It is a commonly accepted fact that British employers have neglected the significance of employee training. They justified this neglect probably on the premise that although training is a major cost item, it does not have a significant correlation with improvement in organizational performance (Hallier and Butts, 1998, p.80). However, in recent years, there is a major upheaval in this line of thinking, prompted by industry experts and fast spreading public opinion about the impact of training and employee development. Employers in Britain are gradually but surely conceding to the fact that employee development does pay in terms of better organizational performance. Based on a research study sponsored by the National Institute of Economic and Social Research, experts generally subscribe to the theory that skills training improve organizational performance and efficiency (Stevens and McKay, p.55).
This recognition assumes great importance as a direct relationship between training and profitability is yet to be firmly established. (Ashton and Felstead, 1995, p.35). According to the employment trend survey report published by the Confederation of British Industry (CBI) in 2001 covering 673 private sector organizations in Britain, employers rated workforce and management skills as the principal factors that will increasingly determine business success in the present and future competitive scenario. More than one-third of the respondents said that there is an increasing trend of shortages in skills required to meet the rapidly changing needs of a dynamic market environment that is becoming more and more global. This gap is affecting business performance and hence profitability of stakeholders. To meet this challenge, more than two-thirds of the respondent companies claimed that they have increasing training expenditure. An important indicator of the growing importance of training is that sixty-two percent firms offered financial support for training of employees beyond the needs of their current jobs. Majority of the firms also provided time-off and funding for employees who take the initiative of upgrading skills and knowledge through self-study. Yet, the general perception is that the United Kingdom still has some way to go in training investment before it can catch up with major competitors in Europe and new industrial competitors from the rest of the world.
Results of a study by Mercer Human Resource Consulting (Britain at Work Survey) reveal that one of the possible reasons for Britain's productivity gap compared to other European nations could be due to the lack of attention showed by companies in managing employee performance. The study, covering over 3500 British workers throws up some telling statistics: only 20% workers feel that good performance in rewarded and only a third of the surveyed workers believe that is there is a significant link between performance and pay. Less than 40% feel that under-performing employees are managed in the right manner. The study highlights that lack of training among managers who conduct the performance appraisal process of employees is one of the major concerns hindering effective employee management process. For instance, only 40% workers feel that their managers show concern for their career development and just one-third are convinced that performing employees are adequately compensated in terms of promotions and incentives. The study also warns that organizations and managers are increasingly focus on employee development practices that produce immediate results, especially in a recessive economic environment. While employers may feel elated in quick returns on people investments, the study warns that such organizations will eventually face a drain of talent when the economy is on the growth path as efficient and productive employees will shift to those companies that have a true performance-rewarding culture.
Employers tend to view training as the answer to performance deficiencies in organizations. However, to bridge the gap of skills, a wide range of human resource practices are necessary. Often, the tendency of employers to sanction training is driven by competitive pressures rather than the actual needs, which does not produce expected results and may only serve to increase costs. From an employer's perspective, there is justification for differentiating the training needs of apprentices or fresher and experienced employees. Employers unanimously agree that apprentices need the longest period of training. However, in terms of quality and efforts, employers tend to focus more established employees, especially when it relates to specific, project-based training that leads to direct improvement in organizational performance. The socialization of managers is necessary and management development schemes of the nature of reinforcing the personality of the manager and the tightening the bond with the management becomes crucial in this context. (Ackers, and Preston p.678) In information technology companies, there is great impetus of training experienced software programmers, so that the company is abreast of latest advances in the field.
It is difficult to provide a conclusive answer to the question of whether training leads to tangible increase in performance and thus profitability; in fact, it is almost impossible to establish such a correlation mathematically, due to the multiplicity and complexity of factors involved. However, it has been established that lack of training activity can adversely affect organizational performance (Steedman and Wagner, 1989,p.45 Mason et al., 1994, p.64). Another study has claimed that inadequate development of skills in employees would hinder performance in many ways such as inability to adapt to new technology quickly, slower reaction to changing customer and market demands and lower efficiency levels affecting deliverables. (Hendry, 1991, p.80)
In the United Kingdom, a major cause of concern in the perceived weakness in functional skills of the middle level employees, which is pointed as one of the reasons for UK's lower ability to compete in international markets relating to certain goods and services. Low level of initial education and inadequate training compared to the workforce in some competing countries has resulted in a segment of the British workforce getting stuck with low skill levels (Stevens and Mackay, 1991, p.55). If this is a fact, then the logical interpretation is that training to improve the intermediate level of operational skills would translate into efficiency and higher profitability. This view has found wide acceptance and the fear of losing out to international competition is the fundamental reason for British employers' favorable inclination towards training and employee development. A case in point is the rise in employer-sponsored training incidence from 9.2% to 15% during the 10-year period from mid-eighties to mid-nineties. Employers are initiating training for the purpose of promoting commitment towards the organization and promote the work environment in the organization. But there are riders to this statistic. (Ashton and Felstead, 1995, p.175).
In 1985, 26% of workers who underwent training took courses that lasted less than a week; in 1994, this rose to 45% (Felstead et al. 1999, p.112), which is a clear indication that while incidence of training is rising, the intensity of training in Britain is on the decline. In Britain, the distribution of training is relatively skewed in the sense that highly educated and well-paid employees are more likely to receive training compared to those with lower qualifications and lesser pay. The probability of an employee gaining access to a training program has been found linked with employer characteristics; the bigger and richer the employer, the more likelihood of employees receiving training. It is difficult for employees of smaller companies to get sanction for training. (Machin and Wilkinson, 1995, p.17). A closer examination of the recent growing interest of British employers in their commitment to training gives enough indication that they are not concerned only with the gap in middle level operational skills.
British employers have begun to view training as a key human resource activity that encompasses the entire organization with the focus on personal development, human relation skills and attitudes. (Hallier and Butts, 84). The narrow focus on interpersonal abilities probably stems from the long-standing values of British management's interest in short-term business results and the refusal to appreciate the organizational and socio-economic problems. (Glover, 1992, p.326). In other words, British employers are of the view that managers must be capable of managing everything that is necessary for the job and training imparted should thus address this central concept of management thinking in Britain. This sharply contrasts with the concept of continental Europe that values productivity, specialized skills development and stability in management.
Employers' favorable inclination towards personal development probably has the hidden objective of resolving conflicts in employment relationship, which has undergone a sea change in the era of intense competition, restructuring and rightsizing of companies. A relatively new definition of the employer-employee relationship provides employees the opportunity to develop themselves and increase their employability in return for the increased skills and output required of them under a flat structure (Holbeche, 1995, p.48). In the turbulent times of economic downturn and job losses, employers lean towards personality development training in the belief that it is capable of protecting the integrity of employment relationship and also promoting some sort of a meeting point for organizational and worker interests. Thus, the primary interest of employers is more directed towards how the efficient and ambitious employees can be satisfied in times of shrinking…