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Training and development in retail market


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An important part of human resource practices is Training and development of employees. Growing competition in market and globalisation make large and medium companies invest heavily in this this field to obtain future benefits. In this essay I try to discuss different attitudes of employees which ensure reduced turnover rate among them.

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Training and development in retail market

  2. 2. DECLARATION I declare that this essay is completely my effort and piece of work based on study conducted by myself. Any work or theory used in this dissertation have been duly referenced and given proper sources. Moreover, the research has been conducted according to the guidelines provided by BBK University.
  3. 3. Contents INTRODUCTION 4 DEFINITION OF TURNOVER 5 WHAT IS STAFF TURNOVER AND HOW IT IS CLASSIFIED 5 WHAT CAUSES EMPLOYEE TURNOVER 6  Relationship between Commitment and Turnover 7  Causes of dissatisfaction at work 7  Relationship between Training, career development and turnover 8 TURNOVER IN RETAIL SECTOR 8 HOW TRAINING REDUCES EMPLOYEE TURNOVER HOW COMMITMENT STRATEGY IMPACTS EMPLOYEE TURNOVER 10  Effect of Training on Employee Investment 11  Effect of Training on Employee Reciprocity 12  Effect of Training on Employees Identity 13  Effect of Training on Employees Lack of Alternatives 13 CONCLUSION 14
  4. 4. INTRODUCTION An important part of human resource practices is Training and development of employees. Growing competition in market and globalisation make large and medium companies invest heavily in this this field to obtain future benefits. In this essay I try to discuss different attitudes of employees which ensure reduced turnover rate among them. These attitudes include employee loyalty and commitment with company, employees’ willingness to invest time in company, lack of opportunities, career development opportunity in company and others.In addition, this essay looks at the effect of training on increasing these factors and as a result reducing turnover among employees. Experts reckon training as an important tool towards gaining organizational goals. They believe that training is best source of increase in employee turnover and retention. They also believe that training is an extremely important part of human resources practice (Colarell and Montei, 2006). There has been a considerable increase in training industry. Joyce (2008) quotes statistics from The American Society for Training and Development and says that from there was an increase of $135 per employee on the training programs from 2003 to 2007, whereas, there has been a slight decline in training expenditure from 2008 onwards (, 2010). Joyce argues that employers are still spending on the training system during the financial crunch, which makes it even more important for the company’s growth. Kaufman and Hotchkiss (2007) argue that although training can be extremely beneficial for company’s growth, it can also be high cost for them. These costs may vary from the salary of the trainer to the technology or material required for it. There are other indirect costs, like productivity of the employee during and after completing the training. Apart from all these costs, it is generally expected that the productivity of the employees will increase at the end of the training program. There is two-way benefit of training; the company will benefit from the increased output of employees, whereas, the increase in productivity will ensure higher wages and better pay and rewards. Generally the company will weigh its cost incur on training with the expected benefit derived from the productivity of the employees. Besides the costs incurred on training, employee turnover also plays an important part in the investment made on training. The company will avoid investing more on training programs, if there are high chances of employee turnover. Reason behind this is that the company will lose all its investment if the employee leaves upon completion of the training. Keeping in view the turnover issue, organizations decide very prudently about the investment they have to make in training employees. Companies should take into account all the factors, like the duration, cost and location of training before starting the program (Frazis and Speltzer, 2005). Organizations usually spent lot of money in hiring, training, developing and retaining their employees. This is the reason that managers make all the effort to reduce the level of employee turnover (Kevin et al., 2009). They said that there is no standardized procedure of reducing turnover and managers should study different factors that may affect employees and make them to leave the organization. The need is to develop strategies to counter and minimize the factors that cause turnover. Globalization has made competition even tougher between the organizations, so that they have to come up with products and services which would make them unique. Employees are source of gaining competitive edge in the market, as they can help provide high value services to the company. Also, if retained by the company, these employees are not easily replicated by other companies. Hence, managers should make every effort to understand the factors behind turnover and try to minimize them as much as possible.
