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Employer provided training and organizational performance:

A Comparative Study of UK and Bangladesh.

Submitted to

Dr. Jens Mohrenweiser

Submitted by

Shilabarata Karmakar

4827269

Word Count: 3005

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Content Page

Introduction. 03

Human Capital Theory. 05

Hofstede Cultural dimension. 06

UK Context. 07

Bangladesh Context. 08

Comparative analysis. 09

Conclusion. 10

Recommendation. 11

Reference. 12

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Introduction

In present business environment organizations are concerned to achieve and accelerate

one of the most important advantages and that is Human Resource (HR). HR is regardedas the

most valuable assets of a firm. But very few firms can utilize its full potentiality (Ahmed &

Schroeder 2002).

Though organizational success depends upon many reasons but HR is the most

importantmatter which directly influence the overall performance of an organization.

Organization can attain the goal without any obstacle if it is run with a satisfied

workforce.Therefore the management of HR undergoes with different practices focusing on

maximum utilization and proper management of their human resources to achieve optimum

output and distinct competitive advantage (Price 2004).

According to the study of Hansson(2007) the system of training is mainly determined

by some of the specific factor of a company and the practice of Human resource management

is one of those factors. Incidence of training and intensity of training are also determined by

various reasons. The profit of a firm is related with the investment of the firm in the intensity

of training. And the suggestion is that the economic output of training is more significant than

employee turnover cost.

For maintaining competitive advantage and achieving the ultimate vision of the

organization it is very much importantthat the practice of HRM has agreat significance. HRM

practices are related to a set of policies andmechanism which uplift an organization’s human

capital and contribute in the achievement of expected business objectives (Gurbuz 2009).

Studies (Price 2004; Gurbuz 2009; and Syed & Yah 2012) havegiven evidence

thatproper use of Human resourcemanagement practices are significant to accomplish both

long term and short term objectives of an organization.

HRM practices relateinvestment of organization in individual employees’ training,

participation, decision making, promotion and the reward acknowledgement and open

communication for building satisfactory image among employees towards their job (Meyer &

Allen 1997; Denaley & Huselid 1996). Orientation Training familiarise new employees with

various aspects of an organization. As for example organizational procedure, social behaviour,

health and safety, and task responsibility.

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Theoretical argumentmainly establishes a relative relationship between initial training and the

work related attitudes of employees and behaviour but empirical support is not

satisfactory.Most of the evaluation studies of job training reflect on the impact of training

program over the pecuniary work place out comes, such as productivity earning and the

turnover (Tabvuma et al 2015).

In an observation it is remarked that Job training and other high performance work

procedures have a statistically significant impact on reducing employee turnover and

productivity and a long term effect on organizational performance (Huselid 1995).

Delany and Huselid (1996) observe a positiverelation between HRM practice including

job training and stuff selection and positive perceptions of organizational performance.

Studies placing emphasis on non-pecuniary work place outcome shows that job training

gives a positive image on employees’ job satisfaction and the commitment to the organizational

(Santos and Stuart 2003; Geogellis and Lange 2007; Aguinis andKraiger 2009). But some

studies cannot find any statistical significant relation between provided training and the job

satisfaction (Shore and Brakesdale1998).

Two closely related topic HR practice and job satisfaction are very deeply investigated

by various scholar in the different parts of world (Abser et al 2012). According to Ting (1997)

HR practice and job satisfaction are very closely related with each other.

Many scholars give positive idea that healthy HR practice brings a better level of job

satisfaction and consequently it improves organizational performance(Applebaum et al 2000).

Gould and William (2003) present their view that utilization of some specific HR practice in

UK local government organization reflect in better jobsatisfaction, trust in workplace, effort,

commitment and organizational performance.

The competitive advantage search in future is likely to be major challenging for

organization. And it is argued that through the utilization of valuable, scarce and inimitable

resources this challenge can be met by an organization (Barney 1995).

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Human capital and performance

The development of human capital and organizational performance have positive

relation. Moreover the emphasis on human capital in organization shows that market value

depends less on tangible resources other than on intangible resources and especially on human

resources.The link between human capital and organizational performance is positive.

Intellectual capital is one of the two categories on tangible assets of a company. Wright

et al (2001) argue that intellectual capital is an indicator that influences human capital, social

capital and organizational capital.

The research of Nahapiet&Ghosal (1998) shows that intellectual capital relates with the

knowledge and knowing capability of a social collectively professional practice and intellectual

community (1998). Intellectual capital is embedded in both in people and system. Human

capital consists of human social and organizational mood (Wright et al 2001)

According to the view of Nahapiet&Ghosal(1998) the central view of social capital

theory is the relationship with social affairs and mutual acquaintance. The same researcher also

expresses the view that social capital increases the efficiency of activity and helps in

cooperative behaviour(Nahapiet&Ghosal 1998).Social relationship and Social capital

significantly influence the development of human and intellectual capital.

