This paper will discuss training and development of employees and focus on soft skills. This will compare the literature with case studies and conclude on the benefits of training in organisations.
Skills of employees are broken down into two main headings, hard (technical) that allow them to perform the tasks that make up the role, and soft skills that encourage interactions, with colleagues, peers and customers. This paper has concluded that both skills need to be present to gain the most from the customer relationship, although soft skills will increase the benefit of hard skills, they allow the communication of technical skills.
Soft skills are the interaction between individuals, which includes communication and empowerment, autonomy and decision making. Soft skills are discussed as the last competitive edge organisations can posses, that add value. This skills are difficult to assess, many are already present in employees, but not nurtured.
The theorist during the early 1990’s discussed soft skills from a management perspective; it was discussed as the hidden value (or skill) that organisations could offer. This perspective has now changed, to one of marketing theory, discussed in areas such as relationship marketing and customer value.
This is opinion by marketers is that by encouraging soft skills in employees it will add value to the product. Marketing theory discusses that customer loyalty can offer the organisation repeat business; this is valuable as it utilises economies of scale, lowering marketing and production costs. This is a cost effective method to maintain and increase business, leading to a higher level of revenue, but it requires the organisation understanding what the customer requires from this relationship.
The question raised at this point, is should customer loyalty be taken for granted, or can it be effected by actions from the organisation, therefore should it have resources ploughed into it. Can employees be trained to meet the needs of the customer? Can organisations build on this through skill utilisation of the human resource, can training affect the relationship, and will lack of training have a negative affect on this. The skills that are needed are classified as soft, in contrast to the hard technical skills that are required for job performance.
At first the area researched was the customer’s opinion of their loyalty, why they made repeat purchases and what actually influenced their decisions. This area proved subjective, they enjoyed the experience of purchasing, and often attributed to the organisations representative.
It then followed to look at the skills of organisations in further depth, studying the skills of their representatives, and how the training and developing of soft skills could add to this relationship.
Literature states that the evaluation of training is neglected, although it must be noted that there is no universal method that can be employed. Evaluation of training is a subjective area, with various factors that impinge on the successful transfer of new skills.
Numerous organisations were contacted, but the response level was low, therefore it was decided to review soft skills within three organisations, as an interaction with both colleagues and ultimately customers. The three organisations that were chosen are all in different industry sections and in different stages of the life cycle.
The first organisation agreed to the research, but then became reluctant to disclosure further information. The organisations felt that the economic position they were in would not be helped by a report written into the possible causes, although, it was stressed this was not the purpose of the paper. It was agreed to keep the organisation anonymous, but meant that their accounts could not be discussed in relation to training.
To maintain neutrality throughout the paper all three organisations would study in the same method. This focussed the paper on utilisation of soft skills, the amount of training invested in them and the ultimate benefit to the organisation.
The paper concludes individually on all three organisations. Assessing their levels of commitment to skills training, the value they place in this, and the culture that encourages the transfer of skills. The main conclusions are drawn from this section.
3.0 Aims and objectives
The aim of this paper is to study the value of soft skills training in terms of attracting repeat customers and increasing company profits. This aim is wide, to allow for other discussion which after reviewing the literature review and case studies, will appear relevant to the paper.
The first objective is to determine the extent to which training can improve the soft skills of employees that are customer facing, combining this with practical experience. In terms of being combined with experience, it may be useful to study whether training before extensive experience of dealing with customers is more effective than training employees who already have significant experience. Do employees get stuck in their ways and find it harder to change. Although it must be noted that the organisational structure and culture will have a direct affect on level of transfer of new skills.
The second objective will be to determine to what extent employee and managerial soft skills can influence the tendency of customers to become repeat, and potentially loyal, customers. Again, soft skills will only be one potential factor influencing customer choices, and it will be necessary to attempt to determine the impacts of the other aspects of the marketing mix: price, promotion, place and product. It is hypothesized that there will be certain combinations of the various aspects that will have the desired effect; however this may vary according to customer demographics.
The third objective will be to determine the extent to which soft skills can be converted to company profits, as a result of gaining more customers, and repeat customers, and how this is affected by company training policies and expenditure. In other words, the data will be used to attempt to discover if expenditure on soft skills training actually produces significant rewards for a company.
It will be necessary to study several organisations who have invested in soft skills training programs, and attempt to determine the perceived improvement in the soft skills of their employees. This should also be compare against an organisation that have not invested in soft skill training, to contrast the skills of the employees.
