Overview of the Effect of Employee Training on Organizational Perf.docx

Overview of the Effect of Employee Training on Organizational
Performance .There has been a general resistance to investment
in training in organizations until recently because of the
presumption that employees hired under a merit system are
qualified and trained for their jobs (Okotoni and Erero, 2005). It
was further assumed that if that was not the case then it means
that initial selection of personnel was faulty (Stahl, 1956). This
assumption no longer holds as the need for training became
evident in all sectors (Okotoni and Erero, 2005). Training offers
a way of “developing skills, enhancing productivity and quality
of work, and building worker loyalty to the firm”
(http://www.bls.gov/oco/ocos021.htm).
Training has become the Holy Grail to some organizations, an
evidence of how much the management truly cares about its
workforce (Hamid, 2011). Hamid (2011) went further to say that
the effectiveness with which organizations manage, develop,
motivate, involve and engage the willing contribution of those
who work in them is a key determinant of how well these
organizations perform.
The importance of training has become more obvious given the
growing complexity of the work environment, the rapid change
in organizations and technological advancement which further
necessitates the need for training and development of employees
to meet the challenges. Training helps to ensure that
organizational members possess the knowledge and skills they
need to perform their jobs effectively, take on new
responsibilities, and adapt to changing conditions (Jones,
George and Hill, 2000). Similarly, training helps improve
quality, customer satisfaction, productivity, morale,
management succession, business development, profitability and
organizational performance.
Usually, before training programmes are organized efforts are
made through individuals and organization’s appraisals to
identify the training needs (Olaniyan & Ojo, 2008:327). After

the training programmes, an evaluation is carried out to
ascertain the effectiveness of the programme in line with the
need, which had been identified (Olaniyan & Ojo, 2008). The
essence of evaluation is to know the extent to which the training
has positively affected the employee’s productivity.
Organization’s development follows the development of
individual who form the organization. It therefore follows that
no organization becomes effective and efficient until the
employee has acquired and applied the required skills and
knowledge.
Conceptual Framework
Training has been defined differently by different authors. It is
“a systematic acquisition and development of the knowledge,
skills, and attitudes required by employees to adequately
perform a task or job or to improve performance in the job
environment” (Tharenou, Saks and Moore, 2007:252). Another
concept opines that training primarily focuses on teaching
organizational members on how to perform their current jobs
and helping them acquire the knowledge and skills they need to
be effective performers (Jones, George and Hill, 2000).
Other scholars view training as, “a planned process to modify
attitude, knowledge or skill behaviour through learning
experience to achieve effective performance in any activity or
range of activities” (Beardwell and Holden, 2001:324). Its
purpose is to develop the abilities of the individual and to
satisfy the current and future needs of the organization.
These definitions did not consider the dynamic and changing
nature of the environment in which organizations operate
(Okanya, 2008). It also implies that training automatically
translate to organizational performance. Skills needed by
employees are continuously changing; besides, the ever
changing improvement on information and technology makes
knowledge and skills obsolete in a short while. This implies that
employees should align their needs to that of the organization’s
requirements and their own long term development and the

Human Resources Department should consider the current and
future needs of the organization when planning for employee
training (Holden, 2001).
These divergent views notwithstanding, all the scholars seem to
point to one fact that the training aims at improving
organizational performance.
Purpose of Training
A number of authors recognize the purpose of training as being
to develop capacities of employees and by extension represents
an investment in human resources (Ulrich and Lake, 1990). The
quality of employees and their development through training
and education are major factors in determining long-term
profitability of any business venture.
Human Resource professionals also believe that an organization
is only as good as its employees, and this understanding
suggests that training should be more specifically responsive to
employees’ training needs (Noe, 2008). Arguing in the same
line, Bratton and
Gold (2000) affirm that successful corporate leaders recognize
that their competitive edge in today’s market place is their
people. They also acknowledge that few organization know how
to manage human resources effectively, primarily because
traditional management models are inappropriate in today’s
dynamic work environment.
To manage an organization both large and small requires
staffing them with competent employees. The formal
educational system in Nigeria does not adequately teach
specific job skills for a position in a particular organization and
few employees have the requisite knowledge, abilities, skills
and competencies needed to work. As a result, many employees
require extensive training on the job to acquire the necessary
knowledge, abilities, skills and competencies needed to make
substantive contribution towards the organization’s growth.
The effectiveness and success of an organization lies on the
people who form and work within the organization. It follows
therefore that for the employees in an organization to be able to

perform their duties and make meaningful contributions to the
success of the organizational goals, they need to acquire the
relevant skills and knowledge (Ospina and Watad, 1999). In the
appreciation of this fact therefore, it becomes imperative for
organizations to ascertain the training and development needs of
its employees, through its training need analysis and align such
needs to the organizational overall needs and objectives in order
to actualize the organizational vision and mission.
Smith (2010) opines that training motivates employee and make
them more productive and innovative. Smith asserts further that
the reasons why training makes sense include, well trained
employees are more capable and willing to assume more control
over their jobs; they need less supervision, with free
management for other tasks; employees are more capable to
answer questions from customers which enhances customer
loyalty. Furthermore, employees who understand their job,
complain less, are more satisfied and more motivated and thus
improve management-employee relationships. Heathfield
arguing in the same direction opines that the opportunity to
continue to grow and develop through training and development
is one of the most important factors in employee motivation
(Heathfield,About.com Guide).
Types of Training
The type of employee training which is best suited to a
particular organization depends on a number of considerations.
The skill gap to be filled, the job description, the employee
present qualification and the challenges faced by the employee
in performing his/her job. The approaches that can be used in
implementing training fall broadly into two categories namely:
on-the job and off-the job techniques, notwithstanding that
some of the training techniques cut across (Kempton, 1995).
On-the-Job training
Adamu (2008) asserts that on-the-job training is designed to
impart knowledge of job by working under an experienced
worker. The trainer or the experienced worker teaches and
advices the trainee on specific methods and techniques of doing

the job. In some cases, the trainee is expected to learn by
watching the master. The trainee is learning and at the same
time working, although the trainee’s output will not be much.
The procedure is usually unsystematic and most times, it is by
trial and error. Baum and Devine (2007) opine that it is better
for the organizations to give their employees on the job training
because it is cost effective and time saving. Besides, it helps
their employees learn in a practical way.
Off-the-Job training
Off-the job training is a process of acquiring skill and
knowledge at a location different from the employee office. It
includes group discussion, individual tutorials, lectures,
reading, training courses and workshops (Kempton, 1995). It
permits individuals to leave their primary place of work for a
different location. Its advantage includes, the trainee’s ability to
concentrate, analyse past behaviours and reflect on what has
been successful and what has not (Okanya, 2008). This kind of
training offers an opportunity to impart knowledge and skills
that can be learnt or practiced in a safe and conducive
atmosphere.
Kempton (1995) opines that if training is conducted in an
organized and systematic way it should be able to develop new
attitudes and experiences that contribute to the success of the
organization, improve employee morale which would translate
to better performance and greater productivity and create a
psychological climate which orients the activities of each
employee towards achieving the goals of the organization.
The Concept of Psychological Contract
The concept of psychological contract helps us understand
employment relationship between employer and employee,
especially in respect to training. Psychological contract concept
was developed by Denise Rousseau in contemporary research.
However, its origin could be traced to as far back as 1960.
While there has not been one universally accepted definition of
psychological contract, most authors tend to see it as an implicit
understanding of mutual obligations between an employer and

