Chapter 2 Strategic Training

Introduction: Business Strategy A plan that integrates the company’s goals, policies, and actions The strategy influences how the company uses: physical capital (plants, technology, and equipment) financial capital (assets and cash reserves) human capital (employees) The business strategy helps direct the company’s activities to reach specific goals

Strategy impacts training with a strong influence on determining: (1 of 2) The amount of training devoted to current or future job skills The extent to which training is customized for: the particular needs of an employee, or developed based on the needs of a team, unit, or division Whether training is restricted to specific groups of employees or open to all employees

Strategy impacts training with a strong influence on determining: (2 of 2) Whether training is: planned and systematically administered, or provided only when problems occur, or spontaneously as a reaction to what competitors are doing The importance placed on training compared to other human resource management practices such as selection and compensation

Evolution of Training’s Role Training Event Performance Result Learning Emphasis Create and Share Knowledge Business Need

Evolution of Training’s Role: Learning The acquisition of knowledge by individuals, employees, or groups of employees Willing to apply that knowledge in their jobs in making decisions and accomplishing tasks for the company

Evolution of Training’s Role: Knowledge Human and Social Knowledge: What individuals or teams of employees know or know how to do Structured Knowledge: Company rules, processes, tools, and routines Explicit Knowledge: Knowledge that can be formalized, codified, and communicated Tacit Knowledge: Personal knowledge based on individual experience Difficult to explain to others

Intellectual Capital Cognitive Knowledge (know what) Advanced Skills (know how) System Understanding and Creativity (know why) Self-Motivated Creativity (care why) 4

The Strategic Training and Development Process: Business Strategy Strategic Training and Development Initiatives Training and Development Activities Metrics that Show Value of Training Mission Values Goals Diversify the Learning Portfolio Improve Customer Service Accelerate the Pace of Employee Learning Capture and Share Knowledge Use Web-Based Training Make Development Planning Mandatory Develop Websites for Knowledge Sharing Increase Amount of Customer Service Training Learning Performance Improvement Reduced Customer Complaints Reduced Turnover Employee Satisfaction

Decisions a company must make about how to compete to reach its goals: 1. Where to compete? In what markets, industries, products will we compete? 2. How to compete? On what outcome or differentiating characteristic will we compete? 3. With what will we compete? What resources will allow us to beat the competition? How will we acquire, develop, and deploy those resources to compete?

Strategic Training and Development Initiatives and their Implications (1 of 4) Diversify the Learning Portfolio Use new technology for training Facilitate informal learning Provide more personalized learning opportunities Expand Who is Trained Train customers, suppliers, and employees Offer more learning opportunities for non-managerial employees Accelerate the Pace of Employee Learning Quickly identify needs and provide a high-quality learning solution Reduce the time to develop training programs Facilitate access to learning resources on an as-needed basis

Strategic Training and Development Initiatives and their Implications (2 of 4) Improve Customer Service Ensure that employees have product and service knowledge Ensure that employees have skills needed to interact with customers Ensure that employees understand their roles and decision-making authority Provide Development Opportunities and Communicate to Employees Ensure that employees have opportunities to develop Ensure that employees understand career opportunities and personal growth opportunities Ensure that training and development addresses employees’ needs in current job as well as growth opportunities

Strategic Training and Development Initiatives and their Implications (3 of 4) Capture and Share Knowledge Capture insight and information from knowledgeable employees Logically organize and store information Provide methods to make information available Align Training and Development with the Company’s Strategic Direction Identify needed knowledge, skills, abilities, or competencies Ensure that current training and development programs support the company’s strategic needs

Strategic Training and Development Initiatives and their Implications (4 of 4) Ensure That the Work Environment Supports Learning and Transfer of Training Remove constraints on learning Dedicate physical space to encourage teamwork, collaboration, creativity, and knowledge sharing Ensure that employees understand the importance of learning Ensure that managers and peers are supportive of training, development, and learning

Example: SunU’s Analysis to Align Training with Business Strategy (1 of 3) Customers Who are our customers and how do we work for them? Organization What is the nature of practices required to complete our mission? Products and Services How do we ensure that our products and services meet strategic requirements?

Research and Development Example: SunU’s Analysis to Align Training with Business Strategy (2 of 3) Research and Development How do we stay current in the training and learning fields and use our knowledge in these areas? Business Systems What are the processes, products, tools, and procedures required to achieve our goals?

Example: SunU’s Analysis to Align Training with Business Strategy (3 of 3) Continuous Learning How do we recognize that learning at Sun Microsystems is continuous, is conscious, and comes from many sources? Results How do we obtain results according to our customers’ standards?

