1. System Dynamics Group “We need to train more”: a dynamic model on the impacts of a training policy implementation Babak Bahaddin bbahaddin@Albany.edu Felippe Cronemberger fcronemberger@Albany.edu SUNY University at Albany December 4th, 2015

2. System Dynamics Group 1.Background 2.Theory 3.Model 4.Policies 5.Conclusion The Context

3. System Dynamics Group AuthorsContributionTitle Felippe CronembergerLearning Systems Lead PhD Student (University at Albany) Babak BahaddinModeler PhD Student (University at Albany) Dr. Edward PavurHuman Resource Expert Adjunct Professor (UALbany) Consultant in Management Service Dr. Rod MacDonaldSystem Dynamics Expert Senior Research Associate (University at Albany) Team Members

4. System Dynamics Group Relevance Micro(Kirkpatrick, 1959) http://www.kirkpatrickpartners.com/OurPhilosophy/TheKirkpatrickModel vs Macro(?)

5. System Dynamics Group I.International branch of an american company Information Technology Services Expanding operations regionally II.~ 8 hours per employee/FY. Recently installed e-learning platform. Mostly compliance training and “self- enrollment”. The Problem/Case

6. System Dynamics Group The meeting -Training hours in the market are much higher than ours. -Our Productivity will grow if we train more. -From now on, our training policy is 45 hours instead of 8 hours. -Training policy is mandatory for everyone. We need to train more!!!

7. System Dynamics Group Reference Mode

8. System Dynamics Group Then something went wrong … Felippe: Dear Associates, from now on you have to train 45 hours. Employees:

9. System Dynamics Group New Hirers: That is a perfect chance to prove myself in the company. Three different response Experienced Employees: Now beside all my tasks I have to train. Deep breath. More Experienced Employees: What? You must be kidding. I do not need any training. I know my job. I am not doing this.

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11. Clark Hull’s Theory Hull, C. L. (1950). Simple qualitative discrimination learning. Psychological Review, 57, 303-313. The general learning and motivation theory of Clark Hull can be described in the following basic equation: S E R = S H R × D In this equation, based on research with animals, Hull defined the terms as follows: S E R is Excitatory Potential (likelihood that the organism would produce response R to stimulus R), S H R is the Habit Strength (derived from previous conditioning trials), and D is Drive Strength (determined by, e.g., the hours of deprivation of food, water, etc.).

12. System Dynamics Group Hull, C. L. (1950). Simple qualitative discrimination learning. Psychological Review, 57, 303-313. This equation can be converted for use in many applied areas. Here is an example for individual job performance in organizations. In this context the terms of the equation are changed: Excitatory Potential = Job Productivity, Habit Strength = Skill Drive Strength = Motivation. This results in the following restatement of Hull’s equation: Job Productivity = Skill × Motivation Clark Hull’s Theory

13. System Dynamics Group How does training affect productivity? Productivity is product of Skills and Motivation. Training will reduce Motivation. If I train today, will my skills increase tomorrow? NO!!! Training will increase our knowledge.

14. System Dynamics Group We start from an equilibrium. Total Turnover = Hiring Total Population = 900 people

15. System Dynamics Group Knowledge from Skilled Experienced employees will not change so much after training policy.

16. System Dynamics Group In this model, skills can only be learned on the job. The more you stay in the company, the more you can get skilled.

17. System Dynamics Group Increase in Knowledge after Training Policy

18. System Dynamics Group Effect of Knowledge on Getting Skilled

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20. Productivity will go up as we were expecting in our reference mode But Where is Motivation?

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22. It does not seem that bad BUT What will happen if productivity goes up?

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24. For a period of time we will have backlog.

25. System Dynamics Group We will hire less people.

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29. In general, our productivity will go up. But how close we are to our desired line? Thing will get worse if we consider the growth in the company.

30. System Dynamics Group Conclusion 1.Unintended consequences will occur which will reduce and will delay our initial purposes. 2.Only by considering the whole picture, we can solve the complexities of a new policy. 3.We should prepare our employees’ mindset before implementing any new policy. 4.The better the initial settings gets established, the closer we get to our success point.

31. System Dynamics Group Future Timing is critical when implementing policies Watch carefully for “organizational climate” Effect of Motivation on Turnover Effect of overtime Working on productivity

32. System Dynamics Group Thank you!