an employee. The most widely accepted definition of
psychological contract is that of
Rousseau in his book titled “Psychological Contracts in
Organization”, as: “The psychological contract is individual
beliefs, shaped by the organization, regarding terms of an
exchange arrangement between the individual and their
organization” (Rousseau, 1995:9). Rousseau’s earlier definition,
refers psychological contract as an individual’s belief regarding
the terms and conditions of a reciprocal exchange agreement
between the focal person and another party (Rousseau, 1989). It
is distinguishable from the formal written contract of
employment which specifies the formal duties, responsibilities
and obligations of employer and employee in an employment
relationship.
When used in terms of training, the psychological contract helps
us understand that some employers invest in training as a sign
of trust in their employees and also as a way of ‘buying’ their
commitment and loyalty (Okanya, 2008). It also shows that they
are valued by the organization. It has been argued that
organizations that recognize the importance of psychological
contracts and have invested in lifelong learning characterized
by long term, high trust, HRD strategies embracing education,
training and career development have had positive responses
from employees even in conditions of adversity (Graeme et al.
1999).
Theoretical Framework of Employee Training
There are two main theoretical approaches towards employee
training, namely, the human capital approach and the
technology-based approach. According to Luo (2000), the
human capital approach regards training as investment in human
capital. Thus, training is provided only when the benefit from
productivity gains is greater than the cost of training. On the
other hand, the technology-based approach regards training as a
skill formation process. According to this approach, the
expanded training in the contemporary period is driven by the
rapidly changing technologies and work reorganization. Thus,

training is provided because it satisfies the functional needs of
an organization and equally contributes to human capital
accumulation or skill formation. These approaches however, to
a large extent overlooked the content of employee training,
which could be a resultant effect of training design and training
delivery style.
Luo (2000) opined that the confusion about employee training
comes in the following four ways. First, it is not inherently or
immediately related to the technical aspects of specific job
tasks. Second, prior need analysis is rarely conducted for such
training, despite suggestions to do so in many training
handbooks. Third, organizations and trainers seldom conduct
evaluations of behaviour or outcome changes brought out by
such training. Evaluation, when there is one, is often about how
one feels about the training or what one has learned. The
evaluation questionnaire is often called a "smile sheet," as
trainees often respond happily to the questions. But the impact
of the training remains uncertain. Fourth, the rapid expansion of
personal development training has taken place in the absence of
scientific evidence of any link between such training and
improvement in organizational bottom lines.
Theoretical Models Linking Training to Organizational
Performance
The knowledge and skills of workers acquired through training
have become important in the face of the increasingly rapid
changes in technology, products, and systems (Thang, Quang
and Buyens, 2010). Most organizations invest in training
because they believe that higher performance will result
(Alliger, et al. 1997:50; Kozlowski, et al. 2000). Devanna,
Formbrun and Tichy (1984) proposed the Michigan School
model also known as the ‘soft’ Human Resource Management
(HRM). This model’s emphasis is on treating employees as a
means to achieving the organization’s strategy. Its assumption
is that ‘what is good for the organization is equally good for the
employee’. According to Devanna, Fombrun, and Tichy (1984),
training and other HRM activities aim to increase individual

performance, which is believed to lead to higher organizational
performance. Although the Michigan School model
acknowledges the importance of motivating and rewarding
people, it concentrates most on managing human assets to
achieve strategic goals (Pinnington and Edwards, 2000).
A second ‘soft’ HRM theoretical model to show how Human
Resource Management (HRM) policies can affect employees and
organizational outcomes was developed by Guest. The central
hypothesis of Guest’s model is that if an integrated set of HRM
practices is applied with a view to achieving the established
goals, employees’ performance will improve. It also assumes
that this will translate to increase in organizational
performance. The strength of
Guest's model is that it is a useful analytical framework for
studying the relationship between HRM policies and
organizational performance. This is because it expresses
pathways for more careful, clear and ease of empirical testing.
Guest also saw the goals of linking employees with
organizational performance as important to ensure the high
quality of products and services. He thus opines that training
policy play an important role in HRM and contributes to
improved strategic integration, employee commitment,
flexibility and quality.
He further asserts that HRM outcomes can lead to high job
performance, high problem solving activity, high cost
effectiveness, and low turnover, reduced absences and fewer
grievances.
Similarly, Kozlowski and Klein (2000) offered an excellent
analytical framework, which uses a multi-level approach to
training. This model bridges the gap between theoretical models
of training needs assessment, design, and evaluation, and the
higher levels at which training must have an impact if it is to
contribute to organizational effectiveness (Kozlowski and Salas
1997). The model focuses on training transfer. There are two
types of training transfer namely horizontal and vertical
transfer. Horizontal transfer concentrates on traditional models

of training effectiveness, while the vertical transfer examines
the link between individual training outcomes and
organizational outcomes. The vertical transfer processes are
composition and compilation. Composition concentrates on
individual contribution at the same content, while compilation
focuses on individual contribution at the different or diverse
content.
Thang, Quang and Buyens (2010) contend that similarities exist
between the normative (hard and soft) models of HRM.
According to these authors, training has been put on a set of
HRM policies and it is considered as an important and vital
policy for improving knowledge, skills, attitude and motivation
of employees.
This review of theoretical models linking training to
organizational performance suggests that it explicitly
recognized that no organization can attain its goals or
organizational strategy without employees that have the right
knowledge, skills, abilities, behaviour, and attitudes.
Thus, training plays an important role in improving the quality
of employees directly and affecting organizational performance
through HR outcomes (Thang, Quang and Buyens,
2010).
Successful Models of Training and Development
There are many models of training and development that have
significantly impacted into organizational settings. Such models
are Instructional Systems Design (ISD), Human
Performance Technology (HPT), Performance-Based
Instructional Design (PBID) and Total Quality Management
(TQM). These models originated from research in the area of
organizational development.
ADDIE Instructional Design Model
The ADDIE Instructional Design model is the generic process
traditionally used by
Instructional Designers and Training Developers. It is the basis
of Instructional Systems
Design (ISD) which is the practice of creating instructional

