Effects of Employees Training on the Organizational Competitive Advantage

Far East Journal of Psychology and Business

Vol. 6 No. 1 January 2012

Effects of employees training on the organizational competitive advantage: Empirical study of Private Sector of Islamabad, Pakistan . Abeeha Batool York University (Schulich School of Business), Toronto, Canada Email: [email protected] Bariha Batool McMaster University, Hamilton, Ontario, Canada Email: [email protected] ABSTRACT

Non Government Organizations existed in Pakistan are performing noble work with welfare and rehabilitation to less fortune people. These organizations are facing problem of staff turnover, due to lack of motivation and low employee‟s satisfaction level. These two factors could be addressed through extending opportunities of learning, developing and imparting on- hand training and workforce experience. Training & Development facets include learning experience, training quality and training design. The effect of employees training has been analyzed as to how it brings competitive advantage to an organization. Variables were analyzed through the results of various scholars on the subjects. Result reveals positive relations between training & development and competitive advantage. On the origin of these outcome, it have be recommended that trainer quality, training design and learning experience shall be accorded due consideration for deriving job satisfaction. Learning ability and education shall be given importance upon selection of employees. To improve training outcome, feedback from the employer shall be obtained and improvement are instituted.

Keywords: Employee training, Competitive advantage, Training Paper Type: Research Paper INTRODUCTION

Private Organizations have stayed energetic in Pakistan since 1947. Their sole purpose is to repair and provide social welfare towards those less fortunate and marginalized people. The spread of has remain steady for about thirty years, but begin to rise in the 1980s and 1990s. From a macroeconomic perspective, private organization is advantageous to the populace of Pakistan in terms of engaging them in human and social development for the betterment of their nation. The two major issues regarding local and international private organizations are their increasingly high rate of staff turnovers and the ineffective performance. It is due to the dissatisfaction encountered by employees and negligence of senior managers in motivating their staff. Keep the employees and volunteers motivated is slightly a difficult task due to various reasons. Both non-profit and profit organizations are facing challenges requiring them to motivate employees to a higher degree (People In Aid, 2007). Challenges of employee motivation are triggered due to various reasons such as low job salary, complex environment, 59

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ambiguous duties, job insecurity, and most importantly few orientations as well as required on and off job trainings desirable to execute the job/tasks efficiently (People In Aid, 2007). Employee satisfaction has turn out to be the most important constituent of concern for the managers, decisional architecture hierarchy and employer around the globe. This is predominantly due to the tied correlation of employees‟ satisfaction with their job performances. It is a proven fact that the employees with satisfied jobs attain a higher rate of success while performing their job than those unsatisfied employees. Employee training remains one of the widely driven forces toward job satisfaction. Glance et al. (1997) frazzled that workforce trainings augments the employee commitment with the organizations and motivating the employees to perk up their work performance. New teaching-learning and training methods are arising due to the modern-day revolutionization in the economic, labor and technological world of workforce. These changes demand to put the theory and practice behind, while prioritizing the more global, integrated, flexible and vocational training. Apart from the basic theories, skills such as critical thinking, information assessment, drawing up work-plans and coordination of resources have risen on the demand graph for future trainees. This paper will propose a rather newer way of training employees by allowing them to gain experience through on-hand training and workforce experience (Tippelt et al., 2003). The major purpose of training is to upgrade the employee‟s abilities to cope with specific situations and performance of various specific tasks with a certain level of simplicity. Prior researches show that the organizations invest largely on the trainings of their employees to enhance their skills (Jones et al., 2008). The current study focuses on the relationship amongst the training and organizational competitive advantage in various NGOs of Pakistan. This study also outlines the long-term benefits of providing employees with effective workforce training while enhancing their modern skills. RESEARCH OBJECTIVES 

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This study aspires to uncover the affects of training on the organizational competitive advantage in non government organizational sector of Pakistan. The study is primarily designed to assess various facets of workforce trainings. To determine the impacts of employee trainings in context to create competitive advantage aggregate on organizational level. To evaluate the nature and correlation amongst the training of the employees and the organizational competitive advantage. To categorize the success and the perceived value of employees training which assists in up gradation of employee performance.

