Thesis Paper_Orientation Training in U.S. Financial Service Industry

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Executive Summary
Orientation programs plays a vital role in shaping the life cycle of a new hire in an
organization. These programs expose the new hire to a new environment, people, rules,
regulations, functioning of the organization and the nature of the job. Issues like
employee turnover can be easily addressed and reduced with an effective orientation
program. Human Resource (HR) plays a vital role in its successful implementation. A
successful orientation program should always have a positive impact on the new hire’s
morale and confidence.
The study design consists of reviewing published literatures and conducting a survey
questionnaire. First, the literature review provides a brief history of training and
apprenticeship. It shows how orientation programs developed through the ages and how
organizations have a wide variety in establishing a centralized or decentralized training
function. The next focus is to study the various training decisions which organizations
consider before initiating employee training. Organizations are affected by both internal
and external factors which in turn affect their training decisions. Return on investment
(ROI) is one of the most important factors taken into consideration when providing
training. The study briefly expands on this aspect and relates to the employee turnover
problems with it. Whether organizations are considering ROI or effective training,
transfer of training holds great importance. It is affected by many factors including the
learning styles of the employees. Further the study provides an introduction of the U.S.
financial services industry, followed by examples of successful orientation programs
within the industry. The researcher has also provided an in-depth look into various
training methods which are used in all forms of employee training.

The survey questionnaire consists of a total of nine questions. All the questions used
were close ended. It was divided into two sections- respondent profile and orientation
training methods. The survey was distributed electronically through the help of
SurveyMonkey.com. Approximately one month was given to collect the responses.
The results of the study found lectures, demonstration, visual aid methods and on-the-
job training to be the best practices in orientation programs. These four methods received
over 55 percent of the total responses. Further, an in-depth analysis was conducted by the
researcher to find the effects on the morale and confidence of the new hire. It was found
that the best practices in orientation programs along with some other training practices
affected new hires positively. Most of the respondents (over 75 percent) experienced
positive effects from these methods. Other training methods like role playing and
mentoring also recorded higher response rate (over 80 percent) for leaving positive
effects on morale and confidence. It was also interesting to find that most of the training
practices did not have a negative effect on the employee. However, lecture method was
found to have no effect at all on morale and confidence of the new hires.
The study provided various recommendations for organizations. First, organizations
should consider orientation as an important part of the new hire’s recruitment process.
Second, methods such as lectures should be used with discretion as it showed signs of
being ineffective in the training. Third, orientation programs should be considered a
continuous process and hence enough time should be provided to adjust to the new
environment. An intensive feedback system should be implemented in organizations.
This system will be dedicated in collecting the suggestions and recommendations of the
new hires and hence

will help organizations to improve their existing orientation programs. Lastly, an
interactive instructor and use of proper materials should be used for orientation programs.

Acknowledgement
There were several people who were instrumental in helping me accomplish this feat.
First of all, I would like to acknowledge my immediate family members who supported
me through the tough time by providing support and love. My parents helped me
immensely in giving a shape to this final project for my MBA degree.
I would also like to acknowledge the efforts, patience and support of my advisor, Ms.
Sherri Villegas. She helped me from the beginning to the end without giving up on me.
At first, when I was unable to formulate the thesis question, she met me personally and
helped me resolve all the issues. She has always replied promptly to all my queries. Next,
I would like to thank my instructor, Mr. Craig Horrocks, for helping me in resolving all
the formatting issues of the thesis. He has always provided feedbacks on the rough drafts
and suggested very important additions.
Lastly, I would like to thank all my cousins and friends who helped me in collecting
the data for my thesis. They have provided me support through words of encouragement,
guidance and wishes.

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Table of Contents
Chapter 1 – Introduction
Background/Overview of the Problem …………………………. 2
Financial service industry ………………………………. 3
Face of human resource in financial services …………... 4
Hiring cost ……………………………………………… 4
MOISE diagram ………………………………………... 5
Research Question ……………………………………………… 9
Research Objectives ……………………………………………. 9
Benefits of Study ……………………………………………….. 9
Scope of Study ………………………………………………….10
Competencies from Major ……………………………………...10
Glossary of Terms ……………………………………………....11
Chapter 2 – Review of Related Literature
Introduction …………………………………………………….14
History of Training ……………………………………………..14
Training systems: structure & organization ……………16
Training Decisions ……………………………………………..16
Training Return on Investment ………………………………...21
Employee turnover problem ……………………………21
Transfer of Training ……………………………………………22
A model of transfer process ……………………………24
Factors affecting training effectiveness ………………..26

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Learning Style ………………………………………………….26
U.S. Financial Service Industry ………………………………..29
Orientation Training in Various Financial Services Companies
of U.S. …………………………………………………………31
New Employee Orientation …………………………………….33
Organizational Socialization …………………………………...38
New employee orientation vs. socialization …………...39
New employee orientation vs. training ………………...40
Training Methods ……………………………………………...40
Lecture ………………………………………………...40
Demonstration ………………………………………....41
Seminar & conference …………………………………41
The case study method ………………………………...42
Role playing method …………………………………..43
Simulation training method ……………………………43
Projects ………………………………………………...43
Visual-aid training method …………………………….44
Mentoring ……………………………………………...47
On-the-job training method ……………………………48
Other Major Non-Orientation Training Methods ……………...49
Management games …………………………………....49
University related programs …………………………...50
Behavior modeling …………………………………….50

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Executive coaches ……………………………………..51
Chapter 3 - Research Design and Methods
Research Design ……………………………………………….52
Data Collection Methodology …………………………………52
Survey questionnaire …………………………………..54
Description of the population and sample ……………..56
Additional sources ……………………………………..57
Limitations of the Research …………………………………....57
Chapter 4 - Data Analysis and Presentation
Data Analysis …………………………………………………..58
Analysis approach ……………………………………...58
Data Presentation ……………………………………………....59
First phase analysis …………………………………….59
Second phase analysis …………………………………68
Data Summary …………………………………………………84
Chapter 5 - Conclusions and Recommendations
Conclusions ……………………………………………………85
Recommendations ……………………………………………..88
References ……………………………………………………………..92
Appendix A Orientation Training Survey Cover Letter ……………..104
Appendix B Orientation Training Survey Questionnaire ……………105
Appendix C Respondents’ Suggestions ……………………………...107

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List of Tables
Table 1 - Decision Criteria for Comparing Off-the-Shelf vs. Customized Training…20
Table 2 – Five Subsectors of Financial Services Industry …………………………..30
Table 3 - Types of CBT Techniques ………………………………………………...46
Table 4 – Rating Scale for Question 8 & 9 in the Survey Questionnaire……………56

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List of Figures
Fig 1 – Organizational Structure MOISE …………………………………….. 8
Fig 2 – Training Decision …………………………………………………….18
Fig 3 – A Model of Transfer Process ………………………………………...25
Fig 4 - Kolb’s learning Style Model …………………………………………27
Fig 5 - Age Group of Respondents …………………………………………..60
Fig 6 - Gender Profile of Respondents ………………………………………61
Fig 7 - Representation of Various Departments of the Industry …………….62
Fig 8 - Organizational Position of Respondents …………………………….63
Fig 9 - Total Number of Orientations Attended …………………………….64
Fig 10 - Orientation Program Length ……………………………………….65
Fig 11 - Best Practices in Orientation Training …………………………….66
Fig 12 - Observed Effects of Trainings on Employee Morale ……………...67
Fig 13 - Observed Effects of Trainings on Employee Confidence ………... 68
Fig 14 - Lecture Method vs. Morale ………………………………………. 69
Fig 15 - Demonstration Method vs. Morale ………………………………..70
Fig 16 - Role Playing Method vs. Morale ………………………………….70
Fig 17 - Simulation Method vs. Morale …………………………………….71
Fig 18 - Visual Aid Method vs. Morale …………………………………….72
Fig 19 - On-the-Job Training vs. Morale …………………………………...72
Fig 20 - Lecture Method vs. Self Confidence ……………………………....73
Fig 21 - Demonstration Method vs. Self Confidence ………………………74
Fig 22 - Visual Aid Method vs. Self Confidence …………………………..74

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Fig 23 - On-the-Job Training vs. Self Confidence …………………………75
Fig 24 - Total Positive Effects on Morale ………………………………….76
Fig 25 - Total Negative Effects on Morale …………………………………77
Fig 26 - Total No Effects on Morale ……………………………………….77
Fig 27 - Total Positive Effects on Self Confidence ………………………..78
Fig 28 - Total Negative Effects on Self Confidence ………………………79
Fig 29 - Total No Effects on Self Confidence …………………………….79
Fig 30 - Morale vs. Confidence …………………………………………...81
Fig 31 - Training Length Distribution …………………………………….82
Fig 32 - Age vs. Number of Orientations …………………………………83

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Chapter One: Introduction
Background/Overview of the Problem
Today, corporations are searching for new and improved methods of producing goods
and services in order to enhance their bottom line and profit margins (Judy, 2007). One of
the most important ways to improve a company’s performance is to enhance the human
resources capabilities of the company, which is one of the most precious asset for a
company. It is necessary to convert the HR into human capital through training and
developing employees. Training is the process of teaching or learning a skill or job. It
takes various forms for an employee and begins from the day when he enters the
company.
After the recruitment process, the new employees undergo orientation training which
exposes them to the new environment, people, rules & regulations, functioning of the
organization and the nature of the job. Orientation is provided to ensure the survival of
the new hire in an alien environment, by making him feel comfortable. It also helps to
improve the productivity of the employee and avoid employee turnover issues.
“Organizations think of training as knowledge transfer process intended to build the
capacity of a new staff member to perform specific work duties. On the other hand, staff
member consider training as the process which involves learning a lot of information and
determining how to apply it” (Bunis, 2006, Building skills, ¶ 1). Training is a
commitment made by the management, which flows from top to bottom. “Without
management’s attendance and ongoing reinforcement, the message is that the training is
valueless” (Greene, 2002, ¶ 1).

