David Anthony Siddall’s Blog

Business activity requires continuing innovation to deliver sustainable growth. Strategic human resource management facilitates this change through training and development, operational responsibility, increased flexibility and team-building. The aim of strategic human resource management is to enable long-term organisational success by ensuring that: the firm has higher quality people than its competitors; the unique intellectual capital possessed by the business is developed and nurtured; organisational learning is encouraged and; organisation-specific values and culture exist which bind the organisation together and give it focus. However, development of human resource management systems often lags behind strategy within small enterprises, and the HR function is rarely allowed to participate proactively in planning by helping to design an organisation that exploits the limit of employee capabilities in support of strategy.

At the policy level, training plays a critical role in developing individual and organisational capabilities. It contributes towards the process of organisational change (Valle, Martín, Romero, & Dolan, 2000) and can improve productivity and organisational results (Delery & Doty, 1996). Training can reinforce individual commitment to the organisation and its objectives (Ichniowski, Shaw, & Prennushi, 1997). In its support of strategic objectives, training should be oriented towards developing a culture of commitment to learning, encouraging constant generation of competences based on knowledge and its dissemination throughout the organisation. Training within small enterprises, though, often emerges from business requirements, is reactive, and initiated only in the event of difficulty in implementing strategy.  It is not generally centrally organised although the HR Manager might be asked about opportunities available and undertake any administration involving training. Small enterprises routinely entrust training initiatives to managers with little training expertise, as opposed to professionals whose sole function is to assess training needs and institute training based on the company’s needs.

Small enterprises are often niche providers and technical training is consequently prioritised. Internal skill sharing is also used to disseminate technical skills. Small businesses, usually working in specialised areas, often conduct some on-the-job training primarily because there is a lack of external provision.  When an employee’s skills are specific to the organisation, his external transfer possibilities are reduced, increasing his value to the firm and his replacement costs (Wright, McMahan, & McWilliams, 1994). Thus, training in specific skills creates a greater potential for competitive advantage, since these skills are more difficult to imitate (Barney & Wright, 1998). However, this idiosyncratic approach reduces flexibility and is at odds with recently adopted strategy. Organisations that are immersed in dynamic environments should not solely pursue the development of specific skills.

Small businesses seldom engage in future planning and are therefore usually unable to anticipate future skill needs. Training is usually of a practical rather than theoretical nature, with variances in the explicit link into strategy. Training also often focuses on informal transfer of skills and knowledge between employees. However, the low levels of training recorded in small firms (Department for Education and Skills, 2003) may not be quite so alarming, given that such firms rely on informal modes of skill acquisition. Informal learning is more resonant with small businesses’ internal environment and potentially more supportive of high performance. However, the informality characteristic of most small enterprises’ training policy can be interpreted as part of a package of informal approaches to HRM, characterised by vague hiring standards and unsystematic recruitment and development of staff.

Small enterprises’ preferences are for training that leads to recognisable business outcomes, is affordable, readily available and presented in short ‘just-in-time’ modules (in which required knowledge and skills are imparted for immediate application, to avoid loss of retention due a time gap). Adoption of ‘just-in-time’ training means efforts are directed at employees most in need of performance enhancement, focusing costs on staff most likely to bring immediate benefits. While this method of training is exacting of trainers’ skills, it forces trainers to reappraise their traditional modes of classroom delivery, trainees become more in control of their learning requirements, and companies ensure that training is faster, more customised, and individually driven.

Communications training is often delivered externally, by a vendor offering courses such as ‘team leadership’, ‘negotiating’ and ‘business writing’. There is a tendency to treat each area as though they are discrete disciplines and for trainers and learners to become too absorbed in the technicalities of the communication media – this is common in the provision of communications training, to the detriment of learning effective communication skills.  Although these topics are generally well received, the evidence seems to be that they are the least effective in terms of tangible gains (Hughey & Mussnug, 1997). Small enterprises need to become more demanding of training requirements, and evaluation of trainees’ needs should be viewed as an ongoing process that recognises changes may be required throughout training. Yet it is not easy to adjust predesigned courses to take account of individual learning needs within a traditional classroom delivery context.

Strategic goals may also be supported by increasing employees’ empowerment. The aim of empowerment is to develop the performance and potential of the individual and the organisation, its need arising from external challenges, such as higher levels of competition and higher expectations from customers, and internal challenges, related to employee retention and motivation. It is said that empowerment remains with the individual, though, and cannot be imposed from above (Beach, 1996). Thus, to foster an empowered workforce, systems and processes must be established that do not restrict employees. By concentrating on what employee behaviour is optimal, management can adapt the organisational structure to produce the sought-after behaviour: self-managed employees dedicated to learning; leadership at all organisation levels; trust among employees; participatory decision making and effective vertical and horizontal communication. Recommendations for increasing empowerment through HR strategy include establishing a powerful vision and expanding support networks. Employees should be channelled to collaborate in workshops directly connected with organisational issues affecting them, an approach that bonds team members and raises motivation through greater self-actualisation. Organisational communication also benefits since group projects stimulate lateral exchanges as opposed to vertical communication. Empowerment can be increased by allowing employees to participate early on in change programmes (Kappelman & Richards, 1996). A great method for empowering employees in this way is by initiating a series of ‘growth action plans’, which all employees are encouraged to contribute to.