The areas that will be examined will involve the structure, culture, leadership and training programmes within the organisations. These findings will be compared to the literature review and a marketing database Factiva to determine the importance customers place on the soft skills of company employees. Surveys of customers were considered; however they may produce even more distorted results, as many customers are unsure of their personal reasons why they make repeat purchases.
The surveying of organisations will determine their expenditure on training, both in time and capital, and focus on soft skills. This should be discussed with the value they place on the customer and the level of repeat business they expect.
This chapter discusses the research methods used for the project and the justification for the choice of methods. It discusses methods that were not used, with justification of why they were not included. Included is a critique of methods selected, and with hindsight identifies any changes that would have enhanced the research.
This paper evaluates customer loyalty that is demonstrated through repeat business. Can organizations influence the level by training their employees in soft skills? Selection of the topic was stimulated and formed the identification of customer loyalty perhaps being the last competitive edge that organisations can offer. The nature of the research was discussed with colleagues and fellow students this not only added practical ideas and suggestions, it opened new avenues of thought. This was the discussed with lecturers sounding out ideas, gauging opinions and clarifying the question. Focusing in on the question was obtained by employing relevance trees, narrowing the research area. This gave direction to the research, although with reviewing the literature this changed several times (Buzan, J. 1995).
Next, a research proposal was compiled, with the benefit of organising ideas and setting a time-scale for research. Theoretically, the proposal would highlight any difficulties with the research question and access to data. Creating a time-scale would focus on targets and meet deadlines in the completion of the paper. This time scale proved invaluable when new avenues were investigated, it helped focus on where the project should be.
The literature review, discussing theories and ideas that exist on the topic formed the foundation of the paper. The findings from the research are then tested on theories for validity (Saunders, M. et al 1997). The literature review was challenging, there is a great deal of academic research on training, but very little on the topic area. Journals and books were the back bone for the review, both in marketing and management theory.
Tertiary data sources, such as library catalogues and indexes were used to scan for secondary data. This produced journals and newspaper articles, books and Internet addresses. With the amount of literature, it took time to sort out relevant material to the research. Narrowing down the search Bell’s (1993) six point’s parameters was applied. Applying key words that were identified in the first search produced relevant and up-to-date material (Bell, J.1993). A limitation on the literature search was the amount of time to read all articles and books on the subject. Whilst reviewing the literature references to other publications were followed and reviewed. Bells checklist on identifying the relevance of literature found was a practical method to reduce the amount of reading (Bell, J. 1993).
Ethical considerations in research fall into three categories, during design, collection, and reporting of the data. These areas were carefully considered at all stages of the research (Oppenheim, A.1996:84). The data sought throughout the research should remain within the scope of the project (Saunders, M. et al 1997). Participants were instructed on the purpose of the paper and how their input would be used. The person privacy must not be evaded during interviewing Oppenheim (1996) referred to this saying “respecting the respondents right to privacy, as the right to refuse to answer certain or all questions” (Oppenheim 1996:84). By participating in the research, no harm should fall on the participant. Consent must be obtained from both the organisation and individuals before commencement of research. The data sought throughout the research should remain within the scope of the project (Saunders et al 1997).
Questionnaires were selected to obtain the overall picture of soft skills from employees and there relevance to customer retention. Before the questionnaires were distributed a letter was delivered given to all employees explaining the purpose of the research, and how the information was to be used. The letter contained a contact number for the researcher, and gave a guarantee of anonymity of the information. An advantage of communicating to respondents before the questionnaire was that it increased the response rate, and addressed ethical concerns (Saunders et al 1997). Fellow students were used to pilot the questionnaires; to test the information gained from the questions and the time take to complete it. From this, adjustments were made on the wording, removing technical jargon (Bell 1993). Closed questions maintained the anonymity of the participants, but had the disadvantage of limiting the data that could be collected, therefore a mixture was used. A copy of the questionnaire is in appendix four.
Processing the data from the questionnaires was achieved using a spreadsheet programme; variables were coded and entered into the computer. This information was quantitative and proved easy to evaluate. Other methods of research gave qualitative data; this was evaluated using key words, and summarising the script to show trends, although some subjectivity will always remain (Cresswell 1994). Classifying the data into categories before it was analysed, putting it in groups of similar responses, allowed the data to be workable, then conclusion were drawn (Saunders et al 1997).
Interviews were used on key employees to gain the formal structure, market segment and background of the organisations (Wass & Wells 1994). After the questionnaires, some employees came forward interested in offering themselves for further input to the research. Although helpful, they could show bias; those coming forward could have an axe to grind, using an interview to grind it, therefore this was rejected (Saunders et al 1997).