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“There is a direct link between training and employee retention. Employees involved
in ongoing training feel that their employer is interested in them doing a better job, and
the employer cares enough about them to make an investment in their development”
(Villegas & Villegas, 2006). Training investments are directly related to a variety of
measures of financial performance in the publicly traded companies within the United
States. According to this study, managers, investors and companies are unable to
comprehend the value of employee training. However, in reality, training and learning
plays a vital role in the creation of intellectual capital, which is today the source of
substantial wealth creation for a growing number of companies (Daniel McMurrer,
2002). “Training doesn't cost . . . it pays! HRD is an investment, not an expense” (Parry,
1996, ¶ 1).
“Employers devote more than $200 billion each year to workforce training, out of
which 30 percent goes to training the technical workforce” (McKenna, 1990, ¶ 4). In
1970’s, the average training expenditure came out to be in between $75 to $ 100. Today,
companies spend around $2000 annually per employee on formal training (Facteau et al.,
1995). This research focuses on uncovering the best practices in orientation trainings.
With the help of this study, the researcher will identify and differentiate the methods of
orientation among different companies and measure their effect on the new employee in
terms of self-confidence and morale. It is believed that organizations today, rely heavily
on training and in future this trend is expected to grow exponentially (Facteau et al.,
1995).
Financial services industry. The finance industry is an important aspect of the
economy including banking, credit, securities and insurance activities. It offers many

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well-paying jobs and expected to grow in the coming years. The predominant jobs
available in the industry are the white-collar jobs. With more than 3.1 million employees,
the industry is expected to grow even further. This industry comprises of specialized
workforce, hence, training plays a major role in providing the organization with skilled
workforce to compete and improve the efficiency of the business (U.S. Equal
Employment Opportunity Commission, 2006). Between July to December 2007, U.S.
financial companies slashed 52,500 jobs (Reuters, 2008). In such a scenario, the HR is
held responsible for managing the human capital.
Face of HR in financial services. It is often seen that HR is neglected even in large
corporations. Many HR Directors of financial services have experienced negation, and
desired the integration of HR with the other functional departments of the company.
Even today, HR is considered as a necessary cost, rather than a functional partner
(Jewsbury, 2003). In today’s competitive world, an organization has to focus on
optimizing the quality, location and cost of customer-facing people to drive business
growth and profitability. To achieve this state, customer facing staff requires extensive
training.
Between 1998 and 2001, HR’s role in record maintenance diminished. It has
increasingly adopted the role of a strategic business partner (Lau, 2002). It is believed
that even if a company adds a new worker, the costs will go up and not down (Lau,
2002), even if a fully trained professional is hired. This is where the new hire
(orientation) training comes into the picture.
Hiring cost. Hiring and retaining an employee is a very expensive task for
organizations. According to Barbara Bauer, VP of Omnia Group, companies spend $7680

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in hiring for the position of teller or member service representative. This cost includes
advertising for the open position, manager's time in conducting interviews, background
testing, drug testing, orientation/training and the salary during the usual 90- day
probationary period. The upper management positions are more costly as they often
include temporary housing and relocation (Moed, 2007). With so much expense incurred
on the new employee, organizations suffer huge losses when the employees leave the
organization. Hence, today, organizations are concentrating on the orientation program in
order to help the new employee to adapt to the new environment and reduce the attrition
rate.
“Orientation programs have rarely been the subject of scholarly thinking and research,
in contrast to other areas of human resource management such as testing, interviewing,
performance appraisal ad training” (Wanous & Reichers, 2000, ¶ 2). “Human resource
development is a crucial component of companies’ efforts to meet the challenges of
global competition, to improve quality, and to capitalize on the strength of a diverse
workforce” (Poell et al. 2004, Introduction section, ¶ 1). “Training and HR makes a
powerful combination” (Blickstein, 1996, Training in the 90’s section, ¶ 8). To
understand clearly the structure of an organization and the place of HR in it, the
researcher used MOISE diagram. It will help to reveal the four components of an
organization i.e. Management, Operations, Infrastructure & Support and External
Environment, in relation to HR. The diagram will help to focus down on the main
component of the research – new employee orientation.
MOISE diagram. In MOISE, M refers to the management component of the
organization, which is necessary to run the organization. O refers to the operations

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component of the organization, which consists of various components that add to the
wealth of the organization. I&S refer to the infrastructure and support component. It
provides aid in the smooth functioning of the management and operations. Lastly, E
refers to the environment component, which comprises of all the other three components.
Every organization is embedded into this component and is greatly affected by it. It
would be wise to state that the environment component is independent, and all the other
three components are dependent on the environmental component.
Fig.1, illustrates the three-level organizational structure of the financial service
industry. Level 1 shows the most visible and outer structure of an organization. The
management level consists of the CEO, CFO and other management positions. The
operations component consists of all the products and services offered by the
organization, which adds to the wealth creation. All the functional departments like HR,
finance and IT act as the infrastructure and support component. They aid in the
functioning of the management and operations component. The external environment
encompasses all these components and influences their functioning.
The Level 2 digs deeper into the HR department of the organization, and unearths its
components. The management component comprises of positions like VP HR, Line
Manager and so on. In the operational component functions like recruitment, training and
development, performance management, are embedded. Staff managers act as the
infrastructure and support component for both management and operations components.
The entire organization act as the environment component for Level 2 as it is embedded
into Level 1.

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Level 3 focuses on the training and development functions of the HR. In this level, the
management component is comprised of the staff manager. They are concerned with the
proper functioning of the operational components of the organization. In operations,
various training tools are used for the training and developing employees. It forms the
sub-components of this component. Trainers (in-house/outsourced),
infrastructure/facility, stationary, computers and others act as the support function to the
management and the operational component for this level. The environment component
comprises of the HR department.
With the help of this diagram, the researcher uncovered the different levels of a
financial services organization. It shows how different components are related and
affected by each other. This study will focus on the Level 3 component which is the
orientation training.

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Level 2
Level 1
Level
E
Level 3
E
Fig 1: Organizational Structure MOISE
E
CEO, CFO, COO
M
1. Online services
2. Checking & Savings
3. Cards
4. Insurance
5. Specialized Banking
6. Business banking
7. Home Buying, Loans & Lines of credit
8. Retirement
9. Investments
10. Wealth Management
11. Vehicle, Personal & Other Loans
12. International Banking
O
Functional Departments –
 Information Technology
 Human Resource
 Finance
I/S
VP HR, Sr. HR Manager, Line Manager
M
HR Functions –
 Job Analysis
 Personnel Planning & Recruiting
 Training & Developing
Employees
 Performance Management &
Appraisal
 Managing Careers
 Establishing Strategic Pay Plans
 Pay for Performance & Financial
Incentives
 Employee Relations
o Labor Relation
o Employee Safety &
Health
O
Staff managers
I/S
Staff Manager
M
Orientation Training Methods -
CBT/Audio visual, Case Studies, Lecture,
Manual, Demonstration, On the Job
Training, Mentoring, etc.
O
I/S
Trainer (In-house/Outsourced),
Infrastructure/Facility, Computers,
Stationary
I/S
(Researcher’s Figure)

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Research Question
What types of orientation training programs exist in the financial service industry and
what types are considered best practices considering employee morale and confidence?
This study will also attempt to answer another sub question like –
Q.1.1) What is the average length of the orientation training programs in companies?
Research Objectives
The researcher will specifically focus his research on the financial sector of the United
States. This study will help the readers to understand the different tools used in the
orientation process of new employees and their effectiveness on employee morale and
self confidence. Through this study the researcher hopes to discover the true opinion of
the participants under study, regarding the orientation training offered by their
organization. With the results of the research, organizations can fine tune their orientation
process. To achieve these objectives, the researcher will adopt two methods - literature
review and survey questionnaire.
Benefits of Study
This research will help to reveal the employee perspective on the orientation training
program and whether these programs help them to increase their morale and self-
confidence. This study will not only benefit the organization in training the new
employee more efficiently but would also act as a guide to all job seekers who wish to
know the orientation training methods of organizations. The researcher will unravel the
strategies used by the Human Resource Department to help the new recruit, counter their
fears on the first day in an alien environment. On the personal level, this study will help
the researcher to complete his Masters in Business Administration degree.

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Scope of the Study
This research is solely based on the orientation training of US financial sector. The
study will comprise two major sections- focused literature review and a survey
questionnaire. The literature review will comprise of books, publications and internet
sources. On the other hand, the survey questionnaire will reveal the results and opinions
of the employees working in this industry. They will provide valuable information on the
orientation training process and its effectiveness on morale and self confidence.
Competencies from Major
The management courses at Western International University have provided the
researcher with various insights into many critical issues of management. One of the most
enlightening core classes, MGT 636, managing organizational changes, examined and
identified various issues relating to the proper training of the employees during a change
process. This is typically true when a new employee joins a company; it is a big change
in his career. The class also revealed various aspects of human resource management,
which proves to be one of the most important functions of the organization.
The HR management course in bachelors provided an in depth view on the HR
department of organizations. It described its various functions, which affected the
organization. Training and development of employees is one of the main tasks of the HR
department. This course provides extensive details on this topic.