experiences that make the acquisition of knowledge and skill
more efficient, effective and appealing (Mayer, 1992).
ISD was developed and used by the military during the World
War II as a training material.
The process consists broadly of determining the current state
and needs of the learner, defining the end goal of instruction,
and creating some “intervention” to assist in the transition.
Tests for assessing learner’s ability were used to screen
candidates for the training programs. It was after the success of
military training that psychologists began to view training as a
system and thus developed various analysis, design and
evaluation procedures to support their argument.
ADDIE is an acronym which stands for Analyze, Design,
Development, Implementation and Evaluation. It was initially
developed by Florida State University (Branson et al 1975). The
ADDIE has five (5) Phases. They are Analyze, Design, Develop,
Implement, and Evaluation.
Reiser and Dempsey (2012) list and explain the five phases as
follows:
• Analyze: The first phase of content development begins with
Analysis. Analysis refers to the gathering of information about
one’s audience, the tasks to be completed, and the project’s
overall goals. The instructional problem is clarified; goals and
objectives are established. The learning environment and
learner’s existing knowledge and skills are identified.
• Design: The design phase deals with learning objectives,
assessment instruments, exercises, content, subject matter
analysis, lesson planning and media selection.
Information gathered from the Analysis phase in conjunction
with the theories and models of instructional design is meant to
explain how the learning will be acquired.
• Development: The third phase is the development phases. Here
the creation of activities being implemented is handled.
Storyboards are created, content is written and graphics are
designed. The proposals in the design phases are assembled.
• Implement: At this stage, the procedure for training the

facilitators and the learners is developed. The facilitators
training should cover the course curriculum, learning outcomes
and method of delivery. This stage allows the instructional
designer to test all materials to identify if they are functional
and appropriate for the intended audience.
• Evaluation: This phase ensures that the materials developed
achieve the desired goals. This phase consists of two parts –
formative and summative. Formative evaluation is inbuilt in
each stage while summative is at end of the whole process and
it provides opportunities for feedback from the users.
Human Performance Technology (HPT)
HPT is a systematic approach to improving individual and
organizational performance
(Pershing, 2006). Human performance technology emerged as a
field designed to help practitioners to critically analyze,
prescribe, influence business leaders and develop interventions
that are best suited to the performance problem presented
(Wikipedia). HPT allows a rigorous analysis of the requirements
of organization and human performance as well as identify the
causes of performance gaps. It also proffers wide range of
interventions with the aim of improving performance.
HPT as a field of study is related to Process Improvement, Six
Sigma, Learn Six Sigma, Organization Development,
Motivation, Instructional Technology and Human Factors. It
focuses on improving performance at the organization, process
and individual performer levels.
HPT is based on the following assumptions:
1. A technology is a set of empirical and scientific principles
and their application.
2. Human performance technology is the technology concerned
with all variables which impact human performance.
3. All organizational processes and practices impact the
production of valued results, whether positively or negatively.
(Everything that an organization does affects what it

accomplishes, whether or not the results are acknowledged or
desirable).
4. The purpose of all organizations is the same.
Performance-Based Instructional Design (PBID)
PBID is designed to help learners perform more effectively in
the workplace. PBID was designed by David J. Pucel, a
professor from the University of Minnesota and a specialist in
the development and evaluation of training and development.
PBID as a system has seven major components (Pucel, 1989).
They are as follows:
1. Program description
2. Content analysis
3. Content selection
4. Content sequencing
5. Lesson structuring
6. Lesson delivery formatting
7. Evaluation and feedback procedures development
The output of the system is an integrated plan of the instruction,
and each system component contributes to the output.
Total Quality Management (TQM)
Total Quality Management is a management style based on
continuously improving the quality of products and processes.
The philosophy of TQM is on the premise that the quality of
products and processes is the responsibility of everyone who is
involved with the creation or consumption of the products or
services offered by an organization (Wikipedia).
The nine common TQM practices are: cross-functional product
design, process management, supplier quality management,
customer involvement, information and feedback, committed
leadership, strategic planning, cross-functional training, and
employee involvement. The processes of TQM as outline above
cannot be achieved without training (Cua, McKone, and
Schroeder, 2001).
Among the entire model x-rayed above, ADDIE Model is the
basis of this research project.

Learning Theories
Armstrong (1996) emphasizes that training should be developed
and operated within an organization by appreciating learning
theories and approaches if the training is to be well understood.
The success of a training program depends more on the
organization’s ability to identify training needs. Training
experts believe that if trainees do not learn, it is probably
because some important learning principle had been overlooked.
Sherman et al (1996) argues that the success or failure of a
training program is frequently related to the recognition and
application of basic psychological principles of learning. This
assertion is not necessarily right. If the trainees do not learn
anything, then of what benefit will they be for the organization.
Laing (2009) argues that trainees could return empty, with
nothing to contribute, even when the organization have done all
that is necessary to ensure a successful training program.
According to him, this could happen if a wrong candidate has
been selected for the training program.
McGhee et al (1996) posit that learning is a term used to
describe the process by which behavioral changes result from
experience. They assert further that the fact that learning has
occurred could only be inferred from a comparison of an
individual’s behavior prior to the experiences of specific kinds
of task. However, if there is no explicit behavioral change, it
could then be argued that learning principles have not been
followed.
Training therefore can be explained as a planned and systematic
effort by management aimed at altering behaviour of employees,
in a direction that will achieve organizational goals. A formal
training program is an effort by the employer to provide
opportunities for the employee to acquire job-related skills,
attitudes and knowledge (McGhee et al 1996).
Identification of Training Needs in an Organisation
The popular saying that ‘a problem identified is half solved’
suggests the need to enumerate the different ways of identifying
employee training needs in an organization. Nielson (2010)

opines that an overall organizational training needs assessment
is a thorough examination of what is currently being trained,
what knowledge, skill and abilities should be added presently
and in future. Depending on the matter, assessment methods
could vary (Nielson, 2010).
Nielson (2010) further notes that training needs could be
identified in the following ways:
1. A felt or perceived need: This is an overall desire for
improvement in a certain subject area.
2. Comparative needs: These are needs that are identified by
comparing the training audience to a set of criteria.
3. Response to a failure of some type. This could be as a result
of the organisation’s inability to meet a set goal for a particular
period.
4. Critical Incident needs: This need could occur because of a
catastrophic failure such as a factory explosion.
5. The final needs: This is an anticipated need that will occur
base on organizational changes, such as new products, new
services etc.
6. If current training is not meeting its objective, there becomes
a need to retrain.
7. When there is a gap in the job. This occurs when performance
is below specification or standard.
Training Needs Assessment
Training needs assessment methods differ from one organization
to another. Depending on the goals, the timeline for the
intervention, staffing and budget, but the most common needs
assessment tool is a survey (written or online) (Nielson, 2010).
Job analysis is another method of identifying training needs and
this has to do with the comparison of job being performed with
job descriptions or manager’s description, or even expected
output.
Other tools as enumerated by Nielson (2010) are:
• Competency identification; and
• Operational measurements.
Benefits of Training Needs Assessment

