UNIT 1
INTRODUCTION
CONCEPTS AND RATIONALE OF TRAINING & DEVELOPMENT
OVERVIEW OF TRAINING & DEVELOPMENT SYSTEMS
Training and Development: Key Components of Learning
To understand the role of training and development in today’s organizations, it is important for you
to understand what training and development means in the broader business context.
Figure 1.1 shows the role of training and development for the business.
Ms. Shikha Dabral
Assistant Professor, IITM
Ms. Shikha Dabral
Assistant Professor, IITM
The overall goal of training and development is learning. Learning refers to employees acquiring
knowledge, skills, competencies, attitudes, or behaviors. But the focus of training and
development is not just on employees training for its own sake. Today, merely offering training
programs is not enough to get support and funding from executives and to establish the credibility
of the training and development function to managers and employees. Learning needs to
demonstrate how it contributes to the company’s competitive advantage through improving
employee performance, supporting the business strategy (such as growing the business), and
contributing positively to business outcomes such as quality, productivity, development of new
products, and retaining key employees.
From a company’s perspective, what employees learn contributes to the development of intangible
assets such as human capital. Human capital refers to knowledge (know what), advanced skills
(know how), system understanding and creativity (know why), and motivation to deliver
high-quality products and services (care why). Human capital may be more valuable than
physical capital (equipment or technology) or financial capital (monetary assets, cash) for
providing a company with an advantage over its competitors, because it is difficult to imitate or
purchase and it is unique to the company.
There are a number of different ways that learning occurs in a company. They are represented on
the outside of the circle in Figure 1.1. (given above)
Training refers to a planned effort by a company to facilitate learning of job related
competencies, knowledge, skills, and behaviors by employees. The goal of training is for
employees to master the knowledge, skill, and behaviors emphasized in training and apply them to
their day-to-day activities. Traditionally, companies have relied on formal training through a
course, program, or “event” to teach employees the knowledge, skills, and behaviors they need to
successfully perform their job. Development is similar to training, except that it tends to be more
future-focused.
Development refers to training as well as formal education, job experiences, relationship, and
assessments of personality, skills, and abilities that help employees prepare for future jobs or
positions.
Formal training and development refers to training and development programs, courses, and
events that are developed and organized by the company. Typically, employees are required to
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Assistant Professor, IITM
attend or complete these programs, which can include face-to-face training programs (such as
instructor-led courses) as well as online programs.
Informal learning is also important for facilitating the development of human capital. Informal
learning refers to learning that is learner initiated, involves action and doing, is motivated by an
intent to develop, and does not occur in a formal learning setting.

Informal learning occurs without a trainer or instructor, and its breadth, depth, and timing is
controlled by theemployee.

It occurs on an as-needed basis and may involve an employee learning either alone or
through face-to-face or technology-aided social interactions.

Informal learning can occur through many different ways, including casual unplanned
interactions with peers, e-mail, informal mentoring, or company-developed or publically
available social networking websites such as Twitter or Facebook.

The application of social media from a marketing strategy to a learning strategy and the
availability of Web 2.0 technologies such as social networks, microblogs, andwikis allow
employees easy access to social learning or learning through collaboration and sharing with
one or two or more people. One estimate is that informal learning may account for up to 75
percent of learning within organizations.
One reason why informal learning may be especially important is that it may lead to the
effective development of tacit knowledge, which can be contrasted with explicit knowledge.
Explicit knowledge refers to knowledge that is well documented, easily articulated, and easily
transferred from person to person. Examples of explicit knowledge include processes, checklists,
flowcharts, formulas, and definitions. Explicit knowledge tends to be the primary focus of formal
training and employee development. Tacit knowledge refers to personal knowledge based on
individual experiences that is difficult to codify.

The characteristics of formal training and development programs, such as the relatively short
duration of classroom or online training and limited opportunities for practice, may limit the
extent to which tacit knowledge can be acquired.

Thus, informal learning is central to the development of tacit knowledge because it involves
employee interactions in personal relationships with peers, colleagues, and experts through
which tacit knowledge is shared.
Ms. Shikha Dabral
Assistant Professor, IITM

It is important to recognize, however, that informal learning cannot replace formal training
and employee development. Formal training and development are still needed to prepare
employees for their jobs and to help them advance to future positions.

