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How training contributes to

companys competitiveness
Submitted by:
Syed Nazim-Ud-Daula

Submitted to:

Competitiveness pertains to the ability and performance of a firm, sub-sector or

country to sell and supply goods and services in a given market, in relation to the
ability and performance of other firms, sub-sectors or countries in the same market.

The term may also be applied to markets, where it is used to refer to the extent to
which the market structure may be regarded as perfectly. This usage has nothing to
do with the extent to which individual firms are "competitive'.

Competitiveness is defined by the productivity with which a nation utilizes its human,
capital and natural resources. To understand competitiveness, the starting point must
be a nations underlying sources of prosperity. A countrys standard of living is
determined by the productivity of its economy, which is measured by the value of
goods and services produced per unit of its resources. Productivity depends both on
the value of a nations products and services measured by the prices they can
command in open markets and by the efficiency with which they can be produced.
Productivity is also dependent on the ability of an economy to mobilize its available
human resources.

True competitiveness, then, is measured by productivity. Productivity allows a nation

to support high wages, attractive returns to capital, a strong currency and with
them, a high standard of living. What matters most are not exports per se or whether
firms are domestic or foreign-owned, but the nature and productivity of the business
activities taking place in a particular country. Purely local industries also count for
competitiveness, because their productivity not only sets their wages but also has a
major influence on the cost of doing business and the cost of living in the country.

What Matters for Competitiveness

Almost everything matters for competitiveness. The schools matter, the roads matter,
the financial markets matter and customer sophistication matters. These and other
aspects of a nations circumstances are deeply rooted in a nations institutions,
people and culture. This makes improving competitiveness a special challenge,
because there is no single policy or grand step that can create competitiveness, only
many improvements in individual areas that inevitably take time to accomplish.
Improving competitiveness is a marathon, not a sprint. How to sustain momentum in
improving competitiveness over time is among the greatest challenges facing

Creating Wealth at the Microeconomic Level

The cornerstones for economic development have long been considered stable
institutions, sound macroeconomic policies, market opening and privatization. Most
discussion of competitiveness and economic development is still focused on these
areas. It is well understood that sound fiscal and monetary policies, a trusted and
efficient legal system, a stable set of democratic institutions, and progress on social
conditions contribute greatly to a healthy economy.

I have found that these factors are necessary for economic development, but far
from sufficient. These broader conditions provide the opportunity to create wealth
but do not they create wealth. Wealth is actually created in the microeconomic level
of the economy. Wealth can only be created by firms. The capacity for wealth
creation is rooted in the sophistication of the operating practices and strategies of
companies, as well as in the quality of the microeconomic business environment in
which a nations companies compete. More than 80 percent of the variation of GDP
per capita across countries is accounted for by microeconomic fundamentals. Unless
microeconomic capabilities improve, macroeconomic, political, legal, and social
reforms will not bear full fruit.

A Flawed View of Competitiveness

Worldwide, the most intuitive definition of competitiveness is a countrys share of

world markets for its products. This definition makes competitiveness a zero-sum
game, because one countrys gain comes at the expense of others. This view of
competitiveness is used to justify intervention to skew market outcomes in a nations
favor (so-called industrial policy). It also underpins policies intended to provide
subsidies, hold down local wages and devalue the nations currency, all aimed at
expanding exports. In fact, it is still often said that lower wages or devaluation make
a nation more competitive. Business leaders are drawn to the market-share view
because these policies seem to address their immediate competitive concerns.

Unfortunately, this intuitive view of competitiveness is deeply flawed, and acting on it

works against national economic progress. The need for low wages reveals a lack of
competitiveness, and holds down prosperity. Subsidies drain national income and
bias choices away from the most productive use of the nations resources.
Devaluation results in a collective national pay cut by discounting the products and
services sold in world markets while raising the cost of the goods and services
purchased from abroad. Exports based on low wages or a cheap currency, then, do
not support an attractive standard of living.
What is Training and Development?
Training is an educational process. People can learn new information, re-learn and
reinforce existing knowledge and skills, and most importantly have time to think and
consider what new options can help them improve their effectiveness at work.
Effective trainings convey relevant and useful information that inform participants
and develop skills and behaviors that can be transferred back to the workplace.

The goal of training is to create an impact that lasts beyond the end time of the
training itself. The focus is on creating specific action steps and commitments that
focus peoples attention on incorporating their new skills and ideas back at work.

Training can be offered as skill development for individuals and groups. In general,
trainings involve presentation and learning of content as a means for enhancing skill
development and improving workplace behaviors.

Organizational Development is a process that strives to build the capacity to

achieve and sustain a new desired state that benefits the organization or community
and the world around them. (from the Organizational Development Network
website) OD work implies creating and sustaining change.