RESEARCH JUSTIFICATION

Employees frequently develop a greater sense of self-confidence, dignity, self-worth as well as well-being when they find themselves to be a valuable asset to the firm and society. Generally, as their productivity increases, their material gains undergo visible increments as well. These factors provide them with a sense of satisfaction based on their achieved company goals and 60



continue to encourage them to effort towards the enhancement of the organization to add value in its performance. The major issues triggered regarding organizational competitive advantage have been in the context of employee satisfaction, aspects which affects the employee performance, commitment and their retention. On the other hand, very little information has been attained that explores the linkage between employee coaching and performance boost up to create competitive advantage (Tansy & Cohen, 2001). Further research can be done in same context to explore the relationship between the employee satisfaction and workplace learning (Rowden & Conine, 2003). Sideburn-Thomas (2005) was well renounced for his study which revealed a high degree of performance and employee satisfaction considerately linked with the workplace training. However, this field of study remains under a minimized concern in the private sector. Although, exploring this topic will not only be beneficial for the practitioners, but it will also prove to be a great contribution the management research. Research Significance

This study investigates the most noticeable factors which affects the yield of the training process and includes the modules of training, quality of trainer and learners as well as preferences of learning styles. Course design is an important asset that helps design the learner‟s experience. The success of training programs is determined by exploring the important determinants of training. Training methods should be closely evaluated in order to measure its effectiveness and efficiency. This particular study will closely research the effects of training associated with employee satisfaction. Statement of the Problem

This study investigates the relationship flanked by the following variables; (1) employee training, and (2) organizational competitive advantage. Research Questions

Through undertaking the present study, the following research questions are to be answered: What association exists among employee trainings and organizational competitive advantage? What are the noticeable outcomes of training? LITERATURE REVIEW 

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Organizations invest a large amount of its capital for training purposes and the development of its employees. It is worthy of probing whether the training is advantageous for the trainees, and to what degree can the process of training be enhanced. Stephen & Bowley‟s (2007) study shows the link between training associated with employee‟s productivity which further leads toward employee and customer satisfaction. Baldwin & Johnson (1995) claim that lower levels of training will increase the chances of employee migration from one organization to another. However, higher degree of training increases employee satisfaction and loyalty towards the firm and decreases the chances of employee terminations and lay-offs. (Choo & Bowle y, 2007). 61



While considering a training process its essential to explore who is taking part in trainings, style and design of training and all about the main objectivity of the trainings being achieved or not (Choo & Bowley, 2007). Stephen & Bowley (2007) focus on the outcome of capital invested on training processes that further raise the efficiency of the employees and the organization. The quality of a trainer is also a key element which affects the training productivity (Coho & Bowleg, 2007). The course design for the training and the trainer selection speaks about the success and the failure of the training itself. Smits (2006) studied the effects of apprenticeship training by obtaining the required data through employee interviews which helped him determine the linkage between training value and training purpose. This learning are troubled by the philosophy of being workers an This learn reflected the philosophy that worker and organizational performance are the essential resulting factor from the behavior of the workers. Baan (2007) researched internal results and experiences of the guidance and growth program. Learning Experience:

Dougherty (2000) highlighted the different aspects of prior literary work on experience, job tenure, training and development and employee satisfaction. The modes and methods of training have begun to differ from the past and new techniques are being approached in the present. Training is becoming more hands-on in order to make it more practical for the employees. Parent (1995) examined the increment in wages due to effective training. It is also observed that the employers are rewarding creativity and skills get through the workforce training. Although, it has been establish that workers during training time and program be inclined to receive eighteen % smaller initial salary as different to other workers. This result is gained by setting up and about a opening pay equation or use the scheme of present work training. The subject of training and growth has paying attention scholar for fairly extended time. Greenhalgh et al. (1982) also believed that training and development was a key asset that helped enhance the job requirements met by employees. Trainer Quality:

Baliga & Pulin (1973) talked about the role of the trainer in team building process and elaborated on the dangerous points that could or had arose based on the trainers‟ actions. This was done by building up a Group Climate. This intervention was observed with the help of various observers and the study revealed the empathy process engendered in the group where it is also pointed out the efficacy of „Modeling‟ as a trainer -intervention. Schell (2006) researched and speaks about the programs those are used to train the employees to enhance their skills and hence it assists various centers for education affiliated with different universities at USA Ramachandran (2006) highlighted the levels of motivation of an Indian teacher. He claimed his conclusion by compiling the governmental essentials data, strategic and prior researches. Research shows that a teacher is expected to handle a far lower degree of diversity within the classroom as opposed to the government. Nile & Grip (2009) was interested in training both