The linking of the resources of an organization together into system is the main role of

organizational capital and it creates value for the customers and well-being of competitive

advantages for the firm (Dess&Picken 1999)

Therefore it has a reasonable ground to investigate this matter of employer provided

training and organizational performance in the comparative study of UK and Bangladesh

professional scenario.

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Hofstede Cultural Impact

In comparative study of Bangladesh and UK the cultural impact is explored here

through the lens of six dimensional model of Greet Hofstede.

Though in case of two dimension masculinity and long term orientation UK and

Bangladesh relate with each other almost similarly but the gap between power distance,

individualism, uncertainty avoidance and indulgence show some reason to evaluate these two

country in different way.

Figure 1: Table showing Bangladesh and UK cultural comparison (Greet Hofstede)

The high score of Bangladesh in power distance shows uneven equality of people in

society and organization and the hierarchy system may affect in responsibility and performance

in society as well as organization. But in case of UK it acts as an equal phenomenon.

In case of Individualism the low score of Bangladesh and high score of UK present a

collectivist and individualist society respectively in these two countries and may affectin the

commitment to organization and that may reflect on the performance.

Another dimension draws the concern in national culture of these two countries and

that is uncertainty avoidance. In this dimension Bangladesh scores almost double of UK score

and that may diverse two countries society about the view on future- in case of Bangladesh it

is more likely to unknown than to be perceived in UK. And that may have cause to influence

in employees’ overall gain and activity regarding the performance of organization.

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UK Context

One of the key task for organization is the effective management of human resources.

This present challenge are going to be faced by both organization and nation of UK to compete

the world market and for searching the incensement of productivity by encouraging the

spreading of high performance.

The research of Guest et al(2003)gives a view of the relation between human resources

management(HRM) and the performance of corporate body in the business environmentof UK

firms. This study features in the comparison of various business objective as well as subjective

measures.

Guest et al (2003) suggest that since there is an association between the greater

utilization of human resource practices and some measures of corporate performance but there

is not much convincing evidence that the use of HR practices is associated with a change in

organizational performance.

This study shows that thereis reason based on the estimates of overall productivity and

organization financial performance and of a positive relation between proper use of HR

practices and the better performance but in contrary view to the other measures of objectivity

the association is more with productivity than with organization’s financial performance.

In the study of Guest et al(2003) it was examined to investigate the relationship between

HRM and organizational performance for a limited sample of UK organizations working in

manufacturing and service sector. The outcomes are very mixed and the balance goes down to

the negativity.

The test of association reflects that there is a positive relationin the use of more HR

practices and it gives lower turnover with higher profit but it doesn’t show relation between

HR and firm’s productivity. And the investigationin relation between the uses of more HR

practices gives a resultof change in performance that reflectsnon-significant in UK.

In another research conducted by Storey (2004)it has been shown that in case of

providing formal training to the employees and managers, small organizations are much less

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likely than large organizations. In comparison with five OECD country USA, Germany, Japan

Canada and Finland with UK the relation between management training of small firm is

ambiguous.

According Storey (2004), when the views of trainees are remarked, at that time public

programmes are appeared as well received. But econometric method relating training

participation on small firm performance shows week result. It means that little output of formal

management training is informed decision on small firm’s managers. It implies that the

increasing of formal small firm training for broadening awareness to the benefits of training is

misguided and that may not be denied.

In the comparative view with five OECD countries and UK it is observed that formal

management programs of small firms are found in all countries but the result depends upon the

public domain (Storey 2004).

Bangladesh Context

HRM practices are mainly related for developing and allocating human capital with a

view to providing good environment and more benefits to achieve long term output fora firm

(Bogdanova et al 2008). Many research were done(Price 2004; Syed & Yah 2012; Javed et al

2012 and Igbal, Malik &Ghafoor 2013) on the reflect of HRM practices for job satisfaction of

employees in the ground of developing as well as developed countries and only a few of those

research investigated on the relative sectors of Bangladesh regarding training and performance

and an example taken here from the banking sector. Similarly with the most of former research

on employees’ job satisfaction, this very research also brings the notable relation between

employees’ job satisfaction and firm’s HRM practices.

There are six practice of HRM as follows that training and development, recruitment

and selection, salary and benefits, and reward are the prominent indicators that affects

employees’ job satisfaction and in broad perspective it impacts on the organizational

performance in the banking sector of Bangladesh. But the security of job andthe role of

supervision did not impact on job satisfaction. With this view it was argued that the banking

sector of Bangladesh should provide essential financial allocation to influence on practices of

job security and role of supervision.

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In the research of Javed et al (2012) done over the public bank of Pakistan shows that

recognition to employees and providing training are more significant than reward, though the

measure was to search the significance of reward, training and recognition.

