The contemporary business environment is becoming more competitive, forcing firms to be aggressive in trying to gain a competitive advantage by differentiating themselves through competent and highly skilled human resources. Therefore, the importance of continuous training and development of the workforce cannot be overemphasized. This paper will discuss the importance of training and development in organizations and using Siemens as a case study. In addition, performance appraisal has gained momentum in most organizations currently. This is in the realization that appraisals help firms to establish the extent to which employees’ performance goes towards meeting organizational goals. Therefore, this paper will discuss the importance of the appraisal system, with HP acting as the case study. Lastly, the paper will discuss the significant role that the training and development budget plays in organizational performance using Samsung as the case study.
Discuss the difference between training and development, and then discuss the effectiveness of any TWO training and development activities at Siemens
Training is a short-term process that involves an organized activity and teaching process aimed at the acquisition of skills, concepts, rules, instructions, values, and information. This is due to the practical and vocational teaching accorded to improve an individual’s general knowledge and competence relating to the specific job (Jacoby, 2004). Training is generally a process that involves the goal of improving the capacity and performance of a specific individual. Moreover, training offered at the technical level is geared towards updating skills and improving productivity. Lastly, the aim of the training is to improve people’s knowledge in line with trading and other professions. The main aim of continuous training is to maintain the skills of individuals in order to ensure that they remain relevant to the changing field of the labor market.
On the other hand, development is an act that involves the systematic and proper use of scientific and technical skills and knowledge to reach a specific requirement, objective, aims, and goals (Jacoby, 2004). Development involves economic and social improvement to an individual; it can also include the transformation of an organization or institution. Again, development is based on different cultural and environmental factors that promote interactions among individuals. Nevertheless, the main aim of development is to get improvement and transformation (Jacoby, 2004).
In Siemens, there are various training and development programs taking place. The two main training programs in Siemens are financial/commercial capability training and apprenticeship training. The aim of financial and commercial capability training is to improve financial and commercial capability within Siemens. In this case, trainees or employees are offered training on the best practice in matters related to financial and commercial aspects of the company. This is meant to ensure that all employees have adequate skills to conduct their activities efficiently and profitably. The main target of training in Siemens is the students who have a keen interest in business and finance. This helps to develop financial skills and presentation skills. On the other hand, apprenticeship training is offered to engineering apprentices; it is normally offered off the job and on-the-job in order to gain experience. The advantage is that apprenticeship training helps the trainees to develop their teamwork skills and information technology skills.
In conclusion, training and development are interrelated, as the two tend to work together. The main aim of training individuals is to achieve development. Development also requires continuous training throughout life. This training helps employees to be adaptable, innovative, and creative, thus leading to development.
In order to measure the effectiveness of training and development, Siemens uses an appraisal system. Explain what is meant by an appraisal system, and then discuss its importance for organizations. Support your answer with one organization as an example.
An appraisal is a term used to define and describe the “analysis and evaluation conducted according to established criteria to determine the acceptability, merit, or worth of an item” according to the established formula (Frank, John, and Morgan, 1998). In most cases, it assesses the market value or worthiness of something. Again, an appraisal can help to estimate the degree of importance of something. In addition, it can help to estimate the cost and value of the services rendered to people.
Generally, a good appraisal method is a factor for proper analysis and evaluation. This is because appraisal provides one of the best ways of determining the worthiness and market value of any services or products provided by an organization. This enables the Organization to know the specific areas to improve in order to offer the best services universally. Again, when used effectively and appropriately, an appraisal can produce better results. Generally, an appraisal will enable both the employee and the employer to compare and share their views, thus promoting both business and people’s needs.
A manager should always engage employees in dialogue and discussion of the results in order to upgrade the business and to establish the best way forward to offer further training to the employees. This also enhances the achievement of the set objectives of the organization. Appraisal also motivates staff members and keeps them updated in all sectors of the business, especially during this period of the technology revolution. Lastly, appraisal allows the organization to get feedback from the staff relating to current changes, thus enabling them to be involved in change management and decision-making.
