IMPACT OF TRAINING AND DEVELOPMENT AND DEVELOPMENT ON EMPLOYEE RETENTION IN AN ORGANIZATION

(A CASE STUDY OF FIRST BANK PLC)

 

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND TO THE STUDY

Over the years, stiff competition among various organizations has made management of corporations to strategically align their human resource to achieve organizational goals. The importance of Training and development and Development is obvious given the growing complexity of the work environment, the rapid change in organization and advancement in technology, among other things. Training and development and development helps to ensure that organizational members possess the knowledge and skill they need to perform their jobs effectively; take on new responsibilities, and adapt to changing conditions. Despite the recognition of the importance of training and development by management experts and government as expressed in white papers on various reforms in Nigeria, the experience of manpower training and development and development in the Nigerian public service has been more of ruse and waste. Until recently there has been a general resistance to investment in training and development in the public service because of the belief that “employee hired under a merit system must be presumed to be qualified, that there were already trained for their job, and that if this was not so, it was at fault” (Dessler, 2005).

In global context, employee retention is considered immensely important. Most of the companies are judged on the basis of their turnover rate. The rate of turnover affects the performance of an organization. Low turnover ensures that organization is retaining their competent employees by providing them superior environment which increases the performance of individual employee.

Globally there are few companies like; SAS General Mills has a turnover rate of 2%, SC Johnson & Sons, Intel, meridian health and national instrument has the turnover rate of 3%. It means that these multinational companies are retaining their employees while ensuring their high performance.

Training and development is one of the most important factors in retaining employees in these organizations. By knowing the factors of retention or the effect of training and development on retention this study can help those organizations to retain their employees which has high turnover rate.

 

In today’s competitive environment companies are struggling hard to design a most appropriate strategy that could enhance the retention rate and pulls the turnover rate downward. Organizations have realized that competitive advantage could be attained by employees’ skills. There is a great importance of an appropriate retention strategy; many retention strategies are designed that are related to provision of training and development to employees, and compensation etc. Fheili (2007)believes that organizations are not interested in providing training and developments that are generalized in nature.

They are focusing on specialized training and developments which is relevant to a specific task and make the employees unfit for competitors use. They are limiting employees’ ability to switch to another job in an industry. Organizations are finding ways to make the employees specialized rather than a generalized one, while rest of the organizations consider training and development as an investment on employees and expect a return in the form of commitment and retention (Danlami Sani Abdul kadir et al 2012).

 

1.2 STATEMENT OF THE PROBLEM

High labour turnover damages the organization through increased costs of recruitment and selection, delayed service delivery and low morale amongst employees. Kabungaidze et al. (2013) argues that such activities greatly affect organizational success to prosper in today‘s competitive economy due to their inability to retain the right quality of employees. There also seems to be a grey area between training and development and employee retention because most researches on the impact of training and development on employee retention have shown inconclusive results (Coetzee and Schreuder 2013; Terera and Ngirande 2014).

Another factor is that although various researches were conducted on the impact of training and development in organizations, not enough research has been conducted in higher learning institutions to provide empirical support for the impact of training and development on attitudinal factors such as organizational commitment and employee retention especially among administrative staff in higher learning institutions.

Therefore the research seeks to investigate the impact of training and development on employee retention.

1.3 OBJECTIVES OF THE STUDY

The main objective of the study is to critically examine the impact of training and development and development on employee retention in an organization. Specific objectives of the study are:

1.  To identify the factors affecting high employee turnover in an organization.

2.  To identify the effect of training and development, its type and duration on employee retention in an organization.

3.  To identify the extent by which management support and rewards affect employee retention.

1.4 RESEARCH QUESTIONS

In-order to guide the study and achieve the objectives of the study, the following research questions will be used for the study:

1.  What are the factors affecting high employee turnover in an organization?

2.  What effects do training and development and development have on employee retention?

3.  How does management support and rewards affect employee retention?

1.5 RESEARCH HYPOTHESIS

Ho: There is no significant relationship between training and development/development on employee retention in an organization.