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formally and informally. The part time employees learning process is diverge from the full time employees in context of formalization and informal modules. Training Design:

There are several different methods of training used in the workforce: learning principles and instructional techniques (Alvarez at el., 2004); goal setting (Holton, 2005) and self-management and decline anticipation strategy or policy (Thinner et al., 1991). Therefore, organizations should prepare their training programs ahead of time. Rautalinko & Lisper (2004) claim that certain training programs are designed to trigger specific reasons while others apply to general strengths and weaknesses of employees‟ before training. The two major types of trainings are off-job training which is conducted outside the office; and an on-job training which is conducted within the office environment. Successful and effective job trainings largely impact the productivity of employees during their present job. If an employee feels well-trained, they automatically commit to the organization. Coho & Bowleg (2007) mentioned some of the most noticeable independent variables affecting training and development. These factors include: training design, trainers quality, and learner‟s experience from the training session. The quality of training is generally influenced by the trainer‟s experience, knowledge and motivation. Course design of training specifies whether the training is designed for on-the-job, off-the-job, or whether the course is rather specific or general in nature. An employee‟s level of confidence reflects the efficiency and effectiveness of the training which further increases the competitive advantage. Competitive Advantage

Competitive plan is the art of enhancing and increasing recourses in order to get better results over opponents. Moreover strategic business unit is estimated by thy position of industry and its performance. In this way it become difficult to imitate resources and it also not focuses on barriers. Competitive strategy is about creating and maintaining competitive advantages over rivals (Porter, 1980). Further, efficiency rents of a strategic business unit (SBU) are said to be largely determined by the attractiveness of the industry (together with its entry and exit barriers) and the competitive position of the SBU within that industry. What matters is achieving a cost or differentiation position (industry wide or in a niche) which can be defended against rivals. In order to achieve such an attractive position a firm must be able to execute the necessary discrete activities (Porter, 1985) in a more effective and/or more efficient way than its competitors. This positioning only explains part of the differences in performance within an industry: a superior performer possesses not only an attractive position, but also unique and hard to imitate resources (Dierickx and Cool, 1989; Wernerfelt, 1984). Competitive strategy thus becomes the art of nurturing, accumulating and deploying rent-yielding resources, rather than a sole focus on erecting entry barriers or deceiving one‟s product-market competitors (Foss, 1996) Strategy for a competitive advantage

Better comprehension and learning becomes an essential ingredient for the progress of any organization. It also increase and facility workers, team and thus lead towards success and continues betterment in business. The level of interest emphases the innovation effectiveness and betterment of orgeranzition.

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Researchers and practitioners have harassed the significance of the learning organization as a plan to improve performance, and as the only sustainable competitive benefit for organizations. Responding to an increasingly unpredictable and turbulent business environment Emphasis has also been placed on effective training and specifically on transfer of training as a strategy for competitive advantage. The confused environment has increased stress on transfer of training. Because organizations are forced to restrain performance. Initially thy put the investment in training for impotent in progress and performance but it result in transfer of training. But resent studies show that a lot of trainees do not transfer after training so its result in better performance. There are some orange rations which express their apprehensions over value of training programs. This research show that transfer of training its an essential factor and lack of training is important issue in present business cultural environment. HYPOTHESIS DEVEOPMENT

H1: Employee training has absolutely considerable effect on organizational competitive advantage Integration between employee trainings and competitive advantage

