) Improving responsiveness and cycle time performance;
(5) Increasing productivity and effectiveness in the use of all resources throughout the organization;
(6) Enhancing the organization’s performance in fulfilling its public responsibilities and service as a good citizen.


Employee success and growth
By providing opportunities for personal learning and practicing new skills, every employee feels motivated and achieves success. Organizations can invest in the employee personal learning through education, training, and opportunities for continuous growth. Personal learning can result in:
(1) More satisfied and versatile employees;
(2) Greater opportunity for organizational cross-functional learning; and
(3) An improved environment for innovation.


Better products and services
Every company’s mission is to help its customers to achieve their business objectives. This is possible if the employees are innovative and highly knowledgeable. This can be achieved by focusing on organizational training.


Approach towards effective training and development
Organizations must realize that by continuously developing and training their employees they can acquire the core competencies needed for the competitive advantage and flexibility. Effective training and development should have the following features in order to be effective
Strategy driven
Return on Investment (ROI)
Methodologies
Ownership
Continuous learning process













These features are listed in the Table1 with the core areas of focus.

Strategy Driven
Alignment of training and
development with
Organization goals
Return on Investment
Short Term / Long Term ROI

Methodologies
e-Learning
Classroom training
Knowledge sharing sessions
Continuous educational program

Ownership
Individual learning plans
Certifications
Competency development
Training calendar

Continuous learning
Process

Motivation to learn



Strategy driven:
Organization strategy should focus on deploying the Training and Development program effectively in such a way it yields business results. One way of doing this is to have a group structure as shown in Fig2. The function of the training group will be to interact with the functional group heads and business leaders and understand the skill sets needed for the organization to compete in the market and develop them. The training needs of the organization will be captured in this way for both long and short term. By identifying the training needs, the training group head designs a training plan for the employees which will be deployed after approval from the CEO.



















Fig 2: Organization Strategy for Business Growth



Business & Growth
Functional Heads
Business Leaders
CEO
Training Needs
Training Group
Training Needs
Training Plan
Market Driven Skill Sets
Employees




























Return on investment (ROI):
The Return on investment on the training can be measured by the effectiveness of the programs. Training feedbacks collected at regular periods from both the trainees and the functional heads help in measuring the impact of training. Some of the measures that indicate short term returns from training are – productivity increase, reduction in defect density etc.

Some of the measures that can be used to measure for returns on the long term are: - customer retention, employee retention, reduction in recruitment cost etc. Benchmarking should be made with the competitors of similar businesses to compare the long term returns.

The measures mentioned above have many factors contributing to them and the effectiveness of the training and development is also one of them.






Methodologies:
Organizations can identify some of the following methodologies depending on the needs and business the organization is engaged in to facilitate the training and developmental programs for their employees:

1) e-Learning – It is one of the most preferred choices of the corporates since the employees are becoming tech-savvy now a days. Business Week reports that e-learning will grow to about $13.6 billion by the end of 2004. Many employees are able to attend the training delivered by the instructors in far away locations through teleconference or videoconference. With the advent of internet, e-learning communities are fast catching up. Exchange of information and knowledge is made possible in very short time through these communities.
The sectors of e-learning are:
Portals
Edu-commerce companies
Network platforms

2) Computer based training (CBTs) – As the cost for instructor and the text books go up computer based training is the best alternative. Many learning materials are available in CD-ROMs and one can learn these courses at ones convenience on a PC. The materials can be stored easily and this encourages self learning. Custom made PowerPoint presentations and word documents can also be used as training material and employees can make use of these whenever in need without waiting for an opportunity to be taught in a classroom.

3) Classroom training (CRTs) – It is the oldest method for imparting training, now a days many corporate conduct class room training with the aid of computer, internet and other multimedia products. This helps the trainees to participate effectively with the instructor and there by enhances the speed of learning process. This is not cost effective compared to the above two methods but it is one of the very effective methods.

4) Mobile learning – Mobile phones and palm tops are in vogue today and have become excellent tools for learning. Imagine an executive preparing to meet his client; while he waits for the meeting to start, he uses his personal digital assistant for communications and e-learning. With the information accessible to him, not only does he stay up-to-date on the market issues essential to his position, but he also receives regular notifications from message boards, news portals and his employer.

5) Continuous education programs in reputed institutions – Organization can educate their employees through universities and reputed education institutions based on the type of business they are engaged. Many institutions are willing to prepare a curriculum for the employees as required by the business units. This enables the employees to earn knowledge and degree and ensures commitment to the organization.


Ownership:
Employees should be encouraged to identify their own needs to create individual learning plans, and to seek learning opportunities. Organization can guide employees to prepare their individual learning plan by recommending a list of specific courseware based upon the needs of the organization. Organization can advocate their employees to choose their mentor who will guide the employees to understand their competency gap and update their skill sets. A systematic process can be followed to enable the employee accountable for their training. The organization should also conduct a satisfaction survey to the employees to know their feedback on training. The employees should be encouraged to have their own training calendar as shown in Fig 3 and schedule their plan thus making them accountable. The organization can recommend the number of training days should each employee put in a year and benchmark the percentage effort spent on training. This helps both the employees and the organization to capture the effort put in training and development. Employees can add value in their work and work towards their growth in the organization.

