Training and development are two very important roles in organizations. Although these two roles are related, they differ in the mode of their execution. Generally, training involves imparting employees or trainees with new knowledge or improving their existing knowledge or skills in order to prepare them for work they are expected to perform. Indeed, training is more individualistic in nature, and it normally focuses on improving an individual’s capacity and capability for a specific job or profession (Rao, 2004). The main aim of the training is to provide knowledge that will remain useful for a long time in the future, usually geared towards a certain job or work environment. Generally, training may be conducted formally or informally, as well as through on-job training programs or off-the-job programs. Nevertheless, training normally involves the presentation of learning content to trainees or employees in order to enhance their skills and behaviors towards work. In organizations, training is normally provided to new employees in order to acquaint them with skills relevant to their roles in the organization (Kozlowski and Salas, 2009).
Development, on the other hand, refers to a learning process aimed at enhancing performance based on specific goals, objectives, and aims for the benefit of all people connected with the organization. Generally, development is geared towards the improvement of career skills as well as social and economic capabilities of employees in order to enhance their performance in meeting long-term organizational goals. This may include improving and transforming employees’ social, communication, and decision-making skills for sustainable productivity (Kozlowski and Salas, 2009).
The two main programs used at Siemens are the commercial academy and graduate development program. In its commercial academy, Siemens offers training in commercial and financial related programs that are aimed at equipping trainees with relevant business skills. Indeed, this program is effective due to the fact that it provides all-around skills by combining on-the-job training, classroom training, and interactive development training, including communication and presentation skills. The Siemens graduate development program provides career enhancement capability through an intensive learning process. Here, training normally focuses on teamwork, customer service, communication, and project management and is normally provided in an interactive environment where graduates are exposed to different company operational units. The main aim of this program is to equip graduates with sustainable career skills.
Nevertheless, training and development play an important role in enhancing employees’ careers and skills for the sustainable performance of the organization. It is, therefore, important for organizations to establish programs for employee training and development.
An Appraisal system is a human resource process used by organizations to evaluate the qualities, usefulness, and worthiness of employees based on their contribution to the organization. Generally, the appraisal system may be employed for various purposes, including improving performance, providing feedback, increasing motivation, determining promotion needs, adjusting salaries, providing information for HR planning, and reconstructing job objectives, among others. However, a good appraisal system should be geared towards the attainment of the overall goal of the organization, which normally requires harmonization of both individual performance and organizational performance benchmarks. There are various types of appraisal systems, among them being management by Objectives (MBO), 360-degree appraisal system, straight ranking, paired comparison, and trait-focused appraisal method, among others (Armstrong, 2009).
The main importance of an appraisal system is to provide appropriate information to the employer about an employee’s job performance within a given period, which will be useful in making certain HR decisions, including compensation and promotion. In addition, an appraisal system requires dialogue between the employer and the employee on matters relating to the job objectives and goals, as well as the means to attain such goals and objectives; this will allow employees to be focused on performance towards attaining the predetermined goals, much to the benefit of the organization as a whole. A good appraisal system will involve self-appraisal by an employee, which will then help in the improvement of performance as well as in reorganizing jobs to fit the employees’ needs and skills. Moreover, an appraisal system will help managers to identify gaps in business practices that need to be improved on or adjusted accordingly. Lastly, a good appraisal system will invite feedback across the board and identify training needs, thus contributing significantly to the improvement of both the employee and the employer (Rao, 2004).
An example of a company that has been using an appraisal system is Apple Inc. At Apple, a 360-degree appraisal system is used where the company receives feedback from various sources, including supervisors, employees themselves, peers, and customer feedback reports (Armstrong, 2009). Normally, appraisals at Apple are done annually, and they are used to gauge the extent to which employees have gone in meeting the predetermined goals and objectives. Generally, both the employees and the line managers set goals and objectives, and then employees are assessed based on their performance towards achieving those goals. The importance of this appraisal system is that managers are able to gather both quantitative and qualitative information relating to the performance of employees.
Training and Development Budget
A budget may be described as a summary of revenue and cost estimates for an organization within a given business period. Normally, a budget serves three key purposes. First, a budget helps in forecasting income and expenditures in an organization within a given period. Here, the manager predicts cash flows and other revenue items and then matches them with predicted expenditures within the same period in order to determine whether the business will be profitable or not at the end of the budget period. Secondly, a budget acts as a tool for decision-making. Here, managers make important business decisions based on the available budget estimates; for example, special training of employees will be based on the availability of funds, and if that was not budgeted for, then there is a possibility of the training not taking place. Lastly, a budget acts as a means of monitoring business performance. Here, the budget provides a benchmark against which the actual performance of the business will be measured. Where the performance exceeds the budget threshold, adjustments should be made in the subsequent period to raise the benchmark, but when the performance is short of the budget estimates, the company has to seek ways to amend the shortfall (Wolfgang, Peter, Robert, Keller, and Annet, 2005).
A training and development budget is very crucial in enhancing employee performance in the organization. Normally, for a firm to gain a competitive advantage, it needs a competent and skilled workforce, which is also updated on the current technology. In addition, given that skills are developed through spending on training, it then follows that the most successful companies are those that spend highly on training and development. Therefore, firms have to invest in staff training and development in order to equip employees with relevant skills for sustainable performance. A training and development budget involves short-term and long-term forecast of skill gaps and then allocating resources effectively to address these training needs. Indeed, a training budget must demonstrate congruence between return on investment (ROI) and knowledge/skills proficiency in the organization. Therefore, a good training budget will assess training needs and then determine the most cost-effective plan to implement the training program.
One example of a company that has invested heavily in the training of its employees is Wal-Mart. Generally, Wal-Mart believes in a competent workforce as a driver to its success in the ever-competitive business environment. Indeed, the company has established Wal-Mart University to offer different training programs, especially corporate training, to its employees on an average annual budget of 24 million dollars (Khalil, 2013). At Wal-Mart University, employees are offered academic training as well as competency-based training programs in order to ensure sustainable success.
Overall, a budget provides an avenue for an organization to thrive in its operations, as it provides a platform for managers to perform their roles in the organization. It is no wonder to see almost every large organization turning into a ‘learning organization’ in order to retain its competitiveness, especially during this era of globalization and technology revolution.
Armstrong, M 2009, Armstrong’s Handbook of Human Resource Management Practice: Performance Management, Kogan Page, London.
Khalil, M 2013, Human Resource Training and Development: Expense or Investment? Web.
Kozlowski, S and Salas, W 2009, Learning, Training, and Development in Organizations, Taylor & Francis, London.
Rao, T 2004, Performance Management and Appraisal Systems: HR Tools for Global Competitiveness, SAGE, New Delhi.
Wolfgang, B, Peter, N, Robert, E, Keller, L and Annet, D 2005, Budget and Budgeting, Morgan Kaufmann Publishers, London.