Case studies of organisations that through varying levels require repeat business to compound and improve their market share have been reviewed and compared to the literature. The case studies discuss the organisations strategy, culture and management style. To produce primary data on customer loyalty proved to be a vast task, taking a lot of time to produce results. Internal and external operations of several organisations would have to be compared to reach any level of validity.
Other methods of data collection were considered and rejected. Focus groups would have offered free flowing information. This could have been facilitated with discussion led by the researcher. The idea was rejected due to the limited resources. The amount of data collected would have taken a long time to analysis, and could have been bias.
It was decided to do case studies on organizations and interview employees. The questionnaire remained anonymous, not only to protect employees, but to allow for the information to flow without recourse. The findings of this will be presented in section seven and in the appendices.
Choosing a multi-method approach for a research strategy allowed several methods for the collection of data. Adding validity of findings and different perspective to the research, each method selected complimented and triangulated the results of another. Questionnaires and interviews triangulate the results from observation (Saunders et al 1997). Each method employed for research has its own advantages and disadvantages’; using a multi-method approach reduces bias and increases validity (Saunders et al 1997).
Multiple regression analysis will be the best method for analysing the data, once potential bias has been identified and removed. Several models will need to be tried, as the relationship may not be simple, and the model that is found to be most accurate would have implications for the analysis of the third objective, as there will potentially be an optimal level of soft skill training, above which the rewards will not match any further increase in expenditure.
Multiple regression will often be the most apt form of analysis, as it will offer information on the explanatory power of certain variables, which will be useful when concluding whether training or experience are most important for soft skill development, the relationship between training and experience, and any potential significance of which of the two is acquired first. Also, for the second objective, multiple regressions can be used for both employees and managers, to determine whether it is the soft skills of employees, or of managers, that have more impact on the number of repeat customers a company receives.
The major limitation of the study lies in its relatively small sample size and the limited coverage. This was mainly attributable to the limited time and other resources available for the study.
5.0 Literature review
This section of the paper is broken down into five sections, which are all relevant. The first section will discuss training and development, followed by the changes in modern organisations, and what is expected of them. The third section will discuss skills and the requirements from them followed by a section of the theory on how to train; if the method selected for training is not appropriate then the end result will disappoint the organisation. The final section will discuss from the marketing aspect the value in attracting repeat business.
5.1 Training and Development
This section will discuss what training and development is the benefits to the organisation and focus of the soft skills.
5.11 What is training and development?
Training can be defined as a planned process to change attitudes, knowledge or skills and behaviour through a range of activities to achieve effective performance. When this training is in the work situation, it develops the employee to satisfy current or future needs of the organisation (Beardwell, I et al 2004).
It is generally accepted that methods of training can usually be separated into two categories: on-the-job, and, off-the-job. On-the-job training is implemented at the trainee’s workplace, while off-the-job training is conducted away from the trainee’s workplace and takes them outside of their work environment (Mullins, L. 2005).
Training can be used as a change agent, to change the culture of an organisation. It is a tool that can improve organisational effectiveness, especially in fiercely competitive markets. All too often organisations that are facing financial problems will cut back the training program, where as they could be used to increase overall performance. The training budget is viewed too often as an expendable, and the first to cut or even go in crises (Rogers 2004).
5.1.2 Why train
Nobody in business would disagree with the cliché that a company is only as good as the people in it. But opinions differ on how that translates into practice, and what it means in terms of the way a firm goes about gathering and developing a world-class staff line-up. With near full employment in the UK, the fight for talent is as ruthless as ever, and getting, hanging on to and developing those people remains the HR issue of the moment.
The principal function of any organisation is to increase the value of the business and therefore enhance the wealth of its Owner(s). This is obtained by efficient use of the limited “resources” available to them (T Blackwood, 1995). Garrick (1998) discussed that HRD is inextricably linked to market economics, that “knowledge is prized in so far as it can generate a market advantage“(Garrick 1998:5). Leading to the assumption that HRD can give the organisation advantage aiding the ability to increase profit.
Therefore using that theory HRD should be viewed as a vital function of all organisations, and not just there to satisfy training issues, a proactive role. Garavan et al (2000) discusses the emergence of strategic HRD practices, which are directly linked to the organisation’s strategies, with profit maximising paramount, HRD is a tool that should be employed to obtain and support this (Garavan et al, 2000).