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Glossary of Terms
For the purposes of this paper, the following definitions may apply.
 Human Resource Management – The policies and practices involved in carrying
out the people or human resource aspects of a management position, including
recruiting, screening, training, rewarding and appraising (Dessler, 2005).
 Organization – It is the structure of authority or power within a firm or public
body. Generally, there will be a number of management levels in an organization
with a chief executive at the top of the pyramid-shaped organization and
increasing numbers of senior, middle and junior managers further down the
hierarchy, operatives, sales people and clerks forming the base of the pyramid.
Lines of authority are established by the organization's structure, with orders
being transmitted downwards in increasing detail and information feedback being
transmitted upwards (Organization, 2006).
 Employee Turnover - The term employee turnover is used to describe the exit of
employees from an organization through resignations, retirements, layoffs, or
firings. There are two categories of employee turnover: involuntary turnover and
voluntary turnover. Involuntary turnover occurs when the organization takes the
initiative to terminate or discharge an employee through firing, layoff,
downsizing, or rightsizing (reorganizing employees to improve efficiency).
Voluntary turnover occurs when an employee takes the initiative to leave the
organization. Examples of voluntary turnover include resignations and retirement
(Employee turnover, 2004).

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 Bottom Line – It is another way of saying net income. It draws its name from the
fact that the net income is the bottom line on an income statement (Bottom line,
2003).
 Training – It is the process of teaching new employees the basic skills they need
to perform the job (Dessler, 2005)
 Employee Orientation – A procedure for providing new employees with basic
background information about the firm (Dessler, 2005)
 Morale – The state of the spirits of a person or group as exhibited by confidence,
cheerfulness, discipline, and willingness to perform assigned task (Morale, 2003).
 Confidence - The state of being able to trust or feel sure about somebody or
something (Confidence, 2006).
 White collar job – It refers to a job in the office, which does not involve physical
labor (White collar job, 2006).
 On-the-Job-Training (OJT) – Training a person to learn a job while working on it
(Dessler, 2005)
 Employee Handbook - A reference document containing information on what an
employee should know about his or her organization or employment. Employee
handbooks typically include information on terms and conditions of employment,
organizational policies and procedures, and fringe benefits (Employee Handbook,
2006).
 Job Rotation – A management training technique that involves moving a trainee
from department to department to broaden his or her experience and identify
strong and weak points (Dessler, 2005)

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 Apprenticeship Training – A structured process by which people become skilled
workers through a combination of classroom instructions and on-the-job training
(Dessler, 2005)
 Lecture - An exposition of a given subject delivered before an audience or a class,
as for the purpose of instruction (Lecture, 2003)
 Audiovisual - Pertaining to methods of education and training that make use of
both hearing and sight (Audiovisual, 2003).
 Snowball Sampling - Sampling in which each person in the sample is asked to
provide the names of several other persons, who are then added to the sample and
asked to provide names, and so on (Sampling, 2001).

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Chapter Two: Review of Related Literature
Introduction
The chapter begins with the history of training in organizations and then focuses down
to the evolution of training in the United States. This section helps the reader to look into
the evolution of training and how it passed the various stages- from the primitive to the
modern era. Next, the focus shifts to the training structure in an organization and the
decisions which influence the delivery of training. The researcher further looks into the
other aspects of training which are the transfer of training, importance of training, return
on investment and the employee turnover problems affecting training decisions. A brief
description of the financial service industry of the United States is followed by some
examples of successful orientation programs. Further, the researcher follows with an in-
depth look into the orientation programs and its various aspects. Finally, the chapter
concludes with a brief discussion on the various training methods.
History of Training
It is believed that on the job training is not a new trend. “Two out of three Americans
say that everything they need to know to do their jobs was learned on the job – not
through classroom preparation to qualify for those jobs” (Carnevale, Gainer & Villet,
1990, p. 23). The British believed that learning by doing is a time honored training
approach. Formalized training can trace its early roots to apprenticeships, where novice
craftsman studied under experts, who shared their years of knowledge and experience in
the craft. The early civilizations like Egyptian, Roman and Greek recorded their craft
knowledge which passed from masters to apprentices (U.S. Department of Labor

15
Employment and Training Administration, 1987, p. 2). In the middle ages, training
became more structured and systematic. It was because of the establishment of trade
guilds, which brought together individuals with an interest or expertise in a common
craft. When Europeans colonized America, they brought with them the system of master-
apprenticeship relationships. With the development of skilled craftsmen, the New World
became self-sufficient (Miller, 1987, p. 5).
Training on the job took a giant step forward with the advent of the industrial
revolution in the late eighteenth century. “The early system of ‘domestic apprenticeship’
in which an apprentice lived with a master and was dependent upon the master for food
and clothing, disappeared and compensation was changed by employers to the payment
of wages” (U.S. Department of Labor Employment and Training Administration, 1987, p.
9). By the mid of 1800s, training in production processes were provided in the workplace
as on-the-job training. The education system was enlisted to begin preparing people to
enter the world of work through vocational education. Some companies even launched
factory training schools to provide formalized classroom instruction. Companies focused
hard on training in the early 1900’s, when Ford Motor introduced the assembly line
concept, creating the need for specialized production workers. World War I acted as a
catalyst in stirring up the training process as well trained workforce led to optimum
production with limited manpower. (Miller, 1987, p. 7-10).
Research has already shown that learning in school and on the job is by far the
most important factor accounting for American economic growth and productivity
in this century. Their research also showed that human resource efforts account
for two-thirds of the nation’s productivity improvement since 1929 and the

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workers must be highly skilled for productivity to remain high (Carnevale, Gainer
& Villet, 1990, p. xi). Paragraph not formatted properly
The learning system of the organization acts as the first line of defense against
technological and economic changes. It keeps the employees up-to-date with all the
changes and helps make a smooth transition during a change process. An employer’s
interest in employee education and training is utilitarian because providing workplace
learning opportunities improves a company’s competitive advantage. Although
employees have always learned on the job, the employer-based training process has
changed substantially from informal to formal learning (Carnevale, Gainer & Villet,
1990, p. 28-29). Training should show what to do rather than tell. Behavioral changes
cannot be forced through training (Greene, 2002, ¶ 3).
Training systems: structure & organization. Organizations structure their training
system in various ways. Sometimes they use centralized structure, sometimes
decentralized and sometimes use a combination of the two. In a centralized structure, all
the critical decisions affecting the training are controlled at a central decision point.
However, in the decentralized structure, all the critical decisions are controlled at the
local levels of the organization. “In reality, most organizations have a blend of
centralized and decentralized management of the training function” (Carnevale, Gainer &
Villet, 1990, p. 31).
Training Decisions
There are various internal and external factors which influence the training decisions
in the organizations. Some of the major internal factors are economic and organizational

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politics and external factors like regulatory requirements and competitive life cycle of
individual products. Fig. 2 helps to distinguish the training decision factor which leads to
the selection of either centralized or decentralized training structure. The economic factor
is solely based on the financial health of the organization and the amount which the
company can allocate for training. The CEO’s perspective often affects organizational
factors. The external factors are controlled by the regulatory requirements and the life
cycle of the individual products (Carnevale, Gainer & Villet 1990, p.32-35).
In the past, employers focused on decentralized training – independently operated,
unique, customized programs directed towards specific sites or segments of a
business. However, today research indicates a turn towards centralized control for
companywide generic training and decentralized control for technical, job-
specific training. Research also indicates that centralized training is especially
critical to organizations that are highly regulated, whose products must meet
exacting standards, or for which safety is a critical factor of production
(Carnevale, Gainer & Villet 1990, p.35). Paragraph not formatted properly

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Once the training structure is decided, companies shift their focus on choosing
between off-the-shelf or customized training. “Off the shelf training refers to the category
of pre-developed, generic training programs, which vary widely in subject, length and
cost” (Gerson & McCleskey, 1998, Definitions, ¶ 1). Pricing and delivery sources vary
with the training programs. These programs are delivered by solo trainers, team of
Training Decision: Centralized or Decentralized?
Economics Organizational
Politics
Internal Factors External Factors
Regulatory
Requirements
Life Cycle of
Individual Product
Power of
Executives
CEO Perspective
Financial
Health
Carnevale, A., & Gainer, L., & Villet, J. (1990). Training in America: The organization
and strategic role of training. San Francisco: Jossey-Bass Publishers.
Fig 2: Training Decision

19
trainers or certified corporate trainers. There are alterations available in off-the-shelf
training software to suit the needs of the company (Gerson & McCleskey, 1998).
Custom training typically requires an instructional designer to assess the
company's need, research, and develop a course or an entire curriculum tailored to
the company’s specific situation. The end product includes all of the associated
learning materials and training aids that will be compatible with the company
(Gerson & McCleskey, 1998, Definitions, ¶ 3).
Table 1 provides some criteria for deciding between off-the-shelf and customized
trainings. Companies are faced with different choices like skills to be trained, corporate
culture, audience size and so on. All of these components affect the decision of the
company in choosing between off-the-shelf and custom training programs. For example –
if a company wishes to train their employees with some generic skills, they would
probably buy the standard off-the-shelf program. However, if the workforce needs to
learn some specific training skills, the company would probably choose custom training
(Gerson & McCleskey, 1998).