Informal learning complements training by helping employees gain tacit knowledge that
formal training cannot provide.
Knowledge management refers to the process of enhancing company performance by designing
and implementing tools, processes, systems, structures, and cultures to improve the creation, sharing,
and use of knowledge. Knowledge management contributes to informal learning.
G4S Secure Solutions provides security solutions around the world.
 Its employees are spread across field offices and client locations.
 Most G4S security officers don’t have computer access or are restricted by client firewalls.
 But security officers need timely information in order to protect clients and property.
 Seeking and sharing knowledge can help save lives. As a result, the company developed an Internet
and social networking solution. It provides access to company materials, announcements, policies and
procedures, training manuals, operational and support tools, and best practice forums.
 It can be accessed from anywhere, giving employees the ability to ask questions across the company as
well as within their office, location, or work team.
 The solution includes social networking features similar to Facebook.
 Employee can create profiles that have their skills, interests, achievements, projects, and contact
information. They can participate in threaded discussions. Tags can be used to identify similar
documents or discussions on the same topic.
Caterpillar Inc. moved toward becoming a continuous learning organization with the help of knowledge
management.
 Thirty years ago, Caterpillar Inc., a manufacturer of construction and mining equipment, engines, and
gas turbines, had most of its value in its plant and equipment. Today, intangible assets account for most
of the company’s value.
 Caterpillar’s web-based knowledge management system, known as Knowledge Network, has
thousands of communities of practice. They range in size from small teams to hundreds of employees
worldwide.
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Assistant Professor, IITM
 The communities of practice are useful for employees to gain both explicit and tacit knowledge. They
are used to distribute information, post questions, and provide space for reference materials.
 One community of practice focused on bolted joints and fasteners. This gives specialized engineers
who generally work alone in manufacturing facilities the ability to ask other engineers questions or get
second opinions on designs and problems.
 The community of practice has resulted in improved decision making, increased collaboration and
teamwork, and better product design and development. For example, members of the Bolted Joints and
Fastener community and the Dealer Service Training Community saved more than $1.5 million from
online discussions.
Consider the role of learning at PricewaterhouseCoopers.
 Its Learning and Education (L&E) team was restructured to better link it to the business goals related
to value and impact.
 L&E works with the business to understand what it wants education to be. It ensures ongoing
innovation in training delivery and instructional methods by evaluating emerging technologies and
using them in small pilot projects.
 The chief learning officer in charge of L&E is a member of the company’s leadership team, which
gives that individual the opportunity to discuss ideas regarding training methods, delivery, and content
with other top-level managers.
 L&E sponsors traditional and virtual classroom courses, self-study, team-based learning, action
learning projects, coaching and mentoring, and conferences, and it has served more than 150,000 users
each year, with over 6,000 courses, 12,000 classroom-based training sessions, and 19,000 Web-based
training sessions.
 PricewaterhouseCoopers uses a learning management system to create a single access point for training
activities. To help employees learn on an as-needed basis, the company’s e-learning includes video and
audio conferencing, virtual classrooms, and webcasting.
 To evaluate the success of training, L&E considers its influence on outcomes such as retention of top
people. Also, focus groups are used to determine whether trainees and managers are satisfied with the
training.
 A program on sustainability was designed to help partners understand how to provide solutions for
their clients.
 The company’s investment in the program has paid off. The company believes it has achieved a return
Ms. Shikha Dabral
Assistant Professor, IITM
on investment of more than 1,000 percent in new business sold and reputation gains in the
marketplace.
 In the future, L&E plans to further strengthen the relationship between training, development, and the
business by focusing on how it can make learning even more accessible and closer to the point where
employees need it.
 L&E wants to integrate learning and knowledge to speed employees’ development and improve their
competencies.
This discussion is not meant to underestimate the importance of “traditional training” (a focus on acquisition
of knowledge, skills, and abilities), but it should alert you that for many companies training is evolving from a
focus on skills to an emphasis on learning and creating and sharing knowledge.
Ms. Shikha Dabral
Assistant Professor, IITM
ISD MODEL OF T & D
Designing Effective Training
The training design process refers to a systematic approach for developing training programs.
Figure 1.2 (below) presents the seven steps in this process.
 Step 1 is to conduct a needs assessment, which is necessary to identify whether training is
needed.
 Step 2 is to ensure that employees have the motivation and basic skills necessary to master
the training content.
 Step 3 is to create a learning environment that has the features necessary for learning to
occur.
 Step 4 is to ensure that trainees apply the training content to their jobs. This step involves
having the trainee understand how to manage skill improvement as well as getting coworker and manager support.
Ms. Shikha Dabral
Assistant Professor, IITM
 Step 5 is to develop an evaluation plan. Developing an evaluation plan includes
identifying what types of outcomes training is expected to influence (for example,
learning, behavior, skills), choosing an evaluation design that allows you to determine the
influence of training on these outcomes, and planning how to demonstrate how training
affects the “bottom line” (that is, using a cost-benefit analysis to determine the monetary
benefits resulting from training).
 Step 6 is to choose the training method based on the learning objectives and learning
environment. This step may include a traditional training method of face-to-face
interaction with a trainer or e-learning using CD-ROM or Web-based training.
 Step 7 is to evaluate the program and make changes in it or revisit any of the earlier steps
in the process to improve the program so that learning, behavior, change, and the other
learning objectives are obtained.
The training design process shown in Figure 1.2 is based on principles of Instructional System
Design.
Instructional System Design (ISD) refers to a process for designing and developing training
programs. There is not one universally accepted instructional systems development model. The
training design process sometimes is referred to as the ADDIE model because it includes analysis,
design, development, implementation, and evaluation.
In Figure 1.2, Step 1, conducting needs assessment, and Step 2, ensuring employees’ readiness for
training, are related to analysis.
The next three steps—creating a learning environment, ensuring transfer of training, and
developing an evaluation plan—are design issues.
Step 6, selecting and using a training method, relates to implementation.
Step 7, monitoring and evaluating the program, relates to evaluation.
Regardless of the specific ISD approach used, all share the following assumptions:

Training design is effective only if it helps employees reach instructional or training goals
and objectives.

