Effect Of Training On Employee Performance: Impact On Organizational Profit And Budgetary Considerations

Impact of employee training and development on organizational profit

Discuss about the Effect of Training on Employee Performance.

In the current business scenario, it is important for the business organizations to have trained and equipped employees in place. This is due to the reason that in the present competitive business environment, one of the major sources of the business organizations to gain competitive advantages is having skilled and trained employees (Nda and Fard 2013). In this case, training and development program plays an important and effective role in enhancing the skill sets of the employees. However, initiating the process of training and development is also having number of factors to be considered such as the cost involved. Thus, proper consideration of the relevant factors in implementing the training and development program will help in increasing the organizational profit.

This essay will discuss about the major impacts of the training and development program on the organizational profit. In addition, the budgetary constraints such as cost involved in sourcing the infrastructure for training facilities will also be discussed in this report. Furthermore, these factors will also be evaluated from the perspective of my organization, TechnologyOne. In accordance to the discussed factors, a few changes will also be proposed.

As stated in the given article, Jenny Dearborn stated that one of the major impacts of the initiation of the employee training and development program for the organization is the increase in the chance of generation of innovative ideas. This is due to the reason that employee training and development program will enable the employees to have more skill sets and expertise in accordance to the present business requirement. In addition, it is also stated by Jenny Dearborn that initiation of employee training and development program will further help the employees to enhance their effectiveness by the means of learning scope. Thus, the more will be the skill set and expertise of the employees in their workplace, the more they will be able to generate innovative ideas that will further enhance the organizational competitiveness and profit in the market (Sung and Choi 2014).

However, on the other factors also that helps the organizations in generating profit from the initiation of the employee training and development program. One of these factors is enhancing the employee performance. This is due to the reason that if the employees are being given proper training and development facilities in their workplace, then they will be able to further enhance their organizational effectiveness. According to Elnaga and Imran (2013), with the help of the employee training and development program, employees will be able to cope up with the current business environment and factors effectively. This is due to the reason that, according to the authors, employee training and development program are being designed in accordance to the current organizational requirement. Thus, according to the authors, employees will always stay updated with the change in business scenario. Thus, the more updated will be the skill sets of the employees, the more will be their performance and effectiveness in their workplace. Organizations can enhance their profitability if they have properly skilled and updated workforce in place.

Budgetary considerations in human resources

According to Jehanzeb and Bashir (2013), another major impact on the organizational profit with the help of employee training and development is enhancement of the team working and team effectiveness among the employees. This is due to the reason that training and development program for the employees also covers the team working skills of them. The authors have also stated that in the current business scenario, team work is being given major focus and concentration. Thus, covering this aspect in the training and development program for the employees can help the organization in promoting team culture. This will also help the organization in enhancing the coordination and cooperation among the internal stakeholders. According to the authors, the more will be the level of coordination and cooperation among the internal stakeholders, the more will be the organizational effectiveness. This will further help the organizations to enhance their performance and profitability.

Initiating strategies in regards to the human resource management involves budgetary considerations. This is due to the reason that human resource management involves different elements and factors that are having the requirement of investment. One of the major budgetary considerations in the human resource management is developing the technology used in the organization (Keep 2014). This is due to the reason that in the current approach of training and development program, employees are majorly being offered digital mode of learning. This helps the employees to get technologically equipped and trained in their learning process. In this case, a certain cost is required in developing the technologies for the employees. In the current time, the cost for digitizing the training facilities is also increasing due to the rapid change and evolution in the technological sector. For instance, employees are now being given training through virtual mediums. This was not present in the earlier training approach. Thus, the extra cost is added in the cotemporary training programs.

On the other hand, calculating of cost is one of the complex tasks for the business organizations. This is due to the reason that it is difficult for the organizations to measure the exact return on investment from the initiation of the training and development facilities. It depends to the extent of effective performance by the employees in the organization. With the help of the employee training and development program, performance and effectiveness of the employees can be enhanced but it cannot be measured about exact improvement of the employee performance. Thus, a cost is associated with the training program for the organization. The cost of time and investment will be more for the organization if the performance of the employees cannot meet the desired level. On the other hand, if the performance of the employees exceeds the desired level then the cost of organization will be less and return on investment will be more. Thus, it can be concluded that it is important for the business organizations to have contingency source of funds in order to adjust with the uncertain cost associated with the employee training and development program.