  5. 5. DEFINITION OF TURNOVER There are various reasons behind employee turnover. Abassi et al (2005) describe turnover as the circulation of employees in the job market from one organization, job or profession to another or from being unemployed to employed. Whereas, Price (1977) cited in Abassi et al (2005) describes turnover as the ratio of the employees leaving in a particular period divided by the people employed in an organization in the same period of time. He also said that the process of turnover starts from the time an employee leaves voluntarily or involuntarily to the time another employee is hired and trained to fill that space. This complete cycle is called turnover. According to Hom and Griffeth (2007), the term turnover can also be used to describe the relationship between an employee and organization upon their leave. They believe that an employee makes a conscious decision to leave an organization. This decision is made after a long process of analyzing different factors, internal and external. Internal factors can be the behavior of the manager, organization policies, lack of career growth; while, external factors can be the better job offer, higher wages, more rewards etc. This is also termed as push and pull factor. Push factors are the internal factors of the organization that push an employee towards another organization, while pull factors are external factors which attract the employee towards it (Beach, 2009). He argued that either single factor makes the employee leave the organization or sometimes both pull and push factors play significant role in employee’s decision to leave. I have tried to look into the relationship between training provided by organizations and employee turnover in retail organization. This essay will cover different areas and factors that cause turnover and how these can be minimized through training programs. WHAT IS STAFF TURNOVER AND HOW IT IS CLASSIFIED? Different authors have defined turnover as movement of employees leaving or joining the organization (Nel, Werner, Haasbroek, Poisat, Sono & Schultz, 2008). As per the definition, the writers do not consider transfers from one branch or office of the same organization to another to be staff turnover, as it is a permanent activity. The authors also explained the controllable and uncontrollable forms of turnover. Controllable turnover is the one that is in control of the management. These include the voluntary turnover, which means the resignation of employees and the termination from work. Such situations can be avoided if the management plays proper role. To minimize the number of resignations, managers should motivate employees, offer better salaries and bonuses, train them and provide opportunities for career development. Similarly, terminations can be controlled if the management recruits employees best suitable for the job, train them according to the expectations and policies of the organization, provide support and guidance when necessary and provide them with opportunity to utilize their strengths. Also, effort should be made to mould the behavior of the employee according to the environment and policies of the company. They should be provided with opportunities for proper socialisation. Uncontrollable staff is the kind of turnover which cannot be controlled or avoided by the management. These include unexpected accidents like death, downsizing staff because of financial loss etc. Similarly, Price (1997) has stated that difference should be made between avoidable and unavoidable turnover. He explained that avoidable turnover is in control of the management and the reduced or prevented. It is pertinent to mention here that retrenchments because of financial loss and cost-cutting would be counted as involuntary turnover (Schultz & Schultz, 2006). They pointed out that in some situation this may be voluntary as well; such as employees resigning due to lack of bonus in worse financial times. Nel et al (2008) pointed out that both voluntary resignations and terminations are controllable by the management. However, some
  6. 6. authors stressed that resignations are voluntary turnover, while terminations are involuntary; adding that both these can be measured and controlled by the management (Swanepoel, Erasmus, Van Wyk and Schenk, 2003). Some authors supported Nel et al (2008) definition and stated that turnover is the movement of employees leaving the organization (Globler et al, 2006). Although they say that that voluntary and involuntary turnover are different from each other, but they do not give any specific differences between the two. But they clearly stated that there is a direct link between job satisfaction and staff turnover. They explained that management should identify and work on factors which reduce employees’ satisfaction at work. Gordon (1991) defined staff turnover as the number of voluntary resignations, while others define it as the number of employees leaving the organization in a certain period of time (Newton & Davis, 1997). It has also been observed that the cause of involuntary turnover may not be related to employees, as it can be restructuring of the organization or downsizing the employees, where the management has to let go of the employees (Price, 1997). North and Stone (2006) said that turnover is a voluntary process, chosen by employees to leave the organization. They said this process brings a balance between the benefits of organization and employee’s aspiration for better opportunity and career development. These factors can be termed as push and pull factors. Pull factors are those that attract the employee to the job market and push factors are those organizational factors that force the employee to look for new opportunities. Moreover, employees’ attitude towards career development and better opportunities in the job market are major factors in voluntary turnover. Similarly, organizations which do not invest in employees create push factors for them to leave. Negrin and Kirschenbaum (1999) explained different attitudes of employees which affect the turnover rate of organization. They said that voluntary turnover reflects an attitude of employee who is in transition of jobs and looks for better opportunity while staying at a job. Such employees