2.1 Introduction
This chapter will review various studies that have been conducted using the current case as a reference and apply them to this study. Therefore, this work will involve the following: the study of the theoretical framework, empirical review, and the conceptual framework of the effect of employee training on the performance of an organization will be looked at.
- 2 Theoretical Framework
Numerous theories have been used to study the Training of employees and organizational performance. Important ones are Human capital theory, Resource-Based View (RBV), Social learning theory
2.2.1 Human Capital Theory
Leoni (2023) stated that the formal human capital theory that was developed during the 1960s assumed that education and Training increase labor productivity, thereby raising organizational outcomes. Scholars have backed the idea that employee training is a strategic asset worth exploring for organizations. Emile & Jami (2023) assert that literature showed firms that trained employees reported the following benefits: improved productivity, innovation, and low turnover rates. Nevertheless, this perspective captures and values education according to its tangible financial returns, disregarding the other more significant effects as described by Sen and Galbraith, including one’s character transformation and poverty eradication. Nevertheless, it was established that Training has a positive relationship with organizational performance. Yet, more attention still needs to be paid to identifying the long-term impacts and investigating influences of cultural context that exist to date. These provide future research avenues that encompass these broad dimensions of Training.
Over the past decade, from the early years of the new millennium, education and human capital have emerged as critical factors in contemporary economies. The Training and development of its employees, which is one of the core areas of human capital management, greatly influence organizational performance. Studies suggest that when Training is practical, it impacts efficiency, morale, and creativity in organizational systems. Fleischhauer (2007) has noted that through the implementation of Training for employees, the company gets to enjoy higher productivity along with increased rates of job growth. For instance, potential emerging from the Training can be explained by theoretical frameworks like the Human Capital Theory (Fleischhauer, 2007). Training outcomes are, therefore, moderated by factors like the training design, support within the organization, as well as the employee trainees’ characteristics (Fleischhauer, 2007). Despite these reported benefits, some gaps are apparent concerning the Training of employees: More emphasis on the analysis of training effectiveness has been accorded a long-term perspective on its Impact on employee performance and the organization as a whole.
2.2.2 Resource-Based View
According to RBV theory, inherent resources and capabilities make a significant contribution to performance improvements and sustainable competitive advantages among organizations. RBV sees unique and imitable resources such as skills, organizational culture, and types of activity as valuable sources of differential performance (Madhani, 2020). Training is another way through which firms create these internal resources to nurture and enhance the capabilities that are unique to their firm and are difficult for other competitors to imitate. As stated by Madhani (2020), it was found that there is a substantial potential for targeted training and development programs to transform organizational performance and increase critical competencies through innovation, efficiency, and the ability to adapt to changes, which are all attained through the improvement of employees’ skills and competencies. Madhani (2020) argues that Training suits RBV by enhancing the configurational flexibility of value chain activities so that firms can dynamically reconfigure the value system and consequently maintain sustainable competitive advantage through resource heterogeneity and stickiness. However, it is noteworthy that this kind of Training can only be effective for the outcomes mentioned above if the skills acquired are utilized appropriately within the framework of the firm’s strategic management.
The Resource-Based View (RBV) of the firm was earlier labeled in 1984, stated that the tailored management and possession of ultra-valuable, inimitable, rare, and non-substitutable internal resources, including capabilities, knowledge, and assets can accrue several economic rents and competitive advantages. Conceptual studies regarding the RBV theory and the empirical Research based on the RBV framework clearly indicate that sustained employee training has the potential to improve organizational performance by fostering valuable internal resources. Appropriate Training enhances the abilities of the workers, and these attributes cannot be easily duplicated, which enhances the first and second types of competitive advantages that are sustainable. According to Miller (2019), Research shows that companies that undertake specific and constant Training receive positive changes in productivity, creativity, and responsiveness to market fluctuations. While some scholars have accused the RBV of being tautological or even incomplete, this view has nonetheless pervaded strategic management. It continues to hold significant sway, particularly when accented by more compatible paradigms, notably the KBV and DCV. These integrations emphasize how learning cannot be a one-time process and call for required skills upgrading and renewal that deliver competitive advantage.
