Management Case Study

Employee training is a vital part of an organisation and should be viewed as a competitive strategic necessity, not a luxury. According to Oh, Ryu & Choi (2013, p. 1), the development of human value and potential through continuous learning and training has become an important investment for organisations in order to compete and to also recover during an economic downturn. Training and development investments from Human Resource Development (HRD) maintain overall performance by promoting a culture for incessant learning and encourage employee motivation, thereby upholding a generation of new knowledge and innovation (Sung et al 2014, p. 394). From the employee’s viewpoint it reinforces the belief that the organisation is interested in their well-being, resulting in increased job retention and reducing the risk of losing highly skilled employees. Research shows that investments in HRD have a positive relationship with employee commitment, market share and profits (Stone 2013, p. 356). Therefore it would be unfavourable for the company to go with Andrew’s idea of abolishing the HRD department and to outsource any training.
The HRD department must make sure that all training and development activities are tied back to the company’s short term and long term goals and objectives -. Stone (2013, p. 365) notes that in order to enhance the effectiveness of training activities, it is essential to perform a comprehensive analysis. Training should have a clear assed return to give purpose to the training program and justify its existence. Based on the human capital theory it should only be provided when the economic benefits outweigh the costs. In order to increase the benefits, a systematic approach to training and development should be used, incorporating the needs for assessment, design, development, delivery, and evaluation (Hung 2010, p.87). In Karen’s case it is more than likely that the benefits from her team-building exercises, given the financial state of the company, do not outweigh the costs. Supporting this argument, Stone (2013, p. 369) states, ‘there is little hard evidence that these exercises yield any long-term benefits.’ Fisher et al. (cited in Ng & Dastmalchian 2011, p. 838) recognises that without any analysis of training needs and results, the program design is ineffective, or training is given for the wrong reason.
Despite any uncertainty of the economy, training should be embedded in corporate culture, tied to the business strategy and linked to bottom line results (Cascio 2014, p.119). Andrew and Rachel need to take a longer-term view and not demand immediate economic results, as