An OD perspective examines the current environment, the present state, and helps
people on a team, in a department and as part of an institution identify effective
strategies for improving performance. In some situations, there may not be anything
wrong at the present time; the group or manager may simply be seeking ways to
continue to develop and enhance existing relationships and performance. In other
situations, there may be an identifiable issue or problem that needs to be addressed;
the OD process aims to find ideas and solutions that can effectively return the group
to a state of high performance.

These two processes, Training and Organizational Development, are often closely
connected. Training can be used as a proactive means for developing skills and
expertise to prevent problems from arising and can also be an effective tool in
addressing any skills or performance gaps among staff.
Types of training

Physical training
Physical training concentrates on mechanistic goals: training-programs in this area
develop specific skills or muscles, often with a view to peaking at a particular time.
Some physical training programs focus on raising overall physical fitness.

In military use, training means gaining the physical ability to perform and survive
in combat, and learning the many skills needed in a time of war. These include how
to use a variety of weapons, outdoor survivalskills, and how to survive capture by the
enemy, among others. Seemilitary education and training.

For psychological or physiological reasons, people who believe it may be beneficial

to them can choose to practice relaxation training, orautogenic training, in an
attempt to increase their ability to relax or deal with stress.[1] While some studies
have indicated relaxation training is useful for some medical conditions, autogenic
training has limited results or has been the result of few studies.

Job Training and Development

Some commentators use a similar term for workplace learning to improve
performance: "training and development". There are also additional services available
online for those who wish to receive training above and beyond that which is offered
by their employers. Some examples of these services include career counseling, skill
assessment, and supportive services.[2] One can generally categorize such training
as on-the-job or off-the-job:

On-the-job training takes place in a normal working situation, using the

actual tools, equipment, documents or materials that trainees will use when fully
trained. On-the-job training has a general reputation as most effective for
vocational work[citation needed].
Off-the-job training takes place away from normal work situations implying
that the employee does not count as a directly productive worker while such
training takes place. Off-the-job training has the advantage that it allows people
to get away from work and concentrate more thoroughly on the training itself.
This type of training has proven more effective in inculcating concepts and
ideas[citation needed].
A more recent development in job training is the On the Job Training Plan or
OJT Plan. According to the United States Department of the Interior, a proper OJT
plan should include: An overview of the subjects to be covered, the number of
hours the training is expected to take, an estimated completion date, and a
method by which the training will be evaluated.
Religion and spirituality
In religious and spiritual use, training may refer to the purification of the mind, heart,
understanding and actions to obtain a variety of spiritual goals such as (for example)
closeness to God or freedom from suffering. Note for example the institutionalized
spiritual training of Threefold Training in Buddhism, Meditation
in Hinduism or discipleship in Christianity. These aspects of training can be short
term or last a lifetime, depending on the context of the training and which religious
group it is a part of.

Artificial-intelligence feedback
Researchers have developed training-methods for artificial-intelligence devices as
well. Evolutionary algorithms, including genetic programming and other methods
of machine learning, use a system of feedback based on "fitness functions" to
allow computer programs to determine how well an entity performs a task. The
methods construct a series of programs, known as a population of programs, and
then automatically test them for "fitness", observing how well they perform the
intended task. The system automatically generates new programs based on members
of the population that perform the best. These new members replace programs that
perform the worst. The procedure repeats until the achievement of optimum
performance.[7] In robotics, such a system can continue to run in real-time after initial
training, allowing robots to adapt to new situations and to changes in themselves, for
example, due to wear or damage. Researchers have also developed robots that can
appear to mimic simple human behavior as a starting point for training.

Induction training

This is training that an employee will receive when they first join an organization or
begin a new role. This type of training is designed to provide the employee with the
essential skills needed to perform their job. Induction training can also include an
introduction to the company ethos, values and culture so that the employee is aware
of the behaviors expected of them.

On the Job training

As the name suggests, on the job training, is training provided during the regular
performance of duties. This can take a variety of forms including:

The employee being guided through a task or process by a colleague or

supervisor, so that the employee knows how to perform the task and to what
Shadowing, spending time with an expert so that the employee can observe
how the expert performs their daily duties.
Observations, the employee is observed whilst they perform their duties. At
the end of the observation, the observer will provide the employee with
feedback on their performance.
Coaching, the employee will learn new skills (not knowledge) and have the
opportunity to practice the skills with the coach before using the skills in the
workplace. An effective coach will review the employees performance to
ensure that the employee uses the newly learnt skills until they become habit.
Mentoring, the employee is partnered with an experienced employee so that
they can discuss performance. The experienced person is known as the
mentor and the employee they are partnered with we will call the mentoree.
The mentoree will discuss their performance and problems with the mentor.