Measurable learning objectives should be identified before the training program begins.
Ms. Shikha Dabral
Assistant Professor, IITM

Evaluation plays an important part in planning and choosing a training method,
monitoring the training program, and suggesting changes to the training design process.
Overcoming the Flaws of the ISD Model
Some training professionals argue that the ISD model is flawed for several reasons.
 First, in organizations the training design process rarely follows the neat, orderly, step-bystep approach of activities shown in Figure 1.1.
 Second, in trying to standardize their own ISD method used in the training function, some
organizations require trainers to provide detailed documents of each activity found in the
model. This adds time and cost to developing a training program.
 Third, the ISD implies an end point: evaluation. However, good instructional design
requires an iterative process of design, execution, evaluation, and reconsideration of the
needs that the program was designed to meet as well as the learning environment, the
transfer of training, and all the other activities in the ISD process.
 Fourth, many companies claim to use an instructional design approach but dilute its
application. This might include assuming that training is the best solution without
investigating other causes for performance gaps, failing to identify training objectives and
results, focusing too much on the training method while ignoring the role of the work
environment in transfer of training, and concentrating evaluation on whether trainees liked
the program rather than on measuring the impact of training on job performance or
business results.
Despite these criticisms, use of the ISD process is the best way to help ensure the effectiveness of
training and development.
The training design process should be systematic yet flexible enough to adapt to business needs.
Different steps may be completed simultaneously. For example, a business leader who was an
important stakeholder at Deloitte wanted a training module for new employees on how to deliver
exceptional customer service to be quickly redesigned. The fast turn-around time was necessary
because of its business implications. Many new employees hired each week needed to understand
how to provide customer service the Deloitte way. Three teams of talent development
professionals were each given the same set of learning objectives to create a revised program.
Throughout the process they exchanged and critiqued each other’s ideas. At the end of the day the
Ms. Shikha Dabral
Assistant Professor, IITM
ideas for the revised program were presented to the business leader. The business leader reviewed
the teams’ recommendations and agreed that hybrid course design based on two of the teams’
recommendations would be the best solution. Keep in mind that designing training
unsystematically will reduce the benefits that can be realized. For example, choosing a training
method before determining training needs or ensuring employees’ readiness for training increases
the risk that the method chosen will not be the most effective one for meeting training needs.
Also, training may not even be necessary and may result in a waste of time and money.
Employees may have the knowledge, skills, or behavior they need but simply not be motivated to
use them.
The introduction of new technologies such as mobile learning highlights a shift from trainees
having to learn from an instructor in one location to trainees learning independently and not being
bound to learn in the workplace. Still, good training design requires determining the trainees’
needs, identifying resources so that trainees can learn what they need to know, and providing
them with access to reference materials and knowledge bases when they encounter problems,
issues, or questions on the job.
The development of a Web-based training program focused on teaching managers skills needed to
run effective business meetings provides a good example of use of the instructional design
process. The first step of the process, needs assessment, involved determining that managers
lacked skills for conducting effective meetings and helped to identify the type of meetings that
managers were involved in. The needs assessment process involved interviewing managers and
observing meetings. The needs assessment process also identified the most appropriate training
method.
Because the managers were geographically dispersed and had easy access to computers and
because the company wanted a self-directed, self-paced program that the managers could
complete during free time in their work schedule, the training designers and company
management decided that Web-based training was the appropriate method. Because training was
going to be conducted over the Web, the designers had to be sure that managers could access the
Web and were familiar with tools for using the Web (e.g., Web browsers). This relates to
determining the managers’ readiness for training.
The next step was to create a positive learning environment on the Web. Designers made sure that
the program objectives were clearly stated to the trainees and provided opportunities within the
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Assistant Professor, IITM
program for exercises and feedback. For example, trainees were asked to prepare an outline for
the steps they would take to conduct an effective meeting. The designers built into the program a
feedback system that indicated to the managers which of the steps they outlined were correct and
which needed to be changed. The designers also included assessment tests that allowed the
trainees to receive feedback through the program and to skip ahead or return to earlier material
based on their scores on the tests. The assessment included a test of meeting skills that the
managers completed both prior to and after completing the program. The assessment tests were
stored in a data bank that the company could use to evaluate whether trainees’ meeting skills
improved from pretraining levels.
Ms. Shikha Dabral
Assistant Professor, IITM
MODELS OF ORGANIZING THE TRAINING DEPARTMENT
Most companies want their learning or training function to provide some courses and programs to
all employees regardless of their functional area, location, business unit, or division. These courses
and programs are developed (or purchased from training vendors or suppliers) and delivered by
learning staff working at corporate headquarters or at a corporate university. At the same time,
companies want their learning function to provide learning that meets training needs that are
unique to a business unit or product line.
One of the important decisions that companies have to consider in choosing how to organize the
training department (or learning function) is the extent to which training and learning is
centralized. Typically, companies don’t choose to entirely centralize or decentralize training and
learning completely. Rather, they organize the training department or learning function in a way
that best supports the business strategy and helps meet its needs. This typically involves an
approach in which some learning is provided by a corporate learning function or corporate
university and others learning is customized, developed, and delivered specifically for function,
product lines or location needs (business-embedded). Centralized training means that training and
development programs, resources, and professionals are primarily housed in one location and that
decisions about training investment, programs, and delivery methods are made from that
department.
One of the advantages of a centralized training function is that it helps drive stronger alignment
with business strategy, allows development of a common set of metrics or scorecards to measure
and report rates of quality and delivery, helps to streamline processes, and gives the company a
cost advantage in purchasing training from vendors and consultants because of the number of
trainees who will be involved. Also, a centralized training function helps companies better
integrate programs for developing leaders and managing talent with training and learning during
times of change.
At Harley-Davidson, a centralized training function allows selection of a common technology for
delivery of training programs. This policy helps reduce the chances that functional groups will
adopt different technologies, for which some training programs and their features, such as video,
will work and others will not. The key to the success of a centralized approach is that top managers
must believe they are in control of the training function and that the training function is aligned
Ms. Shikha Dabral
Assistant Professor, IITM
with the business strategy.
Ms. Shikha Dabral
Assistant Professor, IITM
1. Faculty Model
Training departments organized by the faculty model look a lot like the structure of a college.
Figure below shows the faculty model.

