Chapter 2 Strategic Training McGraw-Hill/Irwin Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.

Introduction Business strategy – a plan that integrates the company's goals, policies, and actions. The strategy influences how the company uses: physical capital, financial capital, and human capital. Goals – what the company hopes to achieve in the medium- and long-term future.

Introduction (cont.) Strategy has a particularly strong influence on determining: 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 is 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.

Introduction (cont.) Strategy has a particularly strong influence on determining: Whether training is planned and systematically administered, provided only when problems occur, or developed 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.

Figure 2.1 - Evolution of Training's Role

The Evolution of Training’s Role Learning – the acquisition of knowledge by individual employees or groups of employees who are willing to apply that knowledge in their jobs in making decisions and accomplishing tasks for the company. Knowledge – what individuals or teams of employees know as well as company rules, processes, tools, and routines. It is either tacit knowledge or explicit knowledge.

The Evolution of Training’s Role (cont.) Explicit knowledge – knowledge that can be formalized, codified, and communicated. Tacit knowledge – personal knowledge based on individual experience that is difficult to explain to others.

The Evolution of Training’s Role (cont.) Key capabilities needed to implement learning strategies: Alignment of learning goals to the business goals. Measurement of the overall business impact of the learning function. Movement of learning outside the company to include customers, vendors, and suppliers. A focus on developing competencies for the most critical jobs.

The Evolution of Training’s Role (cont.) Key capabilities needed to implement learning strategies: Integration of learning with other human resource functions such as knowledge management, performance support, and talent management. Training delivery approaches that include classroom as well as e-learning. Design and delivery of leadership development courses.

Figure 2.2 - The Strategic Training and Development Process

The Strategic Training and Development Process Mission – the company's reason for existing. Vision – the picture of the future that the company wants to achieve. Values – what the company stands for. SWOT analysis – an analysis of the company's operating environment to identify opportunities and threats as well as an internal analysis of the company's strengths and weaknesses. The company has to consider its competition.

The Strategic Training and Development Process (cont.) Strategic training and development initiatives – learning-related actions that a company should take to help it achieve its business strategy.

Table 2.2 - Strategic Training and Development Initiatives and Their Implications

Table 2.3 - Questions to Ask to Develop Strategic Training and Development Initiatives

The Strategic Training and Development Process (cont.) Metrics are used to identify: trainees' satisfaction with the training program. whether the trainees' knowledge, skill, ability, or attitudes changed as a result of program participation. whether the program resulted in business-related outcomes for the company.

The Strategic Training and Development Process (cont.) Balance scorecard – means of performance measurement that provides managers with a chance to look at the overall company performance or the performance of departments or functions It considers four perspectives: customer, internal, innovation and learning, and financial.

Table 2.6 - The Roles and Duties of Managers in Companies That Use High-Performance Work Practices

Organizational Characteristics That Influence Training Top management support The CEO is responsible for vision, and being a sponsor governor, faculty, learner, and marketing agent. The degree to which a company's units or businesses are integrated affects the kind of training that takes place. Global presence. Business conditions.

Organizational Characteristics That Influence Training (cont.) Human resource management (HRM) practices – the management activities related to investments, staffing performance management, training, and compensation and benefits.

Organizational Characteristics That Influence Training (cont.) Staffing strategy – the company's decisions regarding where to find employees, how to select them, and the desired mix of employee skills and statuses. Human resource planning – identification, analysis, forecasting, and planning of changes needed in the human resource area to help the company meet changing business conditions.

Figure 2.4 - Implications of Staffing Strategy for Training

Organizational Characteristics That Influence Training (cont.) Extent of unionization Unions' interest in training has resulted in joint union-management programs designed to help employees prepare for new jobs. Staff involvement in training and development If managers are not involved in the training process, training may be unrelated to business needs.

Organizational Characteristics That Influence Training (cont.) Staff involvement in training and development If line managers are aware of what development activity can achieve, they will be more willing to become involved in it. They will also become more involved in the training process if they are rewarded for participating. An emerging trend is that companies expect employees to initiate the training process.

Table 2.7 - Implications of Business Strategy for Training

Table 2.7 - Implications of Business Strategy for Training

Table 2.7 - Implications of Business Strategy for Training

Models of Organizing the Training Department Centralized training - training and development programs, resources, and professionals are primarily housed in one location and decisions about training investment, programs, and delivery methods are made from that department. It helps companies better integrate programs for developing leaders and managing talent with training and learning during times of change.

Models of Organizing the Training Department (cont.) Faculty model Look a lot like the structure of a college. Training staff are experts in the areas in which they train. The training department's plans are easily determined by staff expertise. The training function may not meet the needs of the organization. Trainers may be unaware of business problems or unwilling to adapt materials to fit a business need.

Models of Organizing the Training Department (cont.) Customer model Responsible for the training needs of one division or function of the company. Training programs are developed more in line with the particular needs of a business group. Trainers are expected to be aware of business needs and to update courses and content to reflect them. Involves considerable time, programs may vary greatly in effectiveness, and design may be poor.

Models of Organizing the Training Department (cont.) Matrix model The trainer has the responsibility of being both a training expert and a functional expert. It helps ensure that training is linked to the needs of the business. Trainer gains expertise in understanding a specific business function. Trainers will have more time demands and conflicts because they report to two managers.

Figure 2.8 - The Corporate University Model

Models of Organizing the Training Department (cont.) The business embedded (BE) model is characterized by five competencies strategic direction, product design, structural versatility, product delivery, and accountability for result. It is customer-focused when compared to the traditional training department.

Table 2.8 - Comparison between a Business-Embedded Training Organization and a Traditional Training Department

Marketing the Training Function

Marketing the Training Function (cont.) Companies sell training services for the following reasons: Some businesses are so good at a particular aspect of their operation that other companies are asking for their expertise. Other companies aim training at their own customers or dealers. In some cases, the training department sells unused seats in training programs or e-learning courses.

Outsourcing Training Outsourcing – the use of an outside company that takes complete responsibility and control of some training or development activities or that takes over all or most of a company's training including administration, design, delivery, and development.

Outsourcing Training (cont.) Why companies outsource training: Cost savings. Time savings that allow a company to focus on business strategy. Improvements in compliance and accuracy in training mandated to comply with federal, state, or local rules. The lack of capability within the company to meet learning demands. The desire to access best training practices.

Outsourcing Training (cont.) Two reasons companies do not outsource their training are: The inability of outsourcing providers to meet company needs. Companies' desire to maintain control over all aspects of training and development, especially delivery and learning content.

Table 2.9 - Questions to Ask When Considering Outsourcing