20
Table 1: Decision Criterion for Comparing Off-the-Shelf vs. Customized Training
Characteristics/Choices Off the shelf Customized Training
Skills
Specific - Yes
Generic Yes -
Strong Corporate Culture tied to
behavior of employee
- Yes
Audience Size vs. Cost
effectiveness
Small Yes -
Large - Yes
Faster Response &
Implementation
Yes -
Long Shelf Life - Yes
Bottom Line Result - Yes
Resource Availability Varies Varies
Carnevale, Gainer & Villet (1990) found that the large corporations mostly rely on
in-house training, when concerned with the lower level and middle level managers.
However, the same companies switch to outside vendors and consultants when the
training pertains to the senior level of management. Smaller companies mostly rely on
outside suppliers because of the difference in resources as compared to a large
corporation (p. 41). “Smaller companies don’t have a significant training budget, and
they don’t have dedicated training employees”. On the other hand, large corporations
have the funding for a well-run training organization (Laff, 2008).
Gerson, G., & McCleskey, C. (1998, July). Numbers help make a training decision that
counts. HRMagazine, 43(8), 51. Retrieved January 5, 2008, from Business Source
Complete database.

21
Training Return on Investment
“For many years, measuring the return on investment (ROI) for training and
development has been a critical issue – on meeting agendas, in the literature, and on the
minds of top executives” (Phillips, 1996, ¶ 1). Reaction, learning, behavior and results
were the four level techniques developed for training program evaluations. By evaluating
all these four levels, an organization can evaluate the training ROI (Kirkpatrick &
Kirkpatrick, 2006). The six main reasons for evaluating a training program are – (i) to
maximize the value of training (ii) to align training with strategy (iii) to demonstrate the
value of training (iv) to determine the life cycle of the program,(v) to help improve a
program and (vi) to ensure learning compliance (Kirkpatrick, 2007, Six reasons to
evaluate, ¶ 1).
Mendosa said, “One of the most common criticisms of human resource managers is
that they don't measure the organization's return on investment in training” (cited in
Rowden, 2005). The training expenses have to be justified in relation to the
organizational performance – growth, profit or market share. It is also mandatory that the
justification should contribute in the bottom line (Rowden, 2005, Conclusion, ¶ 1).
McNeil said, “It is hard to get banks to even measure their spending on training and it is
even more difficult to tie it back to real business results” (Lockyer, 2003, ¶ 8).
Employee turnover problem. The American industry suffers with huge monetary
losses every year due to employee turnover problems. The costs to the companies are
both direct and indirect. Direct costs are the additional fees for the recruitment, steeper
assessments for unemployment taxes and the rising expenses of payroll administration.

22
On the other side, indirect costs are the marked decreases in productivity, as replacements
require training time to reach adequate levels of job performance (Laser, 1980).
“The major causes of turnover can be classified under three general headings:
improper personnel selection techniques; inadequate employee orientation and training;
and personnel management problems within the organization” (Laser, 1980). Some
employers consider formal orientation training to be a time consuming process and very
unnecessary. This kind of thinking was found to be very prevalent in the small and mid-
size corporations. As a result, the most common approach to employee orientation and
training was the sink-or-swim method (formally called on-the-job training); it costs
virtually nothing, though it’s ultimate value tends to equal its purchase price. Another
classic method used was the buddy system, where the new hire is paired with an existing
employee, to learn the job. However, these formal orientation methods have a chance to
backfire, because if the new employees get paired with the wrong buddy, they can
acquire some bad habits (for example- how to avoid working too hard). In general, a lack
of formal training can get the new employees off to a bad start, and over a period of time,
problems could multiply. With no instruction in proper work behaviors, the situation
becomes worse. The final result is that these people leave (Laser, 1980). Failing to
integrate the employee into the office culture often leads to high employee turnover rates
(Friedman, 2006, New hire development, ¶ 3).
Transfer of Training
Georgenson (1982) estimated only 10 percent of content presented in a classroom is
reflected in behavioral change on the job. Management demands the results of training in

23
terms of effectiveness and hence the problem of transfer becomes a critical concern.
Transfer is defined as “The degree to which an individual uses the knowledge and skills
learned in the classroom on the job in an effective manner” (Georgenson, 1982). It is
achieved through the conjunction of factors like –
(i) program content based on short and long range goals, (ii) policies, norms and
procedures which support the course content, (iii) learners who are rightly
motivated towards training, (iv) program content based on a through task analysis
which identified the knowledge and/or skills that distinguish the effective from
the ineffective performer and (v) Management which actively supports and
promotes the use of training content (Georgenson, 1982, ¶ 3).
It is also believed that the manager has the most control over the skill usage of an
employee, because it is he who assigns work, provides daily feedback and evaluates
results (Georgenson, 1982, Manager support, ¶ 1). “The manager’s control over the
tangible and non-tangible rewards provides them with substantial influence over the
employee’s work behavior” (Georgenson, 1982, Manager support, ¶ 1). Another major
factor which influences the transfer of skills is the integration of the training content with
the organization culture, norms, and so on (Georgenson, 1982, Manager support, ¶ 9).
Rossett (1997) shares her experience of a training session. After the session,
employees were happy and content with the training they received but at the same time,
were disheartened by the feeling that they would not get the chance to use it at their
workplace. It is often seen that once the employees return from the training session and

24
meet their managers, they often receive the reply, “Get back to the real work” (Rossett,
1997, But what?, ¶ 2).
The findings of Seyler et al (1998) showed that the environmental factors like
opportunity to use, peer support, supervisor sanctions and supervisor support had a large
inconsistency in the motivation to transfer. The results showed that the opportunity to use
had a strong influence on the motivation to transfer, followed by the peer support and
supervisory sanctions. Supervisor support was significantly correlated with the
motivation of transfer (Discussion, ¶ 1) what is this (Discussion 1). It was found that the
motivation of transfer is somehow related to organizational commitment, attitudes and
reaction towards training and finally the transfer environment (Discussion, ¶ 4) here also.
A model of transfer process. Fig 3 shows a model of transfer process of training. “The
conditions of transfer include both the (i) generalization of material learned in training to
the job context and (ii) maintenance of the learned material over a period of time on the
job” (Baldwin & Ford, 1988).
Training outputs are defined as the learning and retention of the content of the
training. Lastly, training inputs include three factors i.e. training design, trainee
characteristics and work environment. Training inputs and training outputs affect the
conditions of transfer, both directly and indirectly. Learning and retention is the training
output which is seen to have a direct impact on the conditions of transfer shown by
linkage 6 (Baldwin & Ford, 1988, A framework for examining training transfer, ¶ 2).
According to Kirkpatrick in 1967, “For trained skills to transfer, training material must be
learned and retained” (cited in Baldwin & Ford, 1988, A framework for examining

25
training transfer, ¶ 2). It was also observed that trainee characteristics (like ability,
personality & motivation) combined with work environment factors (like support from
the supervisor/manager) and the opportunity to use the skills, had a direct impact on the
conditions of transfer, as shown by linkage 4 & 5. For example – presence of managerial
support can affect the maintenance of well-learned skills. Lastly, all the training inputs
have a direct effect on the training outputs, shown by linkage 1, 2 and 3 (A framework
for examining training transfer, ¶ 2).
Trainee
Characteristics-
 Ability
 Personality
 Motivation
Training Design -
 Principles of
Learning
 Sequencing
 Training
Content
Work Environment -
 Support
 Opportunity to
Use
Learning
&
Retention
Generalization
&
Maintenance
Training Inputs Training Outputs Conditions of
Transfer
4
2
6
1
5
3
Baldwin, T., & Ford, J. (1988). Transfer of training: A review and directions for
future research. Personnel Psychology, 41(1), 63-105. Retrieved March 10, 2008,
from Business Source Complete database.
Fig 3 – A Model of Transfer Process

26
Factors affecting training effectiveness. According to the results of Kontoghiorghes
(2001) research, retention of training material depended on trainee’s current knowledge
base, training transfer climate and the broader organizational environment within which
the training was provided. The most essential factors which influence the transfer of
training were: (i) supervisory support for new skills and knowledge, (ii) participative
organization, (iii) task cues and (iv) post-test scores.
Learning Style
With the help of the training transfer model it was clear that learning affects directly
the conditions of transfer. Learning is an integral part of everyday life at work (Buch &
Bartley, 2002). J. Blackmoore said, “The skill of knowing how to learn is a must for
every worker…It opens doors to all other learning and facilitates the acquisition of other
skills” (cited in Buch & Bartley, 2002). Due to the advent of technology, the impact on
the learning style was found to be more profound.
Technology has added many new delivery mode options to the traditional face-to-
face classroom format, including a variety of computer-and television-based
delivery mode formats. T. O’Conner believes that technology has not only
reduced the cost of training but also offered capabilities to reconstruct learning
environment around specific learning styles (cited in Buch & Bartley, 2002).
Kolb defined learning as “the process whereby knowledge is created through
transformation of experience” (cited in Buch & Bartley, 2002). The Kolb’s learning
model, is shown in Fig. 4. According to the model, “there are two processes for grasping
information (concrete experience and abstract conceptualization) and two processes for

27
transforming experience into learning (active experimentation and reflective
observation)” (Buch & Bartley, 2002, Kolb’s model of learning style, ¶ 1). These four
processes combine to give birth to four styles of learning – (i) convergers,
accommodators, divergers and assimilators (Kolb’s model of learning style, ¶ 1).
There is a strong relationship between the learning style and the training delivery
mode. Motter-Hodgson believed that “divergers are social learners who regard feedback
highly, and thus tend to feel isolated when working on-line” (cited in Buch & Bartley,
Accommodators
Convergers Assimilators
Divergers
Processing Continuum
Perception
Continuum
Abstract
Conceptualization
Active
Experimentation
Concrete
Experience
Reflective
Observation
Fig. 4 – Kolb’s Learning Style Model
Buch, K., Bartley, S. (2002). Learning style and training delivery mode
preference. Journal of Workplace Learning, 14(1/2), 5-10. Retrieved January 1, 2008,
from ABI/INFORM Global database.