Another major cost that is associated with the employee training and development program is the cost of employee attrition. This is due to the reason that in the given article it is stated that in the current time, employees does not see their career being developed by staying in single organization. They have the objective of enhancing their skill sets and looking for new job opportunities in order to develop their career. Thus, the current business organizations also have the provision of involvement of cost of employee attrition (Rahman and Nas 2013). With the help of the employee training and development program, the skill sets of the employees will get enhanced and this increases the chance of changing job for the employees. Thus, the contemporary business organizations are facing the risk of attrition of employees. This will lead to the loss of investment on providing training for the employees along with loss of human resources for the organizations.

Thus it can be concluded that it is difficult to measure the budget for the employee training and development program. It is difficult due to the reason that enhancement of the employee performance after the implementation of the training and development program is uncertain and it is depending on the individual aspects of the employees. It is important for the contemporary business organizations to have contingency reserve in order to initiate the process of employee training and development program. This reserve can help the organizations in adjusting with the potential cost in the training program.

For last two years I am working with TechnologyOne, Australia. They are one of the leading software companies in the Australian region and are having extensively strategy of human resource management. One of the major human resource management strategies being identified by me in this organization is the involving the entire organizational levels in the training program. This is being done in order to engage the top and lower level hierarchy in the process. The major advantage that is being gained from this approach is effective relationship and communication between the lower and upper management level. Issues and challenges with the lower level employees are being effectively mitigated and identified by the upper level management. This also ensures that the training program is in accordance to the actual need and requirement of the employees.

However, in this case, one of the major challenges being faced by the upper level managers is regulating the attrition rate of the employees. This is due to the reason that upper level managers can identify the challenges and issues faced by the employees in their training process but they are having no control over the reasons for leaving the organization by the employees. Thus, it is identified by me that though the training and development process is being initiated in accordance to the requirement of the employees, but the level of attrition rate is not reducing. This is denoting that employees are having different reasons to leave their organization apart from just having being trained and equipped.

It is recommended that upper level managers in TechnologyOne should also consider the personal attributes of the employees in designing the training and development process. This is due to the reason that in major cases it is seen by me that employees are leaving the company for personal reasons and not for the organizational reasons. Thus, it is being identified that though the training and development program is effective and efficient enough in enhancing the skill sets of the employees but it is not meeting the personal aspirations of them. In accordance to this factor, it is recommended that the personal aspirations such as the expected earnings of the employees should also be considered by the managers. According to me, if the employees can be provided with the best in the industry financial benefits, then the rate of the employee attrition can get reduced. This is due to the fact that employees majorly leave their existing workplace for better pay structure. If they are being offered with the best in the industry structure, then employees will be less motivated in leaving the organizations.

Conclusion

It is concluded that there are number of advantages that can be gained by the business organizations from the initiation of the human resource management including the employee training and development program. This essay discussed about number of advantages of initiating employee training and development program that can further help the organizations in increasing their profitability. This essay also discussed about some major budget related issues being faced by the organizations in initiating employee training and development program. The identified factors are reflected on the basis of my own working experience in TechnologyOne

Reference

Elnaga, A. and Imran, A., 2013. The effect of training on employee performance. European Journal of Business and Management, 5(4), pp.137-147.

Jehanzeb, K. and Bashir, N.A., 2013. Training and development program and its benefits to employee and organization: A conceptual study. European Journal of business and management, 5(2).

Keep, E., 2014. Corporate training strategies: the vital component?. New Perspectives, pp.109-125.

Nda, M.M. and Fard, R.Y., 2013. The impact of employee training and development on employee productivity. Global Journal of Commerce and Management Perspective, 2(6), pp.91-93.

Rahman, W. and Nas, Z., 2013. Employee development and turnover intention: theory validation. European journal of training and development, 37(6), pp.564-579.

Sung, S.Y. and Choi, J.N., 2014. Do organizations spend wisely on employees? Effects of training and development investments on learning and innovation in organizations. Journal of organizational behavior, 35(3), pp.393-412.