2.2.3 Social Learning Theory
Cherry states in 2022 that, Alber Bandura proposed the Social Learning Theory, which states that learning is influenced by observation and modeling and that it combines both cognitive and environmental factors, including attention, motivation, attitude, and feelings. Observing behaviors and the outcomes of these actions witnessed in others lies at the center of this theory. It has implications for the training of employees and business organization operations. According to Cherry (2022), integrated training programs aimed at learning promote the use of elements, including role modeling, feedback, and social interactions as ascribed by the social learning theory. Training strategies that incorporate social learning have better results than the traditional didactic approaches: mentoring, collaborative projects, and other similar exercises that let the trainee actively engage with the content being trained on results in enhanced skills, job performance improvement, and also have a positive effect for the trainee thus increasing their motivation as pointed by Cherry (2022). In a way, organizations promote a positive learning culture with an understanding of the following processes: performance, innovation, and adaptability, which are bound to be optimized, thus achieving improvement and competitive advantage in the marketplace.
2.3 Empirical Review
2.3.3 Effects of technical skills Training on employee productivity and operational efficiency
Evidence from the literature supports the argument that the management of training programs has a positive impact on the performance of employees within organizations by increasing their output, proficiency, and motivation levels. The study by Olasanmi et al. (2021), alongside the work of Abebe (2018), reveals that Training should encompass the creation of adequate training programs that would enable the employee to reach and overcome scores determined beforehand, resulting in increased productivity. For example, companies that provide personnel with training and development experience have higher ROI and talent management effectiveness, according to Haymanot (2019) and Helal (2022). Skills and confidence in core job areas are essential to reduce possible errors or carelessness, enhance the level of job satisfaction, and improve performance (Mualuko et al., 2023). Nevertheless, Training can face the following obstacles: ineffective training methods, irregular programs, and insufficient funding and support from the management level. Unqualified trainers in Cambodia, for example, have been observed to adversely affect productivity, while Nigerian organizations have blamed their lack of funding as well as their inability to deliver programs as some of the issues that have been experiencing (Okeke et al., 2019). Mualuko et al. (2023) raise insights that in Ghana and Kenya specifically, inadequate managerial support and resistance to Training make it harder to enhance employee performance. Therefore, Training plays a vital role in increasing productivity, but only when it is done through high-quality, well-delivered training programs supported by practical training programs.
The existing literature affirms the significance of training employees in regard to performance in organizations, with chief noted areas being productivity and satisfaction. According to Eneh et al. (2015), Training is described as the process through which requisite skills needed for achieving organizational goals and objectives are imparted to the workforce and state. Training plays a primary function in identifying the existing performance gap and how to close that gap. A review of the success of Training, general or professional or straightforward Training for the targeted job, characterizing improved efficiency of the trains as well as reduced mistakes. Eneh et al. ( 2015) pointed out that Research carried out in Nigerian organizations reveals that Following training structures in organizations is effective in helping to train the workers, improve the workers’ productivity, and increase their organizational commitment. However, the success of training programs depends on the needs of the organization and the opportunities for the utilization of newly acquired skills. While adequate training methods, qualified trainers, and management support are undoubtedly beneficial and can improve the organization’s performance – both in terms of efficiency and productivity – and as demonstrated in various organizations, their opposite can present adverse effects, such as inefficiencies. Therefore, for the purpose of achieving the organizational goals and objectives as well as retaining competitive advantage, it is essential to train and develop human resources and do it well and continuously as it ensures the competencies or employees to acknowledge technological increases as well as organizational requirements and thus element the job satisfaction and performance.