Hi: There is a significant relationship between training and development/development on employee retention in an organization.

1.6 SIGNIFICANCE OF THE STUDY

The study will help firms understand the importance of training and development programs. It will also enable them structure their training and development programs to make them more effective in terms of helping to improve the efficiency of the workforce and lead to less employee turnover. This also ensures the existence of a pool of skilled workforce who could be utilized for national development. Labour is a major input to the success of the company. If labour is efficient it will help improve the performance of the company. As companies perform better they are able to increase output and contribute more to the economy. They are also able to grow and hire more people thus helping to decrease the level of unemployment. As companies perform better, they are also able to compete better enabling the economy to remain vibrant.

The study will also be of great benefit to student researchers who wish to explore more into the impact training and development has had on the overall performance of employees in various organizations. The study will serve as a guide to these students who may further get more insights into the recommendations and findings from the study thereby, forming an empirical literature for them.

1.7 SCOPE OF THE STUDY

The study is limited to the role and impact that training and development have on the performance of employees of First bank, using their branch office in Umuahia, Abia State as the focus point. The branch office constitutes an important location of First Bank and holds a large population of employees.

1.8 DEFINITION OF TERMS

Training and development: Training and development could be seen as an Organizational effort aimed at helping an employee to acquire basic skills required for the efficient and effective execution of the function for which he/she is hired for.

Planning: Is a strategy by which Organization ensures that right number of employees with the right talent/skill occupy the right position of the Organization. It is a deliberate effort put in place to attain a target goal.

Efficiency: This refers to an input-output relationship that is maximum work achieved for a minimum time or result. It is a notion of ‘Optimization’ whereby maximum satisfaction is obtained for a given out lay of resources.

Effectiveness: This is referred to how frequently and perfectly human or machine are able to carry out a task leading to a required output that always resulted to an Organizational efficiency. Effectiveness is therefore a means to an end”.

Organization: This is referred to as two (2) or more people working together in a co-ordinated manner to attain group results.

Performance: The accomplishment of a given task measured against preset known standards of accuracy, completeness, cost, and speed. In a contract, performance is deemed to be the fulfillment of an obligation, in a manner that releases the performer from all liabilities under the contract.

Productivity: Productivity is the ratio of output to inputs in production; it is an average measure of the efficiency of production. Efficiency of production means production’s capability to create incomes which is measured by the formula real output value minus real input value.

Output: Output is the term denoting either an exit or changes which exit a system and which activate/modify a process. It is an abstract concept, used in the modeling, system(s) design and system(s) exploitation.

Employee: An employee is anyone who has agreed to be employed, under a contract of service, to work for some form of payment. This can include wages, salary, commission and piece rates.

Employee Retention: This refers to the ability of an organization to retain its employees.

Employee turnover: This refers to the number or percentage of workers who leave an organization and are replaced by new employees

Seminar: This is, generally, a form of academic instruction, either at an academic institution or offered by a commercial or professional organization. It has the function of bringing together small groups for recurring meetings, focusing each time on some particular subject, in which everyone present is requested to actively participate.

Workshop: a gathering of small group of individuals for academic conference or job training and development.

REFERENCES

Ahmad, K., 2011. Person-Environment Fit: The Missing Link in the

Organizational Culture -Commitment Relationship. International Journal of Business and Management, 6(11), 11-20.

Coetzee M, Schreuder D 2013. Personnel Psychology:An Applied

Perspective. South Africa: Oxford UniversityPress.

Dessler G. (2005): Human Resource Management. Pearson

Education Incorporation, Upper saddleriver, New Jersey, 07458.

Fheili, M., 2007. Employee turnover: an HR risk with firm-specific

context. Journal of Operational Risk, 2(3), 69-84.

Kabungaidze T, Mahlatshana N, Ngirande H 2013. The impact of job

satisfaction and some demographic variables on employee turnover intentions. International Journal of Business Administration, 4(1):53-65.

Terera SR, Ngirande H 2014. The impact of rewards on job

satisfaction and employee retention. Mediterranean Journal of Social Sciences, 5(1): 481-487.

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