Metrics and Training: Balanced Scorecard (1 of 2) Measurements that look at performance from the perspective of: internal customers external customers employees shareholders

Metrics and Training: Balanced Scorecard (2 of 2) Four different perspectives are considered: Customer (time, quality, performance, services, cost) Internal (processes that influence customer satisfaction) Innovation and Learning (operating efficiency, employee satisfaction, continuous improvement) Financial (profitability, growth, shareholder value)

Organizational Characteristics That Influence Training Roles of Employees and Managers Top Management Support Integration of Business Units Global Presence Business Conditions Other HRM Practices Extent of Unionization Staff Involvement in Training and Development

Encouraging Continuous Learning The Roles and Duties of Managers in Companies That Use High-Performance Work Practices (1 of 3) Managing Alignment Clarify team goals and company goals Help employees manage their objectives Scan organization environment for useful information for the team Encouraging Continuous Learning Help team identify training needs Help team become effective at on-the-job training Create environment that encourages learning

Coordinating Activities The Roles and Duties of Managers in Companies That Use High-Performance Work Practices (2 of 3) Coordinating Activities Ensure that team is meeting internal and external customer needs Ensure that team meets its quantity and quality objectives Help team resolve problems with other teams Ensure uniformity in interpretation of policies and procedures

Facilitating Decision-Making Process The Roles and Duties of Managers in Companies That Use High-Performance Work Practices (3 of 3) Facilitating Decision-Making Process Facilitate team decision making Help team use effective decision-making processes Creating and Maintaining Trust Ensure that each team member is responsible for his or her work load and customers Treat all team members with respect Listen and respond honestly to team ideas

Other HRM Practices The type of training and resources devoted to training are influenced by the strategy adopted for two HRM practices: Staffing Human Resource Planning

Staffing Strategy Influence on Training Two aspects of a company’s staffing strategy influence training: The criteria used to make promotion and assignment decisions (assignment flow) The places where the company prefers to obtain human resources to fill open positions (supply flow)

HR Planning Influence on Training HR planning allows the company to anticipate the movement of human resources in the company HR plans can help identify where employees with certain types of skills are needed in the company Training can be used to prepare employees for: increased responsibilities in their current job promotions, lateral moves, transfers downward job opportunities that are predicted by the human resource plan

Implications of Business Strategy for Training (1 of 2) Emphasis How Achieved Key Issues Training Implications Concentration Increased market share Reduced operating costs Create or maintain market niche Improve quality Improve productivity Customize products or services Skill currency Development of existing work force Team building Cross-training Specialized programs Interpersonal skill training On-the-job training Internal Growth Market development Product development Innovation Joint ventures Add distribution channels Expand global markets Modify existing products Create new products Joint ownership Create new jobs Create new tasks Communication of product value Cultural training Conflict negotiation skills Manager training in feedback and communication Technical competence in jobs

Implications of Business Strategy for Training (2 of 2) Emphasis How Achieved Key Issues Training Implications External Growth (Acquisition) Horizontal integration Vertical integration Concentric diversification Acquire firms for new market access Acquire firms to supply or buy products Acquire any firm Integration Redundancy Restructuring Determining capabilities of acquired employees Integrating training systems Team building Disinvestment Retrenchment Turnaround Divestiture Liquidation Reduce costs Reduce assets Generate revenue Redefine goals Sell off all assets Efficiency Motivation Goal setting Stress management Time management Leadership training Outplacement assistance Job-search skills training

Models of Organizing the Training Department Faculty Model Customer Model Matrix Model Corporate University Model Virtual Model

Training Specialty Areas The Faculty Model Training Specialty Areas

The Customer Model Business Functions

Production and Operations The Matrix Model Training Specialty Areas Production and Operations Marketing Business Functions

The Corporate University Model Historical Training Problems Excess Costs Poor Delivery and Focus Inconsistent Use of Common Training Practices Best Training Practices Not Shared Training Not Integrated or Coordinated Leadership Development Programs Training Advantages Dissemination of Best Practices Align Training with Business Needs Integrate Training Initiatives Effectively Utilize New Training Methods and Technology Product Development Sales and Marketing Human Resources Operations New Employee Programs

Virtual Model (Virtual Training Organizations) Virtual training organizations operate according to three principles: Employees (not the company) have primary responsibility for learning The most effective learning takes place on the job, not in the classroom For training to translate into improved job performance, the manager-employee relationship (not employee-trainer relationship) is critical

Characteristics of Virtual Training Organizations: A virtual training organization is customer focused Takes more responsibility for learning and evaluating training effectiveness Provides customized training solutions based on customer needs Determines when and how to deliver training based on customer needs Leverages resources from many areas Involves line managers in direction and content

Tactics to Market the Training Function (1 of 2) Involve the target audience in developing the training or learning effort Demonstrate how a training and development program can be used to solve specific needs Showcase an example of how training has been used within the company to solve specific business needs

Tactics to Market the Training Function (2 of 2) Identify a “champion” who actively supports training Listen and act on feedback received from clients, managers, and employees Advertise on e-mail, on company websites, in employee break areas Designate someone in the training function as an account representative between the training designer and internal customer