Chapter

2
Strategic Training

McGraw-Hill/Irwin

2005 The McGraw-Hill Companies, Inc. All rights reserved.

2-1

Introduction: Business Strategy

A plan that integrates the companys 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 companys activities to reach specific goals
McGraw-Hill/Irwin
2005 The McGraw-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

McGraw-Hill/Irwin
2005 The McGraw-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
McGraw-Hill/Irwin
2005 The McGraw-Hill Companies, Inc. All rights reserved.

2-4

Evolution of Trainings Role

Training Event

Create and Share Knowledge

Performance Result

Learning Emphasis

Business Need

McGraw-Hill/Irwin

2005 The McGraw-Hill Companies, Inc. All rights reserved.

2-5

Evolution of Trainings 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

McGraw-Hill/Irwin

2005 The McGraw-Hill Companies, Inc. All rights reserved.

2-6

Evolution of Trainings Role: Knowledge

Human and Social Knowledge:
What individuals or teams of employees know or know how to do

Explicit Knowledge:
Knowledge that can be formalized, codified, and communicated

Tacit Knowledge:

Structured Knowledge:
Company rules, processes, tools, and routines

Personal knowledge based on individual experience Difficult to explain to others

2-7

McGraw-Hill/Irwin

2005 The McGraw-Hill Companies, Inc. All rights reserved.

Intellectual Capital

Cognitive Knowledge (know what) System Understanding and Creativity (know why)

Advanced Skills (know how) Self-Motivated Creativity (care why)

McGraw-Hill/Irwin

2005 The McGraw-Hill Companies, Inc. All rights reserved.

2-8

The Strategic Training and Development Process:

Business Strategy
Mission
Values Goals

Strategic Training and Development Initiatives

Training and Development Activities

Metrics that Show Value of Training

Diversify the Learning Portfolio

Improve Customer Service Accelerate the Pace of Employee Learning Capture and Share Knowledge

Use Web-Based Training

Make Development Planning Mandatory Develop Websites for Knowledge Sharing Increase Amount of Customer Service Training

Learning Performance Improvement

Reduced Customer Complaints

Reduced Turnover Employee Satisfaction

McGraw-Hill/Irwin

2005 The McGraw-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?

McGraw-Hill/Irwin

2005 The McGraw-Hill Companies, Inc. All rights reserved.

2 - 10

Strategic Training and Development Initiatives and their Implications (1 of 4)

Strategic Training and Development Initiatives Diversify the Learning Portfolio Implications Use new technology for training Facilitate informal learning Provide more personalized learning opportunities Train customers, suppliers, and employees Offer more learning opportunities for non-managerial 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

Expand Who is Trained

Accelerate the Pace of Employee Learning

McGraw-Hill/Irwin

2005 The McGraw-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 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 decision-making 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

Provide Development Opportunities and Communicate to Employees

McGraw-Hill/Irwin

2005 The McGraw-Hill Companies, Inc. All rights reserved.

2 - 12

Strategic Training and Development Initiatives and their Implications (3 of 4)

Strategic Training and Development Initiatives Capture and Share Knowledge Implications Capture insight and information from knowledgeable employees Logically organize and store information Provide methods to make information available Identify needed knowledge, skills, abilities, or competencies Ensure that current training and development programs support the companys strategic needs

Align Training and Development with the Companys Strategic Direction

McGraw-Hill/Irwin

2005 The McGraw-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 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

McGraw-Hill/Irwin

2005 The McGraw-Hill Companies, Inc. All rights reserved.

2 - 14

Example: SunUs 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?
McGraw-Hill/Irwin
2005 The McGraw-Hill Companies, Inc. All rights reserved.

2 - 15

Example: SunUs 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?

McGraw-Hill/Irwin

2005 The McGraw-Hill Companies, Inc. All rights reserved.

2 - 16

Example: SunUs 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?