The training department is headed by a director with a staff of experts who have
specialized knowledge of a particular topic or skill area.

These experts develop, administer, and update training programs. For example, sales
trainers are responsible for sales skills training (cultivating clients, negotiating a sale,
closing a sale), and computer experts provide training on topics such as using e-mail and
the World Wide Web as well as software design language.

The faculty model has several strengths.
 First, training staff are clearly experts in the areas in which they train.
 Second, the training department’s plans are easily determined by staff expertise. The content
and timing of programs are determined primarily by when they are available and the expertise
of the trainers.

Organizing by the faculty model also has several disadvantages.
 Companies that use the faculty model may create a training function that has expertise that
does not meet the needs of the organization.
 Trainers in a faculty model may also be unaware of business problems or unwilling to adapt
materials to fit a business need.
 This can result in demotivated trainees who fail to learn because course content lacks meaning
for them—that is, it does not relate to problems or needs of the business.Programs and courses
that may be needed may not be offered because trainers are not experts in certain areas.
 Skill and knowledge emphasized in programs may not match the needs of the company.
To overcome these disadvantages of the faculty model, managers need to frequently survey
training’s customers to ensure that course offerings are meeting their needs. Expert trainers also
need to ensure that they adapt course materials so they are meaningful for participants.
Ms. Shikha Dabral
Assistant Professor, IITM
Ms. Shikha Dabral
Assistant Professor, IITM
2. Customer Model
Training departments organized according to the customer model are responsible for the training
needs of one division or function of the company.
For example, trainers might be responsible for programs related to information systems, marketing,
or operations. The trainers might also be human resource generalists whose job responsibilities
include a broad range of human resource functions such as training, performance management,
hiring, and benefits. Figure below shows the customer model.
This model overcomes a major problem of the faculty model.
 Training programs are developed more in line with the particular needs of a business group
rather than based on the expertise of the training staff.
 Selection, training, compensation, and development are all based on a common set of
knowledges, skills, abilities, or competencies. That is, training is integrated with other
human resource responsibilities.
 Trainers in this model are expected to be aware of business needs and to update courses and
content to reflect them. If needs change such that training is no longer available from a
source inside the company, the trainers may use outside experts (e.g., consultants).
 Materials provided by a training staff organized by this model are likely to be meaningful to
trainees.
There are several disadvantages to this model.
 First, trainers have to spend considerable time learning the business function before they
can be useful trainers.
 Second, a large number of programs covering similar topics may be developed by
customers. These programs may also vary greatly in effectiveness. It may be difficult for
the training director to oversee each function to ensure that (1) a common instructional
design process is used or (2) the company’s quality philosophy is consistently emphasized
in each program. For example, quality training may be developed separately for marketing
and for operations employees. This type of structure is likely to be unattractive to trainers
who consider presentation and teaching to be their primary job function. In the customer
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Assistant Professor, IITM
model, trainers are likely to be employees from the functional area (e.g., manufacturing
engineers) who have great functional expertise but lack training in instructional design and
learning theory. As a result, courses may be meaningful but poor from a design perspective
(e.g., have inadequate feedback and practice opportunities).
Ms. Shikha Dabral
Assistant Professor, IITM
3. Matrix Model
In the matrix model, trainers report to both a manager in the training department and a manager
in a particular function. Figure below shows the matrix model.
The trainer has the responsibility of being both a training expert and a functional expert. For
example, as Figure shows, sales trainers report to both the director of training and the marketing
manager.
 One advantage of the matrix model is that it helps ensure that training is linked to the
needs of thebusiness.
 Another advantage is that the trainer gains expertise in understanding a specific business
function.
 Because the trainer is also responsible to the training director, it is likely that the trainer will
stay professionally current (e.g., up-to-date on new training delivery mechanisms such as
the Internet).
 A major disadvantage of the matrix model is that trainers likely will have more time
demands and conflicts because they report to two managers: a functional manager and a
training director.
Ms. Shikha Dabral
Assistant Professor, IITM
4. Corporate University Model (Corporate Training Universities)
To gain the advantages of centralized training, many companies use the corporate university
model, as shown in Figure below.

The corporate university includes not only employees, managers and stakeholders
outside the company, including community colleges, universities, high schools, and grade
schools.

Corporate universities can provide significant advantages for a company’s learning efforts
by helping to overcome many of the historical problems that have plagued training
departments (see the left side of figure below).

A corporate university can help make learning more strategic by providing a clear mission
and vision for learning, and ensuring that it is aligned with business needs.

It can also help companies who have a strong business culture and values ensure that they
are emphasized in the learning curriculum.

Also, the corporate university can control costs and maximize the benefits of learning.
This occurs through providing consistent training activities, disseminating best learning
practices throughout the company, effectively using technology to support learning,
evaluating learning’s impact on employees and business results, and establishing
partnerships with academia and other company stakeholders (community) to develop
custom training and degree programs.