28
2002). Divergers enjoy idea generation activities like brainstorming, reflective activities,
lectures and rhetorical questions. People with this learning style prefer traditional and
classroom-based delivery of training (Buch & Bartley, 2002). Various studies have
shown accommodators to enjoy learning which are computer-based, simulation games,
role plays, and so on. (The relationship between learning style and training delivery
mode, ¶ 2). Convergers enjoy small group discussions and classroom participation but
hate lectures. These people are not high risk takers and prefer a trial and error
environment; prefer computer based learning over any other delivery (The relationship
between learning style and training delivery mode, ¶ 3). Lastly, assimilators are called
“private learners” (cited in Buch & Bartley, 2002). They enjoy “theoretical readings,
thinking alone and use of case studies” (cited in Buch & Bartley, 2002) for learning.
Hence, they prefer print-based delivery (The relationship between learning style and
training delivery mode, ¶ 4). The research supported the notion that “learning style
should be taken into account in decisions regarding the use of the many delivery mode
options available today” (cited in Buch & Bartley, 2002, The relationship between
learning style and training delivery mode, ¶ 4). It was concluded that all the four types of
learning style learners preferred face-to-face classroom delivery (Buch & Bartley, 2002,
Discussion and implications, ¶ 1).
Human resource development is undergoing a massive shift from “training orientation
to learning orientation” (Poell et al., 2004, ¶ 1). Organizations are also supporting this
movement by directing their policies towards education and formal training (Skule,
2004). “On-the-job learning style is the tendency to use a particular combination of
implicit and explicit learning activities that a person can and likes to perform. The person

29
adapts the combination of learning activities to each situation differently” (Berings, Poell
& Simons, 2005).
US Financial Service Industry
The financial services industry is one of the most significant components of US
economy, as it represents a whopping 20.4% share of the total GDP because it generated
$2.5 trillion dollars in 2003. “In 2004, financial activities employment averaged
8,052,000, an all time high” (The U.S. Department of Labor, Employment and Training
Administration, 2007). The Bureau of Labor Statistics projects the employment in
between 2004-2014 will increase by 10.5 percent. Several occupations are expected to
grow and create more jobs; however, there exist different training requirements,
workplace trends and future workforce issues (The U.S. Department of Labor,
Employment and Training Administration, 2007).
The US financial services industry comprises of five subsectors according to the North
American Industrial Classification System (NAICS). These subsectors are divided into
five categories, as shown in Table 2.

30
Table 2 – Five Subsectors of Financial Services Industry
The Monetary Authorities-
Central Bank (Central Banking)
This subsector is dedicated in performing central
banking functions like issuing currency, managing
the nation’s money supply and international reserves.
It mainly acts as a fiscal agent for the central
government.
Credit Intermediation and Related
Activities (Banking/Credit)
This sector comprises of firms that lend funds and
primarily engage in activities like mortgage, loan
brokerage, clearinghouse and reserve services and
check cashing services.
Securities, Commodity Contracts,
and Other Financial Investments
and Related Activities
(Securities)
Firms in this sector are engaged underwriting
securities issues, acting as agents between buyers and
sellers of securities or commodities, providing
commodity or security exchange services and other
services like managing portfolios, investment advice
and custody services.
Insurance Carriers and Related
Activities (Insurance)
This subsector is primarily engaged in underwriting
annuities and insurance policies or facilitating such
underwriting by selling insurance policies and by
providing other insurance and employee-benefit
related services.
Funds, Trusts, and Other
Financial Vehicles (Funds):
Firms in this subsector engage in organizing pool
securities or other assets on behalf of shareholder
shareholders or beneficiaries of employee-benefit or
other trust funds. These entities earn interest,
dividends, and other property income, but have
limited employment and no revenue from the sale of
services.
U.S. Equal Employment Opportunity Commission. (2006). Diversity in the Finance
Industry. Retrieved October 31, 2007, from http://www.eeoc.gov/stats/reports/
finance/index.html
Due to the dynamic state of this industry, managers have to give careful thought in
designing training courses. It is also visible that training knowledge retention is very
poor. Madeline Berlin says, “Training is most effective when it’s treated by learners as an
ongoing process” (Sussman, 2006, Delivering training, ¶ 5). The following section
describes some of the best examples of orientation training programs in the industry.

31
Orientation Training in Various U.S. Financial Services Companies
As per an article, it was found that Wells Fargo provides formal orientation program
to their new employees. It includes various sections like, computer training, guest
lectures, diversity exercise, team building activities, infrastructure tour and review of
Well’s Fargo history, vision, values and culture. It is estimated that the company spent on
average $5000 per new hire in 2006. The company also focuses on providing formal
leadership programs for entry level hires (2007 Best places to launch a career, 2007).
At PNC Financial Services Group, Inc., the systematic training encompasses 27, 500
employees at a time. The training cycle covers all the aspects of training like the new
employee orientation and job-specific instruction, along with leadership, executive, and
organizational development. The company has developed a specific process called
“Strategic Workforce Development Plan (SWDP)” (Weinstein, 2007), which receives
inputs from the key executives to make the training align with the business objectives. At
the end of third quarter every year, senior representatives from every key business line
meet and propose the improvements in the training process. “We use a blended approach
to development, which ensures we reach participants of various learning styles and
approaches” (Weinstein, 2007). The delivery medium of training depends upon the type
and size of audience and varies from classroom learning, e-learning, games and
simulations, role-play training, and so on (Weinstein, 2007).
Klunick (2004) provides a fine example of successful new employee orientation
training at South Carolina Federal Credit Union in North Charleston; the company invests
$915 million in training. The company has won three ELLy awards from the Credit

32
Union National Association at its Experience Learning Live conference. The company
has formed a “training plan” (Klunick, 2004) indicating all the knowledge and skills
necessary for each position and the applicable training resources. For the position of
teller, the company provides three days of orientation training in which the new employee
is provided hands-on and simulates on-the-job processes. For the purpose of training, the
classrooms are equipped with “mock teller lines to stimulate serving the credit union’s
membership” (Klunick, 2004). The trainer is a peer who is skilled and has substantial
experience with this work. Once training objectives in the orientation manual are met, the
trainer conducts a formal follow-up process. “In addition, a 60-day talk-back program is
provided by human resources to evaluate the hiring process, training and employee
satisfaction” (Klunick, 2004, New employee orientation – teller, ¶ 1).
Arthur Anderson created a program named – Transition Program, which aimed to
ensure that the new employee feels welcomed in the organization. One of the most
astonishing component of this program is the quarterly “welcome reception” (Sims, 2001,
p.4), where the current employees meet together to welcome the new hires. One of the
key features of this program is the distribution of the new hire’s photograph and resume
throughout the firm. This is mainly done to make the current employees find common
interests and hobbies with their new member. Apart from this, this program follows the
employee through their first month on the job and ends with a 60-day follow up with the
Human Resource member, guided learning experiences, expectation agreements,
sponsors and mentors (Sims, 2001, p.4).

