Employee Development for Organizational Success: The Pressures, the Economics, the Rewards

Employee Development for Organizational Success: The Pressures, the Economics, the Rewards

Francois Silatchom (State University of New York Empire State College, USA), Nancy Kymn Harvin Rutigliano (State University of New York Empire State College, USA) and James Fiorino (State University of New York Empire State College, USA)
Copyright: © 2017 |Pages: 16
DOI: 10.4018/978-1-5225-1049-9.ch059


Today's organizations are faced with pressures not present 20 years ago. Demands are placed on leaders and managers to reduce overall expenses and to increase productivity and revenues at significantly higher levels than in the past. In this process, many organizations choose to reduce operational expenses in order to increase their profit margins and, in doing so, may target the Learning and Development departments often housed within Human Resources. Reducing these expenses may save some operational expense in the short term; however, over the long term, research shows that cutting learning opportunities is likely to have a negative effect on employee morale and job satisfaction. Investment in employee development is a strategy successful organizations adopt in order to remain competitive in the long run. Studies show that organizations that invest in employee development and training tend to consistently be the most competitive in their industry. This chapter makes the case that investing in an organization's greatest asset—its people—is a successful strategy for sustainable growth.
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Organizations today are confronted with more competitive pressure, often of multiple dimensions, than they did years ago. In a globalized economy we currently live in, the growing of the middle class in developing countries creates a significant new potential demand base that has access to a large set of competing organizations worldwide through a broad system of communication networks, including the Internet. Organizations are no longer competing only within their own domestic boundaries; they are competing globally and, because of that, organizations need to be competitive on a global scale.

In such a more competitive global marketplace, managers are often tasked with finding ways to minimize costs while at the same time maintaining customer service levels, quality, and employee morale. In management’s efforts to achieve efficiency, cost saving and productivity gains are not generally expected to lead to tangible results overnight, but rather, are a continuous process that requires time and sustained efforts.

When organizations are too focused on short term cost saving, which often include reducing costs in the area of training and development, they may not realize that the real business value can be destroyed if approached purely as a cost-cutting exercise (Burrows, 2012). There are a few reasons why managers will look to cut this area when times are tight within the organization.

First, many managers consider training and development as discretionary spending and as such, serve as an easy target item that can be reduced to achieve corporate short term optimization objectives. Training and development is usually not associated with immediately measurable performance bonus plans, nor is it considered as necessary to boost short term revenue. Management has more flexibility in terms when it comes to choosing when to provide training; they can provide it now, or sometime in the future. The decision about how much and when to offer training does not generally rely on some existing modeled framework. There is no clear systematic metric or formula on which organizations rely to determine how much training to provide, nor when training should optimally be provided (Harward, 2009).

Key Terms in this Chapter

Empowerment: Employees have the power to take the initiative and make decisions to solve problems and improve organizational performance.

Transparency: Open dialog between organization and employees with no hidden agendas and conditions, and free sharing of information.

Motivation: The general desire or willingness of someone to succeed.

Loyalty: Strong feeling of support or allegiance to an organization.

Employee Engagement: Emotional commitment of the employee toward organizational success.

Trust: Expectation that another will not act opportunistically.

Development: The act of growing or progressing.

Feedback: Open dialog between leaders and employees.

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