TABLE OF CONTENT
List of tables’
List of figure
CHAPTER ONE: INTRODUCTION
1.0 Background of the study
1.1 Statement of the problem
1.2 Objectives of the study
1.3 Significance of the study
1.4 Justification for the study
1.5 Research questions
1.6 Scope of the study
1.7 Limitations of the study
1.8 Organization of work
CHAPTER TWO: LITERATURE REVIEW
2.1 Training and investment – what are they?
2.2 Reasons for training investment
2.3 Framework for training investment process
2.3.1 Training needs assessment
2.3.2 Training design and development
184.108.40.206 Defining training objectives and Developing training content
220.127.116.11 Selecting trainers
18.104.22.168 Scheduling the training programme
2.3.3 Implementing the training programme
2.3.4 Training evaluation
2.4 Training investment at the Ghana National Airline
2.4.1 The national airline training centre
2.4.2 Objectives of the training centre
2.4.3 Facilitators of the training centre
2.4.4 Admissions and entre requirements of the centre
2.4.5 The national airline training policy
2.4.6 Courses available at the national airline
CHAPTER THREE: USING CAPITAL BUDGETING TECHNIQUE OF NET PRESENT VALUE TO DETERMINE THE BENEFIT OF TRAINING INVESTMENT
3.1 Using capital budgeting of NPV to determine benefit of training Investment
3.1.1 Estimating the cost of training investment
3.1.2 Estimating the future benefits of the training investment
3.1.3 Estimating discount factor
3.1.4 Determining NPV of the training investment
CHAPTER FOUR: METHODOLOGY OF THE STUDY
4.0 The research approach
4.1 The case selection
4.2 Sources of data
4.3 The sample procedure
4.4 Data collection instruments
4.5 Quantitative techniques
4.6 Validity and reliability
CHAPTER FIVE: PRESENTATION AND ANALYSIS OF DATA
5.1 Training needs assessment
5.1.1 Self request
5.1.2 Response to emergencies
5.2 Design and development of training
5.3 Transfer of training
5.4 Evaluating training programme
CHAPTER SIX: CONCLUSIONS AND RECOMMENDATIONS
I declare that I have personally under supervision taken the study herein submitted.
I declare that I have supervised the student in undertaking the study submitted herein and confirm that the student has my permission to present for assessment.
DR. FRANKLIN VALCIN
I wish to express my sincere thanks to the almighty God who made it possible for this study to become a reality.
My heartfelt gratitude goes to my supervisor Dr. Franklin Valcin at Atlantic International University for sparing his time to read and assess this final thesis. There is nothing I can do in return except to say God richly bless him and reward him accordingly.
I also owe special thanks to my father for financing my early childhood education. My wife and child also deserve applause for their understanding for my absence at home during the research.
Finally special thanks also go to managers and employees of Ghana International Airlines for taking their time to attend to my questionnaires and interview.
I would like to dedicate this PhD thesis to two personalities who are so dear to me and these are my wife and father. They have been so helpful to me from my child days up to now. I am also in debt to my pastor and his wife Mr. and Mrs Bawuah of Pentecostal Life Church, Atonsu for remembering me in prayers. God richly bless them.
LIST OF TABLES
Table 5.1 Trainees opinion on why management invest in them through training
Table 5.2 Methods of training needs assessment
Table 5.3 Trainee’s view on why they were selected for training
Table 5.4 Heads of Department participation in training design
Table 5.5 Heads of Department view on training methods used for training employees
Table 5.6 Trainees’ opinion on relevance of training programmes to employees’ personal needs
Table 5.7 Trainees opinion on relevance of training programmes to organizational needs
Table 5.8 Trainees’ expectations at the beginning of the course
Table 5.9 Trainees view on their training programme duration
Table 5.10 Extent of trainees acquiring new knowledge, skills and attitudes from training
Table 5.11 Trainees satisfaction about the current system of evaluation in the company
Table 5.12 Ghana International Airlines number of trainees, productivity and profitability from 2006 to
Table 5.13 Statistical test showing the relationship between training and productivity in terms of passengers carried by the national airline
Table 5.14 Statistical test showing the relationship; between training and profitability
LIST OF FIGURE
List of Abbreviations
illustration not visible in this excerpt
The research study set out to identify how Ghana International Airlines which is termed as the national airline use training as investment tool to improve efficiency in terms of maximizing shareholders wealth. There have been many attacks with regard to the services provided by the national airline. Some customers of the airline even claim that the employees who provide services to them have not got the required skills and knowledge and as such the services they receive from them are below expectations. On the other hand, if the national airline also claims that they invest so much money in their employees so as to ensure that better services are provided which at the end of the day will lead to more customers referring their friends and relatives, then there may be so many questions which one may need to ask. Among some of these questions are, do they invest in the right employees, do they design and develop their training programmes to meet the needs of the employees as well as the organization? Lastly one may also ask if they evaluate their training programme at the end of the day so as to know the cost and benefit associated with it.
The study was mainly to provide answers to these questions by using questionnaires and interviews so as to get responses from employees of the airline, heads of department as well as trainers and the human resource manager of the company. The study realized that the most common means of assessing whether an employee needs to go on training or not was the self request method where the employee choose from the list of training programmes of the airline which he is interested in. It was also realized that though Heads of Department of the airline play important role in the design and development of training programmes but when it comes to evaluation, there is no proper way to determine the cost and benefit associated with the training embarked by the airline. The study also came out with a way by which cost and benefit of a particular training programme can be determined using the Net Present Value technique. This was based on the opinion of the researcher on how training benefit of an organization can be determined.