33
Bayer Federal Credit Union (BFCU) created a new employee orientation program
called, “Dare to Soar (Successful Orientation Achieves Rewards)” (Ortiz, 2005). It
includes training and support system that follows employees during their first months on
the job. The first phase of this program is called Transition Program and includes – (i)
delivering benefits package to employee’s residence, (ii) introduces the new employee
via email to other members of the organization, (iii) holds an orientation program which
includes games and other interesting learning activities for the new hire, (iv) holds
quarterly welcome reception, (v) celebrates birthday and anniversary with electronic
cards sent by Human Resources, (vi) a welcome note by the CEO highlighting on focus,
strategy, values and core competencies of BFCU and (vi) presenting the new employees
with a welcome box full of office supplies, a junior portfolio with Soar stationary, pen,
highlighter, whiteout, mug and company shirt. The second phase is called New Job
Comfort and focuses on creating a environment where the employees are felt at ease
without any doubts or concerns and instills the employee with confidence of his decision
to work at BFCU. The third and final phase of this program is called, the buddy program,
where the new employees are hooked with one point access to all operational information
in the form of a mentor or buddy (Ortiz, 2005).
New Employee Orientation
“New-hire orientation is the first shot HR and training managers get at employee
development. It might also be the most important chance, since it sets the tone for the
future relationship between the organization and its new members” (At CSC, employee
training and development starts from the date of hire. 2004). Once the grueling
recruitment process is over, and candidates selected, they undergo through the new

34
employee orientation and training., Employee orientation is defined as, “The process that
provides new employees with the basic background information required to perform their
job satisfactorily, such as information about the company rules” (Dessler, 2005, p.268).
According to Pyle, “Orientation is an ongoing process that can span 60 days or more”
(Hoogasian, 1995, Ongoing process, ¶ 1). It can take six months for the new hires to get
up-to-speed in some organizations (France & Jarvis, 1996). The new employee
orientation only concerns the new members of an organization and excludes those who
have been rehired and those who move internally. Most of the orientation program lasts
only one day (Wanous, 2007, p. 517).
Studies tell us that an effective orientation program plays a significant role in
employee retention. Loret Carbone, president of Carbone International said, “Training
has to start as soon as someone is hired. Employees have to have the right mindset when
they come through the door on their first day of work” (Employees can make or break the
bottom line - Guess what's coming to dinner? supplement, 1996). Bob Schulrz, a
consultant based in Grand Rapids, Michigan said, “The Goal of a NEO (new employee
orientation) should be to have the person psychologically join the organization from the
first day” (Garvey, 2001, p.111, ¶4). Various researches have proved that the key to
successful orientation is to “create a line of sight that shows how the new employee’s
work contributes to the overall success of the company” (Friedman, 2006, Integration, ¶
4). Therefore, “a successful new employee orientation serves not only to answer
employees' fundamental questions about health insurance and other benefits, but also to
begin the ongoing communications and training that helps employees succeed in their
jobs” (McGillicuddy, 1998, ¶ 7). Liberman (2006) thinks that the new employee should

35
be introduced to the CEO and senior management as soon as possible, as a part of their
orientation. She also thinks that if the managers can provide more information about their
department, it helps the new hire immensely. Also, possible introduction to the staff
members should take a high priority in orientation programs (During the first month, ¶ 1).
Orientation creates the first impression of the company on the new hire. A positive
impression leads to successful working relation whereas a negative impression leads to
shocking consequences (¶ 3). “New employee orientation is increasingly helping
companies to motivate and retain productive loyal employees” (Sims, 2001, p.3).
The traditional orientation program takes place on the very first day of the job and
usually consists of “survival information – a virtual data dump of procedures and policies
of the organization” (Sims, 2001, p. 3). The orientation program may range from brief,
informal introductions to lengthy formal courses, depending upon the company (Dessler,
2005, p. 268). A survey conducted by Anderson et al in 1996 (cited in Wanous &
Reichers, 2000) showed that two thirds of the orientation programs lasted between 1 and
5 days (Defining new employee orientation section, ¶ 2). Orientation programs generally
include information on employee benefits, personnel policies, daily routine, company’s
organization and operations, safety measures and regulations and facility tour. Mostly, it
is observed that companies provide either printed or Internet based employee handbooks
to the new employees (Dessler, 2005, p.268).
Under certain conditions, the courts may find that the employee handbook’s
contents represent legally binding employment commitments. Therefore,
companies often include disclaimer to make it clear that statements of company
policies, benefits and regulations do not constitute the terms and conditions of an

36
employment contract either expressed or implied. In addition, companies
generally do not insert statements such as no employee will be fired without just
cause or statements that imply or state that employees have tenure (Dessler, 2005,
p.268).
According to Dessler (2005), orientation is not only about rules but, also serves the
purpose of making the new person feel welcomed at home and an integral part of the
team (p. 268). “The programs today are moving away from routine discussions of
company rules, to emphasizing the company mission and the employee’s role in that
mission, and to making the new recruit feel a productive part of the team as soon as
possible” (Garvey, 2001, ¶3).
Most of the organizations focus their orientation only on imparting information. “A
new employee requires more than information in terms of employment and related factors
in order to adjust” (Wanous & Reichers, 2000, Defining new employee orientation, ¶ 4).
As Bourne said that a new employee requires help in establishing new relationships and
managing the anxiety and stress that accompanies with the newcomer experience (cited in
Wanous & Reichers, 2000). The purpose of new employee orientation is to make the
new employee feel welcomed and not to disorient them on the very first day. To avoid
this, organizations should stick to the basics and follow one on one approach (Ryan,
2007).
A successful orientation should accomplish four things:
Firstly, the new employee should feel welcome and at ease. Secondly, the new
employee should understand the organization in a broad sense (it’s past, present,

37
culture and vision of the future), as well as key facts such policies and procedures.
Thirdly, the employee should be clear about the expectations in terms of work and
behavior and lastly, the person should have begun the process the process of
becoming socialized into the firm’s way of acting and doing things (Successful
orientation programs, 2000).
In a study, it was observed that not all new recruits react to the orientation in the same
way. Therefore, supervisors should be vigilant, follow up and encourage new employees
to engage in those activities that will enable each of them to learn the ropes and quickly
become productive (Ashford & Black, 1996). There have been several excellent
examples of successful new hire orientation program that benefited the companies in
many ways. For example - Apollo Ship Chandlers in Miami introduced a new employee
orientation program, which emphasized on company's history, diversity/cultural
awareness, customer service and communication. Between 70-80 percent of the new
employees who attended this orientation stayed with the company (H.J. 2002). Another
success story is found at Baptist Hospital, which exposed the new hire to the senior
leadership as part of their orientation process. The result was reduced employee turnover
from 17.4 percent to 12.4 percent. At the end 1997, Arthur Anderson had only 40 percent
of retention rate of new hire employees because the new hires felt themselves as invisible
in the organization (Sims, 2001, p.4).

38
Organizational Socialization
Organizational socialization (OS) is defined as “the process whereby new employees
move from being organizational outsiders to becoming functioning organizational
insiders” (Cooper-Thomas & Anderson, 2007, p.583). It has been referred as “the process
of learning the ropes of being an effective” (Cooper-Thomas & Anderson, 2007,p. 583).
Mannen & Schein in 1979 developed six bipolar tactics model for organizational
socialization based on the reasoning that a newcomer’s learning is dependent upon both
process and content. The six tactics used by organizations to structure the early work
experiences of newcomers are – (i) collective-individual, (ii) formal-informal, (iii)
sequential-random, (iv) fixed-variable, (v) serial-disjunctive and (vi) investiture–
divestiture (cited in Cooper-Thomas & Anderson, 2007, p. 582). Collective socialization
is a tactic where newcomers are grouped and put through a common set of experience
whereas individual socialization treats each new employee separately and puts him or her
through unique experience. In formal socialization, the newcomers are segregated from
the senior members of the organization, whereas no such segregation is found in informal
socialization. Sequential tactics refers to a series of steps leading to the assumption of a
role, which is not the case in the random tactic. Fixed socialization provides a timeline
for understanding and assumption of roles which is not the case in variable socialization.
Lastly, investiture tactic recognizes the identity and characteristics of the newcomer
which in reveres in divestiture tactics (Ashforth, Saks & Lee, 1998, Socialization tactics,
¶ 1).

39
According Jones (cited in Ashforth & Saks, 1996) hypothesis, tactics used in the
institutionalized socialization process forces the newcomer to accept the organizational
status quo and produces a “custodial role orientation” (cited in Asforth & Saks, 1996).
However, when organizations use tactics which represent individualized socialization, the
newcomers are able to develop unique approaches to their role and leads to “innovative
role orientation (Role change and person change, ¶ 1).
Cooper-Thomas & Anderson (2007) believed that OS includes the learning of task
information, social information and cultural information, which are the most important
factors of organizational life (p.583). “OS has been linked to a number of important
organizational outcomes including increased organizational commitment, job
involvement, role orientation and tenure” (Klein & Weaver, 2000, ¶ 1). Orientation
training programs play a critical role in the socialization process of a new employee. It is
a general belief in many organizations that “socializing newcomers is the responsibility
of the person whose position the newcomer will occupy” (Allen & Meyer, 1990,
Discussion, ¶ 9). Allen & Meyer (1990) suggested that, organizations should ensure that
the newcomers are properly treated and are not isolated by the lack of contact.
Organizational socialization as well as orientation relates to the newcomers in the
organization. The following section deals with the similarities and dissimilarities between
socialization and orientation. Then it follows with the comparison between employee
orientation and training.
New employee orientation vs. socialization. There exists significant similarities and
differences between new employee orientation and organizational socialization. Both the

40
concepts deal with the post entry period of the employees and talk about the issues of
person-organization fit. However, there exists around four main differences between the
two concepts. Firstly, the post-entry time period of orientation is relatively short as
compared to organizational socialization. Secondly, fewer members are involved in
orientation. The next dissimilarity lies in the differences in the content of the orientation
program and organizational socialization. Lastly, the orientation is a program bounded by
a time period, which is easier to measure. However, in case of organization socialization,
it is difficult to estimate the beginning and end of this concept (Wanous & Reichers,
2000).
New employee orientation vs. training. The new employee orientation and training are
very closely related because of the similarities between them. Firstly, both are concerned
with the organizational influence on employees. It is also seen that both the concept can
be classified as programs rather than processes. And lastly, both of them suffer with the
same problem of estimating the effectiveness of the program component on individuals
(Wanous & Reichers, 2000).
Training Methods
The researcher will be studying all the training methods which are used for the new
employee orientation process and also some other major training methods which are used
for employee training apart from orientation.
Lecture. It is one of the most quick and easy methods to provide knowledge and
training to a large group of trainees and is one of the best methods to create a general