2.2.3 Impact of soft skills Training on employee satisfaction and organizational culture.
Various academics have supported the fact that employee training is an essential factor in the achievement of improved organizational performance through the motivation of employees and the improvement of soft skills and job satisfaction. According to Akla & Indradewa (2022), Training is rendered as the practical acquisition of the required competencies that enable staff personnel to attain organizational objectives. Research has also found that when Training is correctly formatted in a manner that favors its absorption, productivity is enhanced. Errors are reduced, which in the long run enhances job performance—Ibrahim et al. (2017) asserted that Training that targets soft skills, including personal traits, interpersonal skills, and problem-solving skills, is helpful in raising the level of organizational commitment and performance among employees. As per the scientific literature reported by Khan et al., 2020; and Rehman et al., 2020). The findings further also established that common precursors of creativity and performance, such as motivation and job satisfaction, enormously enhance organizational commitment and, thereby, organizational performance, as confirmed by Khan et al. 2020 Rehman et al. 2020. According to Nadeak & Naibaho (2020), Research conducted within Hotel Mandiri proves that the effectiveness of training programs delivered to soft skills, motivation, or job satisfaction directly impacted both organizational commitment and improved employee performance. However, the efficacy of this Training has been seen to depend on the needs of the organization as well as the availability of opportunities to use the acquired skills. So, it can be concluded that practical but, more importantly, continuous Training is crucial for an organization in the pursuit of its objectives and to reduce the competitive threat that it faces.
A more general finding has also been established from the literature that has identified employee training as having a strong influence on organizational performance levels, especially in the hotel industry. Iaeme (2021) posited that there is a centrality of the Training, which is practical human relation skills, personal and interpersonal skills, teamwork, collaboration, flexibility, work stressors, and work ethics, as subsequent to these technical and soft competencies promote the desirable employee performance, resultant gratifying guests’ satisfaction, and organizational performance. Based on this, Iaeme’s (2021) findings have indicated that comprehensive Training on these aspects was beneficial to the employees in the hotels, including front desk, housekeeping, and management, highlighting that the more the staff were trained, the better their ability and thus performance in their job and the outcome of the guest service (Iaeme, 2021). Research that has been carried out in the hotel environment, for instance, showed that increasing the focus on top of the training and development programs in the provision of hotel human resources can spearhead a boost in the performance of the hotel employees and, therefore, a boost in service delivery as well as customer satisfaction (Al-Sabi et al., 2023). These findings emphasize the need to develop a corporate culture where the commitment towards employee training and development is a crucial guiding principle in any organization in the hospitality industry in the pursuit of its goals.
2.2.3 Impacts of employee training on career advancement and organizational growth.
Research has also revealed that Training influences the career mobility of workers and organizational development. The use of technology has been widely embraced in today’s society, as noted by Walters & Rodriguez (2017). While Training refers to the process of upgrading skills to meet the current organizational requirements, development refers to the process of awakening and nurturing skills to meet future organizational needs and prepare for the next higher rank in a particular organization. , as stated by Chellappa (2023), this kind of Training leads to increased personal and organizational productivity, organizational commitment, and internal mobility for better succession planning, which is crucial for the success of any organization in the long run. According to Driver Software (2024), Career development overlays the match between current skills and acquiring or maintaining employment progressively requiring anticipated skills. Hence, it is the process that is responsible for matching the goals of the employees with those of the organizations. At the same time, the dual emphasis on the present and future competence of employees results in capable and motivated personnel, which is vital for organizational growth. Further, because the prerequisites of such targeted Training and development reformulation build up a specific expectation of career advancement in an organizational setting, employees are likely to become more devoted to the organization, contributing to lower turnover and more organizational stability. Consequently, Training and development play a significant role in personal and professional progression as well as the enhancement of the organization.
2.4 Conceptual Framework
There are only two key variables in this study: employee training, which forms the independent variable, and organizational performance, which forms the dependent variable. Under these key variables are sub-variables, which were analyzed. The study analyzed the effect of employee training on organizational performance in the selected study site, Sarova Hotel and Resorts.
The conceptual framework is a conceptualization in functional form of how the independent variables affect the dependent variables.
Figure 2.1: Conceptual Framework
Independent variables Dependent variables
Performance of organization
ü Employee Productivity
ü Service Quality
ü Customer Satisfaction
ü Employee Retention and Loyalty
Employee training
Interpersonal and Communication Skills
Teamwork and Collaboration
Stress Management
Work ethics
The above conceptual framework was developed by examining how employee training would affect an organization’s performance. The main objective of this study was to establish the effect of employee training on organizational performance from an organizational perspective.