Impact of Training and Development on Employee Performance: Azzawiya Oil Refining Company Case Study
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Impact of Training and Development on Employee Performance: Azzawiya Oil Refining Company Case Study
Abstract
The human resource is the most important resource in an organisation. It is the performance of the human resource that determines how an organisation performs. Training and development have been speculated to be the major factors that contribute to improved employee performance. This paper seeks to evaluate the impact of training and development on the performance of employees with the primary consideration being in the oil refining industry. This research uses a cross-sectional research design. This research design was institutionalised and was used a quantitative approach to evaluate the effect of training and development on employee performance. Data collection was done using a questionnaire using Likert’s scale from ninety five employees. Participants of the research were selected using a systematic random sampling method. Selection of participants was limited to employees in Azzawiya Oil Refining Company. Sixty questionnaires from those collected were viable for use. Descriptive statistics and Pearson’s correlations were used in the analysis of the data. The relationships generated through data analysis showed a correlation between employee training and development and their performance. Moreover, the research found out that the design of delivering training affects the effects of training and development on employees. The research also figured out that it was essential for the Azzawiya Oil Refining Company to develop training programs that meet the needs of its employees through consultations.
Acknowledgments
A thesis project as such is not a single person’s work. It is a combination of the contribution of various people in different ways. I would hence like to extend my sincere gratitude to that following people whose help was indispensable in my working on this project.
I would like to be thankful to the Almighty God for his unfathomed goodness in my life and for making it possible for me to undertake this project. His goodness towards me cannot be overemphasised. More so, I would like to thank my dear parents for their support during my studies and this project.
Am most appreciative to my supervisor, WRITE YOUR SUPERVISOR’S NAME HERE PLEASE, whose guidance, priceless criticisms, patience, suggestions and support has been critical to the undertaking of this research. I would also like to thank the management of Azzawiya Oil Refining Company for allowing me to undertake my project in the company. Am humbled by the support and time that this company gave me while undertaking my research despite the busy schedules of the company and its employees. I am most grateful to you all.
Table of Contents
Contents
1.1 The research background. 1
1.2 The research justification. 3
1.6 Methodological approach. 6
2.1.1 Employee performance and the effect of training and development on it 9
2.2 Theories related to research topic. 11
1. Introduction
The business industry has seen tremendous improvement and enhancement in how they carry out their activities. Every organisation seeks to improve its effectiveness in the various aspects it deals with such as service delivery and production. In achieving such effectiveness in an organisation’s activities, various factors need to be present in the best state. Such factors include such as the work environment ergonomics, quality raw materials and state of the art equipment (Degraft-Otoo, 2012, p. xi). However, none of these factors can be able to facilitate the improvement of an organisation’s performance without an effective and efficient human resource (Tahir, Yousafzai, Jan & Hashim, 2014, p. 87).
Performance effectiveness of the employees is often imparted during formal education. However, the formal education only lays a base from which the employee can operate from by utilising the analytical skills and knowledge that they obtain during their studies. According to Asfaw, Argaw and Bayissa (2015, p. 189), the basic skills learnt during formal education are not sufficient to ensure that employees work effectively. Besides, the formal education fails to teach in particular positions in an organisation that an employee holds. Therefore, it is pertinent to ensure that employees are subject to continued training and development in their particular areas of working. This paper seeks to explore the role of training and development in employee’s performance. In assessing the effect of employee training and development, the researcher performs a case study of the Azzawiya Oil Refining Company.
1.1 The research background
Organisations are often devising new ways of outperforming their competitors. This competition has even intensified due to globalisation, the advent and progressive changes in economic, political and technological environments in which business operate (Nassazi, 2013, p. 10). In light of the competitive environment, organisations have devised ways of improving their competitiveness such as through price and product diversity. However, the human resource forms the blood stream of any organisation that determines its performance (Elnaga & Imran, 2013, p. 137).
Degraft-Otoo (2012, p. xi) explains that human resources are very crucial in any organisation. More so, human resources are an expensive resource that requires optimisation of their contribution to sustain their effective and economical performance. As mentioned above, such optimization of human resources can be achieved through training and development. Hafeez and Akbar (2015, p. 51) also account for the critical role of the employee in an organisation. The performance of the employees defines the success of failure of any organisation. Haffex and colleague assert that performing organisations spend more on training as it helps employees to learn information from viable experiences as compared to academic information.
According to Asfaw, Argaw and Bayissa (2015, p. 189), training refers to the process of conveying particular skills to perform specific task(s). On the other hand, development refers to the conscious or unconscious enhancement and growth of abilities and skills. Training and development help in improving the competencies of the employee to ensure their maximum efficiency and effectiveness. Organisations cannot gain benefits by winning the mind and hearts of their employees. In such way, the organisation can let employee identify with the organisation and act on its behalf by winning their loyalty.