The main limitation of the study was based on the responses given by the employees, heads of department, the trainers and the human resource manager since all the analysis of the study were based on their responses. Though the study tried to cross check most of the information that were given by the respondents for its originality in order to come out with a credible response from the respondents but not withstanding there may be a case where one or two of the respondents especially the employees may not give accurate response to the questionnaire because of the lack of time.
CHAPTER 1 INTRODUCTION
1.0 Background of the study
In this modern era, many companies are shifting away from the old adage of production orientation to human resource based orientation. This means that organizations nowadays see investment in employees as a number one priority compared to focusing on production. Companies believe that when training is provided to employees as a means of investment, then all other things been equal, productivity will automatically increase. According to the Bureau of Labour Statistics (1995) which was cited by Tauer (2001), there is no question that training is a big business. That is, about US$37 billion were spent on trainees wage and salary in the United States (US) whilst they were on training. This really shows that a reasonable proportion of today’s companies’ budget are allocated to investment in employees training.
In the words of the American Society for Training and Development (ASTD 2001), organizational training investment data is one of the important issues investors consider before they decide which company they want to invest. This is due to the fact that, an organization’s training investment data helps investors to predict a firm’s stockholder’s return, gross profit margin as well as other financial performance measures. It is of no surprise that looking at what ASTD is saying on investment in training, that all other things been equal, investors prefer to invest in companies in developed countries like the United Kingdom (UK) and United States than those of the developing countries like Ghana where figures on training investment appears to be low. Investors know that based on the high training investment figures of developed countries like UK and US companies, these companies have got competent, qualified and well skilled management to manage their funds than those of the companies in the developing countries whose training investment data appears to show lower figures in comparison. A typical example is where due to skilled shortages, many experts are expatriated from the UK and US to manage various functions in Ghana because of their expert knowledge or the training they had received.
In determining the overall training investment data of a business sector within a particular country, competition within that business sector is one of the key factors that need to be considered. In business sectors where competition is very intense, organizations are always exploring new ideas and knowledge through research in order to be a market leader rather than a market follower. In order for the organization to implement the new ideas and knowledge, employees need to be trained so that they can acquire these new ideas and knowledge to be used in their day to day performance of their duties. In developing countries like Ghana where a greater percentage of the business sectors are characterized by fewer companies, investment in employee training may be very low due to the weak competition in those sectors. On the basis of this, very few of these companies in those developing countries like Ghana pay a greater attention regarding investment in training their employees. A Pricewaterhouse Coopers survey cited by (Dillich, 2000) identified that 700 out of 1000 fortune companies interviewed, cited lack of trained employees as the number one barrier to growth. Training is therefore seen as indispensable in the lives of business organizations. Organizations in one way or the other need to train its newly recruited or existing employees in order to acquaint themselves well with the job. Training can be either off-the-job or on-the-job. Off-the-job training occurs in a situation where the employees either the new or existing ones are trained outside the job. On the other hand, on-the-job training is where the newly or the existing employees are trained on the job.
According to Bialyi (2006), employee training is so important that lack of employee training is costing employers in the building industry to lose millions of British Pounds every year. To him, small construction businesses with between 1 to 49 employees could collectively be wasting about £193 million every year through material errors and on-site accidents. This shows that no matter how big or small a company is in terms of the number of its employees, training is still important for the survival of that company.
It is interesting to know that in Ghana, attention on training investment covers a limited spectrum and this attention is geared towards mainly the limited liability companies. Companies such as AngloGold Ashanti, Barclays Bank, Unilever Ghana Limited, Standard Chartered Bank, Ghana International Airlines and Guinness Ghana Limited because of their size and the number of employees they employed have established their own training schools responsible for training their employees. According to the World Bank (1991), training schools established by various organizations such as the national airline of Ghana for training their employees have become necessary because public training institutions like polytechnics, vocational and universities have established little working relations with employers. On the basis of this, employers find little reason to co-operate with vocational and other public institutions because of the fact that these public institutions have not been able to respond to their exact needs by providing them with the labour force that will suit exactly their requirements. It is on the basis of this that most organizations like those mentioned above are investing in their employees by establishing training schools within their organizations which aim at equipping their employees with the exact skills and knowledge which will fit their culture. In the Airline Industry, training is indispensable since no airline company can operate on smoothly without investing in their employees through training. For instance in the national airline of Ghana, the large number of departments as well as the diversity of functions has created the need for numerous training programmes to be set up in order to meet the training requirements of both the staff and the organization. With this information, the management of the national airline bearing in mind its responsibility to train their staff to acquire the knowledge and skills needed to perform their jobs effectively and efficiently has instituted a training policy which aims at ensuring that all employees are given some form of training irrespective of their status.
Apart from the in-house training programmes which the airline companies invest to train their employees, there are other external training programmes which these companies also invest by way of sending their employees to participate. For instance, in 1997 the national airline of Ghana as a way of improving its services sent some of their employees to participate in the external training programmes organized by the IATA Learning Centre (Handout on Ghana International Airlines Training Policy, Unpublished). Though such investments are very expensive taking into consideration the cost involved and the philosophy of every company in the Airline Industry to minimize cost because of the competition facing the industry, most companies in the industry still finds it a necessity to embark on such an investment. Therefore the questions that one may put up regarding these companies training investment are:
a) What are the real motives of these companies embarking on employee training?
b) For in-house training programmes, have these companies been able to design, develop and implement their training programmes in such a way that these motives can be achieved?
c) Do they invest in the right employees?
d) Is there any mechanism after their training to ascertain whether it was worthwhile?