Fig 3 Organization Learning Process













Continuous learning process:
The Process of learning never ceases. It is an ability to learn to learn, learning need not be a linear event where a learner goes to a formal learning program, gains areas of knowledge and skills about the process, and then the learning ceases. Organizations can establish structures and processes that cultivate continuous learning. Based on the premise that continuous learning is driven by goal attainment, goal setting Human Resource Management (HRM) practices should support continuous learning in the workplace. For example, if a performance appraisal reveals opportunities for development, instruction may help to address it. If a firm uses individualized development plans, the manager and the subordinate generate a list of personal, professional, and developmental goals. The developmental goals may point directly to a learning opportunity. Personal and professional goals may point to a deficiency which in
turn points to a learning opportunity. These common HRM practices can be used to generate goals that involve continuous learning opportunities. The learning experiences themselves should improve both the worker's self-efficacy and ability, which in turn should improve his/her commitment to the performance goals. As a result, more and more difficult goals can be achieved, which in turn feeds the self-efficacy of the worker.

Businesses Benefit From Training
Business owners are struggling to do more with less in today's difficult economic environment and are exploring new ways to stretch their dollars while maximizing employee productivity. The U.S Small Business Administration reports that most businesses recognize the importance of training employees and realize that as the marketplace becomes more competitive, training programs are both marketable to potential employees and critical to a business' success.
According to a report composed by The American Society for Training and Development (ASTD), an organizations' investment in learning technologies pays-off through cost savings and efficiency gains. A study by ASTD of 540 U.S. companies concluded that those who invested more in training realized a 37 percent higher gross profit per employee. Training is an essential means by which employers can attract and retain quality employees, as well as increase the efficiency, output and production of a company.
1. Training Can Help Attract and Retain Employees
As business owners know only too well, the days of employees remaining with one company for the entirety of their career is gone. Small- and mid-sized businesses are at a distinct disadvantage in attracting the best-qualified workers, as they usually are unable to offer or manage comprehensive employee training and professional development programs that larger companies present. Ultimately, the implementation of training programs can significantly further a company's growth potential and profitability, as employee turnover as a result of stationary career growth requires the company to continually hire and train new employees. Companies that spend $218 per employee on training have more than a 16 percent voluntary turnover, while companies that spend more than $273 per employee have turnover of 7 percent annually, reports Workforce.
Besides the direct financial impact to a business' bottom-line, there are other benefits to investing in employee training programs. For example, training increases employees' skill levels, positively affecting performance and productivity. It provides employees with valuable tools to manage their activities more effectively. Training also increases employee satisfaction, deferring the need to recruit, hire and train new employees, all of which adds costs to businesses. Another benefit of having a well-trained workforce is the reduction of employer liability.
2. Training Can Help Reduce Risk
Employers are at risk for a myriad of lawsuits, including discrimination, wrongful termination and sexual harassment. Companies are less likely to face these types of situations if employees and managers know their rights and responsibilities. Training helps to reduce the risk of inappropriate behavior and the resulting lawsuits while increasing productivity and employee satisfaction.

3. Training Does Not Have to Be Costly
While the benefits of employee training may be clear, businesses often work under the misconception that it is too costly. However, any business can provide its workforce with the necessary tools to succeed. Depending on the investment level a business owner can make, there are several different training options available.
The most accessible training resource an employer has is its own workforce. Companies with limited budgets can conduct their own in-house training sessions led by employees with remarkable skills in specific areas. Employers can also provide access to books, videos and e-learning tools and encourage discussions among staff. Another inexpensive training technique is to join a local business association, which may yield new avenues of training options, including governmental-sponsored seminars.
4. How a PEO Can Help
An alternative to in-house training programs is to work with a Professional Employee Organization (PEO). PEOs provide small- and mid-size businesses with full-service human-resource management and payroll services. A major benefit of a PEO relationship is the access to experts it provides its clients. PEOs are available to help employers through employment related situations. Many PEOs offer training programs that can increase employee productivity, some even offer specialized development programs to their clients. These value-added benefits include online and in-person training sessions for employees and managers, including pre-employment and hiring, regulatory compliance, workplace safety and terminations. The training seminars offered by PEOs benefit both the employer and employee, providing them with the necessary tools to succeed.
Regardless of which training options an employer implements, there is a clear correlation between productivity and training. In order to survive the unexpected and all too frequent shifts in business, it is necessary to have a well-prepared workforce. Training strengthens an employee's knowledge base, increases core skills that yield higher levels of productivity, creates a sense of loyalty and well being within the company and is an added benefit to help maintain and attract qualified individuals.
Conclusion:
Organizations realize business results by continuously developing and training their employees. The above discussed approaches provide ways and means of making training and development programs effective. An effective training and development program makes the employees committed to the organization and also makes them productive and successful. Employees will in turn be motivated to have self-development and will develop learning and sharing as a habit.