1.2 The research justification
Performance can be viewed by the accomplishment of certain goals or the effectiveness while working (Tahir, Yousafzai, Jan & Hashim, 2014, p. 87). Performance is attained at the individual, processing or organisational level and also how these interrelate. The performance of the employees is determined by their skills, knowledge and improved capabilities. Elnaga and Imran (2013, p. 137) account for these factors as being the core determiners of the competitive advantage of an organisation. Developing the necessary skills, desired knowledge and abilities of the employees calls for continued and effective training and development.
Tahir, Yousafzai, Jan and Hashim (2014, p. 87) also accounts for the role of training and development in enabling an organisation to improve its profitability. Training and development also help an organisation to cultivate a culture of positive attitude in its orientation towards profit making. At an individual level, training and development help employees to improve their job knowledge. Employees also have the opportunity to identify themselves with the organisation’s goals. Moreover, Asfaw, Argaw and Bayissa (2015, p. 189) also account for the importance of training and development in experiencing effectiveness and flexibility by the employees in their work. Training and development help employees to feel valued by the organisation.
Previous researches have created a link between employee training and development (Asfaw, Argaw & Bayissa, 2015, p. 195; Degraft-Otoo, 2012, p. xxi; Elnaga & Imran, 2013, p. 144; Hafeez & Akbar, 2015, p. 62). However, such linkage is primarily from a general perspective or the analysis of other industries rather than the oil refining industry. Given the difference in the need for various skills and the extent of their masterly in different industries, it would be crucial to undertake a research of this kind in the oil refining industry.
Training and development are hence of critical importance in ensuring that employees are abreast with the necessary skills, knowledge and have improved capabilities to foster the achievement of an o0rganisation’s goals. They create a platform in which an organisation can invest in employees to ensure that they are equipped to perform efficiently and effectively (Asfaw, Argaw & Bayissa, 2015, p. 189). Considering the above inference, it is critical to note the extent to which training and development have in the oil refining industry. More so, it would be pertinent to understand how different training programmes help in attaining the goals of a refining industry. The research will also provoke further research on the impact of training and development in other industries as well as add to academic knowledge on related to these organisational issues.
However, this research is limited to particular issues of the human resource management. The research only covers areas to do with training and development aspects of the human resource management. Therefore, it does not consider other factors such as team work, working conditions and management that may affect the performance of the employees. Besides, the research is only based on the examination of one company. Inferences made from such an analysis may not apply to other oil refining companies. Therefore, the research may have some biassed inferences if applied to other oil refining company. However, the research will help in inferring the nature of the effects of training and development in the oil refining company.
1.3 Research questions
Training need to be performed in an effective and systematic manner that is pleasing to the employees to ensure that it achieves its goals of imparting the relevant skills. In such a case, training and development improve performance, revenue generation and its competitiveness. Previous researches have
There is need to determine the importance of investing in employee training and development. In particular, it would be pertinent to determine this effect of employee training and development regarding the oil refining industry. Considering these issues and others outlined in the research background, the primary research question would be:
‘Does training and development influence employee’s performance?’
Other questions that need to be addressed include the following:
- What training programmes are used for employee training and development in Azzawiya Oil Refining Company?
- What are the training objectives, methods and do the training programmes achieve them?
- Does training design influence the effect of the training program on the organisational performance?
- Are the employees of Azzawiya Oil Refining Company satisfied with the current training methods?
1.4 Research aim
The aims of the research are:
- To determine training programs that exist in the oil refining industry.
- To determine the objectives of the training programs.
- The methods through which the training objectives are attained.
- The determiners of the training objectives and design.
- How training and development affect employee performance.
1.5 Research objective
The research seeks to identify the effects of training and development on the performance of the employees in Azzawiya Oil Refining Company. Specifically, the objectives of the research include the following:
- To identify the training programs in Azzawiya Oil Refining Company.
- Assessing the training objectives.
- Analysing the methods utilised and how these methods meet the training goals.
- Evaluate and measure the effects of the training on the employee’s performance.
- To analyse whether the employees are satisfied with their current training methods.
1.6 Methodological approach
This research uses a cross-sectional institutionalised research design. A quantitative approach was used while data is collected using a questionnaire. Participants were selected from Azzawiya Oil Refining Company. Participant selection was through a systematic random sampling with a total of sixty interviews being used for inferring the research objectives.