Employees who are given empowerment and have capacitated by the organization to resolve to resolve the conflicted matters and adjoined to make improvements and enhancements in processes are needed to be tailored with the specific skills which is necessary to get their efforts succeeded (Miller, 1992). Quality managers are increasingly realizing the importance and need of non technical skills as the foundations of enhancement in quality. Aspects/ areas critical to create some extra advantage consider four major interpersonal and analytical skills conduced into leadership skills; work process skills; teamwork skills and customer partnership skills (Zenger, 1989). With a positive look upon the leadership skills, managers have a crucial role in communicating the quality message to their employees. Managers need to hone their skills of focusing employees on quality objectives, obtaining their commitment, and sustaining the momentum. By sharpening these leadership skills, they can make the quality message more urgent and personal to everyone (Zenger, 1989). Leadership can and must occur at every stage within the quality improvement effort (Katter, 1991). The author believes that all employees can benefit from this type of training. By increasing work process skills, all employees can make better use of their individual expertise and become actively committed to the quality improvement process (Zenger, 1989). In context of a deep analysis on work systems and processes managers always exposes themselves in becoming more responsible towards responsiveness and strategize accordingly consistent with the needs of consumers/end. Consequently it results into customer satisfaction and produces loyalty as well as line of customers. Managerial positions of front line can also participate and work along consistent and continuous improvement where convolution and squanders can be skipped and adding value to Aid the performance which exceeds it towards customer satisfaction (Zenger, 1989). Through enhancement and involvement with their teamwork and skills it‟s easy for managers to take a quality initiative by focusing on the procedures (Zenger, 1989).For Teamwork, training is obligatory to provide reliable meaning and clear payback to organization.

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As a final point, feedback and partnership skills from customers assists the employees to grasp how to initiate partnerships with internal as well as the external consumers and then formulate a plan which meets their needs without compromising and exaggerating (Zenger, 1989).Employees should learn the skills of uncovering the expectations of their customers and responsiveness to customer grievances. By better serving their customers, quality is enhanced. RESEARCH FRAMEWORK

Prior studies and research on training sets a platform to design a model in which employee training has been sub faceted in three dimensions i. Learning experience ii. Trainer quality iii. Training design Where-as employee training is the independent variable and competitive advantage is taken as dependent variable which finally outcomes into organizational performance and employee satisfaction ORGANIZATIONAL

LEARNING EXPERIENCE

TRAINER QUALITY TRAINING DESIGN

PERFORMANCE

EMPLOYEE

COMPETITIVE

TRAINING

ADVANTAGE

EMPLOYEE SATISFACTION

METHODOLOGY The study population consists of 1300 low-middle level employees; however, 250 employees were selected for data collection using criterion sampling technique. Thus, a total of 250 questionnaires were distributed among the respondents but only 133 questionnaires were returned with useable data reflecting a response rate of 53.2%. The study respondents were lowmiddle level employees belonging to private organizations in Islamabad. All of the private setups were certified by the Pakistan Centre for Philosophy for good internal governance, financial management, and program delivery. The respondents were chosen by considering their personal characteristics like age range (30-50), gender (50% male and 50% female), qualification (degree level), number of years with the organization (minimum 2), and number of trainings attended (minimum 2). Instrument & Measure

The study adopted a structured questionnaire developed by Choo & Bowley (2007) used in their study pertinent to training outcomes. The questionnaire was amended according to the study requirements. Twenty eight more items were included for identifying impact of employee trainings on the competitive advantage. The questionnaire comprised of two sections. The first section contains questions regarding personal information of the respondents, while in second section, the respondents were asked to express their perceptions regarding the study variables. The instrument contained pertinent questions regarding the study variables which have been addressed through 56 statements to which the respondents have been asked to express their judgments using a five point Likert scale ranging from strongly disagree (1) to strongly agree (5). 65



Pilot Testing

To validate the instrument, a pilot test was carried out at a convenience sample of 50 respondents. The returned questionnaires helped us refine the survey instrument. To improve the comprehensibility and clarity of the questionnaire, difficult words were substituted with simpler words where possible. Also, a few other items were reworded to ensure that the understanding level is more appropriate. The remaining respondents were contacted later after redesigning the instrument as required. Results of the pilot testing are discussed below in study findings. Procedure

The survey instrument was distributed among the targeted respondents using various references e.g. managers of the departments. Questionnaires were given to the managers who were requested get them filled. Sufficient support was provided managers who shared it with the study respondents to understand and answer the asked questions accurately. Only one questionnaire was given to each respondent. Questionnaire comprises questions related to all independent and dependent variables. Demographic section covers questions related to age, gender, education and experience etc. Respondents were facilitated during questionnaire filling process for correct data acquisition. Few filled questionnaire were rejected because of double entry, keeping questions blank and other problems. Extent of Researchers Interference

