Introduction

1. Improving Organizational Performance through TrainingRonald L. Jacobs, Ph.D.The Ohio State University6 November 2007

2. Introduction This session describes a case-study in which training was used to help address a common problem in the banking sector, high employee turnover. The session will emphasize the analysis of the performance problem and the evaluation of the training program: structured on-the-job training (S-OJT). Ensuring that training makes a strategic contribution is a continuing challenge. But this goal cannot be achieved without understanding best practices in HRD. By the conclusion of the session, participants should have the knowledge and skills to begin to use the process in their own bank settings.

3. Global Trends Domestic Issues CMFIS Act FTA Global IBs M&As Customer Needs Boundaryless competition Financial liberalization Advances in technology Korean Banking Sector

4. Challenges for HRD Global Competence Core-Value Driven Strategic Alignment Performance Improvement

5. HRD Case Study HNB is a large regional bank in the U.S. The Retail Division has experienced high turnover among its frontline employees. Many of these individuals were the highest performing employees. This situation has hurt profits. As the HRD Manager, the Chairman has asked that you develop a training program to help address this problem. What would you do?

6. Definition . . . Human Resource Development is the process of improving organizational performance and learning through the accomplishments that result from employee development, organization development, and career development programs.

7. OSU Training Management System Conforms with ISO 10015 – Quality of Training 0. Quality Management System 1. Analyze performance problems 2. Define training needs 5. Evaluate training outcomes 6. Monitor and improve 3. Design and plan training 4. Provide for the training

8. 0. Quality Management System • Document the mission and strategic direction of the organization • Document the quality policies and priorities of the organization • Document the training structure, staffing, and responsibilities • Outputs: • Organization strategic plan • Quality policy statement • Description of training structure

9. 1. Analyze Performance Problems • Analyze the current performance of a problem situation, strategic orientation, or change in operational context • Identify the desired performance of a problem situation, strategic orientation, or change in operational context • Identify the causes of the gaps in performance • Identify the most likely training and non-training solutions that might be used to address the gaps in performance Output: • Performance analysis report

10. 2. Define Training Needs • Identify the areas of employee competence related to the performance problem • Identify the sources of information related to the areas of employee competence • Identify any changes in the areas of employee competence based on requirements, technology, or continuous improvement efforts • Identify any changes in employee competence based on legislative, regulatory or external certification requirements • Conduct a job and task analysis • Identify the employees who should receive the training • Define the gaps between the existing and required areas of employee competence • Develop methods for anticipating future competence requirements Outputs: • Job and task analysis report • Needs analysis report

11. 3. Design and Plan the Training Design • Prepare the training objectives based on the areas of competence • Analyze the characteristics of the trainees that might affect training effectiveness • Describe the constraints in the setting that might affect training effectiveness • Describe any policy, regulatory, certification requirements on the training • Select the training strategy, training methods, and training media • Develop the training program: trainer materials, trainee materials, performance guides, rating scales, tests, and all other materials and resources for the training program • Conduct a pilot test of training program Outputs: • Project documentation • Training program • Pilot test plan and results • Recommendations to improve the training design

12. 3. Design and Plan the Training (Cont’d) Plan • Identify the training provider(s), their roles, and expectations • Ensure trainers are qualified to deliver the training • Determine the training schedule, sequence, training location, and resources Outputs: • Description of trainers and the training provider(s) • Contracts or letters of agreement with training provider(s) • Evidence of trainer qualification • Training plan

13. 4. Provide for the Training • Obtain management support for the training • Ensure the availability of resources to carry out the training plan • Ensure that information learned during the training is used back in the work setting • Identify the staff responsible for maintaining and up-dating the training Outputs: • Memos, letters, or other means to communicate management support • Checklist that specifies the training resources • Performance guides • Management follow-up after the training • Staff assignments

15. 5. Evaluate Training Outcomes • Evaluate the impacts of the training: improvements in performance, financial benefits, and use of the learning on the job • Evaluate changes in learning and satisfaction • Evaluate the training design: training strategy, training methods, training media • Evaluate the training plan: training provider(s), schedule, sequence, and resources • Evaluate unanticipated effects: management feedback, stakeholder satisfaction, employee motivation, organizational climate and culture, quality of work life Outputs: • Evaluation plan • Evaluation report

16. 6. Monitor and Improve the Training • Maintain records related to trainees’ outcomes • Maintain records related to organizational impacts • Monitor institutionalization of the training program • Implement improvements to the training program • Implement improvements to the training management system Outputs: • Employee training records • Evaluation reports • Revised training program • Revised training cycle

