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How high performing is your workplace?

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Training really does make a difference - the evidence exists - but only, argues Donald H Taylor when learning is part of a coherent package of high performance workplace practices.


How's your organisation performing? It's a question that should concern us all. After all, training is all about improving performance, isn't it?

"The evidence is there: training does make a difference... a measurable, direct impact on the value of employees. A difference which has been shown to apply consistently for more than a decade."
 

Certainly it is, so not only should we know how our organisation is performing, we should also know how the learning and development function is contributing towards that. It's what the job is all about.

While we in training know learning helps performance, what do managers elsewhere in the organisation think? Broadly, there are 3 camps:

1. Do it because they have to
2. Do it because they think they probably should
3. Do it because they know developing people is essential

If the managers in your organisation are mostly in group 3, that's great. Start writing for TrainingZone.co.uk and tell us how you're getting on.

If they are mostly in group 1, tough. These are the late majority/laggards. They won't be persuaded until mostly everyone else is. You're in for a long slog, but you already knew that.

Most managers fall into group 2. They know that 'people are our most important asset' - they're just not quite sure what to do about it.

How do you move people from group 2 to group 3? How do we move them from treating training as a fast food fulfilment service to actively engaging in developing their people? They'll want proof that it's worth something. And that is where it starts to get tricky.

We can explain how building knowledge and skills fits with motivational and environmental factors to increase performance, using the AMO model popularised by Prof. John Purcell. But that isn't proof. They'll ask for numbers, the hard evidence that shows the value of training.

On a specific, engagement level, you can use the sort of approache advocated by Paul Kearns. You can take the performance consulting approach of Nigel Harrison. But how do you demonstrate that, generally, training is going to make people more valuable to the organisation?

The evidence exists. It's a bit messy, because training alone is almost never the answer to performance issues. But there's very strong evidence that training is one of a set of 'high performing work practices'.

"Training on its own is not enough. It needs to be delivered as part of a consistent set of people policies. Not because it's nice to have, or because people might like it, but because it makes a real difference."
 

The literature on this is extensive, but the leaders in the field, ploughing the furrow since 1992 are Brian Becker and Mark Huselid. In fact, start reading in this field and one of the most quoted papers you'll find is High Performance Work Systems and Firm Performance a 1998 paper by Becker and Huselid. Along with 'Why High-Performance Work Systems Pay Off' (Applebaum et al, 2000), this was at the beginning of a trend of identifying packages of HR practices that led to improved organisational performance.

The idea is this: there is a set of HR practices that, taken together, have a measurable effect on organisational performance. This can be measured in different ways (e.g. share price, value of personnel).

As well as training, the 17 items that made up Becker and Huselid's bundle of practices in the 1994 survey included: alignment of HR strategy to business strategy; internal communications; performance management; and pay's relation to performance.

While the exact number of practices might vary between exponents, an integrated approach to skills and training is always included. When several of the practices are used together, the benefits multiply.

In their 1998 paper, Becker and Huselid detail, over 48 pages, the results of several surveys. But for me the graph below sums it all up. It shows the results of their 1994 survey of nearly 4,000 US firms with more than 100 employees:


(Quoted from www.ceoforum.com.au)

The vertical axis shows the value per employee, and the horizontal axis show how many good HR practices firms were using. Clearly if your firm is the bottom 20% of use, your people are worth a great deal less than if they are in the top quintile, where you can expect them to be worth almost 30% more. They can also express this result in terms of revenue. An increase of about 14% on the horizontal axis means that the revenue is increased by $42,000 per employee per year.

Becker and Huselid's other surveys reflect this pattern, as do other more recent surveys by other researchers. The result is always the same: using a majority of a set of practices together, boosts organisational value.

So the evidence is there: training does make a difference, as part of a bundle of HR practices. A measurable, direct impact on the value of employees. A difference which has been shown to apply consistently for more than a decade.

It strikes me that consistent results like this call for two things. First, while your managers may never have heard of Becker and Huselid, they do know the value of money. You might want to throw that graph into your next strategy presentation to the management team. You don't have a presentation to your management team lined up? Maybe you should.

Second, it makes it absolutely clear that training on its own is not enough. It needs to be delivered as part of a consistent set of people policies. Not because it's nice to have, or because people might like it, but because it makes a real difference.

The next time someone asks "How's your organisation performing?" it would be great to answer: "Very nicely, thanks to our people and learning strategy".


Donald H Taylor is chairman of the Learning and Skills Group and the Learning Technologies conference. He blogs at www.donaldhtaylor.co.uk

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