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     Volume 2 Issue 11| March 14, 2010|


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Importance of Employee Training and Management Development

Nazwa Warda

Employee Training and Management Development:
Training is defined as the systematic development of the knowledge, skills and attitudes required by an individual to perform a given task or job successfully. Training aims at improving the organization's performance through the enhanced performance of its employees. While training helps employees do their current jobs, development prepares individuals to handle future responsibilities.

Purpose of training and development:
The major purposes of training are improving employee performance, updating employee skills, avoiding managerial obsolescence, preparing for promotion and managerial succession, and satisfying personal growth needs. Training needs are determined based on the organization's and the employee's needs.

Training increases productivity, reduces the level of supervision required, reduces accidents related to work and increases organizational stability. Apart from training, an organization should also concentrate on management development. Organizations provide training to employees in the areas of company policies and procedures, specific skills, human relations, and managerial skills. Some organizations also provide apprentice training.

There are two types of training methods - on-the-job and off-the-job. In on-the-job training methods, an employee is given training in the actual work situation, where he learns by doing and through direct experience. Some of the on-the-job methods of training are job instruction training, apprenticeship and coaching, job rotation, and committee assignments. Off-the-job training refers to the training given to an employee away from the immediate work area. Here the employee focuses his attention upon learning from the trainer's lectures or through simulated exercises. Off-the-job training methods include classroom lectures; various simulation exercises like case exercises, experiential exercises, computer modeling, vestibule training and role playing and programmed instruction. Systematic evaluation of training activities helps in evaluating the success of the training

Management Development:
Management development is a systematic process of growth and development by which employees develop their skills and abilities to manage. It is future oriented and is concerned with education of the employees. Management development improves a manager's ability to understand problems and arrive at solutions. It helps the manager in effective handling of his different work roles like planning, monitoring performance, communication and development. Management development programs are designed to meet specific objectives, which contribute to both employee and organizational effectiveness.There are several steps in the process of management development. These include reviewing organizational objectives, evaluating the organization's current management resources, determining individual development needs, designing and implementing development programs, and finally, evaluating the effectiveness of these programs.

The two categories of development methods are on-the-job development, and off-the-job development. Some of the widely used on-the-job development methods are: coaching, job rotation, under study assignments and multiple management. Off-the-job development methods include simulation exercises, sensitivity training, transactional analysis, conferences and lectures. To ensure the success of the management development programs, they have to be evaluated from time to time.

Compensation Management:
Job evaluation helps in determining the relative worth of each job in an organization. The basic purpose of job evaluation is to ensure the systematic assessment of jobs to determine their worth for the purpose of wage and salary administration. The process of job evaluation starts with a plan, moves to the identification of job dimensions and classification of the jobs and finally ends with the implementation of the evaluation.

There are different techniques of job evaluation, some are quantitative and some are non-quantitative. There are both advantages and limitations to job evaluation. Compensation of an employee consists of mainly three components, the base wage or salary, incentives and benefits. Base wage or salary forms the basis for calculating or determining the total compensation of an employee.

Types and Concepts:
There are three different concepts of wages: the minimum wage, the fair wage and the living wage. The minimum wage is the least of them all and the living wage, the highest. Minimum wage is the base wage that an employee has to be paid to fulfill his basic needs and provide basic amenities for his family. The fair wage takes into consideration the paying capacity of the employer. The living wage, which is the highest of the three, is aimed at providing a comfortable living for the employee and his family. It includes providing health, educational and social facilities. Traditional wage plans include the piece-wage plan, based on the units produced by the employee and the time-wage plan, based on the total working time of the employee. Modern wage plans include skill-based wage plan, competency-based wage plan and broad banding.

Variable compensation programs are designed to reward employees in accordance with their performance and not in accordance with their hierarchical position in the organization. They motivate individuals and groups to perform better and also enhance employee involvement in organizational management. The scarcity of executive talent for the running of successful businesses in this highly competitive era, has led to enormous pay packages for executives.

An effective and efficient executive compensation plan should take into consideration various factors like the organizational objectives and stakeholder expectations. Wage differentials can be defined as the difference in wages paid for same or similar work because of various reasons like differences in work schedules, hazards involved, cost of living, or other factors. The wage differentials across the country have given rise to the need for a national wage policy. Though this is desirable, the differences in the paying capacities of states and industries and the local issues are a hindrance to its practical application. In India, the wage and salary administration is based on different theories like the minimum wage theory and the bargaining theory of wages. Different surveys like the working class family income and expenditure survey and the occupational wage survey further determine the wage fixation from time to time.

There are two types of rewards, extrinsic rewards and intrinsic rewards. Extrinsic rewards are tangible and within the control of the organization. Intrinsic rewards are intangible in nature and depend on the individual's perception. Rewards can also be classified into monetary and non-monetary rewards. Incentives are the rewards given to an employee, over and above his salary, in recognition of his performance. They can be termed as performance based rewards. Benefits are the rewards an employee receives as a result of his employment with the organization and his position in the organization. They are also called the membership-based rewards. Incentives can be monetary as well as non-monetary. Incentive plans are both long-term and short-term. Short-term incentive plans like the Halsey plan and the Rowan plan reward the employee immediately for his performance over a short period, normally a day.

Long-term incentive plans like profit-sharing plan and employee stock plans reward the employee for his performance over a continued period of time, either one year or his entire tenure with the organization. Incentive plans, to be effective, have to be perceived as fair and transparent by the employees and should not affect the company bottom line. The basic purpose of an employee benefit program is to retain and motivate employees and improve their organizational commitment.

More and more organizations are designing and implementing innovative benefit schemes to attract and retain talent. The diversity in workforce gives rise to a need for different benefit schemes to match individual needs. Therefore, contemporary benefit programs try to provide flexibility to employees in designing their own customized programs, from a basket of benefit schemes. This is called the cafeteria-style benefit plan. The compensation program of any organization, including the salary, the incentives and the benefits should contribute positively to both the employee and the employer.

Sources: Internet
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