17. 1. Analyze Performance Problems Desired Performance Need - Two levels of measured performance Problem – A need that has value Current Performance

18. 1. Analyze Performance Problems • What is the current turnover rate? • 2004 • 934/3147 29 percent • 2005 • 775/3098 25 percent • 2006 • 698/3032 23 percent • What are the reasons for the turnover? • Self InitiatedCompany Initiated • Personal reasons Low performance • Better job Attendance • No advancement Dishonesty

19. 1. Analyze Performance Problems • What percentage might be preventable? • Better job • No advancement • 362 individuals or 15 percent • How much does it cost when someone leaves? • Recruit • Select • Basic teller training • One month wages • $4000 total per person • 362 persons x $4000 = $ 1,448,000

20. 1. Analyze Performance Problems • What are the underlying causes of the preventable turnover? • Interview employees • Interview managers/supervisors • Results: Frontline employees felt frustration because: • No clear job instructions • Lack of feedback on their performance • No development plan

21. 1. Analyze Performance Problems: Summary • Current Situation 26 percent average turnover (3 years) • 15 percent is potentially preventable • Preventable turnover occurs more frequently • Cost per turnover is approx. $4000 per • Total cost of turnover is $1,448,000 • Other costs possible • Desired Situation Reduce preventable turnover by 10 percent* • Cause(s) Lack of clear expectations • Lack of job instruction • Lack of performance feedback • Lack of development plan

22. 1. Analyze Performance Problems: Proposed Solutions • Conduct job analysis of frontline employee positions • Develop S-OJT modules on key areas • Certify supervisors on how to deliver S-OJT modules • Develop a blended training program: • “Providing Feedback to Subordinate Employees” • using classroom training to introduce the process and S-OJT (HRD staff) to use the process. • Produce materials to clarify HNB Development Institute

23. Structured On-the-Job Training The planned process of developing competence on units of work by having an experienced employee train a novice employee at the work setting or a location that closely resembles the work setting.

24. Company Employee Level Results

25. 5. Evaluate Training Outcomes How did it affect measures of performance? Do trainees respond to the information? Did trainees learn? Impact Behavior Learning Did trainees like it? Satisfaction

26. 5. Evaluate Training Outcomes • Lack of: • Job expectations • Job instruction • Performance feedback • Development plan Solutions to address the causes of the problem Employee Turnover

27. 5. Evaluate Training Outcomes • Efficiency - Does one approach achieve the outcomes faster, and is the cost less than the value of the outcomes? • Effectiveness - Does one approach result in superior work outcomes, and is the cost less than the value of the work outcomes?

28. 5. Evaluate Training Outcomes Performance value – The financial worth of the work Training Costs – The expenses to design, deliver, and evaluate a program Benefit – The contribution of the training, given an accounting of the costs (Burden, Opportunity)

29. Performance Value • Quality • Accuracy • Class • Novelty • Error rate • Rework • Scrap • Waste Difficult to Calculate • Effect on suppliers • Effect on customers • Lost business • Lost customers • Reputation • Costs • Recruiting, hiring, orienting new staff • Exit interviewer’s time • Terminating an employee • Administration related to termination • Separation pay • Unemployment tax • Vacancy • Replacement • Increased supervision • Quantity • Volume • Rate • Productivity • WIP • Machine down time • Cycle time • Timeliness

30. Training Costs • Work analysis • Training development • Training the trainer • Consultant • Materials, facilities, transportation • Training delivery • Training evaluation • Trainer backfill • Trainee’s time • Performance follow-up

31. Training Efficiency Training Option A Savings in Time Option B Specialist Performance Level Time savings: 4 - 6:1 $ savings: 2 - 8:1 Novice Time to Learn

32. Training Effectiveness Employee learns through unstructured OJT Work Accomplished • Truck windshields installed • Sales calls made • Machinery on-line • Hard disks manufactured Employee learns through S-OJT Measured Performance Fewer reworked windshields Higher sales volume Higher machine productivity Lowered scrap rate

33. Lessons Learned

34. Kam-sa Ham-ni-da! 너무) 감사합니다! Ronald L. Jacobs Professor, Workforce Development and Education Director, Center on Education and Training for Employment The Ohio State University Email: jacobs.3@osu.edu Homepage: http://www.coe.ohio-state.edu/rjacobs/ CETE website: http://cete.org/