Off the Job training

This is training provided away from the employees usual work environment and the
employee will stop their usual duties/work during the training. Off the job training
may be in the same building or off site. This training may be provided by trainers
working for the same employer as the employees being trained or an outside
company hired by the employer.
Training and Development - Meaning,
its Need and Importance
Training and development is vital part of the human resource development. It is
assuming ever important role in wake of the advancement of technology which has
resulted in ever increasing competition, rise in customers expectation of quality and
service and a subsequent need to lower costs. It is also become more important globally
in order to prepare workers for new jobs. In the current write up, we will focus more on
the emerging need of training and development, its implications upon individuals and
the employers.

Noted management author Peter Drucker said that the fastest growing industry would
be training and development as a result of replacement of industrial workers with
knowledge workers. In United States, for example, according to one estimate technology
is de-skilling 75 % of the population. This is true for the developing nations and for
those who are on the threshold of development. In Japan for example, with increasing
number of women joining traditionally male jobs, training is required not only to impart
necessary job skills but also for preparing them for the physically demanding jobs. They
are trained in everything from sexual harassment policies to the necessary job skills.

The need for Training and Development

Before we say that technology is responsible for increased need of training inputs to
employees, it is important to understand that there are other factors too that
contribute to the latter. Training is also necessary for the individual development and
progress of the employee, which motivates him to work for a certain organisation
apart from just money. We also require training update employees of the market
trends, the change in the employment policies and other things.

The following are the two biggest factors that contribute to the increased need to
training and development in organisations:

1. Change: The word change encapsulates almost everything. It is one of the

biggest factors that contribute to the need of training and development.
There is in fact a direct relationship between the two. Change leads to the
need for training and development and training and development leads to
individual and organizational change, and the cycle goes on and on. More
specifically it is the technology that is driving the need; changing the way how
businesses function, compete and deliver.
2. Development: It is again one the strong reasons for training and
development becoming all the more important. Money is not the sole
motivator at work and this is especially very true for the 21st century. People
who work with organizations seek more than just employment out of their
work; they look at holistic development of self. Spirituality and self awareness
for example are gaining momentum world over. People seek happiness at jobs
which may not be possible unless an individual is aware of the self. At ford, for
example, an individual can enroll himself / herself in a course on self
awareness, which apparently seems inconsequential to ones performance at
work but contributes to the spiritual well being of an individual which is all the
more important.

The critical question however remains the implications and the contribution of
training and development to the bottom line of organizations performance. To
assume a leadership position in the market space, an organization will need to
emphasize on the kind of programs they use to improvise performance and
productivity and not just how much they simply spend on learning!

How can training courses be used as a company benefit?

Training courses are ways of improving the effectiveness of your current workforce,
but they are also attractive benefits for ambitious people. Benefits both your
company and your employees will realize include:

Improved productivity and adherence to quality standards.

Employees develop skill sets that allow them undertake a greater variety of
Improved ability to implement and realize specific goals outlined in a
company's business plan.
Increased ability to respond effectively to change.

Training also makes a company more attractive to potential new recruits who seek to
improve their skills and the opportunities associated with those new skills.
The lack of a training strategy to a potential top candidate suggests that the
company will fail to meet his or her own aspirations, leading to a lack of ambitious
Objectives of training

The reasons behind employee training and development cannot be overemphasized.

From our discussions so far, one can easily deduce some reasons behind firms
engaging in training and developing their staff. We will summarize some of the
reasons thus;


Communications: The increasing diversity of today's workforce brings a wide variety

of languages and customs, thus staff should be able to be very good in both written
and verbal communication.

Computer skills: Computer skills are becoming a necessity for conducting

administrative and office tasks. In this era of technological advancement, computer
skills are very necessary for almost of departments in an organization.

Customer service: Increased competition in today's global marketplace makes it

critical that employees understand and meet the needs of customers. The firm that
stands out from the crowd is that firm that puts its customers first before every other

Diversity: This includes explanation about people and their different perspectives
and views, and how this can be handled.

Ethics: There are divergent ethics in different firms. Some firms attach more
importance to certain issues like moral, work period, lateness etc than other issues.
Today's society has increasing expectations about corporate social responsibility.
Also, today's diverse workforce brings a wide variety of values and morals to the
workplace. This calls for the need for staff to be reminded of these always through
training and development.

Human relations: The increased stresses of today's workplace can include

misunderstandings and conflict. Training can help people to get along in the
workplace with good understanding of each other and the office inter personal
relationship to reduce official conflict.
Quality Management: Initiatives such as Total Quality Management, Quality Circles,
benchmarking, etc., require basic training about quality concepts, guidelines and
standards for quality, etc.

Safety: Safety training is critical where working with heavy equipment, hazardous
chemicals, repetitive activities etc. Staff should be made to understand that despite
the fact that they have a safety department; the safety of each staff is in his /her own

Training implies enhancing the skills and knowledge of the employees for performing a specific job.
Training tries to improve employees performance in current job and prepares them for future job.
The crucial consequence of training is learning.