It is argued that organisations require new skills to survive; the new thinking is based on complexity and chaos theory. Organisations are viewed as self-regulating, emergent, open, whole systems. This contrasts the metaphor of organisations being machines to that of organisations as living systems (Capra 2002 cited in Nixon 2004:58). For organisations to prosper in the future global economy, workplace culture needs to enhance a learning organisation, fluid responses to the ever changing environment. This can only be obtained with proactive HRD policies, disseminating a culture of learning through out the organisation (Nixon 2004).
Since the late 1990s the business environment has drastically changed (Mullins, L. 2005). Chaos theorists have argued that the world of the organisations is “turbulent and chaotic, making it impossible for them to predict the future”. Therefore conventional approaches to strategic decision making are no longer appropriate (Harrison, R. 1997:78). Competition and the pace of change in business require continuous improvement, therefore it means continuous learning. From this demand the market for business education has grown with a proliferation of courses, full- and part-time, ‘open’ and bespoke (Mullins, L. 2005).
Investment in training and development is an issue that provokes varying reactions amongst business managers. The allocation of time and resource is an issue to organisations, therefore there is a tendency to focus towards “on the job” training and learning through experience.
5.1.3 What are Soft Skills
The term that describes this interpersonal dimension of life at work is soft skills. Soft skills are attitudes and behaviours displayed in interactions among individuals that affect the outcomes of such encounters. These differ from hard skills, which are the technical knowledge and abilities required to perform specific job-related tasks more formally stated in job descriptions. In the past, it was felt that managers and employees did not need soft skills as long as they could do their work, but now even positions in hard, task-oriented roles require soft skills as well as technical skills (Muir, C. 2004)
This introduces new challenges on how the organisation responds to the interpersonal evolution, how do you measure the need for soft skills, and how to design programs that address such needs? One theory is to ensure the workforce is a high-performing by (1) the requisite knowledge, skills, and abilities for the organisation to accomplish its current mission and that is (2) appropriately prepared for achieving the vision for the future (Muir, C. 2004)
This position includes working collaboratively with Human Resource and Development partners in staffing and employment, organisation development, diversity, performance management, and total compensation to recruit, develop the capabilities of, and retain desired staff. This is used to create conditions that engage employees in productive, meaningful work. These conditions are a result of designing systems, providing needed resources, and implementing policies that support employees and that develop their skills and knowledge in ways that match the organisations evolving challenges and priorities. Guidance is vital in the training function, throughout the organisation to foster an enterprise-wide view of capability development (Muir, C. 2004)
Soft skills development has been viewed as a fad. This is now viewed as a necessary component in organisational development. These skills it can be argued that these skills are at the very heart of creating capability in employees and leaders. Individuals require the technical skills unique to their role, whether they are craft workers in a maintenance department or payroll specialists in accounting. However, even at the individual employee level it soon becomes apparent that little work gets done in isolation. All employees must be skilled at participating in team projects and affirming others. They must be adept at managing conflict and creating inclusive relationships that improve team performance and launch ideas. Indeed, the soft skills of negotiating solutions are the essential tools of effective contributors everywhere (Muir, C. 2004)
Moreover, those formal leadership roles, it is vital to be proficient in “soft skills”. Thinking systemically and acting strategically is the linchpin of effective leaders, but excellent soft skills are necessary to actually implement the vision and to communicate values, standards, and expectations. Although this is limited where “command-and-control” approach is appropriate. Individuals support what they help create, and “soft skills” are the essential tools for helping them contribute to their full potential (Muir, C. 2004)
While soft skills are apparently essential workplace requirements, they are also it appears that they are lacking. According to Field and Ford (1995) soft skills are like an iceberg, `under the surface’, and although hard to understand, help employees contribute fully to the new, challenging work environment. This makes them liable to subjectivity, difficult to define, observe or measure and open to the influence of work organisation and the social construction of skill in the workplace. Thus, it is the premise of this paper that an organisation’s culture, the predominant management style and the extent of management/employee soft skills will have an influence upon workplace participation (Field, L and Ford, B 1995).
Soft skills are an important factor in the success of decentralised, participatory work environment programs. Soft skills include teamwork, decision making and conceptualisation. Changes to workplace organisational structure require soft skills to foster improved communication and understanding of accountability. The subsequent globalisation of markets, deregulation of various sectors and the pressure to be competitive have all had major implications for the management of organisations and the skills required of the workforce (Connell, J. 1998).
5.2 The changing nature of organisations
Over the past decade organisations are changing, through pressure from the markets and the environment. This has forced change on many, this section will discuss the implications on organisations and how it has forces a change in the skills required from employees. This section will also discuss management sttl and the culture of organisation, and how this impacts on training.
