Chapter 2 Strategic Training Mc GrawHillIrwin 2005 The

Chapter 2 Strategic Training Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 -1

Introduction: Business Strategy A plan that integrates the company’s goals, policies, and actions The strategy influences how the company uses: physical capital (plants, technology, and equipment) financial capital (assets and cash reserves) human capital (employees) The business strategy helps direct the company’s activities to reach specific goals Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 -2

Strategy impacts training with a strong influence on determining: (1 of 2) The amount of training devoted to current or future job skills The extent to which training is customized for: the particular needs of an employee, or developed based on the needs of a team, unit, or division Whether training is restricted to specific groups of employees or open to all employees Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 -3

Strategy impacts training with a strong influence on determining: (2 of 2) Whether training is: planned and systematically administered, or provided only when problems occur, or spontaneously as a reaction to what competitors are doing The importance placed on training compared to other human resource management practices such as selection and compensation Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 -4

Evolution of Training’s Role Training Event Create and Share Knowledge Performance Result Learning Emphasis Business Need Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 -5

Evolution of Training’s Role: Learning The acquisition of knowledge by individuals, employees, or groups of employees Willing to apply that knowledge in their jobs in making decisions and accomplishing tasks for the company Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 -6

Evolution of Training’s Role: Knowledge Explicit Knowledge: Human and Social Knowledge: What individuals or teams of employees know or know how to do Knowledge that can be formalized, codified, and communicated Tacit Knowledge: Structured Knowledge: Company rules, processes, tools, and routines Mc. Graw-Hill/Irwin Personal knowledge based on individual experience Difficult to explain to others © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 -7

Intellectual Capital Cognitive Knowledge (know what) Advanced Skills (know how) System Understanding and Creativity (know why) Self-Motivated Creativity (care why) Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 -8

The Strategic Training and Development Process: Business Strategy l Mission l Values l Goals Strategic Training and Development Initiatives l l Mc. Graw-Hill/Irwin Training and Development Activities Diversify the Learning Portfolio l Improve Customer Service l Accelerate the Pace of Employee Learning l Capture and Share Knowledge l Use Web-Based Training Make Development Planning Mandatory Develop Websites for Knowledge Sharing Increase Amount of Customer Service Training Metrics that Show Value of Training l Learning l Performance Improvement l Reduced Customer Complaints l Reduced Turnover l Employee Satisfaction © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 -9

Decisions a company must make about how to compete to reach its goals: 1. Where to compete? In what markets, industries, products will we compete? 2. How to compete? On what outcome or differentiating characteristic will we compete? 3. With what will we compete? What resources will allow us to beat the competition? How will we acquire, develop, and deploy those resources to compete? Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 10

Strategic Training and Development Initiatives and their Implications (1 of 4) Strategic Training and Development Initiatives Implications Diversify the Learning Portfolio • Use new technology for training • Facilitate informal learning • Provide more personalized learning opportunities Expand Who is Trained • Train customers, suppliers, and employees • Offer more learning opportunities for non-managerial Accelerate the Pace of Employee Learning Mc. Graw-Hill/Irwin employees • Quickly identify needs and provide a high-quality learning solution • Reduce the time to develop training programs • Facilitate access to learning resources on an as-needed basis © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 11

Strategic Training and Development Initiatives and their Implications (2 of 4) Strategic Training and Development Initiatives Improve Customer Service Provide Development Opportunities and Communicate to Employees Mc. Graw-Hill/Irwin Implications • Ensure that employees have product and service knowledge • Ensure that employees have skills needed to interact with customers • Ensure that employees understand their roles and decisionmaking authority • Ensure that employees have opportunities to develop • Ensure that employees understand career opportunities and personal growth opportunities • Ensure that training and development addresses employees’ needs in current job as well as growth opportunities © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 12

Strategic Training and Development Initiatives and their Implications (3 of 4) Strategic Training and Development Initiatives Implications Capture and Share Knowledge • Capture insight and information from knowledgeable Align Training and Development with the Company’s Strategic Direction • Identify needed knowledge, skills, abilities, or competencies Mc. Graw-Hill/Irwin employees • Logically organize and store information • Provide methods to make information available • Ensure that current training and development programs support the company’s strategic needs © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 13

Strategic Training and Development Initiatives and their Implications (4 of 4) Strategic Training and Development Initiatives Ensure That the Work Environment Supports Learning and Transfer of Training Mc. Graw-Hill/Irwin Implications • Remove constraints on learning • Dedicate physical space to encourage teamwork, collaboration, creativity, and knowledge sharing • Ensure that employees understand the importance of learning • Ensure that managers and peers are supportive of training, development, and learning © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 14

Example: Sun. U’s Analysis to Align Training with Business Strategy (1 of 3) Customers Who are our customers and how do we work for them? Organization What is the nature of practices required to complete our mission? Products and Services How do we ensure that our products and services meet strategic requirements? Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 15

Example: Sun. U’s Analysis to Align Training with Business Strategy (2 of 3) Research and Development How do we stay current in the training and learning fields and use our knowledge in these areas? Business Systems What are the processes, products, tools, and procedures required to achieve our goals? Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 16

Example: Sun. U’s Analysis to Align Training with Business Strategy (3 of 3) Continuous Learning How do we recognize that learning at Sun Microsystems is continuous, is conscious, and comes from many sources? Results How do we obtain results according to our customers’ standards? Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 17

Metrics and Training: Balanced Scorecard (1 of 2) Measurements that look at performance from the perspective of: internal customers external customers employees shareholders Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 18