CommLab (2013) highlighted the following as the importance of
training needs assessment to organizations:
1. It explores ways in which the competency, capability and
potential of organization can be enriched;
2. It enables organizations obtain better out outcomes with
optimum utilization of resources;
3. It establishes relevance of training for employees as data
obtained from the assessment reveals training requirements;
4. It aligns organizational goals with training;
5. It enlists standards that need to be followed for ideal
competency levels;
6. It helps to work on areas in which employees need skills
development; and
7. It identifies the list of skills or knowledge that employees
need in order to achieve organizational goals.
Training Design and Organizational Performance
It is very necessary for the organization to design training in a
very careful manner (Armstrong, 2000). The design of the
training should be according to the needs of the employees
(Khan, Khan and Khan, 2011). Those organizations which
develop a good training design according to the need of the
employees as well as the organization always get good results
(Partlow, 1996). Effective training design considers learning
concepts, legal issues, and different approaches to training
(Mathis and Jackson, 2000:225). Training design plays a very
crucial role in the employee as well as organizational
performance. A bad training design is nothing but the loss of
time and money (Tsaur and Lin, 2004).
Mathis and Jackson (2000) assert that there are three primary
considerations when designing training. They are (1)
determining learner’s readiness, (2) understanding different
learning styles, and (3) designing training for transfer. For
training to be successful and capable of influencing
organizational performance, the trainees must have the basic
skills necessary for learning, the motivation to learn and
possess self-efficacy.

Since the objective of training is to assist learners acquire the
behaviour necessary for effective work performance, it is
therefore imperative that a clear understanding of the ways in
which learning theories are applied when designing training
programs are explained.
Flippo (1984) opines that the more highly motivated the trainee,
the more quickly and thoroughly a new skill or knowledge is
learned. People learn if they accept the need for training and
commit to it. For instance, if their motivation is weak and they
doubt their ability to learn; no matter how well their training is
designed and implemented, its effectiveness will be limited.
This is to say that training must be related to something which
the trainee desires.
The drive could be the need which the trainee feels that training
will help him or her solve.
For example, job promotion, recognition, and so on (Bryan,
1990). The second requirement is cue. Through training the
learner recognizes relevant cues and associates them with
desired responses. The third is response. Training should be
immediately followed with positive reinforcement to enable the
learner feel the response. If reinforcement is not timely,
positive and consistent; then there is every tendency that it will
not produce the desired result.
Feedback is another important requirement. The information the
learner receives indicating the quality of his response is the
feedback. It should be made available as quickly as possible to
ensure possible effective learning. Although, these learning
principles are good, the author, nevertheless, failed to discuss
its practicability, where the learner actively participates in
using the skills and knowledge acquired and did not mention
that the level of aptitude and intelligence of individuals are
different and that could affect the methods of training (Bryan,
1990).
Implication of Training Delivery Style on Employees
Performance
Training delivery style is a very important part of training

(Carlos, 1995). Employees are very conscious about the delivery
style (Armstrong, 2000)). Thus, if someone is not delivering the
training in an impressive style and not capturing the attention of
the audience, it means the trainer is wasting the time (Mark and
Andrew, 2000). Therefore, it becomes imperative for a trainer
to engage its audience during the training session (Phillip and
Eves, 2005). Delivery style means so much in the training
because it is what goes into making the change expected in the
trainee. The HR Department must ensure that no matter the type
of method used, it must be able to catch the trainees’ interests.
Once training has been designed, then the actual delivery of
training can begin. The general recommendation is that training
be pilot-tested or conducted on a trial basis in order to ensure
that the training meets the needs identified and that the design
is appropriate (Mathis and Jackson, 2004).
Methods of Training
Training methods refer to the means by which learning contents
are communicated to learners or trainee. The effectiveness of
training depends on the methods and techniques used. However,
choice of any method by an organization will depend on cost,
time available, number of employees to be trained, the depth of
knowledge required and the trainee’s background. (Adamu,
2008).
Ezigbo (2011) argues that the method to be adopted depends on
whether the training is going to be applied in the employee’s
current position, future or anticipated position. However, since
training is our focus, the HR Department should consider the
suitable and most rewarding methods.
a. Apprenticeship
Apprenticeship is a system of training of a new generation of
practitioners of structured competency based on set of skills.
Apprenticeships ranged from craft occupations or trades to
those seeking a professional license to practice in a regulated
profession. Apprenticeship training provides an individual with
the knowledge and skill in doing a craft or a series of related
job (Ezeigbo, 2011). Most of their training is done while

working for an employer who helps the apprentices learn their
trade or profession, in exchange for their continuing labour for
an agreed period (say 4-6 years) after they have achieved
measurable competencies. During the apprenticeship period, the
employer pays them allowance for their upkeep. Sometimes,
apprenticeship programme combines on-the-job training and
formal or classroom instruction (Ezeigbo, 2011).
b. Induction/Orientation
This type of training is carried out for new entrants on the job
to make them familiar with the total corporate requirements like
norms, ethics, rules and regulations of the organization
(Olaniyan and Ojo, 2008). This training is concerned with the
introduction of new employees into new roles usually during
their first day in office.
c. Internship
This is a system of on-the-job training, but usually for white-
collar and professional careers.
Internships for professional careers are similar to
apprenticeships for trade and vocational jobs. The major
difference is that internship is typically for college or university
students.
Sometimes, post-graduate adults go on internship.
Generally, the internship works as an exchange of services for
experience between the student and his or her employer.
Students exchange their cheap or free labour to gain experience
in a particular field. Internship could also be used to determine
if a person has interest in a particular career. An internship may
be paid, unpaid or partially paid. Paid internships are common
in professional fields. Non-governmental and non-profit
organizations have unpaid internships.
d. Coaching and Understudy
According to Ezigbo (2011:419), “understudy is a type of
training where an employee works as a subordinate partner with
a boss so that eventually the subordinate will assume the full
responsibilities and duties of the particular job”. Merriam-
Webster, a free online encyclopedia defines understudy as ‘the