It is only after answers are provided to the questions above that we can know why companies particularly those in the airline industry invest in their employees through training, the way and manner by which they go about it and has their training investment been worthwhile in relation to the cost incurred for such an investment?
1.1 Statement of the problem
Comparing to developed countries, Ghana is one of the countries that has limited number of companies coming under the Airline Industry. With all these companies, the Ghana International Airlines is the only national airline in the country’s aviation industry. Within about fifty one years of existence, it has undergone certain major changes with the last one re-positioning itself and changing its name from Ghana Airways to Ghana International Airlines because of the world negative perception in terms of the services the company offers to its customers. Anytime the company undergoes a change, it is followed by a series of training programmes which are attended by the employees of the company. Apart from the training programmes which comes as a result of planned change of the company, the company has also got a training centre managed by permanent and experienced staff who provide training for employees from different departments throughout the year (Handout on Ghana international Airlines, Unpublished). In fact in Ghana International Airlines, the management of the company has established that a well trained employee is a great asset in attaining success and profitability for the company. For example in 1996, the company as a way of widening its market share in the industry and also boosting up profits instituted a training programme for all of its employees irrespective of their educational background, position or length of service in order to improve their skills, knowledge and attitudes.
Despite all these efforts put in improving the knowledge and skills of their employees, people are still not satisfied with the kind of services provided by Ghana International Airlines which is the only national airline in the aviation industry. For example, a survey that was conducted at the arrival and departure lounges of the Kotoka International Airport between November and December 1996 by Alkapo (1997) reveals that most passengers’ especially foreign ones who travelled using Ghana Airways which is now known as Ghana International Airlines were dissatisfied with the kind of services they receive. Such poor services include cancellation of flights, late flight departures and arrivals as well as the poor services they receive when they are on board. Again interviews that was conducted by the same writer during his survey at the company’s headquarters also reveals that the company has also been losing a lot of passengers on the Accra – New York route to other airlines of which this was attributed to the unsatisfactory service provided by the company.
This notion was also supported by Ellison (2002) who in his article ‘ The Rot of Ghana Airways’, now re-branded as Ghana International Airlines commented that passengers of the airline are frustrated by the poor services they receive from the company. He mentioned some of these poor services as flights that do not take off at all, telephone enquiries that go unanswered, eccentric scheduling and melee between passengers and management of the company.
Looking at the numerous effort that the only national airline company has put into training its employees as a result of both planned and unplanned change and the kind of service it provides to its customers, one is tempted to conclude that in effect;
a. The company has not been able to get the maximum returns from their employee training investment since they do not adopt proper training strategies in respect to needs assessment as well as design, development and implementation of their training which are needed for improving the organizational performance.
b. The company also does not carry out proper method of evaluation preferable in cost/benefit terms in respect to their training and as such cannot confidently justify to the top management that their training is adding more benefit rather than cost to the company.
1.2 Objectives of the study
The main objective of the company is to examine training as investment tool for improving efficiency in the Ghana’s national airline. In order to achieve this main objective, the study will concentrate on the following specific research objectives:
a. To assess the reasons behind the national airline investment in training.
b. To investigate based on their training strategies how the national airline conduct their training needs assessment and also design, develop, implement and evaluate their training programmes.
c. The study is also to evaluate the relationship that exists between the training offered by the company to their employees and productivity in terms of the number of customers carried by the airline and profitability growth of the company after the training.
d. To examine the extent by which employees from the company have been able to transfer their new knowledge and skills to the job.
e. To develop a way of determining the benefit of organization’s training investment using capital budgeting technique of NPV
1.3 Significance of the study
The significance of the study lies on its emphasis on drawing out how good returns can be made from employees training by setting out appropriate training strategies in relation to training needs assessment as well as design, development and implementation of employees’ training. The study also highlights on the various reasons why companies invest in their employees through training and whether they have been able to use training to accomplish those reasons. Human Resource Managers and Training Managers in various companies in Ghana will also find this thesis beneficial as it will provide them with a better view on how to determine in cost/benefit terms, the extent by which their training has been beneficial to the company.
1.4 Justification for the study
Most often, cedis are wasted by failing to link training with organizational strategies. If companies design and develop their training programmes by considering the training needs of their employees, this will help to correct the performance gap. As ‘Peter Principle’ points out, people are normally promoted to higher positions where they then become inefficient to perform their duties. When such inefficiency sets in, then all other things been equal, training may be one of the solutions to remedy the situation. In remedying the situation of inefficiency, the desired results required from the training must be achieved since if these desired results are not achieved, training funds would be wasted.
On the basis of this, it is important for every organization to take its training seriously so as to get the maximum returns from any Ghana Cedi which it has invested in training its employees.