1.7 Summary
Human Resource is the most crucial resource in any organisation. With the increase in global competitiveness, it is pertinent that organisations achieve optimal utilisation of this resource. Previous research has shown an association between training and development and the achievement of optimal use of the human resource. Most previous research has majored on the influence of training and development on the performance of employees from a general perspective or regarding other industries rather than the oil refining industry. This research aims to evaluate the correlation between training and development and employee performance in the oil refining industry. In achieving this evaluation, this research examines the various aspects related to training and development in Azzawiya Oil Refining Company with the aim of determining whether these elements influence employee performance. Another area of importance for the research is the determination of how employees perceive various methods used in the delivery of training and development.
2.1 Introduction
Khan R., Khan F. and Khan M. (2011) explains that the human resource forms the backbone of every organisation. Moreover, the primary resource in an organisation is the human resource. Therefore, organisations need to invest huge amount of money as it will be the ultimate determiner of its performance. Therefore, the human resource should be utilised in the best way possible. One area that is critical in ensuring achievement of effective o=use of the human resource pertains to training and development. As highlighted earlier, training and development create a platform for the optimisation of employee performance (Asfaw, Argaw & Bayissa, 2015, p. 189). The achievement of this optimisation occurs if employees are motivated to steer the accomplishment of the goals and aims of an organisation. Such motivation and alignment towards the organisation’s goals and aims can only be achieved through coaching and support that are offered through training and development.
Training and development are indispensable tools for strategic planning required for organisational and individual performance facilitation (Falola, Osibanjo & Ojo, 2014, p. 162). Organisations are hence investing heavily in training and development. For instance, Obi-Anike and Ekwe (2014, p. 67) infers that organisations in the United States invest approximately $51 billion annually in training employees. In the United States, investment in training and development continues to increase. On the contrary, Canadian investment in the training and development programs continues to decline. Comparing these two countries, Obi-Anike and Ekwe infer that organisations in the United States benefit more from the high investment in training and investment.
2.1.1 Employee training
Training refers to a systematic process that aims at altering the behaviour and attitudes of employees in a manner that favours attainment and development of the organisational goals (Elnaga & Imran, 2013, p. 139; Obi-Anike & Ekwe, 2014, p. 67). Such alteration of the employee behaviour and attitude aims at bridging the gap that exists in the current performance of an organisation with the desired or standard performance (Elnaga & Imran, 2013, p. 139). Training helps employees to develop and sharpen their creativity and thinking ability. Such factors hep them to make better decisions that are more productive to an organisation. Therefore, through training, an organisation can make use of their human resources to gain more competitive advantage.
Khan R., Khan F. and Khan M. (2011) explains that organisations ought to do careful planning of the training design. Administration of training should be in such a way that it meets the needs of the employees. Better training design is critical in attaining excellent results. Khan R. And colleagues observed that the design of the training used affects both the performance of the employee as well as that of the organisation. Another aspect of training and development that is critical is the delivery style used. The trainer ought to delivertraining sessions in a manner that is impressive to the employees. Else, the training program will be a waste of time.
2.1.2 Employee development
Kennedy defines employee development as a process “that strives to build the capacity (of employees) to achieve and sustain a new desired state that benefits the organisation…” (2009, p. 7). Employee development helps them to identify the current environment as well as the prevailing state, team up and design strategies that are effective to improve the performance. Employee development may also be facilitated in the case when management wants to ensure continued development and enhancement of job performance and the existing relationships (Obi-Anike & Ekwe, 2014, p. 68). Therefore, employee development refers to the creation and maintenance of changes in the employee’s abilities and skills.
2.1.1 Employee performance and how training and development influence it
Employee performance can be viewed as how an organisation achieves specific preset tasks that have particular standards of completeness, cost, accuracy and speed (Hafeez & Akbar, 2015, p. 53). Nassazi (2013, p. 28) further states that employee performance can be perceived through profitability, productivity and quality, The management has the responsibility to facilitate the achievement of high-performance levels through the use of standards and goals that determine the performance of the employees. The management hence needs to encourage employees involvement. The management should hence promote and ensure motivation and of the employees. Nassazi further explains that such motivation of the employees is determined by their satisfaction with their jobs.
According to Elnaga and Imran (2013, p. 140), employee performance is a product of employee satisfaction. Poor employee satisfaction results in poor performance. Moreover, employee satisfaction determines the turnover rate in an organisation. The employee turnover rate is low in employees who are satisfied with their work. On the other hand, the turnover rate is high in employees who are not satisfied with their jobs. Employees can only be satisfied with their jobs if they feel to be part of the organisation. Such identification of the employees with their organisations motivates them to steer its operations towards the attainment of its goals and aims.
The benefits of training and development on employee performance cannot be overemphasised. According to Kum, Cowden and Karodia (2014, p. 74), one of the benefits of training and development is the capital improvement. Often, organisation are faced with the need to improve their equipment and plants as a way of improving their performance. As mentioned earlier, the human resource is the primary resource for any organisation. Therefore, it would be prudent to ensure that there is an upgrade in this resource which can be achieved through training and development.