act of studying another actor’s part in order to substitute in case
of an emergency’.
Christy Lively posits that the incoming or current employee
should work directly with a senior manager or supervisor he or
she is to replace for weeks to ensure proper training with the
intent that the new employee will become the new manager. She
argues that for understudy to be effective, coaching and
understudy training should be implemented as part of a
manager’s day-to-day work far before retiring or leaving a
company (www.ehow.com).
e. Job Rotation
This is a training technique that assigns trainees to various jobs
and departments over a period of few years. Job rotation is an
effective approach to management development in that
individual is moved from a schedule of assignments designed to
expose him or her to the entire operations of the organization
(classsof1.com).
A well structure job rotation program in an organization has
huge potential of positive impact on job satisfaction,
engagement of people as well as retention of people. Its benefits
include leadership development, job enrichment, effective
motivation to perform caused by newer challenges and career
development (en.wikipedia.org).
f. Informal Training
Informal training occurs through interactions and feedback
among employees. Much of what employees know about their
jobs is learnt informally from asking questions and getting
advice from other employees and their supervisors, rather than
from formal training programs (Mathis and Jackson, 2004).
g. E-Learning: On-line training
E-learning is the use of the internet or an organizational intranet
to conduct training on-line.
As more and more employees use computers and have access to
internet portals, their employers look for training opportunities
on-line that will be beneficial to the employee.
Computer-supported simulations within organizational training

can replicate the psychological and behavioural requirements of
a task, in addition to providing some amount of physical
resemblance to the trainee’s work environment (Mathis and
Jackson, 2004).
h. Vestibule training
This is a system of training whereby an employee is sent to a
replica organization in another location outside his place of
work. The training place looks exactly like the employee’s work
environment. The difference between the training venue and
employee’s workplace is that emphasis is on learning instead of
production. The trainee is there only to acquire the desired
knowledge or skill. Some banks in Nigeria have this kind of
training facility. The essence is to ensure that the trainee learns
the job skills without necessarily imbibing some bad customs
and practices of the work environment. Another advantage of
this method is that costly mistakes are avoided and acquisition
of knowledge is enhanced since the trainee practices with
identical equipment and tools.
i. Classroom instruction technique
This method is usually designed for the purpose of passing on
knowledge in an off-the-job location such as training centres,
schools, professional institutions. The emphasis is on
developing an understanding of general principles, background
knowledge and general awareness of comparative ideas (Adamu,
2008). The techniques used in this method include case study,
role-playing, in-basket and lectures. Workshops, seminars,
conferences and symposiums also belong to this category of
training. Sometimes, an examination is conducted at the end of
the training and a certificate of participation issued.
Difference between Training and Development
Some authors use the terms “training” and “development” as
synonyms. However, some view the two concepts as being
different. Jones, George and Hill (2000) posit that training
primarily focuses on teaching organizational members how to
perform their current jobs and helping them acquire the
knowledge and skills they need to be effective performers.

Development on the other hand focuses on building the
knowledge and skills of organizational members so that they
will be prepared to take on new responsibilities and challenges
(Ezigbo, 2011).
According to Crawford in Adamu (2008), training is the ways in
which specific knowledge and skills necessary to perform
specific jobs are taught and learnt, development entails an
analogous process in which people acquire more general
abilities and information, but in ways that cannot always be tied
directly to a particular task they perform.
Training refers to the acquisition of skills, knowledge and
information directly required for the performance of a specific
role. It includes on-the-job training, workshops, seminars and
conference. Development broadly refers to job enrichment that
has an intrinsic mechanism to
motivate an employee to accept and play challenging
organizational tasks (Chukwunenye and
Igbokwe, 2011). Development is not as specific as training; it is
more general in application.
It is used in relation to the process of helping managerial
employee who perform non-routine jobs to improve their
managerial, administrative and decision making abilities and
competence (Adamu, 2008).
Training is any learning activity which is aimed at the
acquisition of specific knowledge and skills for the purpose of
an occupation or task. The focus of training is the job or task,
while development is a learning activity which is directed
towards future needs rather than present needs (Adamu, 2008).
Comparison of principal characteristics of training and
development
S/N Characteristics Training Development
1. Primary target group Rank and file Managers and
professional
2. Usual location Local Dispersed
3. Pay off Right away or soon Long term
4. Application Current job Future job

5. Specificity Narrow Broad
6. Objective Improved performance Improve potential
7. Linkage to performance Immediate Distance sometimes
uncertain
8. Number of target employee served at a time Large Small
9. Transferability Narrow Broad
10. Scope Single level Across levels
11. Variations required Comparatively uniform
Many special requirements
12. Duration Short Extended
13. Participant gain or reaction Sense ofcompetency
Meaningful overview, sense of satisfaction
14. Anticipated Specific, definite and measure General and
uncertain and difficult to measure
Human Resource Management (HRM) Process vis-à-vis
Employee Training
Stoner, Freeman and Gilbert (2007), refer to HRM as the
management function through which managers recruits, select,
train, and develop organization members. The HRM process is
an ongoing procedure that tries to keep the organization
supplied with the right people in the right positions, when they
are needed.
Stoner, Freeman and Gilbert (2007) go further to explain the
seven basic activities of the HRM process.
1. Human resource planning: This activity has to do with
ensuring that personnel needs are constantly and appropriately
met. It is accomplished through analysis of (a) internal factors,
such as current and expected skill needs, vacancies,
departmental expansions and reductions and (b) factors in the
environment which includes the labour market, the host
community and operational equipment and materials.
2. Recruitment: This is concerned with developing a pool of job
candidates in line with the human resource plan. Potential
employees are usually located through newspaper, professional
journals and internal advertisements, employment agencies and
so on.

3. Selection: This activity involves the use of application forms,
curriculum vitae, interviews, employment and skills tests to
evaluate and screen job candidates for the HRM Manager who
has the responsibility to finally select and hire a candidate.
4. Orientation: This stage of the HRM process ensures that the
selected individual fit smoothly into the organization. New
employees are introduced to their colleagues, acquainted with
their responsibilities, and informed about the organization’s
culture,policies and expectations regarding employee behaviour.
5. Training and development: Training and development aim at
increasing employees’ abilities to contribute to organizational
effectiveness.
6. Performance appraisal: The next stage becomes the
comparison of individual’s job performance to standards or
objectives developed for the individual’s position. Low
performance may prompt corrective action, such as additional
training, a demotion, or separation, while high performance may
merit a reward, such as raise, bonus, or promotion. The
individual’s immediate supervisor performs the appraisal but
the
HRM department is responsible for working with upper
management to establish the policies that guide all performance
appraisals.
7. Promotions, transfers, demotions, and separations: High
performers may be promoted or transferred to help them
develop their skills, while low performers may be demoted,
transferred to less important positions, or even separated. Any
of these options will, in turn, affect human resource planning.
Huma n Resour ce
Pla nning
R ecruitment Selection
Tra ining a nd Development
Or ienta tion
Performa nce
Appra isal
Promotions, Tra nsfer s,