Consider the benefits that several different companies have realized from their corporate
universities.
Example – Deloitte LLP
 Deloitte LLP invested $300 million to build a corporate university in Westlake, Texas. The corporate
university includes state-of-the-art learning technology, 800 sleeping rooms, and even a ballroom.
 Such an investment runs counter to the cost savings and efficiencies resulting from instructional
solutions such as mobile learning, virtual reality, and e-learning that require only that learners have
access to a personal computer, iPhone, or iPad, eliminating the need to travel to a physical training site.
 The results suggested that its partners were supportive and most Generation Y (Gen-Y) employees
wanted a physical location where they could meet and learn face to face.
 Also, the CEO believes that learning is an important investment that can provide a competitive
advantage by aiding in the recruiting of talented employees and helping Deloitte LLP cope with the
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Assistant Professor, IITM
fast rate of change in the business.
 The corporate university supports Deloitte’s culture of personal and professional development for its
employees.
 Deloitte University provides 1 million hours of the 3 million total training hours the company provides
each year.
 The training will cover technical, professional, industry, and leadership skills.
 Interactive instructional techniques are used, including case discussions and simulations that require a
small instructor-to-student ratio (one instructor to every five students).
 D Street, Deloitte’s social networking system, is used by employees to interact before and after
attending courses at the university to discuss what they have learned, explore potential applications,
and find expertise across the company.
Example - Hamburger University
 Hamburger University, the corporate university for McDonald’s Corporation, is charged with
continuing to teach the core values that founder Ray Kroc believed were the key to success: quality,
service, cleanliness, and value.
 Hamburger University is one of the oldest and most effective corporate universities.
 Founded in 1961, it is estimated that approximately 5,000 McDonalds employees attend the U.S.-based
Hamburger University each year, and more than 90,000 managers and owner-operators have graduated
from it.
 Hamburger University is a global center for operations training and leadership development for
McDonalds. It also gives employees the opportunity to get a college degree.
 McDonalds has a university in Oakbrook, Illinois, six global universities, and twenty-two regional
training centers.
 To promote learning, the facilities and programs offered at Hamburger University are reviewed and
revised. As a result, Hamburger University has transitioned away from teaching courses with a lecture
format and is moving toward fewer large group sessions and more interactive learning in classes of 25–
35 students, which are then further divided into small groups for discussion and exercises.
 McDonald’s changed its learning format to accommodate how most of its students (who would be
considered Generation Y) learn.
 The typical education level of frontline service workers has influenced curriculum design through the
development of more easily understandable coursework.
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Assistant Professor, IITM
 E-learning is used to deliver the basics of restaurant operations or management training and classroom
instruction and simulations are used to help the learner apply the basics on the job.
 Recently, new audiovisual equipment was installed, a cybercafé was added, and large auditorium
classroom spaces were converted into smaller spaces that facilitate collaboration and interaction.
 Virtual classrooms were also built to connect instructors with McDonalds employees around the world.
 Learners are provided with headphones that connect them to translators who provide instruction in the
learner’s native language during class.
 McDonalds is planning to add connectivity to classrooms that will allow learning using mobile
devices and social networking.
 Besides classroom instruction, Hamburger University includes a simulated kitchen and drivethrough window.
 Despite having learners at the university who are already familiar with behind-the-counter operations,
everyone takes part in the simulation, making real food and filling orders just as they would at a real
McDonald’s restaurant.
 Learners have performance goals to meet, and they receive feedback from fellow learners and trainers.
 Managers can support and track earner development by accessing online course completion reports of
their scores on tests of their knowledge and behavior.
 All of McDonalds restaurant management and middle manager courses are accredited, meaning that
participants can receive college credit.
 The credits for these courses represent half of the credits required to earn an associate’s degree at a
two-year college and a large number of the credits needed to receive a bachelor’s degree in business
administration or management at a four-year college or university.
 The curriculum for department managers now allows them to test content they already know, and
training time has been reduced from one-and-a-half years to two years to four to six months.
Ms. Shikha Dabral
Assistant Professor, IITM
Ms. Shikha Dabral
Assistant Professor, IITM
Creating a Corporate University
Creating a corporate university from scratch involves several steps.

First, senior managers and business managers form a governing body with the
responsibility of developing a vision for the university. (This group answers questions
such as, “What are the university’s policies, systems, and procedures?” and “What are the
key functional areas for which training courses will be developed?”)

Second, this vision is fleshed out, and the vision statement is linked to the business
strategy.

Third, the company decides how to fund the university. The university can be funded by
charging fees to business units and/or by monies allocated directly from the corporate
budget.

Fourth, the company determines the degree to which all training will be centralized. Many
universities centralize the development of a learning philosophy, core curriculum design,
and policies and procedures related to registration, administration, measurement,
marketing, and distance learning. Local and regional on-site delivery and specialized
business-unit curriculum are developed by business units.

Fifth, it is important to identify the needs of university “customers” including employees,
managers, suppliers, and external customers.

Sixth, products and services are developed.

The seventh step is to choose learning partners including suppliers, consultants, colleges,
and companies specializing in education.

Eighth, the company develops a strategy for using technology to train more employees,
more frequently, and more cost-effectively than instructor-led training.