It is a fact that companies that spent money investing in their employees through training has an ultimate aim of getting good returns from such investment. Training investment does not come alone. It goes with the process of designing, developing, implementing and delivering the training programme. It ends when the training is evaluated in order to determine the cost and benefit associated with it. If there is a problem in anyone of the above phases in terms of its execution, it becomes difficult for the organization to get the maximum return in the training investment. As the research work looks at training investment in the national airline of Ghana, it will examine all these phases in the training process of the airline and finally conclude if the airline is using training an investment tool to improve efficiency in the company.
1.5 Research Questions
At the end of the study, the following research questions would be addressed:
a. What are the reasons behind the national airline of Ghana investment in training?
b. Does Ghana International Airlines conduct any proper and thorough training needs assessment before they invest in their employees through training? How do they go about it and is it helping them to invest in the right employees?
c. Does the design, development and implementation of the training programmes run by Ghana International Airlines up to standard to address the news of their employees?
d. How do they determine whether their training has been beneficial? Is their approach really giving them the information needed to assess the cost and benefit associated with their training investment?
e. Does Ghana International Airlines training which they embark have any link with the number of customers carried by the airline and profit growth?
f. To what extent has employees from the company been able to transfer what they learnt from their training to the job? Does the training they received have any link with their wages after the training?
1.6 Scope of the study
The study is concentrated on a thorough assessment of training as investment tool for improving efficiency in the national airline of Ghana. Since there is only one airline which is the Ghana International Airlines that forms the national airline in Ghana, the study will use the company as a case study. In examining training as investment tool for improving efficiency in the Ghana’s national airline, the study would looked at all the phases in training investment in relations to needs assessment, design and development as well as delivering the training programme. The study also covers training evaluation which involves looking at the cost and benefit associated with the training rendered by the national airline.
In all situations, questionnaires and interviews were used to obtain primary sources of data for this work. Journals, articles and relevant human resource management text books were also used to assist in the literature review.
1.7 Limitations of the study
Firstly, the retrieval of the questionnaire was not encouraging as was expected as some of the employees who had benefited from some of the company’s training could not located where they had placed their questionnaire. The researcher believes that with a much higher rate of questionnaire retrieval, the investigation and the results of the study might have been different.
Thirdly, the results and analysis of the study were based on the answers given by the respondents and as such the validity of this thesis depends much on their responses to the questions asked.
Lastly, since it is difficult to measure the performance of the employees in respect to the training they receive, the researcher has decided to limit himself to the number of employees continuously trained in the company and the quality of service and profitability of the company.
1.8 Organization of work
The work consists of five chapters. Chapter 1 – Introduction. This is made up of:
a) Background of the study
b) Statement of the problem
c) Objectives of the study
d) Significance of the study
e) Justification of the study
f) Scope of the study
g) Limitation of the study
Chapter 2 - Literature Review and review of the national airline’s training centre
Chapter 3 - Developing a way of determining an organization’s training investment using capital budgeting technique of NPV. This chapter is based mainly on the opinion of the researcher with regard to how training investment benefit can be determined.
Chapter 4 - Methodology of the study
Chapter 5 - Presentation and analysis of data collected
Chapter 6 - Conclusions and Recommendations
CHAPTER 2 LITERATURE REVIEW
According to Anson and Robert (2000) the ‘literature’ of a literature review refers to any collection of materials on a topic, not necessarily the great literally texts of the world. To them ‘literature’ could be anything from a set of government pamphlets on a particular issue to scholarly articles on the same issue. In reviewing literature, the word ‘review’ according to Lamb (1998) does not necessarily mean that the readers of the work want the writer to give his personal opinion as to whether he likes the sources or not. What is required from the writer most is to give, compare and contrast what other writers are saying on the issue been discussed. On the basis of this, one can say that a literature review discusses published information in a particular subject area and sometimes information in a particular subject area within a certain time period. From the words of Cooper (1998), a literature review is a body of text that aims to review the critical points of current knowledge including substantive findings as well as theoretical and methodological contributions to a particular topic. As already highlighted above, literature reviews are secondary sources and as such do not report any new or original experimental work. There are many reasons why it is necessary for a researcher to conduct a literature review. For example, Gall et al (2002) have highlighted that the main reasons why a researcher may do a literature review are:
- To highlight research possibilities that has been overlooked implicitly in research to date.
- To discover explicit recommendation for further research.
- To help avoid simple repetition of work that has been done already.
- To sample current opinions in newspaper and trade journals, thereby gaining insight into the research questions and objectives as seen in chapter one of this thesis.
The literature review for the issue discussed in this thesis which is training as investment tool for improving efficiency in the national airline will look at published information from many scholars on what both training and investment is about and we will linked these two terms together. The writer will also looked at published materials on phases needed for training investment to take place and this involves training needs assessment, design, development and delivering of training, transfer of training and training evaluation to determine in cost and benefits the returns derived from the training programme. The literature review under this chapter will also be used as a foundation and as a support for new insight that the writer would contribute. As part of the literature review, as said by Rosen and Laurence (2002), the focus will be to summarize and synthesize the arguments and ideas of others without the researcher adding new contributions. This chapter is considered as very useful to readers and other professionals who may lay their hands on this thesis because it will provide useful reports and keep them up-to-date on the issues been considered under the literature review.
2.1 raining and Investment – What are they?
