2 Chapter Strategic Training

Objectives After reading this chapter, you should be able to: Discuss how business strategy influences the type and amount of training in a company. Explain how the role of training has changed. Describe how changes in work roles influence training. Discuss how a company’s staffing and human resource planning strategies influence training.

Objectives (continued) Explain the training needs created by concentration, internal growth, external growth, and disinvestment business strategies. Discuss the advantages and disadvantages of organizing the training function according to the faculty, customer, matrix, and corporate university models. Discuss the characteristics of the virtual training organization and how it can contribute to the company’s business strategy.

Introduction Tires Plus’s business strategy affects the time and money invested in training. Training helps employees learn job skills and helps the company retain and motivate employees. Training is strategic for: Business goals related to human resources, and Productivity, customer service, and innovation Employees are aware that training is essential to their future marketability.

What is a Business Strategy? A plan that integrates the company’s goals, policies, and actions. The strategy influences how the company uses: physical capital (plants, technology, and equipment) financial capital (assets and cash reserves) human capital (employees) The business strategy helps direct the company’s activities to reach specific goals.

Decisions a Company Must Make about How to Compete to Reach Its Goals Where to compete? In what markets will we compete? How to compete? On what outcome or differentiating characteristic will we compete? Cost? Quality? Reliability? Delivery? Innovativeness? 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?

Strategy impacts training with a strong influence on determining: 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.

Strategy impact on training (continued) 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.

Encouraging Continuous Learning The Roles and Duties of Managers in Companies That Use High-Performance Work Practices 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.

Coordinating Activities The Roles and Duties of Managers in Companies That Use High-Performance Work Practices (con’td) 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. Facilitating Decision-Making Process Facilitate team decision making. Help team use effective decision-making processes.

Creating and Maintaining Trust The Roles and Duties of Managers in Companies That Use High-Performance Work Practices (con’td) 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.

Organizational Characteristics That Influence Training Integration of Business Units Global Presence Business Conditions

The Importance of Training Compared to 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

Staffing Strategy Influence on Training Two aspects of a company’s staffing strategy influence training: The criteria used to make promotion and assignment decisions (assignment flow) The places where the company prefers to obtain human resources to fill open positions (supply flow)

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, and downward job opportunities that are predicted by the human resource plan.

The Broadening of Training’s Role Focus on Teaching Skills and Knowledge Link Training to Business Needs Use Training to Create and Share Knowledge

Implications of Business Strategy for Training Emphasis How Achieved Key Issues Training Implications Concentration Increase market share Reduce operating costs Create market niche Improve quality Improve productivity Customize products Skill currency Development of existing work force Team building Cross-training Specialized programs Interpersonal skill training On-the-job training Internal Growth Market development Product development Innovation Joint ventures Add distribution channels Expand global markets Create new products Joint ownership Create new jobs Create new tasks Support high-quality product value Cultural training Conflict negotiation skills Manager training in feedback and communication Technical competence in jobs

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

Models of Organizing the Training Department Faculty Model Customer Model Matrix Model Corporate University Model Virtual Model

Training Specialty Areas The Faculty Model Training Specialty Areas

The Customer Model Business Functions

Production and Operations The Matrix Model Training Specialty Areas Production and Operations Marketing Business Functions

The Corporate University Model Historical Training Problems Excess Costs Poor Delivery and Focus Inconsistent Use of Common Training Practices Best Training Practices Not Shared Training Not Integrated or Coordinated Leadership Development Programs Training Advantages Dissemination of Best Practices Align Training with Business Needs Integrate Training Initiatives Effectively Utilize New Training Methods and Technology Product Development Sales and Marketing Human Resources Operations New Employee Programs

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.

Virtual Training Organizations (continued) 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