Another investigation by Mojumder (2012) reflects very significantly on HRM

practices along with job satisfaction of employees’ in Bangladesh private banking sectors. And

the result was that the major number of employees were not satisfied with the package of

compensation following career growth,training and development, rewarding and employee

motivation, jobdesign, responsibility and organizational procedure.

In an another study on job satisfaction by Jeet&Sayeeduzzafar(2014 cited by Ahmed

2015) among the Indian Private Bank Employees shows that training, team work, performance

appraisal as well as financial benefit have important influence on the satisfaction of job but

participation does not givereliable evidence on job satisfaction among the employees.

On other study of Abser et al (2012) regarding result of HR practices on job satisfaction

in Bangladeshi context it was found that HR practices have very significant relation with job

satisfaction. Moreover training and development, human resource planning have positive

impact on job satisfaction. It is observed that training and development has the greatest

significance on job satisfaction.

Comparative Analysis

In this review of literature the mainconcern was to find the relation of employer

provided trainingand organizational performance in two country- Bangladesh and UK

analysing the valuable observation from the study conducted in related field. Training is very

important and perhaps the most significant part of human resource management which is dealt

by the organization in different ways at various time, place and manner.

The study of Guest et al (2003) and Storey (2004) in UK and the study of Ahmed (2015)

and Abser et al (2012)in Bangladesh present some inner view on these two countries and those

study give us an insight view for reviewing the difference and similarity though there might be

some difference in sample selection and research objective.

Observing theideas related to the employer provided training and organizational

performance it is remarked that training enhances the satisfaction of job among the employees

and casually it reflectsupon the overall performance of a firm. Inthe sense of human capital

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theory it also can be assumed that training bring a development in intellectual capital, social

capital and organizational capital of an organization that may add some value in individual and

organizational performance.

The cultural theory indicates some difference between the UK and Bangladesh

respectively of Europe and Asia as well as developed and developing nation. That may be the

reason behind that in UK along with some OECD countries training impacts very few positive

image on organizational performance. But in case of Bangladesh training almost give some

sorts of job satisfaction among the employees and that may reflect positively in organizational

performance.

Conclusion

In the concluding part it may be discussed with the question is that- why the employer

provided training is not bringing expected level of positive impact especially in UK. The reason

behind it, that may be the society is individualistic, people enjoy the social right almost equally,

they may not feel that they will work in a same organization for life long, and they may not be

worried about tomorrow for their job security. Employees may run for self-acceleration and

gain as result the affection to the organization may not create and long term bondage.

Moreover the unemployment rate is not as much as the Asian region. So they know that

the versatile experience in numerous organization may secure their opportunity to get other

jobs in future. And that may let them tobe a bit reluctant to the future commitment and

engagement to the organization they serve in present days.

On the other hand the firms may also know that very few employees will be working

for a long period in the same organization and that’s why there may not be strong reason to

train the employees for future. Therefore it may not bring so much expected benefit to the

organization inspite of offering or conducting employer provided training to the employees of

an organization.

Now it comes to the matter of Bangladesh that why employer provided trading usually

bring some expected positive colour in an organizational performance. With the above study it

is observed that Bangladesh lies in the developing region of South Asia along with India and

Pakistan. Here the unemployment rate is higher than the UK. That may be a vital reason in case

of employeeperspective.As a result the employees may try their best to keep themselves up to

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date with employer provided training and other sorts of intellectual capital enrichment. They

may not wish to lose their job in a competitive job market.

The culture is collective so they may get the reflection of their personal development

in the development of organization. They may try to avoid the uncertain feature to keep them

stable in a job doing for long time customizing their position through self-development of

training and other related procedure. In this society there is observed power distance that may

define inequality between the several hierarchallevels of organization.

On the other hand the organization in this developing countries may give importance to

create human capital to sustain in a challenging environment where there are some

opportunities for new investment and growing of new firm as because of the demand of

developing market. And this nature may also be observed in cases of India and Pakistan as it

is observed in studies. Therefore it is assumed that in Bangladesh the employer provided

training may have positive reasons for better performance of organization.

This study might have some limitation in selecting case study and reference between

UK and Bangladesh as the sectors are bit different and that gives a scope toinvestigate to dig

into dip for more evidential analysis on employer provide training and organizational

performance.After all these two countries of eight thousand kilometre distance stand on

different socio-politico-economical and anthropological background,lying on the coast of

Indian and Atlantic ocean and their difference in man, mind and society is inevitable.

Recommendation

Form the above study it is observed that employer provided training may not so

positively impact uponthe performance of employees as well as organization. And this view

comes out from the studies referred in this literature. Therefore it may be recommended in case

of UK firm that the firm should give importance in employees’ individual demand such as

financial other social benefits.

On the other hand in case of Bangladesh since it is observed that employer provided

training reflects positively upon the performance of employees as well as organization.

Therefore here on the part of Bangladesh it may be recommended that firms should pay

attention upon the development of employees providing the training and other related

advantages.

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