An example of an organization that has used appraisal as a means of evaluation is Hewlett-Packard. At HP, wages are pegged on individual employee’s rating or ranking based on perfo0rmance and experience as determined by the appraisal system. Primarily, HP embraces Management by Objectives (MBO), where employees participate in setting objectives and at the same time allowed to suggest how they will achieve those objectives. After every quarter, the employee and the manager review/appraise the performance of the employee towards meeting the goals. Moreover, an annual performance appraisal is conducted to establish whether the employee met the target or not. Here, salaries are adjusted according to the rating of the employee as determined by the degree of goal attainment (Sims, 2002). This system motivates employees to increase their productivity, and it has been the reason for good performance in most organizations such as HP.
The training and development budget is a part of an organization’s overall budget. Outline the purposes of budgets within organizations, and then discuss how the training and development expenditures could be justified by explaining their benefits. Support your answer with an example other than Siemens.
A budget is an estimate of cost, revenue, and resources over a given period; it normally involves a quantitative and quantitative expression of a plan within a specific period. This may include a plan made for “sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows” (Arthur, 2003). Generally, it shows and indicates the strategic plan of business units and organization, expressed in measurable terms (Arthur, 2003). On the other hand, budgeting is the process of preparing the predicted and calculated value of resources and allocating detailed financial statements expected within a given period of time (Arthur, 2003).
Making budget estimates and allocating the required resources provides the following benefits to an organization. To begin with, a budget helps in the planning of actual operations and can force the top management to condition themselves to use the allocated resources on each item (Wolfgang, Peter, Robert, Keller, and Annet, 2005). Secondly, a budget enables the management to consider any problem that may arise before spending. Thirdly, budget is important too in the co-ordination of operations, as it enhances inter-departmental analysis and cooperation. In addition, the budget helps in controlling resources, and in motivating the management team in order to achieve the set goals of an organization. Lastly, a budget will enable proper evaluation and accountability to persons concerned in development.
An example of a company that values the importance of budget in training and development is Samsung, which believes that success in the IT business is driven by the skills of its staff. In addition, companies that spend more on training (have high training budgets) tend to be more successful than those spending less. Samsung has a training and development budget that covers a capacity development program as well as corruption prevention training. Specifically, the company’s training budget has been rising year after year, with the budget for the year 2011 standing at 0.07% of total sales made by the company (Samsung Electronics, 2012).
For a company to fit in the market and become competitive, it must arm its entire workforce with the right skills, values, and knowledge. Here, the company needs to offer training to its entire staff. This is the only way through which a business will be able to meet its set objectives and maintain a competitive advantage. With current changes in information technology and the various cultural and environmental differences, the company needs to maintain a continuous and comprehensive training program. Furthermore, new employees who will later fill the gaps left by retiring employees need training in order to acquire relevant knowledge and skills, hence enabling the business to flourish in the long run.
In conclusion, for the achievement of proper training and development, each organization needs a well-drawn budget. This will also aid in providing various strategies to use in order to achieve the goals of the organization, as well as proper utilization of resources. Lastly, organizations need to have a training and development budget to improve employees’ performance, and in the process, helping the company achieve its growth agenda.
Arthur, S and Sheffrin, M 2003, Economics, Upper Saddle River, New Jersey.
Frank, D, John, K & Morgan, K 1998, Appraisal and Evaluation, Pearson Prentice Hall, New York.
Jacoby, J 2004, Development and Training, Pearson Prentice Hall, New Jersey.
Samsung Electronics 2012, Samsung Electronics Sustainability Report, Web.
Sims, R 2002, Organizational Success through Effective Human Resources Management, Quorum Books, Westport, CT.
Wolfgang, B, Peter, N, Robert, E, Keller, L and Annet, D 2005, Budget and Budgeting, Morgan Kaufmann Publishers, London.