In describing what training is about, allinterviews.com which is a popular website were people share their knowledge compiled various views by many people on what training is about. Some of the views shared by people in describing training include; training as an organized procedure for developing skills, knowledge, abilities to perform a job. Others include describing training as moulding an employee’s skills and knowledge to make him fit into a particular job. The rest include training as a learning process that involves acquisition of knowledge, sharpening the skills, concepts, rules or changing of attitudes and behaviours to enhance performance of employees. Though all the views expressed by the commentators cannot be highlighted here under the literature review but the writer realized that most of the views on what training is about focus on seeing it as a learning process to sharpen the skills, knowledge and attitude of the employee to improve efficiency in the organization. Grobler et al (2006) described training as a tool used to designate the acquisition of technically oriented skill by non-management personnel. Looking at the definition given by the writers, it is clear that the writers want to emphasize that training is mainly meant for people who are not into management. Perhaps the writers wanted to use the term development to mean the activities carried out to enhance the skills and knowledge of managers and future managers. From the website of Wikipedia, they described training as the acquisition of knowledge, skills and competencies as a result of the teaching of vocational or practical skills and knowledge that relate to specific competencies. From the words of Casico (1986), training consists of planned programmes designed to improve performance at the individual, group and organizational levels. Considering what Cascio has written about training, it presupposes that training occurs at three main levels namely at the individual, group and organizational levels. This view is also shared by Howe (1995) who considers training occurring at various levels within the organization. The Manpower Services Commission (MSC) in (1981) considers training as a planned process to modify attitude, knowledge or skill behaviour through learning to achieve effective performance in an activity or range of activities. The description of training by MSC means that training occurs in a situation where it is found that certain attitude or behaviour is undesirable or there is a gap between the current knowledge and skill of the employee and the desired knowledge and skill needed to perform the job effectively. De Cenzo and Robbins (1996) have also added their view to what training is about. To them, training is a learning experience in that it seeks a relatively permanent change in an individual that will improve the ability to perform on the job. Their point also adds to the view of Manpower Services Commission (1981) that training seeks to change attitude, knowledge and skill behaviour. Bottomley (1990) commenting on what training is about is also of the view that training is not something that is done once to new employees but it is something that is used continuously in every well-run establishment. To the writer, anytime you get someone to do work the way you want it to be done, then it means you are training or anytime you give directions or discuss a problem, you are embarking on training. This means that training is sometimes don unconsciously. From all the descriptions given by the various scholars and authorities under what training is about, it is evident that they all emphasis the fact that training has to do with acquisition of skills, knowledge and abilities to enhance the growth of the organization. After looking at what training is about, the literature will also consider what is investment? When people mention the term investment, what normally comes in the mind is finance. On the basis of this very few organizations see training as also an investment which an organization can undertake. Investment can be described as the action taken by individuals or corporate bodies to add value to already controlled asset or resources. This description clearly indicates that employees are regarded as assets of the company and their value are enhanced when the organization embarks on training. Organizations should know that employees are regarded as controlled assets in that when their value is enhanced, managers can use this value added gained through training to improve the efficiency of the organization but it does not necessarily mean that these assets (employees) are owned by them. It is on the basis of this that organizations sometimes may spend huge sums of money to improve the skills and knowledge of an employee through training but at the end of it the employee will resign to the detriment of the organization. The website of Wikipedia also defines investment as putting money into something with the expectation of profit. This definition shows that investing in employees by organizations is aimed purposely of getting good returns from the money that has been invested in the employee. Having known what constitutes training and investment, the researcher can conclude that in effect training investment has to do with organizations adding value to the existing skills, knowledge and ability of the employees so as to maximize organizational returns. According to Gomez et al (1998), investing in employees is classified as intangible investment which the returns do not come with immediate effect. It will take a little long for the returns to be realized but when it is realized, it is continuous which the organization can reap for a very long period of time. This means that in the national airline of Ghana, if an employee’s skills and knowledge is enhanced through training, the national airline is going to benefit from such investment by means of improvement in performance throughout the period which the employee continuous to work with the national airline.
2.2 Reasons for training investment
Many writers have commented that training should not be seen as cost but rather an investment. According to the American Society for Training and Development (ASTD) 2010 quoted by Heathfield, though many businesses are not favoured by economic conditions but business leaders still continue to commit huge sums of money in training because they see it as a means of investment which will yield returns. The ASTD estimates that about US$125.88 billion were invested in employee by means of training in 2009. Out of this total figure, according to them about two-thirds of the amount which is US$78.61 billion were spent on internal learning function whilst US$47.27 billion were allocated to external services. Looking at such huge sums of money spent on training, there is no doubt that organizations are reaping benefits from such investments. This can be evident from a comment made by the American Society for Training and Development which highlighted that the best award winning organizations are those that spent a lot of money investing in their employees. From the words of Grobler et al (2006), employee training investment is a big business in many countries such as South Africa. According to them, training costs is estimated to be R5 billion per year. The writers see employee training as investment since it is a key factor in meeting the employer’s strategic, business and operational goals. The writers also emphasized that technological advances as well as social, political and economic pressures means that an organization cannot do away with training. This is one of the main reasons why training is seen as vital in the national airline of Ghana. In the national airline of Ghana, training is one of the tools used to avoid non compliance of state laws in the aviation industry so as to avoid financial penalties associated with mistakes and unorthodox practices by its employees (Handout on Ghana International Airlines Training Centre, Unpublished). Looking at the words of Huselid (1995), training is considered as very important to organizations in such that the main problem facing them is not whether there should be training or not but rather the problem is which employees should be trained and what methods should be used to train them. Training is not considered as important only to organizations but nations and various governments are also realizing the benefits that can be derived in training. For instance according to Grobler et al (2006), the passage of various Acts in relation to enhancing workers skills and knowledge by the South African government indicates the seriousness nations place on training investment. Some of these Acts according to the writers include the South African Qualifications Authority Act, No. 58 of 1995, the Skills Development Act, No. 97 of 1998 and the Skills Development Levies Act, No. 9 of 1999. From the words of Barney (2005), one of the reasons why companies spent huge sums of money investing in training is that it serves as a means of competitive in many companies advantage. To the writer, for this investment to generate competitive advantage, it should be able to meet certain criteria which among them are:
i) It must add positive value
ii) It must be unique or rare among current and potential competitors
iii) It must be imperfectly imitable
iv) It should not be substituted with another resource by competitors.
