The Effect of Training on Employee Performance

Abstract
Employee is a blood stream of any business. The accomplishment or disaster of the firm
depends on its employee performance. Hence, top management realized the importance of
investing in training and development for the sake of improving employee performance. This
conceptual paper aimed at studying the effect of training on employee performance and to
provide suggestion as to how firm can improve its employee performance through
effective training programs. The research approach adopted for the study conforms to
qualitative research, as it reviews the literature and multiple case studies on the importance
of training in enhancing the performance of the workforce. Further the paper goes on to
analyse and understand the theoretical framework and models related to employee
development through training and development programs, and its effect on employee
performance and on the basis of the review of the current evidence of such a relationship,
offers suggestions for the top management in form of a checklist, appropriate for all
businesses, to assess the employee performance and to find out the true cause(s) of the
performance problem so the problem could be solved in time through desired training
program.
The study in hand faces the limitations as there are no adequate indications to correlate
directly the relationship between training and employee performance. Hence, there is a need
for conducting an empirical research in future to test the proposition discussed in the study.
The study in hand provides brief overview of the literature about training effectiveness and
how it contributes in enhancing the employee performance and ultimately concludes along
with recommendation to give directions for future research by applying different level of
analysis on exploring the impact of training practices on employee performance.
Keywords: Training , Employee performance.
1. Introduction
Improved capabilities, knowledge and skills of the talented workforce proved to be a major
source of competitive advantage in a global market (McKinsey, 2006). To develop the
desired knowledge, skills and abilities of the employees, to perform well on the job, requires
effective training programs that may also affect employee motivation and commitment
(Meyer and Allen, 1991). In order to prepare their workers to do their job as desired,
organizations provides training as to optimize their employee’s potential. Most of the firms,
by applying long term planning, invest in the building new skills by their workforce, enabling
them to cope with the uncertain conditions that they may face
in future, thus, improving the employee performance through superior level of motivation and
commitment. When employees recognizes their organization interest in them through
offering training programs, they in turn apply their best efforts to achieve organizational
goals, and show high performance on job. Employees are the most valuable asset of every
company as they can make or break a company’s reputation and can adversely affect
profitability. Employees often are responsible for the great bulk of necessary work to be done
as well as customer satisfaction and the quality of products and events. Without proper
training, employees both new and current do not receive the information and develop the
skill sets necessary for accomplishing their tasks at their maximum potential. Employees
who undergo proper training tend to keep their jobs longer than those who do not. Training is
a necessity in the workplace. Without it, employees don't have a firm grasp on their
responsibilities or duties .Employee training refers to programs that provide workers with
information, new skills, or professional development opportunities.
The companies aimed at gaining the competitive advantage realized the importance of
training in improving the employees performance. Past researches provides the evidence
regarding the positive effect of training programs on both employee and organizational
performance. On one hand previous work in the field proved that effective training programs
leads to superior return on investment while the other researches mentioned the positive role
of training in attaining the supreme levels of employee retention (Colarelli & Montei, 1996;
Becker, 1993).
Due to fast pace global and technological development the firms are now facing new
changes as well as challenges.
Technological advancements have moulded the need of capabilities and competencies
required to perform a particular tasks. Thus, to cope with these challenges, more improved
and effective training programs are required by all corporates. Effective training programs
helps in constructing a more conducive learning environment for the workforce and train
them to cope with the upcoming challenges more easily and in time (Wei-Tai, 2006).
According to Farooq. M, & Aslam. M. K (2011), managers are trying their level best to
develop the employee’s capabilities, ultimately creating good working environment within the
organization. For the sake of capacity building managers are involved in developing the
effective training programs for their employees to equip them with the desired knowledge,
skills and abilities to achieve organizational goals. This struggle by the top management not
only improves the employee performance but also creates positive image of the firm
worldwide, (Jia-Fang, 2010).
Effective training programs helps employees to get acquaintance with the desired new
technological advancement, also gaining full command on the competencies and skills
required to perform at a particular job and to void on the job errors and mistakes (Robert,
2006).
Amongst the important function of human resource management, one of the crucial function
is employee development through proper training and development programs. Employee
development refers to the capacity and capability building on an employee, and thus as of
whole organization, to meet the standard performance level (Elena P. 2000). More the
developed employees, more they are satisfied with their job, hence increasing the firm
productivity and profitability. (Champathes, 2006).
In spite of the large number of researches on the relationship between training and
employee performance, there appears to be a gap, concerning the study of effect of training
on employee performance. The purpose of this study is to close this gap by deeply
investigating this phenomenon through the relevant literature, shedding more light into the
relationship of training effectiveness, and superior employee performance and providing
suggestions to the firms as how they can make best use of training programs to make their
employees perform well on job.