Ninth, learning that occurs as a result of a corporate university is linked to performance
improvement. This involves identifying how performance improvement will be measured
(tests, sales data, etc.).

Finally, the value of the corporate university is communicated to potential “customers.”
Questions about the types of programs offered, how learning will occur, and how
employees will enroll are addressed.
Ms. Shikha Dabral
Assistant Professor, IITM
Ms. Shikha Dabral
Assistant Professor, IITM
Ms. Shikha Dabral
Assistant Professor, IITM
6. Business-Embedded Learning Function
Most companies are ensuring that their learning function is centralized to some extent so that they
can better control their training costs and ensure that training is aligned with the business strategy,
but at the same time respond quickly to client needs and provide high-quality services.

A business-embedded (BE) learning function is characterized by five competencies:
strategic direction, product design, structural versatility, product delivery, and
accountability for results.

Strategic direction includes a clearly described goal and direction to the department as
well as a customer focus that includes customizing training to meet customer needs and
continuously improving programs.

A BE learning function not only views trainees as customers, but also views managers as
customers who make decisions to send employees to training, and senior-level managers
as customers who allocate money for training.

Table below shows the features of a learning function that is business-embedded.
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Assistant Professor, IITM

BE means the learning function is customer-focused. It takes more responsibility for
learning and evaluating training effectiveness, provides customized training solutions based
on customer needs, and determines when and how to deliver training based on customer
needs.

The most noticeable feature of a BE function is its structure.

In BE training functions, all persons who are involved in the training process communicate
and share resources.

Trainers—who are responsible for developing training materials, delivering instruction,
and supporting trainees—work together to ensure that learning occurs. For example,
access to project managers and subject-matter experts can be provided by developers to
instructors who usually do not have contact with these groups.

The number of trainers in BE training functions varies according to the demand for
products and services.

The trainers not only have specialized competencies (e.g., instructional design) but can also
serve as internal consultants and provide a wide range of services (e.g., needs assessment,
content improvement, customization of programs, and results measurement).
Current Practice: The BE Model with Centralized Training
Because many companies are recognizing training’s critical role in contributing to the business
strategy, there is an increasing trend for the training function, especially in companies that have
separate business units, to be organized by a blend of the BE model with centralized training that
often includes a corporate university.
This approach allows the company to gain the benefits of centralized training but at the same time
ensure that training can provide programs, content, and delivery methods that meet the needs of
specific businesses.
TRAINING AND DEVELOPMENT POLICIES
Ms. Shikha Dabral
Assistant Professor, IITM
LINKING TRAINING & DEVELOPMENT TO COMPANY’S STRATEGY
Given the important role that intangible assets and human capital play in a company’s
competitiveness, managers are beginning to see a more important role for training and development
as a means to support a company’s business strategy, that is, its plans for meeting broad goals such
as profitability, market share, and quality. Managers expect training and development professionals
to design and develop learning activities that will help the company successfully implement its
strategy and reach business goals.
Why is the emphasis on strategic training important?
Companies are in business to make money, and every business function is under pressure to show
how it contributes to business success or face spending cuts and even outsourcing. To contribute
to a company’s success, training activities should help the company achieve its business strategy.
A business strategy is a plan that integrates the company’s goals, policies, and actions.

The strategy influences how the company uses physical capital (e.g., plants, technology,
and equipment), financial capital (e.g., assets and cash reserves), and human capital
(employees).

The business strategy helps direct the company’s activities (production, finance, marketing,
human resources) to reach specific goals.

The goals are what the company hopes to achieve in the medium- and long-term future.
Most companies’ goals include financial goals, such as to maximize shareholder wealth.
But companies have other goals related to employee satisfaction, industry position, and
community service.
There are both direct and indirect links between training and business strategy and goals.

Trainingthat helps employees develop the skills needed to perform their jobs directly affects
the business.

Giving employees opportunities to learn and develop creates a positive work environment,
which supports the business strategy by attracting talented employees as well as motivating
and retainingcurrent employees.
Ms. Shikha Dabral
Assistant Professor, IITM
Business strategy has a major impact on the type and amount of training that occurs and whether
resources (money, trainers’ time, and program development) should be devoted to training. Also,
strategy influences the type, level, and mix of skills needed in the company. Strategy has a
particularly strong influence on determining the following:
1. The amount of training devoted to current or future job skills.
2. The extent to which training is customized for the particular needs of an employee or is
developed based on the needs of a team, unit, or division.
3. Whether training is restricted to specific groups of employees (such as persons identified
as having managerial talent) or open to all employees.
4. Whether training is planned and systematically administered, provided only when
problems occur, or developed spontaneously as a reaction to what competitors are doing.
5. The importance placed on training compared to other human resource management
practices such as selection and compensation.
Ms. Shikha Dabral
Assistant Professor, IITM
The Strategic Training and Development Process
Now that you have been introduced to the concept of business strategy and how training can
support a business strategy, you are ready to study the process of strategic training and
development.
Figure below shows a model of the strategic training and development process with
examples of strategic initiatives, training activities, and metrics.
Ms. Shikha Dabral
Assistant Professor, IITM

The model shows that the process begins with identifying the business strategy.

Next, strategic training and development initiatives that support the strategy are chosen.

Translating these strategic training and development initiatives into concrete training and
development activities is the next step of the process.