Researcher ensured it to the best possible that the data collected is unbiased and reliable data. However, researcher had to interfere during the collection of data. As few respondents‟ employees remained careless in filling the mentioned fields therefore I helped them in filling the questionnaire. Few respondents‟ employees did not fill the questionnaire completely. Thus for getting the questionnaire refilled by the employees. Generally employees committed mistakes because of not concentrating on the questions and double entry or no entry for any question in the questionnaire. Data Analysis

Only quantitative technique was used to analyze data. Statistical Package for Social Sciences (SPSS) was employed for data analysis. Descriptive frequencies, percentage, standard deviations, mean, average, correlation, regression and ANOVA were drawn using SPSS.

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Correlations TLE

TQ

TD

CA

TLE

Pearson Correlation

1

TQ

Pearson Correlation

.974**

1

TD

Pearson Correlation

.956**

.928**

1

CA

Pearson Correlation

.847**

.769**

.767**

1

**. Correlation is significant at the 0.01 level (2-tailed). The above inserted table depicts correlation analysis between three independent variables including TLE,TQ,TD and a dependent variable namely CA. This table shows that value of TLE in relation to TLE is 1. The value of TQ in relation to TLE is .974 and in relation to TQ is 1. The value of TD in relation to TLE is .956, in relation to TQ is .928 and in relation to TD is 1. The value of CA in relation to TLE is .847, in relation toTQ is .769, in relation to TD is .767 and in relation to CA is 1. All values show that there is a significant positive relationship between independent variables TLE, TQ, TD and a dependent variable CA. Regression Model Summary

Model

R

R Square

Adjusted R Square

1

.897a

.804

.803

Std. Error of the Estimate .26829

a. Predictors: (Constant), TD, TQ, TLE The above inserted table depicts model summary of regression analysis between three independent variables including TLE,TQ,TD and a dependent variable namely CA. The table shows that value of R is .897, the value of R square is .804, the value of adjusted R square is .803 and the value of standard error of the estimate is .26829. Positivity and significance of all values shows that model summary is also significant and therefore give a logical support to the study model. ANOVAb Sum of Squares

df

Mean Square

F

Sig.

Regression

99.376

3

33.125

460.208

.000a

Residual

24.185

336

.072

Total

123.561

339

Model 1

a. Predictors: (Constant), TD, TQ, TLE b. Dependent Variable: CA

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The above inserted table depicts ANOVA (Analysis of Varaicnce) of regression analysis between three independent variables including TLE,TQ,TD and a dependent variable namely CA. On one hand table shows that in regression, the value of sum of squares is 99.376, the value of df is 3, the value of mean square is 33.125, the the value of F is 460.208, and the significance value is .000. On the other hand in residual, the value of sum of squares is 24.185, the value of df is 336, the value of mean square is .072. Hence making a total of 123.561 as a sum of squares and 339 as a df. Positivity and significance of all values shows that model summary is also significant and therefore give a logical support to the study model. Coefficients

Model 1

a

Unstandardized Coefficients

Standardized Coefficients

B

Beta

Std. Error

t

Sig.

-2.491

.013

(Constant) -.350

.140

TLE

3.179

.175

2.475

18.151

.000

TQ

-1.577

.148

-1.142

-10.637

.000

TD

-.588

.090

-.539

-6.550

.000

a. Dependent Variable: CA The above inserted table depicts coefficient of regression analysis between three independent variables including TLE,TQ,TD and a dependent variable namely CA. The table shows that in constant, the value of B is -.350, the value of standard erroe is .140, the value of t is -2.491, and the significance value is .013. In TLE, the value of B is 3.179, the value of standard erroe is .175, the value of Beta is 2.475, the value of t is 18.151, and the significance value is .000. In TQ, the value of B is -1.577, the value of standard erroe is .148, the value of Beta is -1.142, the value of t is -10.637, and the significance value is .000. In TD, the value of B is -.588, the value of standard erroe is .090, the value of Beta is -.539, the value of t is -6.550, and the significance value is .000. The table contains both positive as well negative values. It further shows that independent variables are TLE, TQ, TD. DISCUSSION & CONCLUSION