react violently to the negative environment in the organization and are the first ones to leave. Overall, it is the attitude towards career development that drives the employees to quit their jobs for better ones. This can also be explained through argument of market viability, which says that an employee who has greater control on his/her professional abilities and is aware of strengths is bound to move more from one organization to another. Greenberg and Baron (2000) explained that while considering different aspects of turnover, this should also be noticed that sometimes turnover can be in interest of the organisation and can prove to be beneficial. Turnover allows organization to reduce its costs through fewer salaries and other financial benefits. However, this can be money consuming with cost of recruiting and training new employees necessary for specific fields. Also, professionals whose skills are less in demand in the market are less likely to leave organizations frequently. It was necessary to explain the difference between controllable and uncontrollable turnover, as this essay will discuss controllable turnover and measures to reduce it. Focus will be on the training of staff to help them in their career growth and reduce turnover rate. WHAT CAUSES EMPLOYEE TURNOVER Boxall et al (2009) have carried out a study in which they concluded that there are several factors that affect the motivation level for job in a work place. They argued that all these factors were linked with turnover, which appeared several times during the study. An earlier research done by Mobley et al (1979) as cited in Morrell et al (2007) proposed that factors such as age, duration at work, job satisfaction, job design and job commitment were indirectly related to turnover, i.e., higher the level of these factors, lower the rate of turnover. 2.2.1 Relationship between Job satisfaction and Turnover There have been number of researches done on the relationship between the level of job satisfaction of an employee and turnover rate. One of the researchers’ Lum et al (2008) suggested that
  7. 7. increase in the motivation and level of satisfaction of employees can lead to lower turnover rate in an organization. It was also researched that job satisfaction is indirectly proportional to turnover (Mobley at al., 1979; cited in Morrell et al., 2007). Similarly, Griffeth et al (2007) found out that job satisfaction has a great impact on the turnover rate of employees in an organization. They said that major reason behind turnover is employee’s dissatisfaction with the management and a more interesting job offer from another company. Relationship between Commitment and Turnover While there seems to be a strong relationship between job satisfaction and turnover rate; researchers have also proposed that employee commitment with the organization also plays an important role in the decision behind turnover. Lum et al (2008) carried out a study on pediatric nurses, in which they concluded that commitment with the organization has a direct relationship and a great effect on employee’s decision to leave the organization. Mueller and Price (1990), cited in Lum (2008) said that there is a close relationship between job satisfaction and commitment, as motivated and satisfied employees tend to stay committed with the organizations for long time. Hence, they said that there job satisfaction, commitment and turnover are inter-related to each other, as both the variables affect the rate of turnover. However, Elangovan (2011) observed that there are various turnover models which do not take into consideration the relationship between job satisfaction and organizational commitment with turnover rate. He proposed that there is a strong relationship between stress and job satisfaction and between job satisfaction and organization commitment. He said that if the employees are under stress at work, they are more likely quit the job as they are not satisfied. Similarly, a committed employee is likely to hold on to the job for a long time. Causes of dissatisfaction at work There are various reasons that may cause dissatisfaction at work place. Researchers have argued that among various factors, pay can be the most important factor in voluntary turnover. Lum et al (2009) studied the effect of pay on the decision of employees to quit work. They found out that the study gave mixed results, but higher number of employees suggested that they would consider leaving the organization if they are not paid according to their job. Similarly, there have been other studies that revealed that there is not a strong relationship between pay, job satisfaction and turnover rate. However, Martin (2008) carried out a survey to find out the importance of higher wages and career growth among hospitality employees. He found out that these two variables can work as push and pull factors in turnover rate. He explained that if an employee is dissatisfied with the wage rate, he or she is likely to leave the job for another company which offers higher wage rate. In another study carried out by Griffeth et al (2007), it was concluded that pay and rewards have considerable effect on the satisfaction and turnover rate in an organization. They analysed different variables including pay, employee performance and turnover rate. Their study concluded that employees who give high performance expect to be paid and rewarded accordingly. When the wage rate fails to meet their expectations, they leave the job for better options. Griffeth et al (2007) also cite findings from research carried out by Milkovich and Newman (1999). The later proposed that the high performers look for collective rewards from the organization rather than individual incentives. But when the organizations fail to fulfill their expectations, they tend to leave the organization for better offers. Sometimes, pay or monetary rewards are not the only reason behind dissatisfaction that may result in turnover. Tang et al (2009) carried out a study including mental health professionals. They observed that different variables such