A technology company’s workforce is its most important strategic asset. Insightful technology leaders recognise that the greatest impediments to success are often related to people rather than information, technology and systems. Given the rapid obsolescence of technology-specific skills there is a continual need to provide opportunities for employees to update their technical skill sets within technology firms, particularly the smaller operators in niche areas. Failure to provide such training increases the likelihood of staff departure and there are high costs associated with replacing technology workers and their experience. Mechanisms that promote knowledge transfer amongst employees can help minimise the effect of the loss of skilled staff. For effective organisational learning, knowledge acquired individually must be rapidly integrated into the organisation. One training method that could facilitate ‘storage’ of these skills and knowledge is job rotation, which helps the transformation or conversion of individual tacit knowledge into collective tacit knowledge. Training based on autonomous interdisciplinary teams, with periodic rotation of members, will foster cohered groups that are committed to learning. The combined effort of the members enables the organisation to assume the returns attributable to its personnel, since the performance obtained is not down to individual persons. Job rotation also allows employees to acquire wide-ranging job experience, positively influences commitment to the organisation and to its objectives, and enables employees to see the firm from a range of perspectives, creating strong personal relations among individuals with diverse functions.

Having people capable of developing multiple skills are integral to obtaining human resource-based competitive advantage. In areas beyond production, the focus of training in growth-oriented small enterprises must therefore move from the role of resolver of competence problems to that of facilitator, providing guidance to employees about how they can become responsible for identifying future potential problems and determining appropriate skills development solutions. The importance of linking individual skills to company strategy in a change environment has been recognised through an enterprise-wide skills audit to delineate training needs.

Many small enterprises evaluate training by assessing participant satisfaction. Participant reaction is critical to the continuation of training programmes, but relying solely on this evaluation method is misled. While initial receptivity provides a good learning atmosphere, this doesn’t necessarily result in high learning levels. Because there is no one evaluation method uniformly accepted and used, comparative analysis of training programmes is difficult. Training leaders often do not have the skills to conduct evaluations as they may be direct line managers. Evaluations should be designed so that data can be utilised to keep the training focused on the firm’s goals, assess effectiveness of delivery and provide measurements of cost-effectiveness. Evaluating workplace transfer requires measurement of behaviours and skill performance, which can involve complex measures that have cost implications for the organisation. A superior evaluation technique is to elicit responses from the trainee’s manager, colleagues and even clients (360-degree feedback), with the advantage of respondents having direct experience of those being assessed.

Training’s value emerges when capability is transformed into improved job performance. Well-learned but poorly utilised training produces no value for the business. Getting improved performance from capability of employees is a performance management challenge, driven by complex factors such as direction, feedback and incentives. While these factors may not be seen as a systemic entity, they nonetheless operate as a system, critically affecting employee performance. When these factors are effective and aligned, employee capability will be leveraged into superior performance (Brinkerhoff, 2006). Small enterprises must therefore closely integrate training with organisational mission and goals, offer top management support and line manager commitment, allow an expanded HRM role and place an emphasis on evaluation if training is to be successful and supportive of organisational strategy.

References

Barney, J. B., & Wright, P. M. (1998). On becoming a strategic partner: the role of human resources in gaining competitive advantage. Human Resource Management, 37 (1), 31-46.
Beach, A. J. (1996). Empowerment to the people: creating an atmosphere for growth. Empowerment in Organizations, 4 (1), 29-33.
Brinkerhoff, R. O. (2006). Telling Training’s Story. San Francisco, CA: Berrett Koehler.
Delery, J. E., & Doty, D. H. (1996). Modes of theorizing in strategic human resource management: tests of universalistic, contingency and configurational performance predictions. Academy of Management Journal, 39 (4), 802-835.
Department for Education and Skills. (2003). Learning and Training at Work 2002. London: DfES.
Hughey, A. W., & Mussnug, K. J. (1997). Designing effective employee training programmes. Training for Quality, 5 (2), 52-57.
Ichniowski, C., Shaw, K., & Prennushi, G. (1997). The effects of human resource management practices on productivity: a study of steel finishing lines. American Economic Review, 87 (3), 291-313.
Kappelman, L. A., & Richards, T. C. (1996). Training, empowerment, and creating a culture for change. Empowerment in Organizations, 4 (3), 26-29.
Valle, R., Martín, F., Romero, P., & Dolan, S. (2000). Business strategy, work processes and human resource training: are they congruent? Journal of Organizational Behavior (21), 283-297.
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Webster, B., Walker, E., & Brown, A. (2005). Australian small business participation in training activities. Education and Training, 47 (8), 552-561.
Wright, P. M., McMahan, G. C., & McWilliams, A. (1994). Human resources and sustained competitive advantage: a resource-based perspective. The International Journal of Human Resource Management , 5 (2), 301-326.