One of the companies that have used training to achieve competitive advantage is the Southwest Airlines as quoted by Barney (2005). The writer see this airline as one of the major airlines that have remained profitable after the September 11 tragedy. From the words of the writer, the airline was able to expand its routes as other carriers close to them. The writer also commented that the ability of the company to retain its customers is based on the excellent and quality services provided by its workers thanks to the training they had received. Apart from Southwest Airlines which is benefiting a lot from training, there are other companies which cannot be left out as pointed out by Bateman and Snell (2000). According to the writers, companies such as Motorola, General Motors and International Business Machines (IBM) have invested over billions of dollars in training. The returns on the training enjoyed by these companies far exceed the amount that was invested. In support of this assertion, they emphasized that Motorola has been gaining $30 on every $1 invested in training. This really shows that companies commit huge sums of money in training with the aim and objective of increasing productivity which will lead to higher returns on the training funds invested.
Alan (2009) adding his voice to the reasons of training investment is of the view that though many people see training as a cost but as far as he is concerned, it should be seen as an investment. To him training yields dividends but it is not easy to measure them in monetary terms. The dividends provided by training can be noticed in terms of the following:
i) Increased Productivity - The writer is of the view that by providing appropriate training, the productivity of the workforce can be increased, empowering employees to be able to set their own targets and achieve them in a timely manner.
ii) Improved Communication and Participation – Alan (2009) see training as paying dividends by improving communication and employee participation in the organization. This is needed for smooth running of the organization.
iii) Reduced Labour Turnover – From the words of the writer, labour turnover has a negative impact on the performance of companies since it can delay many projects initiated by the company that can bring profit. With training, employees are empowered and they get satisfied in every work they do.
iv) Waste Reduction – According to Alan (2009) with training, employees are able to learn the ideal way of doing a particular task and the methods for limiting any inefficiently used time or materials in their working day. In the national airline of Ghana, though training is supposed to perform this function of eliminating waste but there are many areas especially with time management where employees come to work late and close early.
Other writers who have also contributed to the reasons why companies invest in training are Bottomley (1990), Cole (1996), Beach (1971), Pratt and Bennet (1990), Crane (1982) and Graham and Bennet (1992). According to Bottomley (1990), the fundamental purpose of training is to provide for the organization’s manpower needs. This writer in support of Beach (1971) continues to give a further intrinsic aim of training which is to equip individuals with the necessary skills to enable them find employment, to gain promotion and to have a reasonable expectation of redeployment in the event of their being made redundant. Cole (1996) also outlined six main reasons why most organizations commit huge sums of money in training employees. His outline focuses on the following reasons:
i) To improve existing skills of employees
ii) To increase the knowledge and experience of employees
iii) To improve job performance which will in turn lead to improvement
iv) To improve service to customers
v) To increase employees’ motivation through greater commitment
vi) To serve as personal growth opportunities for employees
Other writers who have also devoted their work to literature on reasons for training are Graham and Bennet (1992). The writers commenting on reasons why organizations are taking their training seriously pointed out the following:
i) To increase productivity and quality
ii) To avoid spoiled work or less scrap
iii) To adopt to new methods of work
iv) To avoid accidents in the workplace
v) To increase the job satisfaction of the employees
Looking at the reasons for organizations embarking on training given by Cole (1996) and Graham and Bennet (1992), they all emphasize the fact that organizations embark on training so as to ensure that productivity is increased and also to motivate employees by having a thorough knowledge and skills on the work which they are supposed to do.
To Beach (1971), organizations embark on training with the view to solving some operational problems as outlined by Graham and Bennet (1992). Lastly for Grobler et al (2006), their outline on the reasons why companies invest in training centered on seven as against six and five given by Cole (1996) and Graham and Bennet (1992). To them organization invest in training with the view of improving performance, updating employees’ skills, avoiding managerial obsolescence, solving organizational problems, orienting new employers, preparing employees for promotion and managerial succession and lastly satisfying personal growth needs of employees. Though Grobler et al (2006) outline seven reasons but most of their reasons fall within the same domain given by Cole (1996) and Graham and Bennet (1992). Looking at a white paper issued by the American Bankers Association on investing in training and development, they emphasized that Chief Learning Officers have a significant leadership responsibility to see that workplace learning and development dollars are spent in ways that support business goals and yield the greatest return to the organization. They concluded that training investment is becoming something which organizations cannot do without in the banking industry since it is seen as one of the greatest investment which an organization can make. From their point of view, training investment lead to improved performance of banks through gains in quality, productivity and customer satisfaction.