  8. 8. as attitude of employees towards money, job satisfaction and voluntary turnover. They found out that attitude of employees towards money is also an important factor in decision to leave the organization. They said that employees who value money more than job satisfaction tend to leave the job voluntarily, as compared to those who regard job satisfaction more important than money. Two things were noted in this study; pay or monetary reward does not affect job satisfaction and dissatisfied employees result in increased turnover. Relationship between Training, career development and turnover During the course of his study, Martin (2008) found a complicated relationship between training, career development and turnover. He argued that training can affect turnover in two ways; it can help decrease turnover rate and sometimes may result in increased turnover rate. Martin further explained that with enhanced and improved career development skills, employees will be satisfied enough to stay with the organization for long. But they can also leave for another employer who will offer better options. This is mostly the case when organizations are not able to provide challenging work according to the employees’ skills. However, some researchers have concluded training has no impact on the movement of employees from one organization to another (Shah & Burke, 2005; Green et al., 2008). They concluded that training which is given by the organizations result in reduce turnover rate, as the organizations are likely to build training programs which will prepare their employees to meet future challenges or change in organizations. Whereas, training obtained outside the organization leads to higher turnover rate. Another study done by Chang (2009) focused on relationship between career development and commitment towards the organization. He found out that when employees are committed they are less likely to leave the organization. This is also because they see career growth in their organizations. It was also seen that employees who have low career ambitions are not committed with the company and hence tend to move frequently from one organization to another. Chang (2009) also concluded that employees tend to stay long in the organization when they see that the management is working for their benefit and career growth. They would prefer an organization which has opportunities for internal growth and promotions and provide training and professional advice. TURNOVER IN RETAIL SECTOR This essay is targeted towards investigating and critically analyzing the unique characteristics of retail organizations and how these characteristics define their overall strategies in retaining staff and reducing turnover and affect their respective performances’ impact. Retail have been playing a very critical role in the world economies. Retail organisations employ around about 9% of workers in the USA and 5% in UK, France and Germany. In the UK retail are basically among the most earning businesses and are biggest employers (Bennett, Iossa & Legrenzi, 2010). Before investigating the impact the unique characteristics of retails make on their overall strategy and performance, it is of utmost importance to establish a clear set of guidelines to classify any organization as a retail Organizations. As per Salamnon and Anheier (1992b), the lack of attention given to retail sector around the world has been more due to the factors that are more conceptual than empirical. In order to define the boundaries around retail sector, this essay will start with the following five big fundamental classifying elements as suggested by Salamnon and Anheier (1992b): A) Formally Constituted B) Private in basic structure C) Self Governing D) Serving every community and class E) Commodity eccentric .These five elements will work as a guiding mechanism for picking up right retail examples, understand the overall RETAIL sector in
  9. 9. any exemplary world economy. Once establishing the clear-cut boundaries around the different sets of RETAIL, I attempt to establish the function of RETAIL and an attempt will be made to understand the methodology used by retail organisations to retain staff. But this is interesting to note that the retail system in different countries of the world differ from each other. For example: In the US states have laws relating to the structure of RETAILs and in the past few decades there has been a general tendency of liberalizing the laws governing the structure of RETAILs in different states. This, in return, has flourished the retail enterprises (Ware, 1996). In contrast, the there are no retail laws in Britain. As per the British Laws, the RETAILs come under the folds of corporate law and the organizations can only seek corporate status, but they must conform to the rules and guidelines laid out by English Corporate Law (Ware, 1996). Till the 19th century, the American and English Laws classifying the retail were quite similar (Ware, 1996). Three elements are to be considered in RETAILs in Ukraine: 1) The first objective of retail is to provide necessary commodities and everyday use products to the customer from all walks of society. 2) It is their responsibility to understand the needs of the customers and arrange necessary products that fulfil their demands requirements. 3) The most important role is played by the employees or the staff in the retail sector. Since retail is customer oriented, it is necessary that the staff is well trained and friendly and deal with the pressures of customer service. The free market system in the world economies basically consists of entities in three different kinds of categories: a) Public Sector b) Private Sector c) Non-Profit Sector. The entities in public sector are generally publicly traded, state-owned agencies, government entities which come under the purview parliamentary office, statuary audit control and established company laws. Whereas, the entities in the private sector operate under free market competition, have their annual accounts subjected to independent public audit system and they are controlled by ownership interests. The retail sector falls in the private sector or the corporate sector. The organizations in this sector include a variety of different entities such as family owned retail, public owned retail. Some retail organisations are also going into different other sectors like charity, research and scientific, educational, cultural or