Demotions, a nd Separa tions
The HRM process is a continuous activity and it also shows
clearly the stage at which training starts. This again underpins
the importance of training on organizational performance.
Non-Systematic Approach of Training
Adamu (2008) argues that the traditional approach of training of
staff in organizations is not a systematic one. Training follows a
process and that process makes it systematic. But most of the
time, human resource departments in most organizations ignore
the process and conduct training in an ad-hoc and haphazard
ways without training need analysis. (Olaniyan and Ojo, 2008).
The following approaches are non-systematic but are sometimes
used by HR Department to identify who attend training
Olaniyan and Ojo (2008):
(a) Administrative approach: This approach is based on
establishment of budget and policies. Employees are sent on
training based on the availability of funds.
(b) Welfare approach: This approach is based on extraneous
considerations whereby some organizations send employees on
training with a view to improving their financial well being or
their skills to enable them secure employment elsewhere.
(c) Political approach: This approach makes use of political
powers. In this case loyalist and favourites of Managers and the
likes are more likely to be sent on trainings. The
Managers and those in power use their positions to secure
training opportunities for those who are loyal to them over and
above their colleagues who in most cases merit the training
programmes available.
(d) Organizational development approach: This approach uses
departmental training needs as consideration for selection.
Systematic Training Process
A systematic approach of employee training stipulates that
training of employees should be a deliberate corporate policy
instrument designed with the central goal and objective to guide
its programme choice and content packaged to evaluate or solve
identified training needs or problems (Adamu, 2008).

Cole (1997) in Adamu (2008) emphasizes that systematic
approach to training will generally follow sequence of activities
starting with the establishment of a policy and planned
resources to sustain it, followed by an assessment of training
provided; and ending with some form of evaluation and
feedback. Mathis and Jackson (2004), while arguing in same
line posit that using such a process reduces the likelihood that
unplanned, uncoordinated, and haphazard training efforts will
occur.
According to Mathis and Jackson (2004), the systematic training
process is made up of four phases namely, assessment, design,
delivery and evaluation.
1. Training needs assessment
Training is designed to help the organization accomplish its
objectives. Consequently, assessing organizational training
needs represents the diagnostic phase of setting training
objectives. The assessment phase considers employee and
organizational performance issues to determine if training can
help. When doing the training needs assessment, it is important
to consider non-training factors such as compensations,
organization structure, job design, and physical work settings.
Mathis and Jackson (2004) further note that organizational
analyses, job analyses and individual analyses could be used to
identify training needs.
After training needs have been identified using appropriate
analyses, then training objectives and priorities must be
established by identifying a skill gap or training need, which is
the distance between where an organization is with it employee
capabilities and where it needs to be. Training objectives and
priorities are set to close the gap.
2. Training Design
Once training objectives have been identified, the next stage is
to develop the training design. Training must be designed to
address the assessed needs. Effective training design considers
learning concepts, legal issues, and different approaches to
training.

3. Training Delivery
After the development of the training design, then begins the
actual delivery of training. It is generally recommended that the
training be pilot-tested or conducted on a trial basis in order to
ensure that the training meets the needs identified.
4. Evaluation of Training
This stage compares the post-training results to the objectives
expected by managers, trainers and trainees. Often times,
training is conducted with little thought of measuring and
evaluating it later to see how well it worked. Mathis and
Jackson
(2004) suggest that because training is both time-consuming and
costly, it is imperative that there is evaluation after training.
ASSESSMENT
•Analyze training needs
•Identify training objectives and criteria
DESIGN
•Pretest trainees
•Select trainingmethods
•Plantraining content
DELIVERY
•Schedule training
•Conduct training
•Monitor training
EVALUATION
•Measure training outcomes
•Compare outcomes to
objectives/criteria
Empirical Framework of Training on Organizational
Performance
Studies have sought to isolate whether high skills are
contributory factor behind successful and higher performing
firms (Tamkin, 2005). These studies have identified a
significant association between a highly skilled workforce and
organizational performance, most commonly measured by the
level of labour productivity. For example, Haskel and Hawkes

(2003) have shown that the top performers in UK manufacturing
are hired workers with, on average, an extra qualification level
compared to the lower performers. These studies also found that
higher skill levels support innovation and more sophisticated
production processes and were associated with the production of
higher quality products (Penny, 2005).
Haskel, Hawkes and Pereira (2003) showed that more
productive UK firms hired more skilled workers. Their finding
showed that skills were positively related to total factor
productivity (TFP) and the skill gap between the top- and
bottom-performing firms explained some 8% of the productivity
gap. Similarly, Lynch and Black (1995) found in the US, that an
extra year of education raised productivity by between 4.9 and
8.5% in the manufacturing sector and between 5.9 and 12.7% in
the services sector. Other research has suggested that a more
highly skilled workforce can bring other benefits such as
enhancing company survival.
Reid (2000) opined that a more skilled UK workforce was
related to a greater commercial orientation and strategic
awareness and propensity to innovate and to retain competitive
advantage.
An OECD study looked at innovation in UK SMEs and found
that higher qualification levels of both managers and staff
boosted innovation (Albaladejo and Romijn, 2001). Higher
training expenditure per employee was also associated with
higher technological complexity and originality. Perhaps, some
of the most influential work in this area has focused on the
investment in skills and training and the association between
skills and productivity. A clear connection between higher skills
and higher productivity has been identified particularly at the
intermediate skills level. The studies found that the higher
average levels of labour productivity in firms in continental
Europe were closely related to the greater skills and knowledge
of their workforces. Within manufacturing firms, lower skills
levels in the UK were found to have a negative effect directly
on labour productivity and on the types of machinery chosen

(Keep, Mayhew and Corney, 2002). There is evidence that skill
levels are associated with innovation performance (Tamkin,
2005).
Several studies have highlighted the performance benefits
associated with increasing training activity, the type of training
provided and the depth. Dearden and Van Reenen (2000)
analyzed the impact of training on performance for a variety of
measures including value added output, profits and wages for a
group of British industries between 1983 and 1996.
They found connections between more training and higher
labour productivity across a number of sectors.
In essence, manufacturing firms undertaking training were
found to be more productive, to have higher capital intensity, to
conduct more research and development and have a more highly
qualified workforce (Penny, 2005). A study in France
(d’Arcimoles, 1997) found that the more training given, the
better the economic performance. Training was permanently and
clearly associated with an increase in profitability and
productivity. Raising the proportion of workers trained in an
industry by 5% points (say, from the average of 10% to 15%)
was associated with a 4% increase in value added per worker
and a 1.6% increase in wages. They note that this level of
increase has also been found by other researchers like Blundell
et al.
(1996) and Booth (1991). Collier et al. (2002) have found that
increasing investment in training reduces the chance of firm
closure. For small firms it was the training of craft and manual
workers that made the difference, for larger firms it was
training of professional, clerical and secretarial employees.
Others have found evidence on benefits from training in terms
of motivation and attitude; Booth and Zoega (2000) suggested
that training fosters a common firm culture and helps attract
good quality workers; Green and Felstead et al. (2000) found
that training had a downward impact on employee turnover.
Effects of Employee Training on Employee Motivation vis-à-vis
Organizational Performance