2.3 Framework for training investment process
As already highlighted above, investing in training does not come in isolation. Management should note that there certain processes that need to be adhered to before investing in training can be complete. According to Werner and DeSimone (2009), management invest in training not because they have got more dollars than they need but rather training investment is used to address a wide range of issues and problems in an organization. They emphasized that training is used to orient and socialize new employees into an organization, provide skills and knowledge and also it help individuals and groups to become more effective. The writers used a framework which they termed as ‘A DImE’ framework meaning (assess, design, implement and evaluate), to illustrate how training starts and ends. This framework which depicts how training starts and ends according to Werner and DeSimone (2009) can be illustrated below:
Figure 1: Training Process Model
illustration not visible in this excerpt
The framework provided by the writers is used as the rest of the literature review. The researcher is of the belief that the writers should have included ‘Budget’ after the assessment since an organization can conduct training needs assessment to know which training it needs to embark on and the number of people that must go for the training programme but if its budget cannot support the training which it wants to embark on, it will be very difficult for the training to come into reality.
2.3.1 Training needs assessment
Need according to Werner and DeSimone (2009) can be described as a discrepancy or gap between what an organization expects to happen and what actually occurs. For example in the national airline of Ghana, a gap may exist when a target of customer complaints is set to 0.6% but at the end of the day the actual results will be 1.0%. When this happens, a gap is created between what the national airline of Ghana want to achieve and what is currently achieving. Such gap can form the basis of identifying that the organization needs to invest in their employees by way of training so that they can get to where they want to be. A need can also be described as any shortfall in terms of employee knowledge, understanding, skill and attitudes against what is required by the job. Jobs which are complex by nature do not only call for the employee to have specialist knowledge but also to have a real understanding of the basic principles underlying the job (Cole, 1996). To Armstrong (1995) a need is defining the gap between what is happening and what should happen.
Turning our attention to assessment, one can describe it as ongoing process of gathering, analyzing and reflecting on evidence to make informed and consistent judgments to improve upon the future. Combining the two words, one can say that training needs assessment is a method of determining if a training need exists, what training is required to fill the gap between standard and actual performance. Visiting the literature given by Grobler et al (2006), needs assessment is the first step towards an organization decision to invest in their employees through training. This idea is also shared by Werner and DeSimone (2009), Osinski and Miller (1996) as well Armstrong (2006). From the words of Osinski and Miller (1996), training needs assessment is a critical activity in any training programme. This means that if you are not able to conduct a proper training needs assessment to know the right people who must be selected for the training, the organization will end up investing in the wrong employees which will be of no benefit to the organization. To the writer, it is very important stage in the training process because it enables the organization to answer two simple basic questions such as who, if any, needs training and what training is needed. Considering the literature given by Werner and Desimone (2009) on training needs assessment as depicted by their model, they are of the opinion that training needs assessment is the starting point in any training process. To them training needs assessment is considered as very important because it can identify:
a) An organization’s goals and it effectiveness in reaching these goals
b) Discrepancies or gaps between employees’ skills and the skills required for effective current job performance.
c) Discrepancies or gaps between current skills and the skills needed to perform the job successfully in the future.
Looking at the importance of training needs given by the writers, it presupposes that they share a similar view given by Labov (1997) who was of the opinion that the main benefit of organization identifying training needs is to ensure that gaps are corrected in the organization. To Armstrong (2006), identifying training needs is not considered as the most important factor in any decision by a company to invest in training. What must be noted is that, it is important for the organization to consider what will be the cost as well as the benefit of the training to the organization. Looking at the statement given by Armstrong (2006), the researcher agrees with him in the sense that as stated earlier, it is not identifying the gap that matters most but will the organization correcting that gap be beneficial to the organization? If the answer to be provided to the question is ‘yes’, then it means such training needs assessment will be beneficial to the organization. As depicted by the training model given by Warner and DeSimone (2009), an organization may identify so many training needs and as such its budget may not be able to absorb the investment which it wants to make. When this happens, it means the best thing for the organization to do is to prioritize all the gaps which it has identified through the assessment and then embark on the training which its budget can absorb. This strategy is practiced by the national airline of Ghana where sometimes the airline may refuse to invest certain categories of their employees because of the fact that their budget cannot absorb it. From the words of Noe et al (1994), needs assessment helps determine whether training is necessary. To them, there are many different ‘pressure points’ that may suggest that training is necessary. Among some of these pressure points which the writers pointed out that may call for training are: Performance problems, introduction of new technology, job redesign, new legislation, changes in customer preferences, introduction of new products and employees’ lack of basic skills. They further pointed out that these pressure points do not guarantee that training is the correct solution. What an organization must do is that it needs to carry out needs assessment to determine whether the pressure points can be successfully addressed by training. In determining how training needs are identified, Taylor (2009) is of the opinion that customer complains serve as one of the important sources or means by which organizations make it a point to invest in their employees. This means of identifying training needs appear to be one of the main sources of the national airline of Ghana identifying if they need to invest in their people through training or not. As pointed out in the statement of the problem, customer complains is one of the main headache of the national airline. In preventing such complains from occurring in the future, the national airline has invested in so many of their customers especially those who are classified as customer service officers as well as their cabin crews so as to ensure that they deliver above the expectation of these customers. In identifying training needs, several writers have also come out with how they are identified. Among these writers are Bottomley (1990) who is of the view that manpower planning plays a key role in identifying training needs. Manpower specialists such as the Personnel Director and the Training Officer working together with other functional specialists should analyse the organization’s business objectives and then predict the categories and number of staff required to run the company in future. The anticipated pattern of employment must be compared with the existing workforce and after making adjustments for retirements and other staff losses, it is possible to estimate where surpluses or shortages of qualified staff are likely to arise. The writer continues to stress that in failing to embark on manpower policy, needs can also be identified as arising in one or more of three main areas namely at the organizational, occupational and individual levels. At the organizational level, Bottomley (1990) suggested that training needs might be determined in terms of changes in the functioning of the organization. He therefore presented eight criteria which are:
i) Quality of production
ii) Number of operators able to reach job standards
iii) Time required for a specific job
iv) Damage to material or equipment
vi) Labour turnover
vii) Running costs
vii) Performance on personnel measures such as rating scales and attitude surveys
Significant differences from the norm in any one of these categories may require further detailed analysis. Such differences may also tell us that something is wrong and training may be the best solution. At the occupational level, the writer pointed out that training needs might arise through the employee inability to meet the job specification. Ideally, there may be shortage of skill on the part of the employee and therefore there is a need to arrange for training. He was quick also to point out that such training need often arises when there is rapid technological change which means new skills are needed in order for the employee to catch up with the technological change.