professional, private foundations etc., together with some of the other entities, the RETAIL sector collaborates with the public sector in the delivery of goods and services (Torres, Pina 2003). In the past three decades, the importance of RETAIL has grown to a very large extent in the different world economies. There also has been an increase in the size and the amount of resources managed by the RETAIL. These reflective trends have made it quite important for us to study the impact of unique dynamic characteristics of RETAIL on their respective Strategies and Performances.The sector is faced with major challenges due to growing inflation and financial crises in past few years. Although large number of people are turning to retail after losing their jobs due to downsizing and financial cuts in their organisation of employment. The only sector that welcomes people from different other professional sectors, qualifications and skills is retail. This can be an advantage or a disadvantage to the retail organisation. Advantages can be in form of cheap labour, which is readily available any time. Also the organisation does not have to spend much on the recruitment and training of the employees, as both these are standardised in retail sector. Large numbers of employees required in the retail are for customer services. This may create problems for a store, if the employees are not recruited after careful process. For example, a person with IT background may not be good with customer service, so it will
  10. 10. be a great challenge for the person to deal with people face to face. Such an employee will get de-motivated very easily and would look for other options in the market. Similarly, if the employees are not given proper training they will not be able to cope with the growing demands of the job. Training is necessary in the retail sector, as most of the employees are from various backgrounds and have no formal training of being a retail store employee. If the employees are not trained according to the demands of the job, then the store would have to bear the loss of losing employees often. In the long run, the retail organisation will end up losing more money in recruiting and training new batch of employees. HOW TRAINING REDUCES EMPLOYEE TURNOVER Krueger and Rouse (2008) studied the effect of training and development programs can have on the growth of various organizations. They studied various variables that were the result of training, educational and vocational programs carried out in various organizations. Variables included the productivity, improved performance, job satisfaction, motivation and regularity at work. It was observed that these variables result in reduced turnover rate in organizations. The researchers explained in presence of these factors, commitment of employees towards their organization increases, which result in reduced turnover rate. Thus, the strategy of reducing turnover by increasing employee commitment level through training can lead to company growth and success. Although there are various human resources strategies to increase commitment level of employees, but this in this essay I will focus mainly on training programs of companies and its role and importance. Scholl (2003) said that companies should develop strategies to motivate and retain employees for long period of time. These strategies should be able to develop a psychological and emotional relationship between an employee and the company. This should be done in an attempt to tie up the employee for a longer period of time with the company, which will help the company to reduce cost of hiring and training another employee. This is the commitment strategy that can help human resource managers to gain loyalty and commitment from the employees. This strategy can be used for almost every human resource practice, for example, recruitment, selection, performance management etc. But in this paper focus is on the training of employees and its effect on turnover of employees. HOW COMMITMENT STRATEGY IMPACTS EMPLOYEE TURNOVER An employee who is committed with the organization will tend to remain with it for a longer period of time. Researchers have conducted various studies to argue and find out the accuracy of this phenomenon. The conclusion was that there are greater chances of a committed employee to stay longer with the company than a non-committed one. Steers (1977), cited in Green et al (2006) proposed that highly committed employees stay hooked to the company for a long period of time than a non-committed one. He said that highly committed employees have the urge to produce more at work, come to work regularly and have a positive attitude towards the co- workers and the job. Thus, he concluded that commitment is a significant factor in curtailing employee turnover. Similarly, Arthur (2004) carried out a study on employees of two steel mills. On one mill he studied the effect of commitment strategy, while on the other control strategy. Arthur observed that the company that followed commitment strategy yielded business growth and productivity. He also found out that the turnover rate in this mill was considerably lower than the one which followed controlled strategy. Through this human resources can make a great impact on the organization. By adopting a strategy human resources can influence the employees’ decisions to change the organization and their attitude towards