Stoner, Freeman and Gilbert (2007) affirm that “managers and
management researchers have long believed that organizational
goals are unattainable without the enduring commitment of
members of the organization”. There will be no improvement on
employees’ performance without employees being motivated to
perform.
Several authors have given many definitions to motivation.
However, a general understanding from the various definitions
of Motivation is that motivation is what causes one to act
(Stoner, Freeman and Gilbert, 2007, p.468). It is the process
that guides and maintains goal-oriented behaviour. Motivation
is a human psychological characteristic that contributes to a
person’s degree of commitment. Eisenbower defined
“Motivation as the art of getting people to do what you want
them to do because they want to do it” (Brany Quote).
Training is an excellent source of motivation. When an
organization sends an employee for training, obviously, that
employee will be motivated to perform. Advance Team
Concepts, a training firm based in the USA opine that trained
employees have a greater capacity to be empowered and perform
with excellence, which also motivates them since it builds their
sense of ownership, confidence and willingness.
No matter the size of an organization, having a team of
motivated, hard-working employee is crucial to business
success. Similarly, when people lose their motivation, their
productivity suffers. They become less productive, less creative,
less of an asset to the organization (AllBusiness.com).
Training has always been seen as a positive impact in every
organization. Employee training increases employee motivation
to perform which in-turn increases organizational performance.
Looking back to the original experiment by Elton Mayo in
Chicago from 1927 - 1932, the mere fact that an organization
has paid attention to people (employee) spurs them to better job
performance. For instance, suppose a management trainee has
been given specialized training in skills show that such
employee is valued in the organization. The feeling that he/she

is on track to the top will motivate him/her to work harder and
better
(www.accel-team.com).
From the argument thus far, training has an important role in
motivating employee to increased performance. Besides,
employees need to be constantly motivated to ensure that there
is no shortfall in productivity.
Measuring the Impact of Training on Organizational
Performance
Evaluating the impact of investments in people (such as
training) helps to justify the costs incurred, validate the
intervention as a business tool, and aid the design and selection
of future investment methods (Page, Jagger, Tamkin and
Henwood, 2006). Page et al (2006) further assert that in
practical terms, isolating the impact on the bottom line is
complex and therefore many organizations do not try to measure
it very rigorously.
Evaluation is a systematic process of determining the
significance or worth of subject, using criteria governed by a set
of standards. It can assist an organization to ascertain the
degree of achievement or value in regards to the aim and
objectives of an undertaken project (ICAP,
2012). The primary aim of evaluation, apart from gaining
insight into prior or existing initiatives, is to enable reflection
and assistance in the identification of future change (Sarahdel
Tufo, 2002).
Organizational Performance Measurement
Many measures of performance may be more relevant to some
sectors than others. When measuring organizational
performance, the choice of measures should be informed by the
sector and business-specific context (Page et al, 2006).
Measurement of organizational performance is not without its
challenges. Measures based on accountancy are to some extent,
open to manipulation and therefore may be difficult to compare
over time, or between organizations. Many measures do not
necessarily capture the quality of a product or service and

where part-time work is frequent and to be comparable,
measures need to take into account hours worked (Page et al,
2006).
Page and others developed a set of ‘core’ measures of
organizational performance that have general application, to
enable benchmarking and comparison across sectors. The ‘core’
set of measures include:
1. Productivity: Productivity could be measured using Net
added value per hour worked or
Net added value per worker. However, this measure will be
affected by investments other than those in skills and training,
for example in capital.
2. Profitability: Return on assets is a useful measure of
profitability, and measures how well a company is using its
assets to generate earnings. However, values can vary
substantially between companies and between sectors and
therefore for wider benchmarking purposes profit per employee
may be more effective.
3. Quality: Manufacturing organizations could estimate quality
using the Number of defects in a given number of products.
More generally, customer satisfaction could be used.
Exactly how customer satisfaction is measured is likely to vary
from organization to organization.
4. Innovation: Sales (N) from new or adapted products or
services is a measure that could be used to benchmark
innovation across sectors and which takes some account of the
success of the innovation.
5. Staff performance: Employees’ performance is appraised
against preset standards. A range of staff performance measures
are detailed below.
Employee Performance Indicators
Tracking employee training and measuring training
effectiveness is a key objective of any HR department. To
ensure that there is adequate return on investment in training of
new and current employees, the organization has to establish
key performance indicators (KPI). KPI if created and tracked

properly serve as a benchmark for measuring the progress of
employees towards a set of broader based goals or objectives
(Lilly, 2011). However, most organizations are faced with the
challenges of developing a good KPI. Lilly (2011) suggests that
quality key performance indicators for tracking employee
training effectiveness should include:
(a) measurable and quantifiable indicators;
(b) competency based indicators;
(c) linked to proficiency indicators; and
(d) mapped to organizational and employee goals indicators.
Hakala (2008) explains that performance measurement uses the
following indicators of
performance.
1. Quantity: This indicator places emphasis on the number of
units produced, processed or sold against the set standard i.e.
the number of units to be produced, processed or sold.
2. Quality: The quality of work performed can be measured by
several means. The percentage of work output that must be
redone or is rejected is one such indicator. In a sales
environment, the percentage of inquiries converted to sales is an
indicator of salesmanshipquality.
3. Timeliness: This indicator measures how fast work is
performed or how fast services are provided. For example, in a
service industry, the average customer’s downtime is a good
indicator of timeliness, while in a manufacturing outfit, it might
be the number of units produced per hour.
4. Cost-Effectiveness: The cost of work performed should be
used as a measure of performance only if the employee has
some degree of control over costs.
5. Absenteeism/Tardiness: An employee is obviously not
performing when he or she is not at work. Other employees’
performance may be adversely impacted by absences, too.
6. Creativity: It can be difficult to quantify creativity as a
performance indicator, but in many white-collar jobs, it is
vitally important. Supervisors and employees should keep track
of creative work examples and attempt to quantify them.

