Other Training

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Part 6

• Other Training Development Issues and
  Organizational Effectiveness Measures

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Career Development

• The central question at the beginning of the
  twenty-first century is what does the career
  mean?
• Until about 1990 careers were well-defined
  progression up the ladder of technology and/or
  management until one retired.
• However, starting with the massive layoffs of the
  last decade (and even restructuring economy in
  the former Eastern Block countries) the
  psychological contract between worker and has
  been shattered.
• Because the pace of competition, technology and
  market change is so rapid and unpredictable that
  no one can afford to offer lifetime employment.

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New Ideas on Career

• This raises the question of what the deal will be
  between companies and employees in the future.
• There are a number of hypotheses about this. Some
  of them perceives the individual as a portfolio
  of marketable securities. A person can trade
  those securities (i.e. skills and knowledge) for
  money, position or whatever.
• If that is the case, the individual begins to see
  herself or himself as something to be actively
  traded, to be lent to the company where the best
  return on personal investment can be found.
• That is obviously a new kind of career model.

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New Look of Career Development

• Traditionally, employee development was
  approached from the viewpoint of the job
  (organization) and from the viewpoint of the
  employee.
• We tried to fit people to job or vice versa. Each
  rationale had its purpose and value.
• But in the last decade, career development has
  been presented with a new challenge. As
  organizations reduced the number of levels and
  moved toward cross-functional and self-directed
  work teams, the question became What do we
  prepare people for?
• The predictable, fixed job hierarchy has all but
  disappeared. Therefore, it is logical to assume,
  that we need new methods or at least new thinking
  regarding what is career and how to develop
  people.

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Issues of Long-Term Career

• There are three issues for people to consider if
  they are interested in a long-term career.
• The first is the need to understand the business
  processes and organization. In all businesses
  there are processes by which inputs come into the
  organization, are employed in the value-adding
  stage and leave the organization the bound for
  the customer. Employees need to learn how to
  apply themselves in this endeavor.
• The second developmental requirement is
  interpersonal skills. As organizations require
  flexibility and move toward team processes, the
  ability to interact with others becomes critical.
• The third issue focuses on analytic capability.
  We are literally drowning in data, yet most of
  the data are wasted because we have not been
  trained to understand them.

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Career Development Measures

• One way to measure career development is to view
  the job-posting system as a career development
  activity. As organizations flatten, lateral
  movement and building a broad range of
  experiences and skills are one of the best career
  moves a person can make.
• As we saw, the job-posting process works the way
  staffing does - we produce applicants and make
  placements. There are three measures we can
  produce, two of which we already know
• the volume of applicants and placements
  handled each month,
• cost per placement measures.

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Career Development Measures

• The third and probably most important issue is
  retention. Applying self-placed (e-)learning,
  job-posting, and other developmental experiences
  will improve the organizations ability to retain
  the talent it most needs and wants.
• When a person is placed through the internal
  system, he/she should be talked about how the
  organization sees this move as a good career
  step.
• One thing we learned from exit interviews is that
  people leave organizations where there is
  abundant opportunity simply because no one has
  talked to them about their careers.
• Personal attention is one of the most effective
  methods for generating loyalty.

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Transformation of Organization Learning to
Knowledge Management

• Today organizational learning encompasses all
  forms of knowledge and skill acquisition. This is
  why knowledge and learning are colliding.
• With technological advancement and organizational
  change coming at a revolutionary speed, people
  need all the tools they can get to keep up.
• As a result, formal classroom training has been
  augmented with many forms of distance learning
  and experimental opportunities.

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Transformation of Organization Learning to
Knowledge Management

• The growth in project teams has made it apparent,
  that a great deal of valuable knowledge is gained
  in the process of working.
• Without a method for capturing it and pushing it
  out to see who can or should use it, we are
  missing a great opportunity to build a
  competitive edge.

the only thing that gives an organization a
competitive edge the only thing that is
sustainable is what it knows, how it uses what
it knows, and how fast it can know something
new. Lawrence Prusak, EY
the one sure source of competitive advantage is
knowledge successful companies are those that
consistently create new knowledge, disseminate it
widely throughout the organization, and quickly
embody it in new technologies and
products. Ikujiro Nonaka, Harvard Business Review
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Culture and Knowledge

• The basis for any knowledge management (KM) and
  organizational learning program is corporate
  culture. Most organizations need to develop a new
  culture, that is driven by trust and sharing.
• The first requisite for leveraging instruments in
  training and development is a culture that
  promotes and reinforces the sharing of
  information.
• The commitment to this type of culture goes
  beyond writing new policies and procedures. It is
  a signal, that management is serious about
  getting everyone at all levels and across all
  functions to work in new ways.
• To sustain knowledge management it is imperative
  that there is a demonstrable connection between
  the investment and the financial return.