  11. 11. the current organization. Also, when human resource managers adopt a commitment strategy, then the percentage of employees leaving the organization reduces. Green et al (2006) said that according to their study commitment strategy plays an important role in retaining the employees. Their study revealed that the organization that practiced committed strategy managed to reduce the rate of turnover from 19% to 10%, whereas, the likelihood of job search was reduced from 26% to 15%. Owens (2008) came up with results with his study of effect of training on organizational growth. Although his study discussed different outcomes of training, he managed to find the relationship between training and turnover rate. He found out that employees who had high commitment level towards their organization, have high level of “turnover cognition”. High level of “turnover cognition” means that the employee tends to stay for long period of time with the company. When he applied T-test, it was calculated that turnover cognition had mean of 33.44 with commitment to organization of 84.45; as compared to untrained employees with mean of 29.32 and commitment level of 73.86. By calculating the level of commitment in trained and untrained employees separately, it was helpful in proving that more committed employees are, more chances of staying long with the company and vice versa. Commitment also plays an important role in job performance of an employee. This is ascertained that a committed employee will perform well on the job, which ultimately leads to employee retention (Walton, 2005). It is believed that when employees perform well improves the working environment of the company, which increases the company growth. There is a two way relationship between the growth of company and the performance of employees. If the performance of employees is low or not up to the expected out turn then it will affect the growth of the company. Of the several outcomes of commitment strategy Walton discusses four most important variables, which impact the turnover of the employees in a company. By discussing these four variables, we can gain deeper insight into the relationship between training and turnover. Effect of Training on Employee Investment Investment is the time and effort an employee makes in return for higher rewards and pay in future. Becker (2003) argued that the benefits reaped from the investment made in the company can be in form of monetary or non-monetary rewards. He said that training is also a benefit gained over a period of time, which may result in higher employee commitment and increased investment in the company. Becker said this can be achieved in two ways; by providing general training and specific training. General training enhances employees’ general skills and provides them with basic skills to survive in the job. These skills help the employee to perform in any company in the market. Kaufman and Hotchkiss (2006) said that it is very unlikely that an employer will invest in basic training skills, as the employers are able to use them anywhere in the job market. Another reason that employers would avoid general training is that it is the kind of training that almost every employee can benefit from and thus, it enhances the skill of the employees all over the market. Keeping in view the market trends, organizations would have to compete with each other in paying more to its employees to retain them. And even by doing that, there are still high chances that the employees would leave the company as soon as a better offer comes in the market. This way the company will have to bear double cost of training the employee and hiring a new one when they leave. Contrary to this, on-the-job or specific training is the one that is provided to employees which is specific to the demands of the company only (Frazis and Spletzer, 2005). Through this training only the employer can benefit out of it. This may include technical training which is specific to the products or services of the company. This type of training differs
  12. 12. from general training in a way that it can only be given by the company and all costs are born by them. The downside of this training is that employees may not be able to utilize the skills learnt in the company with any other employer. The idea behind this training is that the skills attained through this training are nontransferable to any other company, but at the same time it enhances the skills of the employees which will be beneficial for the company. This increases chances of career growth of the employees within the company and reduces the chances of turnover to maximum level. Becker argues that due to its nontransferable nature, this training is given by the companies and all costs are incurred by the company. During the course of training the employees are not paid high and the anticipation of getting a higher wage after training also keep them stick to the company. If we compare Becker’s model with that of commitment strategy, we can see that employees’ investment in terms of time, effort and wait for wage increase will lead to the commitment with the organization. Thus, training becomes a side benefit which fosters employee investment that leads to commitment and reduced turnover rate. There are other researches that have expanded the works of Becker by blending the general and specific forms of training. Pischke (2009) said that without even knowing some companies give a blend of general and specific training to their employees. He argued that general and specific training are dependable to each other. He said that companies invest unknowingly in general training while providing with specific training to their employees. Speltzer (2005) said that according to the research done by Employer Opportunity Pilot Project, 63% of employees reported that the training that they received can be transferable to other companies. Moreover, 90% of the employees believed that their skills can be utilized in other companies as well. The results found by Speltzer can be compared with the commitment strategy. This ensures that the time invested during training and in anticipation of better wages and rewards can be taken as the commitment towards the company, even in the situation when the employees know that their skills can be used in other companies. This can actually make the employees more committed towards their work and organization. Researchers have also said that employees sometimes are unaware that the training they are getting can be used in other companies. Regardless of this, employees spent more time on work, produce better work, their performance improves; which translates into more rewards and high wages that lead to commitment with organization and reduced turnover rate. Effect of Training on Employee Reciprocity Reciprocity means that two-way, that is an employee will be loyal and committed to the company because the company has trained and enhanced the skills of the employees. This is similar to the notion of being under debt, in which employee feels that he/she is under the debt of the company. Researchers