McGraw-Hill/Irwin

2005 The McGraw-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

McGraw-Hill/Irwin

2005 The McGraw-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)

McGraw-Hill/Irwin

2005 The McGraw-Hill Companies, Inc. All rights reserved.

2 - 19

Organizational Characteristics That Influence Training

Roles of Employees and Managers Top Management Support Extent of Unionization Integration of Business Units Global Presence
McGraw-Hill/Irwin

Business Conditions
Other HRM Practices

Staff Involvement in Training and Development

2 - 20

2005 The McGraw-Hill Companies, Inc. All rights reserved.

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
McGraw-Hill/Irwin
2005 The McGraw-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

McGraw-Hill/Irwin

2005 The McGraw-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
McGraw-Hill/Irwin
2005 The McGraw-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

McGraw-Hill/Irwin

2005 The McGraw-Hill Companies, Inc. All rights reserved.

2 - 24

Staffing Strategy Influence on Training

Two aspects of a companys 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)

McGraw-Hill/Irwin

2005 The McGraw-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
McGraw-Hill/Irwin
2005 The McGraw-Hill Companies, Inc. All rights reserved.

2 - 26

Implications of Business Strategy for Training

(1 of 2)
Strategy Concentration Emphasis
Increased market share Reduced operating costs Create or maintain market niche Market development Product development Innovation Joint ventures

How Achieved
Improve quality Improve productivity Customize products or services

Key Issues
Skill currency Development of existing work force

Training Implications
Team building Cross-training Specialized programs Interpersonal skill training On-the-job training Communication of product value Cultural training Conflict negotiation skills Manager training in feedback and communication Technical competence in jobs

Internal Growth

Add distribution channels Expand global markets Modify existing products Create new products Joint ownership

Create new jobs Create new tasks Innovation

McGraw-Hill/Irwin

2005 The McGraw-Hill Companies, Inc. All rights reserved.

2 - 27

Implications of Business Strategy for Training

(2 of 2)
Strategy External Growth (Acquisition) Emphasis
Horizontal integration Vertical integration Concentric diversification

How Achieved
Acquire firms for new market access Acquire firms to supply or buy products Acquire any firm

Key Issues
Integration Redundancy Restructuring

Training Implications
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

McGraw-Hill/Irwin

2005 The McGraw-Hill Companies, Inc. All rights reserved.

2 - 28

Models of Organizing the Training Department

Faculty Model Customer Model

Matrix Model

Virtual Model
McGraw-Hill/Irwin

Corporate University Model

2005 The McGraw-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

Training Specialty Areas

McGraw-Hill/Irwin

2005 The McGraw-Hill Companies, Inc. All rights reserved.

2 - 30

The Customer Model

Director of Training Information Systems Marketing Production and Operations Finance

Business Functions

McGraw-Hill/Irwin

2005 The McGraw-Hill Companies, Inc. All rights reserved.

2 - 31

The Matrix Model

Director of Training

Training Specialty Areas

Sales Training

Quality Training

Technology and Computer Systems

Safety Training

Marketing

Production and Operations

Business Functions
McGraw-Hill/Irwin
2005 The McGraw-Hill Companies, Inc. All rights reserved.

2 - 32

The Corporate University Model

Historical Training Problems
Excess Costs Poor Delivery and Focus Product Development Operations Sales and Human Marketing Resources

Leadership Development Programs

Training Advantages Dissemination of Best Practices

Inconsistent Use of Common Training Practices Best Training Practices Not Shared Training Not Integrated or Coordinated
McGraw-Hill/Irwin

Align Training with Business Needs Integrate Training Initiatives

New Employee Programs

Effectively Utilize New Training Methods and Technology

2 - 33

2005 The McGraw-Hill Companies, Inc. All rights reserved.

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

McGraw-Hill/Irwin

2005 The McGraw-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
McGraw-Hill/Irwin
2005 The McGraw-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
McGraw-Hill/Irwin
2005 The McGraw-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
McGraw-Hill/Irwin
2005 The McGraw-Hill Companies, Inc. All rights reserved.

2 - 37