41
understanding of a topic. There are several variations found in the lecture method as it
ranges from more or less formal to interactive. Generally the pure lecture format is a very
straightforward training technique where there is one way communication, that is, from
the trainer to trainees. The format of the lecture usually starts off with the introduction
which tells the trainees about the purpose of the training, sequence in which the training
topics will be covered and other rules like break time, questions, clarifications, and so on.
Once the introduction is finished, the trainer starts off with the main material of the
training, which includes detailed information. It is considered that the usefulness of this
method is limited because it only provides information to the trainees (Blanchard, n.d.).
In the work of Arthur Jr. et al. (2003), lecture has been proved very effective in training
several types of skills and tasks, even though it suffers with a public image of being
boring and ineffective (p.243, Discussion, ¶3).
Demonstration. This method of employee training is widely used in the hospitality
industry because of the involvement of psychomotor activities. In this method, the trainer
performs the task in front of the trainee, while explaining each and every detail of the
work. This kind of training is mostly used in the hospitality industry. It is also seen that
after the demonstration session,, the trainees are asked to perform the same task with
immediate feedback (Jaszay, C., & Dunk, P. 2003, p.86).
Seminar & conference. Many companies and universities offer Web-based and
traditional management development seminars and conferences. For example – the
American Management Association (AMA) provides thousands of courses in areas
ranging from accounting and controls to assertiveness training, basic financial skills,

42
information systems, project management, purchasing management and total quality
management (Human resource management seminar, n.d.).
AMA’s human resources management and training seminars provide skills,
behaviors and strategies for recruiting employees, reducing employee turnover,
promoting employee development and retaining a talented, flexible and diverse
workforce (Human resource management seminar, n.d.).
The case study method. Case study method presents the trainee with a written
description of an organizational problem and the trainee then analyzes the case, diagnoses
the problem and presents his or her findings and solutions in a discussion with the other
trainees. Integrated case scenarios expand the case analysis concept by creating long
term, comprehensive case situations (Dessler, 2005, p. 287). The case study method
ranges from few pages in length to more than a hundred pages. This method of training
allows the trainees to look at a problem from different aspects. There exists, many
possible solutions depending on the assumptions and interpretations of the trainees. The
value of the case approach is the trainees' application of known concepts and principles
and the discovery of new ones (Blanchard, n.d.).
The FBI Academy created an integrated case scenario, starting with a concerned
citizen’s telephone call and ends 14 weeks later with a simulated trial. In between
is the stuff of a genuine investigation, including a healthy sampling of what can
go wrong in an actual inquiry. To create such scenarios, scriptwriters (often
employees in the firm’s training group) write the script. The scripts include
themes, background stories, detailed personnel histories and role playing

43
instructions. In the case of FBI, the scenarios are aimed at developing specific
training skills such as interviewing witnesses and analyzing crime scenes
(Whitcomb, C. 1999).
Role playing method. The aim of role playing is to create a realistic situation and then
have the trainees assume the parts of specific persons in the situation (Dessler, 2005,
p.288). In a structured role play, trainees are provided with extensive detail about the
situation, character’s attitude, needs, opinions, etc. Often scripted dialogues are provided
for this kind of role play. The unstructured or spontaneous role plays are also very
interesting as the trainees have to construct a loosely constructed scenario. The main
objective of this kind of role play is to develop insights into the trainee’s behavior and its
impact on others. The number of trainees involved in the training, affects the decision of
deciding the structure of the role (Blanchard, n.d.).
Simulation training method. Simulated training or vestibule training is a method in
which trainees learn on the actual or simulated equipment that they will use on the job but
are actually trained off the job. This kind of training method is used when it is too
dangerous or costly to train employees on the job. Normally, airline pilots are provided
with this kind of training. The equipments used during this training sessions are identical
in nature to the real equipment in the real job (Dessler, 2005, p. 261).
Projects. Making the employees undertake projects on the job is an excellent way of
providing training to them. This helps them to improve the business and helps them to
learn about the topic of training in a very practical manner. Mostly, selected employees
are formed in a group and assigned projects, however, types of projects vary by

44
businesses and skill levels of the employees. The advantage of this type of training is
mostly for experienced employees; however, some organizations make the new employee
undertake projects as a part of their orientation program (Dessler, 2005, p. 281).
Visual-aid (movies, video, CBT) training method. In computer-based training (CBT),
the trainees use computer-based and/or DVD system to interactively increase his/her
knowledge of skills (cited in Dessler, 2005, p.281). “The distinctive advantages of CBT
are: availability, self-paced features, distribution and changeability and work simulation”
(Ganger, 1994)
Programs are usually interactive, so that trainees can select from multiple-choice
options or key in their own answers. A popular medium for computer-based
training is CD-ROM, although there is a growing trend towards online training,
where computer-based training is delivered over the Internet or through company
intranets. Computer-based training is a form of e-learning (Computer-Based
Training, 2006).
A research by Rockley Miller (cited in Dessler, 2005) showed that McDonald’s had
developed numerous CBT training programs for its franchisees’ employees. With the
help of these interactive technologies (wherein trainees require feedback), learning time
has been reduced by an average of 50% (Dessler, 2005, p. 281). CBT offers numerous
advantages like cost effectiveness, consistency mastery of learning, increased retention
and increased trainee motivation. CBT is increasingly interactive and interesting. For
example – interactive multimedia training integrates the use of texts, video, graphics,

45
photos, animation and sound to produce a complex training environment with which the
trainee interacts (Blanchard & Thacker, 2003,p.247).
Virtual Reality training takes this realism even a step further as it “puts the trainee in
an artificial three dimensional environment that simulates events and situations that might
be experienced on the job” (Dessler, 2005, p. 282). The sensory devices like special
goggles, etc. transmit the signal from the trainee to the computer and with the help of
those signals; the computer analyzes the responses of the trainee and presents the results
(cited in Dessler, 2005, p.282).
According to a report by Paul Harris (cited in Dessler, 2005), the U.S. Armed
Forces are increasingly utilizing simulation-based training programs for soldiers
and officers. The army has developed video-game type training programs called
Full-Spectrum Command and Full-Spectrum Warrior for training troops in urban
warfare. According to one description, the two games offer extremely realistic
features, within a context that emphasizes real-time leadership and decision-
making skills (p.282).
Blanchard and Thacker (2003) listed the names and description of various types of
Computer-Based Training techniques (p.144). They are shown in Table 3.

46
Table 3: Types of CBT Techniques
PI
Computer-based programmed instruction (PI) programs consist of text,
graphics and perhaps multimedia enhancements that are stored in memory
and connected to one another electronically. Material to be learned is
grouped into chunks of closely related information. Typically, the
computer-based PI program presents the trainees with the information in
the chunk and then tests them on their retention of information. If they
have not retained the material, they are cycled back to the original
information. If they have retained the information, they move onto the next
information to be learned.
CBT Training provided in part or in whole with a computer. CBT often used in
private industry or government for training employees using computer-
assisted instruction.
CMI Computer-Managed Instruction (CMI) uses a computer to manage the
administrative functions of training, such as registration, record keeping,
scoring and grading.
ICAI
When the CBT system is able to provide some of the primary
characteristics of a human tutor, it is referred as an Intelligent Computer-
Assisted Instruction (ICAI) system. It is a more advanced form of PI.
Expert system are used to run the tutoring aspect of the training, monitor
trainee knowledge within a programmed knowledge model and provide
adaptive tutoring based on trainee responses.
ITS
Intelligent Tutoring System (ITS) makes use of artificial intelligence to
provide tutoring that; is more advanced than ICAI type tutoring. ITS
“learns” through trainee responses the best methods of facilitating the
trainee’s learning.
Simulations
Computer simulations provide a representation of a situation and the tasks
to be performed in the situation. The representation can range from
identical (e.g., word processing training) to abstract (e.g., conflict
resolution). Trainees perform the tasks presented to them by the computer
program and the computer program monitors their performance
Virtual
Reality
Virtual Reality is an advanced form of computer simulation, placing the
trainee in a simulated environment that is “virtually” the same as the
physical environment. This simulation is accomplished by the trainee
wearing special equipment such as head gear, gloves and so on, which
control what the trainee is able to see, feel and otherwise sense. The trainee
learns by interacting with objects in the electronic environment to achieve
some goal.
Blanchard, P.N., & Thacker, J (2003). Effective training systems, strategies and
practices. Upper Saddle River, NJ: Pearson.

47
Dessler (2005), discusses further on the different types Distance and Internet-Based
Training, a part of CBT is. “Tele-training is a training process where the trainer in a
central location teaches groups of employees at remote locations via television hookups”
(Dessler, 2005, p. 283). “Videoconferencing refers to the transmission of images (via
video) and sounds (via audio) between two or more physically separate locations”
(Videoconferencing, 2003). Dessler (2005), recommends preparing a training guide
ahead in time before the videoconferencing training session begins as it can be used as
the training guide and the learner can use to follow points which the trainer mentions
during the actual training. JP Morgan Chase bank uses this method to train employees
based in remote areas (p.284). Training via the internet is another form of training and is
becoming increasingly popular. There are numerous websites, like www.click2learn.com,
which offer training courses. Ford Motor Company used extensive video training
sessions, where the all the customer complaints, reactions and problems were simulated
(p.280).
Mentoring. This training method is a form of coaching where a relationship is
developed between a junior and senior employee. The senior employee is known as the
mentor of the junior employee and focuses on providing political guidance to the junior
employee. The mentor also helps the junior employee in understanding the functioning of
the business and how things are run in the organization. This kind of training is
concerned with improving he employee’s fit within the organization and hence, is
different from coaching, which focuses on improving the technical fit (Blanchard, n.d.).