have argued that this notion can be useful for the companies, as their training can play a major role in developing this feeling in the employees. The kind of training that fosters the feelings of reciprocity in the employee will ensure their commitment towards the organization. Glance et al (2007) argue that organizations that provide training to their employees on regular basis have greater chances of retaining them than the ones who do not follow this practice. They further explained that the companies which have trained staff are able to adjust in the times of change inside and outside the company. They carried out a research on organizations with changing environments and recorded the effect on turnover. Their research concluded that companies which had trained employees faced less resistance from employees and low level of turnover, as compared to the companies with untrained employees who were not ready to face the challenge of changing environment. If we see this from the reciprocity view, it can be ascertained that the trained employees feel in debt of the company and tend to stick with the company in times of change. This
  13. 13. commitment can also be due to the fact that the employees were already trained to cope with the needs of the change, which may result in better work conditions and pay raise. Also, this training may offer the employees an opportunity to increase their skills and knowledge of their job, which they may not be able to get anywhere else. This also leads to the sense of debt that fosters commitment and loyalty in the employees. Burke (2005) observed that the trained employees who found their training relevant and beneficial for their future goals have rated their companies very favourably and plan to stick to the companies for long period of time. Effect of Training on Employees Identity Various researches have shown that there is a close relationship between the identity of the employee and its job. So it can be said that training that increases the productivity of an employee at work helps it to identify itself with the organization and enhances commitment towards the company. When hired, the employee has to pass through a formal training and plays a role of socialization for the new employees (Tannenbaum et al., 2010). New employees have high hopes and expectation from the company when they join. These desires and expectations when fulfilled by the company help the employee to identify more closely with the company. Similarly, when a training program fails to satisfy the demands and expectations of the employees then it turns into a negative attitude towards the company. These failed or unmet expectations and demands can lead to lack of commitment in an employee, which may result in higher turnover. Similarly when the demands of an employee are met, then they feel greater affinity and identification with the company, which leads to loyalty and commitment towards the company. Green et al (2006) said that companies tend to give specific job training so that they can identify with the culture of the organization, while also gain skills for career growth. They said that Japanese companies like Toyota follow this path rigorously to build level of association and attachment in employees with the companies, while also giving them social identity. Bartlett (2009) said that training can increase the identification of an employee with organization when used with a strategy. Social support for training is one way of integrating employees in the culture of the organization. This support comes from higher and middle management and also the co-workers which helps the new employee to go through the training successfully and blend in with the environment of the company. Due to this the commitment of employees towards the organization increases and so reduces the risk of turnover. Effect of Training on Employees Lack of Alternatives Becker (2003) has described this in his model of general and specific kinds of training. The kind of training that limits the job alternatives of curtails the opportunities for employees outside the company leads to reduced turnover. There are several researchers who have defended Becker’s work and expanded on the model. Lynch (2001) cited in Green et al (2006) observed that young employees with specific training skills tend to stay committed with the organization for longer period of time than the ones with general training skills. She also found out that employees with specific training skills tend to get more benefits than the ones with general training. Glance et al (2007) elaborated on the “cherry-picking” phenomenon, which refers to the practice when companies wait till the employees get trained and then attracts them with better offers and job opportunities. They said that companies tend to steal the trained employees as they help in reducing the cost of training while increasing their production. Due to this practice, organizations also lose all their investment in terms of cost and time on their employees. This is the main reason that companies stick to specific job training.
  14. 14. CONCLUSION In this essay different models and approaches of training have been discussed to build a theoretical framework for the study. In the first part of the essay various reasons behind turnover have been discussed, such as, dissatisfaction at work, organizational environment, career development, pay and wage rate and attitude of employees towards work and money. Through the understanding of these factors the relationship between commitment and turnover has been established. It was seen through various researches that committed employees tend to stick to the organization for a longer period of time than the non-committed ones. In the next phase, the essay focused on the literature that explained ways through which commitment can be fostered in employees. These include through employee investment of time and efforts, reciprocity between employees and organizations, social identity of the employees and lack of job alternatives. Although there are various other factors which enhances commitment among employees which leads to lower turnover, but this paper focused on these four elements. REFERENCES
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