Metrics and Training: Balanced Scorecard (2 of 2) Four different perspectives are considered: Customer (time, quality, performance, services, cost) Internal (processes that influence customer satisfaction) Innovation and Learning (operating efficiency, employee satisfaction, continuous improvement) Financial (profitability, growth, shareholder value) Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 19

Organizational Characteristics That Influence Training Roles of Employees and Managers Business Conditions Other HRM Practices Top Management Support Extent of Unionization Integration of Business Units Staff Involvement in Training and Development Global Presence Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 20

The Roles and Duties of Managers in Companies That Use High-Performance Work Practices (1 of 3) Managing Alignment Clarify team goals and company goals Help employees manage their objectives Scan organization environment for useful information for the team Encouraging Continuous Learning Help team identify training needs Help team become effective at on-the-job training Create environment that encourages learning Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 21

The Roles and Duties of Managers in Companies That Use High-Performance Work Practices (2 of 3) Coordinating Activities Ensure that team is meeting internal and external customer needs Ensure that team meets its quantity and quality objectives Help team resolve problems with other teams Ensure uniformity in interpretation of policies and procedures Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 22

The Roles and Duties of Managers in Companies That Use High-Performance Work Practices (3 of 3) Facilitating Decision-Making Process Facilitate team decision making Help team use effective decision-making processes Creating and Maintaining Trust Ensure that each team member is responsible for his or her work load and customers Treat all team members with respect Listen and respond honestly to team ideas Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 23

Other HRM Practices The type of training and resources devoted to training are influenced by the strategy adopted for two HRM practices: Staffing Human Resource Planning Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 24

Staffing Strategy Influence on Training Two aspects of a company’s staffing strategy influence training: The criteria used to make promotion and assignment decisions (assignment flow) The places where the company prefers to obtain human resources to fill open positions (supply flow) Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 25

HR Planning Influence on Training HR planning allows the company to anticipate the movement of human resources in the company HR plans can help identify where employees with certain types of skills are needed in the company Training can be used to prepare employees for: increased responsibilities in their current job promotions, lateral moves, transfers downward job opportunities that are predicted by the human resource plan Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 26

Implications of Business Strategy for Training (1 of 2) Strategy Emphasis Concentration Increased market share Reduced operating costs Create or maintain market niche Improve quality Improve productivity Customize products or services Skill currency Development of existing work force Team building Cross-training Specialized programs Interpersonal skill training On-the-job training Internal Growth Market development Product development Innovation Joint ventures Add distribution channels Expand global markets Modify existing products Create new products Joint ownership Create new jobs Create new tasks Innovation Communication of product value Cultural training Conflict negotiation skills Manager training in feedback and communication Technical competence in jobs Mc. Graw-Hill/Irwin How Achieved Key Issues Training Implications © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 27

Implications of Business Strategy for Training (2 of 2) Strategy Emphasis How Achieved Key Issues Training Implications External Growth (Acquisition) Horizontal integration Vertical integration Concentric diversification Acquire firms for new market access Acquire firms to supply or buy products Acquire any firm Integration Redundancy Restructuring Determining capabilities of acquired employees Integrating training systems Team building Disinvestment Retrenchment Turnaround Divestiture Liquidation Reduce costs Reduce assets Generate revenue Redefine goals Sell off all assets Efficiency Motivation Goal setting Stress management Time management Leadership training Outplacement assistance Job-search skills training Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 28

Models of Organizing the Training Department Faculty Model Customer Model Matrix Model Virtual Model Mc. Graw-Hill/Irwin Corporate University Model © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 29

The Faculty Model Director of Training Safety Training Quality Training Technology and Computer Systems Leadership Development Sales Training Specialty Areas Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 30

The Customer Model Director of Training Information Systems Marketing Production and Operations Finance Business Functions Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 31

The Matrix Model Training Specialty Areas Marketing Production and Operations Business Functions Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 32

The Corporate University Model Historical Training Problems Leadership Development Programs Dissemination of Best Practices Excess Costs Poor Delivery and Focus Training Advantages Product Sales and Human Development Operations Marketing Resources Inconsistent Use of Common Training Practices Align Training with Business Needs Best Training Practices Not Shared Integrate Training Initiatives Training Not Integrated or Coordinated Mc. Graw-Hill/Irwin New Employee Programs Effectively Utilize New Training Methods and Technology © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 33

Virtual Model (Virtual Training Organizations) Virtual training organizations operate according to three principles: Employees (not the company) have primary responsibility for learning The most effective learning takes place on the job, not in the classroom For training to translate into improved job performance, the manager-employee relationship (not employee-trainer relationship) is critical Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 34

Characteristics of Virtual Training Organizations: A virtual training organization is customer focused Takes more responsibility for learning and evaluating training effectiveness Provides customized training solutions based on customer needs Determines when and how to deliver training based on customer needs Leverages resources from many areas Involves line managers in direction and content Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 35

Tactics to Market the Training Function (1 of 2) Involve the target audience in developing the training or learning effort Demonstrate how a training and development program can be used to solve specific needs Showcase an example of how training has been used within the company to solve specific business needs Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 36

Tactics to Market the Training Function (2 of 2) Identify a “champion” who actively supports training Listen and act on feedback received from clients, managers, and employees Advertise on e-mail, on company websites, in employee break areas Designate someone in the training function as an account representative between the training designer and internal customer Mc. Graw-Hill/Irwin © 2005 The Mc. Graw-Hill Companies, Inc. All rights reserved. 2 - 37