The learning can be accomplished in terms of relationship among the trainings of employees and competitive advantage. This study aims to investigate in measuring the training needs of the employees at privet and the organizations by applying the tools which measures the factors which affects the competitive advantage. It has also been endeavored to evaluate the role of training process on crafting the organizational competitive advantage with satisfaction of employees and for the overall performance of organization. Organizations mostly invests a lot on their human capital to fulfill their training needs and improve their skills generally by organizing training programs/modules to make their competencies in accordance with the needs of changing world which finally contributes to gain the competitive advantage. Findings of this study enlightens the effective and compatible features of employee training by using and modeling quality dimensions with training module to cover the quantitative and qualitative aspects. This study of linking organizational competitive advantage in context of employee performance with 68



It is estimated that workers cannot produce better achievement till than they are contented with their employment and it is because of suitable training and progress. Training and employee progress completely is linked with managerial competitive advantage. A good chance of training motivates worker contribution and promotes capabilities. In review, the present study shows that focus on training promote competitive advantage in context of job satisfaction and performance, decrease non-attendance and lower suspend intention. RECOMMENDATION

On the basis of result obtained from the at hand outcome , I wish to suggest the following recommendation to which private sectors need to think: 1. We must know that training components are usually familiar drivers of winning job fulfillment, beside other factors and ground rules for achievement of private sector, but unluckily we are least bearing in mind this association in its real aspect . Therefore the higher-ranking administration should keep their workers content with their employment to achieve extensive results. 2. It is in general practical that there is short of having proficient move towards the enrollment and assortment procedure of the workers that afterward create troubles for the employee to perform according to prospect-As end result, training programs are helpless for these workers to enhance their performance and ultimately the organization suffers from loss. It is therefore required for the Top management to concentrate on recruitment of those employees who possess positive attitude 3. Those persons selected for delivering trainings who are well trained in this line of work, and know how to meet with hope as well as necessities of the employees. 4. The course inside having pertinent and matter-of-fact in sequence with examples can help the trainees to understand. Therefore, the design of the training should be prepared in the manner which is helpful and most practical. 5. Feedback of the knowledgeable workers is very necessary for the result of training program. LIMITATIONS OF THE STUDY

The current study has some reservations as it does possess some limitations. The limitations are as under: The respondents were equally divided on basis of gender but due to unavailability of female respondents the gender biasness created. Perhaps the response would be different if I could get free access to the female participants The Sample size of the respondents was not enough, and all the 250 questionnaires were not homecoming with useable data. Perhaps the findings of the may be different if I could have received all questionnaires properly filled. PRACTICAL IMPLEMENTATIONS

The drivers of job satisfaction generally considers the facets of training in aspects of trainer quality, course design and learning experience but due to some social and non professional experiences at private organization its real essence can be ignored some times. Somehow the senior management focused and considers their employees to be very much satisfied with their 69



job roles and satisfied so they can come up with the best out of their abilities resultant in the form of outcomes. The main and general root cause of this is due to lacking of professional managerial approach in regard of recruitment and selection of employees which in future shuttles down towards employer employee relations and variance in performance of employees according to expectations. As a result, training programs are helpless for such employees to boost their performance and ultimately the organization suffers from loss. Hence it‟s requisite for the top executives of the organization to concentrate and involved keenly while recruiting for the organization. Keep a concentrated observing eye on the talent who possesses the professional approach and seriousness towards the profession or job. Thus, select the appropriate trainer/ resource person who must be fluent n communication, well versed, professional as well as grasps and understands how to cope with the challenges as well as fulfills the requirements and needs of the trainees/ participants. The enriched course contents having relevant and practical information with examples can help the trainees to understand. Consequently it is recommended that before going for delivering training, design of the training should be prepared in the manner which is effective and most useful. Feedback of the experienced participants is very necessary for the outcome of training program and before the conduction of training program the trainer must know about knowledge and expectations of the experienced participants. FUTURE RESEARCH

Today‟s study discovered the positive and noteworthy association between the trainings its sub facets and competitive advantage of an organization. However further studied can be extended towards the exploration of relationship among the training and organizational loyalty with intervening variables like office environment, promotion policy, allowances and perks etc. apart from this future studies can be done with, semi governmental and private sectors in SME as well as in industry sector. REFRENCES

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Effects of Employees Training on the Organizational Competitive Advantage

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