Training in Human Resource Management

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Professor Marler- Mgt 514

Spring 2012 Mgt 514-Prof Marler

Agenda
Definition of training Case :Leading Change at Simmons  Is training a good investment?  

◦ Training evalution ◦ General vs Specific Training


How to design an effective training program

“HR Model and Training”

Training is a big business


How much do you think organizations with 100+ employees spend on training annually? ◦ $60 billion



Is it worth it? How much of that do you think gets used on the job? ◦ Of this only $6 billion result in transfer

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Professor Marler- Mgt 514

Spring 2012 Mgt 514-Prof Marler

Training
A planned effort by a company to facilitate employees learning of knowledge, skills, and behaviors that are critical for successful job performance. Different from DEVELOPMENT

© 2001 by Prentice Hall

What is Learning?

Learning is defined as a relatively permanent change in knowledge, behavior or attitude.

◦ Knowledge(Know) acquisition of
conceptual information, facts, understanding how and why

◦ Behavioral (DO) competence with
procedures, operations, methods, techniques..skills

◦ Attitude (Feel) formation of feelings,
preferences, evaluation of an object

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Professor Marler- Mgt 514

Spring 2012 Mgt 514-Prof Marler

Leading Change at Simmons
◦ What is Eitel attempting to accomplish with the Great Game of Life program? How is it supposed to help Simmons or other companies? ◦ Should Simmons roll out the GGOL program? If so, how, and how would you justify the $7.2 million investment to the NY investors? ◦ Is the GGOL “specific” or “general” training? Why would this make a difference ?

Simmons
Can training solve Simmon’s financial problems?  Is the GCOL a good investment?  How would Eitel know? How would the company’s owners know? 

Is Training a Good Investment?
 

Training Evaluation
◦ 4 Types

Human capital theory
◦ When PV of Benefits >= Training Costs

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Professor Marler- Mgt 514

Spring 2012 Mgt 514-Prof Marler

Evaluation of Training
Level 1: Reaction - How employees feel about the course, the instructor, etc. (measured through survey) Level 2: Learning - What learning has occurred (measured with pre-training/post-training assessment Level 3: Behavior - Performance should improve (transfer of learning should occur on the job) Level 4 and 5: Results and Return on Investment - What business results can be attributed to training (savings generated, revenue, error rate, etc.)

Performance Levels of Training and Control Groups at Garrett Engine Division Response Time Training Group Before training After training Control Group1 Before training After training 1 The

Completion Time

Total Down Time

Estimated Cost

4.8 hours 4.1 hours

13.6 hours 11.7 hours

18.4 hours 15.8 hours

$1,341 $1,156

4.4 hours 4.4 hours

11.6 hours 11.7 hours

16.0 hours 16.1 hours

$1,165 $1,211

control group was not trained. The numbers cited here for the control group were compiled before and after the training group underwent training. © 2001 by Prentice Hall

ROI After Four Average Workweeks at Garrett Engine Division
$55 (average savings per job (1,211-1,156) 55 (jobs per week) 4 (number of weeks)

x x

= $12,100 (benefits) - $5,355 (cost of training) = $6,745 (net benefits)

6,745 = 1.26 = 126% ROI 5,355

© 2001 by Prentice Hall

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Professor Marler- Mgt 514

Spring 2012 Mgt 514-Prof Marler

Human capital theory


Economic theory

◦ Investments in education, and training (vs physical capital) ◦ When PV of Benefits >= Training Costs  General training  Specific training  Should a firm pay for training?

General Training
Earnings + Increases an individuals productivity to the same extent in all (or a large number of) firms. G’ General Training Gross Benefits

U Indirect Costs 0
Direct Costs

G

U’

Specific Training
Earnings + Employer’s benefit share

Should your employer pay for specific ....
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