1. Fattenin’ Frogs for Snakes? Company Investments in Job Skills Training David Knoke Song Yang Department of Sociology University of Minnesota University of Arkansas

2. It look me a long time, to find out my mistakes Took me a long time, to find out my mistakes (It sho’did man) But I bet you my bottom dollar, I’m not fattenin’ No more frogs for snakes. -Sonny Boy Williamson II

3. Human capital theory hypothesizes that no firm rationally invests in general job skills training because its competitors might hire the trained employees away before the firm could recover costs through higher worker productivity. Drawing from four explanatory perspectives, several research hypotheses were developed about the organizational & environmental source variation in company provided job skills training for core employees & tested with a national sample of U.S. work establishments.

4. Classic general/specific job skill hypothesis  Labor Economists  No company would rationally invest in increasing it’s workers general skills. General skills: reading, math.. Job specific skills: instruction in operating unique equipment not useful to other organizations

5. 4 PERSPECTIVES 1.Economic perspective – emphasize the importance of supply and demand. 2.Institutional perspective – concerned with complying with standards, expectations and/or requirements employee training. 3.Human Resource Management perspective – accentuate differences among employer’s practices, policies and philosophies regarding employee relations in the work place. 4.Internal Organization perspective – structures may constrain the skill requirements and training opportunities for employees in organizations with complex division of labor.

6. ECONOMIC H1The greater the employee use of advanced technologies to perform jobs, the more likely are organizations to invest in job skills training programs. H2The greater the increase in employee job skill requirements, the more likely are organizations to provide employee training. H3The greater the shortage of skilled labor, the more likely are organizations to provide employee training.

7. H4 The more developed the institutional training environment, the more likely are organizations to provide employee training. INSTITUTIONAL

8. HUMAN RESOURCE MGMT H5Organizations with an HRM employability strategy are more likely to provide employee training. H6Organizations with HRM job security or HRM contingent workforce strategies are less likely to provide employee training. HRM: Human Resource Management

9. INTERNAL STRUCTURES H7The more complex the internal structure the more likely are organizations to provide employee training.

10. DATA National Organizations Study(NOS) 1996- 1997 1002 establishments Sample reflects the establishments experienced by typical employees Interviewees were HR managers or functional equivalent.

11. Measures H1 – H 6 – Operationalized independent variables from survey responses. H7 – Used two measures of internal organizational structures –Internal labor market (hierarchy of jobs) –Formalization (written documents ) Control variables –3 organizational size measures (full time/part time) –9 dummy variable for the industry group Measure of analysis – multivariate equations

12. Results The 1996-1997 NOS offers strong evidence contradicting human capital theory expectations that employers will not invest in general job skills training of their employees. Only one hypothesis was supported by the results from the general skills training analysis.

13. The only significant predictor is HRM employability strategy (H5). Evidently indicating that companies with workforce policies emphasizing training and job skills helpful to their employees “wherever they may work” actually provide more general skills training than available in companies with either a job security or contingent workforce strategy. H5Organizations with an HRM employability strategy are more likely to provide employee training.

14. Other Dimensions Employee productivity is a joint function of both technical knowledge & attitude and behavior Social/general skill training will improve employee productivity Jobs are increasingly multidimensional

15. The human capital theory is inadequate for explaining the training investment decisions of contemporary workplaces. It is important to take a broad perspective in explaining sources of variation in training programs. Conclusion Researchers must recognize that work organizations regularly underwrite substantial amounts of general skills training for their workers, despite the possibility of “fattenin frogs for snakes” and having their investments in human capital stolen.