The final step involves identifying measures or metrics. These metrics are used to determine whether
training has helped contribute to goals related to the business strategy.
Ms. Shikha Dabral
Assistant Professor, IITM
The following sections detail each step in the process.
1. Business Strategy Formulation and Identification
Five major components are part of developing a new business strategy or changing an existing one.
Figure below shows the components.

The first component is the company mission, which is a statement of the company’s reason
for existing. Company missions vary, but they typically include information on the customers
served, why the company exists, what the company does, the value received by the
customers, and the technology used. The mission statement is often accompanied by a
statement of the company’s vision or values.
The vision is the picture of the future that the company wants to achieve, while values are
what the company stands for.

The second component is the company goals, which are what the company hopes to achieve
Ms. Shikha Dabral
Assistant Professor, IITM
in the medium to long term; they reflect how the mission will be carried out.
Training can contribute to a number of different business goals i.e. productivity, reduced
scrap and rework, increased customer satisfaction, increased employee satisfaction and
retention,better management decisions, etc.
Both for-profit and not-for-profit companies often include goals related to satisfying
stakeholders.
The term stakeholders refers to shareholders (if the company is publically traded and forprofit), the community, customers, employees, and all the other parties that have an interest
in seeing that the company succeeds.

The third and fourth components, external and internal analysis, are combined to form
what is called a SWOT analysis.
A SWOT analysis consists of an internal analysis of strengths and weaknesses and an
external analysis of opportunities and threats to the company that currently exist or are
anticipated.
External analysis involves examining the operating environment to identify opportunities
and threats.
Examples of opportunities include customers and global markets who are not being served,
technology that can help the company, and unused or underutilized potential sources of
talented employees.
Threats might include changes in the economy, talent, and leadership shortages, new
competitors, and changes in legislation that can adversely affect the company.
Internal analysis attempts to identify the company’s strength and weaknesses. It focuses on
examining the available quantity and quality of financial, physical, and human capital. The
last component is strategic choice. After completing the SWOT analysis, the company
(usually managers involved in strategic planning) has all the information it needs to consider
how to compete, generate several alternative business strategies, and make a strategic choice.
The decisions that a company has to make regarding how to compete are given in the table
2.3 given below.
The possible alternative strategies are compared based on the ability to achieve the company
goals. The strategic choice represents the strategy believed to be the best alternative to
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Assistant Professor, IITM
achieve the company goals.
Although these decisions are equally important, companies often pay less attention to the
“with what will we compete” issue, resulting in failure to reach the goals. This decision
includes deciding how human, physical, and financial capital will be used. To use human
capital to gain a competitive advantage requires linking the company’s human resources
practices (such as training and development) to the business strategy.
Ms. Shikha Dabral
Assistant Professor, IITM
2. Identify Strategic Training and Development Initiatives That Support the Strategy
Strategic training and development initiatives are learning-related actions that a company should take to
help it achieve its business strategy.
The strategic training and development initiatives vary by company depending on a company’s industry,
goals, resources, and capabilities. The initiatives are based on the business environment, an understanding of
the company’s goals and resources, and insight regarding potential training and development options. They
provide the company with a road map to guide specific training and development activities. They also show
how the training function will help the company reach its goals (and in doing so, show how the training
function willadd value).
There is a tendency to have a disconnect between strategy and execution of the strategy. To avoid
this, learning professionals need to reach out to managers to ensure that the strategic training
initiatives and training activities are aligned with the business strategy and the necessary financial
resources and support are provided to carry out the training activities.
To contribute to a company’s business strategy, it is important that the training function understand
and support it and provide value to its customers. Linking training plans to business plans is
important because business plans describe company priorities (plans or initiatives) and include
descriptions of who will be involved, the context and how it might affect the plan, how the plan will
be carried out (operations), and what decisions have to be made, including those involving training
and development, to increase the likelihood that the plan will succeed.
Table below shows strategic training and development initiatives and their implications for
training practices.
Ms. Shikha Dabral
Assistant Professor, IITM
Ms. Shikha Dabral
Assistant Professor, IITM
 Diversify the learning portfolio - Diversify the learning portfolio means that companies
may need to provide more learning opportunities than just traditional training programs.
These learning opportunities include informal learning that occurs on the job through
interactions with peers, new job experiences, personalized learning opportunities using
mentors, coaches, and feedback customized to employee needs, and the use of technology
(including web-based training). Such training is self-paced and available outside a formal
classroom environment.
Reliance Industries Ltd., an Indian company with businesses in energy and petrochemicals
and polyester products, employs a wide variety of learning initiatives using different
methods. For example, to increase the opportunities for plant employees to train for
emergencies and malfunctions, Reliance invested in simulator training at more than 185
facilities. To capture expert knowledge and make it available to other employees working
anywhere in the company, a new technology-based solution was used. Experts can share their
knowledge and experience using video lectures that are made available at any time to other
employees on the company intranet. To help meet its needs for engineers, Reliance has
partnered with educational institutions to create a curriculum that is supported by specific
company assignments.
 Expand who is trained - Expand who is trained refers to the recognition that because
employees are often the customer’s primary point of contact, they need as much if not more
training than managers do.
 Accelerate the pace of employee learning - To be successful, companies have to be able to
deal with changes in technology, customer needs, and global markets. Training needs have to
be quickly identified and effective training provided. That is, companies have to accelerate