Lastly, at the individual level, the writer focused on appraisal method as a means of identifying training need. Warner and DeSimone (2009) shared the same view as that of Bottomley (1990) that training needs can be identified under three main areas. For them, they used different terms as they emphasized that training can be identified under organizational level, task level and personal levels. The task and personal levels given by the writers coincides with the occupational and individual levels which was given by Bottomley (1990). Warner and DeSimone (2009) were of the view that at the task level, the training Manager needs to collect data about a specific job or group of jobs and then determine what employees must know in order to achieve optimal performance. They mentioned some of the techniques for collecting data for training investment to take place as obtaining information from job descriptions and job specifications.
Cole (1996) commenting on how training needs are identified also mentioned several methods used for collecting information for carrying out training needs analysis. Among these methods which he mentioned are:
i) Interviewing managers and supervisors about their subordinates’ training needs
ii) Observing the job performance of individuals
iii) Analysing self-recording diaries kept by managers and supervisors
iv) Monitoring the results of group discussions relating to current work problems
With regard to all these methods used for identifying training needs, Cole (1996) was quick to point out that the most popular one used by organizations is the one which involves interviewing managerial and supervisory staff. He also stressed that appraisal form these days is becoming one of the popular documents which contributes to analysis of training needs. The information found in the appraisal form helps the training officer to identify the current level of job performance so that it can be compared with the desired level of performance and if deviations exist, all other things been equal, training must be conducted to correct this deviation. Armstrong (1995) in adding his voice to the methods of training needs analysis mentioned four of such methods. To him, these methods are the use of job analysis, analysis of performance reviews, training surveys and analysis of human resource plans
De Cenzo and Robbins (1996) used a model to explain training needs identification. To them, the first thing the training officer needs to consider is; what are the organization’s goals? Having considered this, then according to them it is necessary to consider what tasks must be completed to achieve these organizational goals. From this stage, the training officer must consider what behaviours are necessary for each job incumbent to complete his or her arranged tasks. Having considered this stage, then the last stage will be to consider what deficiencies if any do incumbents have in the skills, knowledge or abilities (SKAs) required to exhibit the necessary job behaviours. De Cenzo and Robbins (1996) further stressed that apart from this criteria used for identifying training needs, there are other signals that will alert the manager to be aware that training is necessary. Among these signals in support of Noe et al (1994) are drop in productivity, inadequate performance, increase in the number of accidents, introduction of new technology, job redesign and high reject rate of products by the Quality Control Division.
Other writers who have also added their views on to training needs are identified are Bateman and Snell (1996). To them, training needs can be identified by comparing three issues. These are comparing organization’s current results as against desired results or standards set, comparing existing knowledge and skill against knowledge and skill needed and lastly by comparing individual performance as against required standards. The writers pointed out that the difference between these comparisons is the training gap. Following the comment given by Wood and Townsley (1987), they share the same view with Bottomley (1990) that a firm’s training needs may be determined by its manpower plan which includes projections of the supply and demand for various classes of labour. To them, if management compares the skills necessary for future success and there are some deficiencies, then it means training is necessary. The writers apart from sharing their views with Bottomley (1990) also added their voice to what was said by De Cenzo and Robbins (1996) and Noe et al (1994) that there are other factors that may signal the manager that training is needed. Among these factors which Wood and Townsley (1987) commented in support of De Cenzo and Robbins (1996) and Noe et al (1994) are poor quality output, high accident rates, high absenteeism, unfavourable performance appraisal reports, high rate of staff turnover and introduction of new products and equipment. However, the writers were smart to point out that these factors which they have highlighted do not necessarily mean that training is needed since lack of motivation on the part of the employee can also cause those factors to occur.
To Oakley and Richmond (1970), in identifying training needs, the training officer must scrutinize the organizational structure as it is at present and decide what amendments are necessary to cater for future developments. The writers gave this assertion in support of Howe (1995) by charging the training officer to scrutinize the organizational structure in order to know the skills, experience and knowledge that the organization is possessing currently and compare it with what it will require in future and if what it will require in future far exceeds its current requirement, it means training is necessary in order to meet this future requirement.