5.2.1 Changing environment
The present challenge facing learning facilitators is how will training continue to be relevant in today’s ever-changing business landscape? Political, economic, social and technological factors are irrevocably changing the way and the nature of commerce. Throughout the UK, the economy is a state of flux, swinging from a traditional manufacturing base to small to medium-sized service based organisations.
The sustained strength of the pound has not helped UK businesses that export products, thereby witnessing the decline of manufacturing. Forward thinking businesses are now recognising that it is through their people that competitive advantage can be achieved.
Best (2001) discussed the “new economy, as a knowledge-based economy without borders, where the race is between companies and locales over how to learn faster and organise more flexibly to take advantage of technology-enabled market opportunities” (Best (2001) cited in DeFillippi, R. 2002). Organisations have changed in the way they operate, shifting from immobile-wired infrastructures to mobile, miniature, and wireless modes of communication, computing, and transacting. Customers now demand 24 hour service, with “any time, any place” solutions of their problems (DeFillippi, R. 2002).
Radical shifts are taking place in management theory; these shifts need to be reflected in the theory of training and development. The move towards a knowledge economy makes these shifts vital to the survival of the organisation. Ideas of training tend to focus on results; typically they are short-term and assume transferable skills. Ideas of personal development may be insufficiently focused on the workplace. Therefore for an organisation to enter the knowledge economy, it is vital for them to review their training and development to a broader aspect (Bryans, P. & Smith, R. 2000).
Increasingly, as the nature of business and organisations change, its’ leaders are recognising that their most valuable assets are their skilled employees and, more significantly, the knowledge, both tacit and explicit, that is possessed by these employees. The “knowledge is power” cliché has never been more accurate than in today’s corporate world. This added value that this can b e seen in products and services is now dependant on knowledge based intangibles (Rogers 2004).
5.2.2 Organisational Structure
There is conclusive evidence that the world of work has changed significantly over the past 20 years. Handy (1989) sees fundamental changes in organisational life reflected in what he refers to as the “shamrock” model with its three groups of workers core, contract and temporary or flexible. Guirdham (1995) says that the nature of work, the nature of organisations and the structure of the workforce have all changed and will continue to change (Handy (1989) and Guirdham (1995) cited in Falconer, S and Pettigrew, M 2003:49)
Reshaping of organizations, re-engineering, restructuring; all these things have led to leaner organizations and the dismissal of a lot of people. Many workplaces have disappeared from the scene, many competences are also disappearing and there is a risk of “destroying ‘uniqueness’ of some cultures as a whole” (Civelli, F 1997:248).
The corpus of knowledge, experiences and abilities, position or job status in an organisation was traditionally also a guarantee of job security. However, these are losing their traditional importance. In the marketplace it is difficult to recognize and get to know the abilities and knowledge of whole populations of young, highly educated people; the marketplace has difficulty in understanding the traditional value of experience (Civelli, F 1997).
The major problem is how the knowledge, experience and capabilities can be actualised. The “product” in a society of more and higher educated people and with more institutionalised training is, paradoxically, a poorer work market. The relationship between people and work is “institutionalised” as a qualification at school and work experience. People learn not only inside the boundaries of “institutions”, but in everyday life situations. Illich, (1971) stated that “most part of things we learn we have learned outside schools” and outside works, factories, offices, banks or training courses (Illich, (1971) cited in Civelli, F 1997:248).
Handy (1994) wrote “… instead of an organization being a castle, a home for life for its defenders, it will be more like a condominium, an association of temporary residents gathered together for their mutual convenience” (Handy, C. (1994) cited in Civelli, F 1997:250).
5.2.3 Management Style and Organisational Culture
The major viewpoint on work organisation this century have focused on increasing worker productivity through various strategies such as scientific management, human relations, the quality of working life and attempts to change organisational cultures. While the culture of organisations has increasingly become the focus of multidisciplinary research, concepts and definitions are as elusive as they are controversial. Arguments tend to polarise between anthropologists and management writers. Anthropologists view culture as the sum of the behaviours, values and attitudes of the group or the organisation, while management writers tend to adopt the view that culture is the product of management strategy and, as such, can affect productivity depending on whether it is weak or strong (Wiener, 1988).
The strong (Deal and Kennedy 1982) and the excellent (Peters and Waterman 1982) culture strategies linked `positive’ culture with increased productivity. These culture strategies functioned for a time as the “new management panacea” amongst American organisations, when faced with losing the competitive edge they looked to Japan for an explanation of the qualities which led to their success. These qualities included transformational leadership style, encouraging the creation of a shared vision and a collective co
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