Employees who feel competent with their work have a high-performance level. The competency of the employees can be determined by their morale in doing particular tasks. Training and development improve the morale of the employees by enabling them to learn skills pertinent to their working (Kum, Cowden & Karodia, 2014, p. 74; Tahir, Yousafzai, Jan & Hashim, 2014, p. 89). Training further enables employees to adapt to changes in their working environment. Employees who are more skilled have better ability to adapt to global as well as domestic changes in the market and services and product demands.
On the other hand, employee development is pertinent to helping employees to become better. It is a way of an organisation focusing on the improvement of the employees abilities and skills. Such continued growth of an employee’s abilities and skills creates an opportunity of giving them more responsibilities and have enhanced output that is critical, among other areas, in organisational performance (Kum, Cowden & Karodia, 2014, p. 74).
Kum, Cowden and Karodia (2014, p. 75) further explain that employee development helps in reducing operational costs. As explained above, employee development help in improving their abilities and skills and hence more is expected of them with time. Moreover, improved capacities and skills result in more efficiency in their activities. The net effect of these factors is the reduced operational costs. Employee development is also critical in promoting their loyalty and enhancing their job satisfaction as they perceive it as a way through which an organisation is concerned with their welfare.
Obi-Anike and Ekwe (2014, p. 69) further add that training and development helps an organisation to act more efficiently. Training and development also help organisations to improve and develop new leaders. Obi-Anike and colleague also infer that training and development help to promote innovativeness by eliminating the fear of trying new tasks or ideas by the employees.
2.2 Theories related to research topic
There are various theories formulated to explain the importance of training and development in organisational settings. One of the theories is the social learning theory. According to Falola, Osibanjo and Ojo (2014, p. 163), this theory stipulates that employees obtain new knowledge and skills from other staff members whom they trust and have confidence in. The staff from whom the skills and knowledge are obtained are considered to be more skilled and knowledgeable by others. According to this theory, employees are influenced by their self-efficacy as well as their ability to learn new skills. In such a case, employees can further be influenced by oral persuasion, observation of others, encouragement and logical confirmation.
According to Falola, Osibanjo and Ojo (2014, p. 163), another theory regarding training and development is the reinforcement theory. This theory perceives training as a strategic tool aiming to make working more interesting as well as a platform through which employees improve themselves to achieve optimal performance. Wei and Yazdanifard (2014, p. 11) inferred that reinforcement theory is a toll through which an organisation’s management can decrease or increase an employee’s behaviour. Therefore, there are two types of reinforcement that include positive and negative reinforcement. Positive reinforcement is the best way of motivating employees as they get a reward for better performance.
Training and development can also be viewed from the perspective of resource-based view (Falola, Osibanjo & Ojo, 2014, p. 163). From this point of view, an organisation can improve on its competitive advantage by attracting and also retaining human resources that are competent. Moreover, this perspective of training and development requires an organisation to identify relevant training programs for its employees to improve their capabilities and skills for optimal performance. According to Stiles and Kulvisaechana (2003, p. 4), the resource-based view considers the human resource as the most important resource in an organisation that requires continued development and nurturing in an organisational culture that is supportive to ensure optimal performance.
Asfaw, Argaw and Bayissa (2015, p. 191) use the social identity theory to explain training and development. Social identity refers to a person’s knowledge that they belong to certain social groups as dictated by their emotions and value of significance for the feeling of belonging. Therefore, the social identity theory accounts for the use of social drivers to promote performance in an organisation. The basis for this theory is that how and what people think as members of particular social groups determines their behaviour and attitudes within those social systems.
2.3 Summary
The human resource forms the backbone of any organisation and hence how this resource acts as the ultimate determiner of the performance of an organisation. Many researchers have established a strong link between training and development and improved employee performance. These researchers have argued that training and development help in closing skills gaps that may be causing an organisation not to perform at an optimal level. Such closing of the gaps existing in the skills of the employee is critical to improving competitive advantage. Training and development are beneficial to both an employee as well as the organisation on the general scale.
While delivering training and development programs, it is pertinent to ensure that all the factors related to them are considered. For instance, training design and delivery method have been shown to influence the effect of training and development on employee performance. Various importances of training and development have been established that add up to improved employee performance and hence that of the organisation as an entity. Determination of the nature of the relationship of training and development is hence critical for various industries due to differences in skill requirement.
Various theories have been formulated that offer different perspectives of the relationship between training and development with employee performance. These theories provide different ways of justifying the importance of training and development in organisational settings. Some of the theories include the social identity theory, reinforcement theory, resource-based view and the social learning theory. However, none of these theories can adequately account for the nature of the relationship between training and development and employee performance.
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