48
On-the-job-training (OJT) method. OJT is the type of training provided by companies
where employees perform everyday work activities and learn about the job. It is based on
“the principle of learning by doing and includes demonstration and explanation by a more
experienced employee, supervisor, or manager; performance of tasks under supervision;
and the provision of appropriate feedback” (On-the-job training, 2006). OJT is for both
managers and non managers and sometimes in firms, OJT is the only training available.
Some of the types of OJT are job rotation, coaching/understudy and action learning
(Dessler, 2005, p. 284).
In job rotation an employee (usually a management trainee) moves from department to
department to broaden his or her experience and identify strong and weak points (Dessler,
2005, p.286). This kind of method provides employees with experience in different jobs
and benefits the management as it creates more depth of experience in the workforce
(Grensing-Pophal, 2005, What is job swapping, ¶ 2).
Coaching/understudy approach is a training process where the “trainee works directly
with a senior manager or with the person he or she is to replace. Normally, the
understudy relieves the executive of certain responsibilities, giving the trainee a chance to
learn the job” (Dessler, 2005, p.286).
“Action Learning is a training technique by which management trainees are allowed to
work full time analyzing and solving problems in other departments” (Dessler, 2005,
p.286). It was originally developed more than 50 years ago by Cambridge professor Reg
Revans (Thrown into deep ends, workers surface as leader, 2002, ¶2). In this method,
between five to 25 members are carefully selected and assigned real world problems

49
which extend beyond their areas of expertise. It is formally structured and learning is
through coaching and feedback (cited in Dessler, 2005, p.286). Mary Young, researcher
and editor of Action Learning Today, believes that it is gaining attention and adherents
among U.S. corporations (Thrown into deep ends, workers surface as leader, 2002, ¶3).
Other Major Non-Orientation Training Methods
Management games. This training method was first used at the University of
Washington in 1957 (Faria, 2006, ¶ 1). In this method, teams of managers compete by
making computerized decisions regarding realistic but simulated situations. Trainees are
divided into five-to-six person group and have to compete by taking decisions on factors
like amount to be spent on advertising, production quantity, inventory levels and number
of products for production. The game compresses two-three years of period into days and
weeks because the training cannot continue for that long. The decisions of each team are
kept secret in order to create a more realistic situation (Dessler, 2005, p.287). This
training method is not only popular in corporate world but also very popular in
universities. “It is estimated that business simulation games are in use in 1,733 degree
granting universities in the U.S. alone, are being used by 11,836 university business
professors at any point in time, and are being used by 7,808 business firms in employee
training programs” (Faria & William, 2004). The results of a survey showed that over
half of all large (more than 1000 employees) companies use simulation exercises in their
training (Faria, 1987, Conclusion section, ¶ 3). Another survey in late 1990’s revealed
that the use of simulation gaming in trainings increased from 55.3 percent in 1987 to 62.2
percent in 1998 (Faria, 1998, Simulation use in business section, ¶ 5).

50
University related programs. Many universities are providing executive education on
topics like leadership, supervision and so on. For example – Harvard Business School has
been offering The Advanced Management Program for executives. The classes in this
program cover areas like developing management skills, how to solve organizational
problems, etcetera (Dessler, 2005, p. 288).
Behavior modeling – In this method of training, the trainees are first shown the right
model of performing a task, then they are allowed to practice it and finally feedback is
provided on their progress. The basic behavior modeling procedure is as follows:
i. Modeling – First, trainees watch films or videos that show models behaving
effectively in a problem situation. The video might show a supervisor
effectively disciplining a subordinate, if teaching how to discipline is the aim
of the program.
ii. Role Playing – Next, the trainees are given roles to play in a simulated
situation; here they practice and rehearse the effective behaviors demonstrated
by the models.
iii. Social Reinforcement – The trainer provides reinforcement in the form of
praise and constructive feedback based on how the trainee performs in the
role-playing situation.
iv. Transfer of Training – Finally, trainees are encouraged to apply their new
skills when they are back on their job (Dessler, 2005, p.289).
“Behavior modeling can be very effective in training novice computer users to use a
menu driven computer system” (Simon & Werner, 1996, Discussion, ¶ 2). A study was

51
conducted with 160 members of a navy construction battalion in Gulfport, Mississippi.
The objective was to train the crew for handling the new computer workstation. Three
training methods were adopted: conventional method involving lecture and slide show,
CBT and behavior modeling. The results showed that the trainees who attended the
behavioral modeling training were the most successful group in completing their
objective. The learning of skills was most impressive in behavior modeling and then
came CBT and conventional methods (Dessler, 2005, p.289).
Executive coaches. Many firms use executive coaches to develop their top manager’s
effectiveness. An executive coach is an outside consultant who questions the executive’s
boss, peers, subordinate and family in order to identify the executive’s strengths,
weaknesses, and counsel the executive in order to help the executive to capitalize on its
strength and overcome the weaknesses (Dessler, 2005, p.289). “Executive coaching has
increasingly shifted away from fixing problem managers to helping corporate stars
achieve peak performance, becoming an estimated $1 billion business in the process”
(Shuit, 2005, ¶ 1).

52
Chapter Three: Research Design and Methods
Research Design
This chapter includes the research design, data collection methods and the limitations
of the research. The main focus of the study is to find out the best training practices for
orientation within the financial service industry. After the identification of the best
practices, the researcher will measure their effects on employee morale and self
confidence. With the help of the literature review, he will throw light on many aspects
such as types of orientation training, training decisions, training ROI, transfer of training
and so on. Many surveys have been conducted on issues of employee motivation and
employee turnover; however, none have identified the best practices in orientation
training which enhances employee confidence and morale. This research falls into the
category of exploratory study. During the course of the research, concepts were
developed more clearly, priorities were established, operational definitions developed and
finally the research design was improved (Cooper & Schindler, 2006).
Data Collection Methodology
The foremost hurdle encountered in the study was the identification of the source of
data. After careful consideration, primary data was chosen for the research, because it is
unique in itself. To gather the primary data, a survey questionnaire (see Appendix B) was
used. The survey was designed and distributed online, with the help of an online software
survey tool, found at www.surveymonkey.com. The following information regarding this
tool was also found on the website.

53
Intelligent survey software for primates of all species. Survey Monkey has a
single purpose: to enable anyone to create professional online surveys quickly and
easily. The SurveyMonkey’s Web site provides answers to the frequently asked
questions about the survey design (http://www.surveymonkey.com/Default.aspx).
The survey software tools provide the capability to create a survey where the
painstaking survey administration tasks are automated. These automation tools as
online survey tools generate an HTML form to post to the internet, allowing the
group of interest to submit their responses via the web. The key benefits derived
from internet survey software tools are simplicity, low cost, scalability and quick
data capture turnaround (Bennekom, n.d.).
To begin with, a free account was created on the web site, and then the survey
questionnaire was designed online. The free account offered limited features, like 100
responses per survey and limitations like, manual transfer of raw data to Microsoft excel.
Once the survey questionnaire was designed, a web link was obtained from the website.
This link was sent to the sample population via email. A cover letter (see Appendix A)
was also designed, which was attached in the email, for introducing the respondents to
the objectives of the research. As a respondent clicks on the link, a window opens up and
displays the survey. To achieve maximum accuracy from the survey, a pilot run was
conducted for the questionnaire before the actual distribution. The pilot run consisted of
three people from the industry, who took the survey, and suggested various changes. The
changes were thoroughly studied and finally incorporated in the questionnaire. The
respondents were not allowed to make any changes to their answers after the completion

54
of the survey. The following link was obtained for the survey -
http://www.surveymonkey.com/s.aspx?sm=Kl0zq5HJ0ait7GYXKu8MdQ_3d_3d
Survey questionnaire. In this section, the researcher goes in-depth of the questionnaire
which helps to reveal the logic behind each question and the expected answers. The
survey questionnaire was divided into two sections – respondent profile and orientation
training methods. The first section comprised of four questions and the second section
consisted of five questions. Additional space was provided at the end of the survey, for
comments by the respondents. They were provided this feature for sharing any additional
information about the orientation programs as well as their personal experiences.
The first section of the questionnaire aimed at identifying the respondent profile. The
first question asked the age of the respondent. It was asked to estimate the number of
orientation trainings the respondent might have undergone in its career. Gender
identification was the second question of the survey. The third and fourth question
actually sets the tone for the survey. It asked the respondent about the department and
their position in their organization. The respondents were provided with various key
departments like banking, cards, insurance, and so on. An additional option of others was
also provided to include all the areas. The final question of this section aimed at
identifying the job position of the respondent in their organization. Four options were
provided for this question, including the others option. All these questions would help in
identifying the profile of the respondent.
The second section focused on the orientation training methods and consisted of five
questions. The first question identified the total number of orientation programs the
respondent undertook during its career. This question holds a lot of significance because

Thesis Paper_Orientation Training in U.S. Financial Service Industry

Thesis Paper_Orientation Training in U.S. Financial Service Industry

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