7. Adherence to Policy: This may seem to be the opposite of
creativity, but it is merely a boundary on creativity. Deviations
from policy indicate an employee whose performance goals are
not well aligned with those of the company.
8. Gossip and Other Personal Habits: This indicator may not
seem performance-related to the employee, but some personal
habits, like gossip, can detract from job performance and
interfere with the performance of others. The specific
behaviours should be defined, and goals should be set for
reducing their frequency.
9. Personal Appearance/Grooming: Most people know how to
dress for work, but in many organizations, there is at least one
employee who needs to be told. Examples of inappropriate
appearance and grooming should be spelled out, their effects
upon the employee’s performance and that of others explained,
and corrective actions defined.
Hakala (2008) goes further to state that performance indicators
must be assessed by some means in order to measure
performance itself. He enumerated the following as some of the
ways in which performance is assessed from the above
indicators.
a. Manager Appraisal: A manager appraises the employee’s
performance and delivers the appraisal to the employee.
Manager appraisal is by nature top-down and does not
encourage the employee’s active participation. It is often met
with resistance, because the employee has no investment in its
development.
b. Self-Appraisal: The employee appraises his or her own
performance, in many cases comparing the self-appraisal to
management's review. Often, self-appraisals can highlight
discrepancies between what the employee and management
think are important performance factors and provide mutual
feedback for meaningful adjustment of expectations.
c. Peer Appraisal: Employees in similar positions appraise an
employee’s performance. This method is based on the
assumption that co-workers are most familiar with an

employee’s performance. Peer appraisal has long been used
successfully in manufacturing environments, where objective
criteria such as units produced prevail. Recently, peer appraisal
has expanded to white-collar professions, where soft criteria
such as “works well with others” can lead to ambiguous
appraisals. Peer appraisals are often effective at focusing an
employee’s attention on undesirable behaviors and motivating
change.
d. Team Appraisal: This is similar to peer appraisal in that
members of a team, who may hold different positions, are asked
to appraise each other’s work and work styles. This approach
assumes that the team’s objectives and each member’s expected
contribution have been clearly defined.
e. Assessment Center: The employee is appraised by
professional assessors who may evaluate simulated or actual
work activities. Objectivity is one advantage of assessment
centers, which produce reviews that are not clouded by personal
relationships with employees.
f. 360-Degree or “Full-Circle” Appraisal: The employee’s
performance is appraised by everyone with whom he or she
interacts with, including managers, peers, customers and
members of other departments. This is the most comprehensive
and expensive way to measure performance and it is generally
reserved for key employees.
g. MBO (Management by Objectives): The employee’s
achievement of objective goals set in concert with his or her
manager is assessed. The MBO process begins with action
statements such as, “reduce rejected parts to 5 percent.”
Ongoing monitoring and review of objectives keeps the
employee focused on achieving goals. At the annual review,
progress toward objectives is assessed, and new goals are set.
There are as many indicators of performance as there are
companies and jobs. The various assessment methods can be
used in combinations. It is important to choose indicators that
align with each company’s goals and assessment methods that
effectively appraise those indicators.

Productivity
According to Larossi, Mousley and Radwan (2009), the
deterioration of the manufacturing sector in recent years can be
attributed to a number of factors, including a poor investment
climate and low capacity utilization which indirectly relates to
lack of adequate training policies for employees. No employee
will give what he/she does not possess. This again emphasizes
the importance of training.
Productivity is the measure of efficiency of production. It is
calculated as the ratio of production output to input.
Productivity measure is defined as the total output per one unit
of total input. The measurement of productivity is geared
towards finding out the effectiveness and efficiency of all
resources employed in production. Resources include time,
money, materials, people, knowledge, information, space and
energy (Scott-Grant, 2012).
The overall aim of all motivational tools whether intrinsic or
extrinsic is to increase employee’s productivity. Training is a
motivational tool. The knowledge that the employee gets after
the training process becomes a stimulus which drive him/her to
improved performance.
BusinessDictionary.com defines productivity as a measure of
the efficiency of a person, machine, factory or system in
converting inputs into useful outputs. Productivity is computed
by dividing average output per period by total costs incurred or
resources consumed in that period.
Measures of Productivity and Profitability
Penny (2005:79) listed the following as some of the formulas
for calculating productivity and profitability.
(a) Gross value added / Total turnover (%): This is the value
expressed as a percentage of total turnover. It is an indicator of
wealth creation and productivity. Calculated as ((employee
remuneration + directors and owners remuneration + employers
National
Insurance contributions + employers pension contributions +
pre-tax profit + depreciation) / Total turnover × 100.

(b) Total turnover per employee (N): This is the ratio of
turnover (sales) divided by the total number of Full Time
Equivalent (FTE) employees and is an indication of employee
productivity. It is calculated as total turnover / no. of FTE
Employees.
(c) Gross added value per employee (N): This ratio represents
the value added divided by the number of FTE employees and is
an indication of employee productivity.
Calculated as (employee remuneration + directors and owners
remuneration +employers National Insurance contributions +
employers pension contributions + pre-tax profit + depreciation)
/ no. of FTE employees
To measure profitability the following are often used:
(a) Tax profit/total turnover (not profit margin) %: This is the
profit before tax expressed as a percentage of turnover. It is an
indicator of profitability and provides a useful measure for how
well costs have been controlled. Calculated as (pre tax
profit/total turnover) × 100.
(b) Return on capital employed (ROCE) %: This is the profit
before tax expressed as a percentage of shareholders’ funds. It
is an indicator of profitability regardless of financing method.
Calculated as (pre tax profit / (total assets-other
liabilitiescreditors)) × 100
(c) Return on net assets (RONA) %: This is the profit before tax
expressed as a percentage of total assets. It is an indicator of
operating efficiency. Calculated as (pre tax profit / total assets)
× 100
(d) Pre-tax profit/ No. of FTE employees (N): This is a pre-tax
profit divided by the number of FTE employees. It is an
indicator of employee profitability. Calculated as pre tax
profit/no. of employees
(e) Total turnover / no. of orders received (N): This ratio
provides an indication of the average order value expressed as
Naira (N) per order. Calculated as total turnover/no. of orders
received
For measurement of total and labour productivity the following

formulas are used:
Compensation Evaluation Grading Guide
HRM/324 Version 4
2Individual Assignment: Compensation EvaluationPurpose of
Assignment
It is important to understand the different perspectives of
compensation as an HR practitioner. This paper will describe
the differences in pay and the importance of aligning internal
equity while maintaining external competiveness and its effects
on the organization’s compensation strategy and its ability to
attract, motivate, and retain top talent.Grading Guide
Content
Met
Partially Met
Not Met
Comments:
The student explains the discrepancy in pay among the current
employees.
The student describes the strategy they would take to correct the
internal equity issue.
The student describes the strategy they would take to correct the
external equity issue.

The student explains how they will ensure that new hires will be
paid equitably both internally and externally.
The student analyzes how an organization’s Total Compensation
strategy affects an organization’s financial operations and its
ability to attract, motivate, and retain top talent.
The student explains the differences between base pay,
performance pay and variable pay, and which is the best option
for an employee.
The paper is 700 to 1,050 words in length.
Total Available
Total Earned

7
#/7
Writing Guidelines
Met
Partially Met
Not Met
Comments:
The paper—including tables and graphs, headings, title page,
and reference page—is consistent with APA formatting
guidelines and meets course-level requirements.
Intellectual property is recognized with in-text citations and a
reference page.
Paragraph and sentence transitions are present, logical, and
maintain the flow throughout the paper.
Sentences are complete, clear, and concise.
Rules of grammar and usage are followed including spelling and
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Overview of the Effect of Employee Training on Organizational Perf.docx

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