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The Foundations of KM

• KM can be broken into four steps identified by
  the acronym CODE which stands for
• Collect information
• Organize it
• Disseminate it
• Evaluate its utility
• Well designed systems provide better access to
  content. This reduces query time and increases
  the accuracy of the output. It allows the
  companies to find the right person quickly.
• Information turns to knowledge as a human being
  acquires it, applies her/his experience base to
  it, and has the insight to see broad and new uses
  for it.

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Knowledge Management Practices

• Surveys of successful KM programs show that
  communities of practice are the most effective
  learning process. They yield four types of
  improvements
• Cost reduction by reducing time away from work to
  learn
• Improved quality through finding errors earlier
  in the process
• Reduced risk and uncertainty by focusing
  investment in activities with a higher
  probability of success
• Improved technology transfer by sharing insights
  within the community on how to do something and
  thus cutting time to learn on ones own.

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Value of KM Example

• Siemens The global network of knowledge of more
  than 430.000 employees for the success of our
  customers.
• Dr. Heinrich von Pierer, president, CEO
• Hypothesis for cost saving of knowledge
  management system (modest scenario)
• Assumed cost per hour EUR 50
• Number of urgent requests 7,200
• Rate of Reaction 95
• Cost saved by quicker reaction
• for urgent requests EUR 2.647 M

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Value of KM Example
Reaction to urgent requests
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KM Stages and Evaluation

• 1. Vision
• Someone decides that KM is necessary and
  beneficial. This is the selling stage, in which
  others must be recruited to share the vision.
• The selling point can be current problems and/or
  future opportunities. The objective is to
  convince others that there can be improvements in
  productivity, quality and service.
• Benchmarking within the industry and the region
  can be an effective tool for making the the case.
• The only measure at this point is whether others
  can be recruited to the cause.

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KM Stages and Evaluation

• 2. Strategy
• At this point the process for turning the vision
  into reality takes place.
• We may foster the process by offering people an
  opportunity to come together around a common
  interest (communities).
• If the community is open and free of bureaucratic
  rules, people want to cooperate. From the
  community we can begin spreading information
  through electronic means of communication that
  require only little extra funding (chat rooms,
  e-mail, etc.)
• These efforts are usually evaluated in anecdotal
  stories. The most common quantitative outcomes
  are cost reduction, time saved or error
  elimination.

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KM Stages and Evaluation

• 3. Expansion
• Based on first limited successes, the effort can
  be expanded to include larger-scale projects.
• At this stage, funding is essential. This is a
  test of managements commitment.
• Typically the results of this larger-scale
  initiatives take longer to appeal. When they do,
  data can be compared to previous internal
  performance levels as well as to external
  benchmarks.
• At this point it is necessary to show
  quantitative returns on investment. Clear
  reductions in cost, improvements in customer
  retention, increased sales and so on are
  essential metrics.

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KM Stages and Evaluation

• 4. Institutionalization
• At this point the culture must support sharing.
  If it does not, the project will not survive. It
  will be viewed by employees as another management
  fad. Here top management must be visible in its
  support.
• As the system matures, measures of knowledge
  management can be incorporated into managers
  performance evaluation.
• Measures are now definitely quantitative.
  Financial benefits have been proved in the third
  stage. At this step climate assessment is
  appropriate What do employees think of the
  emerging new culture?
• We can develop a balanced scorecard approach
  that would be composed of a small number of
  qualitative and quantitative measures (example).

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Intellectual Capital Capacity

• Learning (hours of training per headcount)
• Percent of staff in company sponsored education
• Invested money per headcount in TD
• Knowledge Containment Rate (percent of key staff
  with more than X years in position)
• Organizational Capacity (average number of years
  of education per employee)
• Diversity (percent of exempt positions held by
  members of affected classes)

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KM Process Metrics

• Innovation
• percent of revenue from new products
• RD expenditures as percent of sales
• Drag
• Span of control (employees per supervisor)
• Cost to supervise
• Number of employee self-services on Intranet
• Team Effectiveness
• Percent of team projects that achieve their goals

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KM Macro Metrics (Organizational Effectiveness
Measures)

• Human Capital Revenue Factor (HCRF)
• Total organizational revenue per FTEs
• Human Economic Value Added (HEVA)
• (Net operating profit after tax - cost of
  capital) / FTEs
• Human Capital Cost Factor (HCCF)
• Pay Benefits Cost of Contingent labor Cost
  of Absence Cost of Turnover
• Human Capital Value Added (HCVA)
• Revenue - (Expenses - Pay and Benefits) per FTEs
• Human Capital Return on Investment (HCROI)
• Revenue - (Expenses - Pay and Benefits) per Pay
  and Benefits
• Human Capital Market Value (HCMV)
• (Market value - Book value) per FTEs

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Thank you !
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C o f f e e b r e a k