the pace of employee learning.
 Improve customer service - Because customers now have access to databases and Web
Sites and have a greater awareness of high-quality customer service, they are more
knowledgeable, are better prepared, and have higher service expectations than ever before.
Employees must be prepared to improve customer service. Employees have to be
knowledgeable about the product or service, they need to have customer service skills, and
they need to understand the types of decisions they can make (e.g., can they make an
Ms. Shikha Dabral
Assistant Professor, IITM
exception to the policy of no cash refunds?).
 Provide development opportunities and communicate with employees - Providing
development opportunities and communicating them to employees is important to ensure
that employees believe that they have opportunities to grow and learn new skills. Such
opportunities are important for attracting and retaining talented employees.
 Capture and share knowledge - Capturing and sharing knowledge ensures that important
knowledge about customers, products, or processes is not lost if employees leave the
company. Also, giving employees access to knowledge that other employees have may
quicken response times to customers and improve product and service quality. For example,
rather than “reinventing the wheel,” service personnel can tap into a database that allows
them to search for problemsand identify solutions that other service reps have developed.
 Align training and development with the company’s direction - Aligning training and
development with the company’s strategic direction is important to ensure that training
contributes to business needs. Companies need to identify what employee capabilities (e.g.,
knowledge, skills) are needed and whether training programs and services are helping to
improve these capabilities.
 Ensure that the Work Environment supports Learning and Transfer of Training Lastly, a supportive work environment is necessary for employees to be motivated to
participate in training and learning activities, use what they learn on the job, and share their
knowledge with others. Tangible support includes time and money for training and learning
as well as work areas that encourage employees to meet and discuss ideas. Psychological
support from managers and peers for training and learning is also important.
How might a company ensure that its training and development initiatives are linked to its
business strategy?
Table given below shows the questions that a company needs to answer to identify and develop its
strategic training and development initiatives.
Ms. Shikha Dabral
Assistant Professor, IITM
To help answer these questions, trainers need to read the annual reports, strategic plans, earnings
releases, and analyst reports for their companies.
To understand the business strategy and its implications for training, it may be useful to invite
managers to attend training and development staff meetings and present information on the
company’s business strategy.
Also, in companies with multiple divisions, it is important to understand each business, including
how it measures effectiveness, how it monitors and reports performance, and what challenges it
faces, such as supply chain management, new product development, competitive pressures, or
service warranty issues.
Ms. Shikha Dabral
Assistant Professor, IITM
3. Provide Training and Development Activities Linked to Strategic Training and
Development Initiatives
After a company chooses its strategic training and development initiatives related to its business
strategy, it then identifies specific training and development activities that will enable these
initiatives to be achieved. These activities include developing initiatives related to use of new
technology in training, increasing access to training programs for certain groups of employees,
reducing development time, and developing new or expanded course offerings.
4. Identify and Collect Metrics to Show Training Success
How does a company determine whether training and development activities actually contribute to the
business goals?
This determination involves identifying and collecting metrics, business-level outcomes chosen to measure
the overall value of training or learning initiatives. Examples of metrics include measures of employee
retention, employee engagement, customer service, productivity, and quality.
It is important to recognize the difference between training program outcomes and business metrics.
Typically, training program evaluation involves measuring trainee satisfaction with the program, assessing
improvements in trainee knowledge, skills, and abilities, or identifying if the program influenced business
results such as productivity.
Accenture, a management consulting, technology services, and outsourcing company, collects several
different learning delivery metrics. All employees have access to training. In 2012 employees completed more
than 3.7 million courses and 1 million course evaluations were submitted. Employees attended more than
208,900 instructor-led training days at Accenture’s regional training centers, which are located around the
world. In comparison to training evaluation outcomes, metrics focus on results rather than on other outcomes.
They are strategic business-related measures. That is, they are not linked to one course or program but are
chosen to represent the expected value of several programs or learning initiatives. Cognizant evaluates its
learning efforts using four outcomes or criteria: business impact, employee satisfaction, business stakeholder
satisfaction, and solution effectiveness.
The business-related outcomes should be directly linked to the business strategy and goals. For example,
business-related outcomes could evaluate customer service, employee satisfaction or engagement, employee
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Assistant Professor, IITM
turnover, number of product defects, time spent in product development, number of patents, or time spent
filling management positions.
Some companies use the balanced scorecard as a process to evaluate all aspects of the business. The balanced
scorecard is a means of performance measurement that provides managers with a chance to look at the overall
company performance or the performance of departments or functions (such as training) from the perspective
of internal and external customers, employees, and shareholders.
The balanced scorecard considers four different perspectives: customer, internal, innovation and learning,
and financial.The emphasis and type of indicators used to measure each of these perspectives are based on the
company’s business strategy and goals. The four perspectives and examples of metrics used to measure
them include:

Customer (time, quality, performance, service, cost)

Internal (processes that influence customer satisfaction)

Innovation and learning (operating efficiency, employee satisfaction, continuous improvement)

Financial (profitability, growth, shareholder value)
Metrics that might be used to assess training’s contribution to the balanced scorecard include employees
trained (employees trained divided by total number of employees), training costs (total training costs divided
by number of employees trained), and training costs per hour (total training costs divided by total training
hours).
Ms. Shikha Dabral
Assistant Professor, IITM
REQUISITES OF EFFECTIVE TRAINING
ROLE OF EXTERNAL AGENCIES IN TRAINING AND DEVELOPMENT
Ms. Shikha Dabral
Assistant Professor, IITM