2. Research problem
This study begins from the realization of the need to effectively administer the effect of
training on employee performance. Training is a systematic process to enhance employee’s
skill, knowledge and competency, necessary to perform effectively on job. Overall, training
impacts organizational competitiveness, revenue and performance.
Unfortunately, the majority of governmental, private organization and international
organizations are not recognizing the importance of training to increase their employee's
productivity and when the economy slows or when profits decline, many organizations first
seek cuts in their training budgets. This will leads to high job turnover then increase the cost
to hire new employees which low down the organizational profitability.
Past researches proved a positive link between training and employee performance, as
training brings benefits for the employee along with for the firm by positively impacting
employee performance through the enhancement of employee competencies and behaviour.
Firms that focuses on shareholders and customer satisfaction realized the importance of
investing in training, and thus recognizes the worth of employee development (Evans and
Lindsay, 1999). Keeping above discussion in mind, the significant function of this study is to
answer the following research question:

Research Question: How training effects the employees’ performance.

Moreover, to find the answer to the above mentioned research question, the study highlights
the critical review on the topic under consideration to better understand the phenomenon as
to how effective training leads to superior employee performance and higher organizational
returns and provide a checklist for improving employee performance through designing
effective training programs.

3. Research objectives
Through the relevant review of different studies, reports, periodicals and books, on the topic
under consideration,
following objectives could be drawn:
• To investigate the meaning and importance of training.
• To identify the significance of employee performance.
• To explore the relationship between Training and employees performance.
• To develop guideline for assessing the employee performance

4. Review of Literature
In the fast pace changing world of business and environmental uncertainty, organizations
realize its limitation of dealing with new challenges (Tai, 2006). However te further states
that the firms should invest in training programs to make their employees competent enough
to face uncertainties and take effective decision in time, in order to remain competitive in the
market. Effective training is beneficial for the firm in variety of ways, such as, it plays a vital
role in building and maintaining capabilities, both on individual and organisational level, and
thus participates in the process of organisational change (Valleet al., 2000). Moreover, it
enhances the retention capacity of talented workforce, hence decreasing the unintentional
job rotation of the workers (Jones and Wright, 1992; Shaw et al., 1998). Furthermore, it
indicates the firm’s long-term commitment towards its workers and increases the employee’s
motivational level (Pfeffer, 1994). All these contributions lead to a achieving competitive
advantage (Youndtet al., 1996) and to an enhancement in employee performance and
organisational productivity (Bartel, 1994; Knoke and Kalleberg, 1994; Huselid, 1995; Delery
and Doty, 1996).
4.1 Training
Effective training and development programs aimed at improving the employees’
performance. Training refers to bridging the gap between the current performance and the
standard desired performance. Training could be given through different methods such as on
the coaching and mentoring, peers cooperation and participation by the subordinates. This
teamwork enable employees to actively participate on the job and produces better
performance, hence improving organizational performance.
Training programs not only develops employees but also help an organization to make best
use of their humane resources in favour of gaining competitive advantage. Therefore, it
seems mandatory by the firm to plan for such a training programs for its employees to
enhance their abilities and competencies that are needed at the workplace, (Jie and Roger,
2005).
Training not only develops the capabilities of the employee but sharpen their thinking ability
and creativity in order to take better decision in time and in more productive manner (David,
2006). Moreover it also enable employees to deal with the customer in an effective manner
and respond to their complaints in timely manner (Hollenbeck,Derue and Guzzo, 2004).
Training develops self efficacy and results in superior performance on job (Svenja, 2007), by
replacing the traditional weak practices by efficient and effective work related practices
(Kathiravan, Devadason and Zakkeer, 2006).
Training refers to a planned intervention aimed at enhancing the elements of individual job
performance” (Chiaburu and Tekleab, 2005). It is all about improving the skills that seems to
be necessary for the achievement of organizational goals. Training programs, may also help
the workforce to decrease their anxiety or frustration, originated by the work on job (Chenet
al., 2004). Those workers who feel themselves to be unable to perform a task with the
desired level of performance often decide to leave the firm (Chen et al., 2004), otherwise
their stay at frim will not dd to productivity (Kanelopoulos and Akrivos, 2006). The greater the
gap between the skills necessary and those possessed by the workforce, the higher the job
dissatisfaction of the workers. Rowden (2002), suggest that training may also be an efficient
tool for improving one’s job satisfaction, as employee better performance leads to
appreciation by the top management, hence employee feel more adjusted with his job.
According to Rowden and Conine (2005), trained employees are more able to satisfy the
customers and (Tsai et al., 2007), employees who learn as a result of training program
shows a greater level of job satisfaction along with superior performance.

4.2 The Importance of Training

Training is important and an imperative tool for the organization to revamp the performance
of all the personnel for organizational growth and success. It is beneficial to both employers
and employees of an organization. An employee will become more efficient and productive if
he is trained well. Firms can develop and enhance the quality of the current employees by
providing comprehensive training and development. Training is essential not only to increase
productivity but also to motivate and inspire workers by letting them know how important
their jobs are and giving them all the information they need to perform those jobs
(Anonymous, 1998). The general benefits received from employee training are: increased
job satisfaction and morale , increased motivation , increased efficiencies in processes,
resulting in financial gain, increased capacity to adopt new technologies and methods,
increased innovation in strategies and products and reduced employee turnover.