Objectives of Employee Training Programs

1. To prepare employees to meet the varying and challenging needs of the job and organizatio
2. To provide knowledge and skills to new entrants and to help them to perform their role and
job well.
3. To coach employees for more complex and higher level jobs.
4. To educate employees new and innovative ways and techniques of performing job.

Benefits of Trained Employees

Training is a significant tool for employee development. Training has assumed great
importance because of exceptional rate of change in the internal and external
organizational environment. The importance/benefits of trained personnel towards
organizational development are as follows-

a. Trained employees do not require tight control and supervision as they are
well aware of how to perform a job.
b. Trained employees can show higher performance by making optimum and
best utilization of the materials, tools, equipments and other resources
provided to them.
c. Trained employees minimize wastages of resources in the organization and
work both efficiently and effectively.
d. Training makes employees more committed to an organization as the
employees are provided with growth, advancement and learning
e. Training develops a line of proficient and skilled managers as it prepares
employees for complex and higher level tasks.
f. Trained employees adjust to the job better and there are fewer rates of
absenteeism and turnover.
g. Trained employees produce quality and quantity output.
h. Trained employees enable the organization to face competition from rival
i. Trained employees can respond and adapt to the changing technology well.
j. Trained employees become more proficient and, thus, their earning potential

Steps in Employee Training Programme

Training programme involves the following steps:

1. Identifying the training needs- The training needs of each employee should
be identified. Programmes should be developed that are best suited to their
2. Prepare the trainer- The trainer must do his home work well. He should know
both what to teach and how to teach. Time management is required by the
trainer. Training should be delivered in such a manner that the trainee should
not lose the interest in the job.
3. Prepare the trainee- The trainee should remain active during training. He
should know that why is he being trained. He should put across the trainer
questions and doubts. The trainee should be put at ease during the training
4. Explain and demonstrate the operations- The trainer should explain the
logical sequence of the job. The trainee should perform the job systematically
and explain the complete job he is performing. His mistakes should be
rectified and the complex step should be done for him once. When the trainee
demonstrates that he can do the job in right manner, he is left to himself.
Through repetitive practices, the trainee acquires more skill.
5. Follow up and feedback- The trainee should be given feedback on how well
he performed the job. He should be asked to give a feedback on the
effectiveness of training programme.
How training contributes to firms

Three major areas of contribution:

Optimum Utilization of Human Resources Training and

Development helps in optimizing the utilization of human resource
that further helps the employee to achieve the organizational goals as
well as their individual goals.

Development of Human Resources Training and Development

helps to provide an opportunity and broad structure for the
development of human resources technical and behavioral skills in an
organization. It also helps the employees in attaining personal growth.

Development of skills of employees Training and Development

helps in increasing the job knowledge and skills of employees at each
level. It helps to expand the horizons of human intellect and an overall
personality of the employees.

There are some specific areas where training can contribute to increase the
competitiveness of the firm. These areas are described below:

Productivity Training and Development helps in increasing the

productivity of the employees that helps the organization further to
achieve its long-term goal.

Team spirit Training and Development helps in inculcating the sense

of team work, team spirit, and inter-team collaborations. It helps in
inculcating the zeal to learn within the employees.

Organization Culture Training and Development helps to develop

and improve the organizational health culture and effectiveness. It helps
in creating the learning culture within the organization.
Organization Climate Training and Development helps building the
positive perception and feeling about the organization. The employees
get these feelings from leaders, subordinates, and peers.

Quality Training and Development helps in improving upon the

quality of work and work-life.

Healthy work environment Training and Development helps in

creating the healthy working environment. It helps to build good
employee, relationship so that individual goals aligns with
organizational goal.

Health and Safety Training and Development helps in improving the

health and safety of the organization thus preventing obsolescence.

Morale Training and Development helps in improving the morale of

the work force.

Image Training and Development helps in creating a better corporate


Profitability Training and Development leads to improved

profitability and more positive attitudes towards profit orientation.

Training and Development helps in developing leadership skills,

motivation, loyalty, better attitudes, and other aspects that successful
workers and managers usually display.
Training and development is vital to any business. Its purpose at Harrods is to better
the performance of employees to enable Harrods to meet its business goals. For
example, at Harrods the Sales Academy develops employees sales skills, leading to
increased sales when they return to the shop floor. Allowing employees to acquire
new skills, expertise and qualifications supports employee progression which leads to
increased motivation. This supports Harrods retention strategies.

Training is about gaining the skills needed for a job. These may be learned at the
place of work (on-the-job) or away from work (off-the-job). On-the-job training
tends to be more cost-effective and relevant. However, off-the-job training is usually
carried out by professional trainers. It also occurs away from the distractions of work.
Training tends to have very specific and measurable goals, such as operating an IT
system or till, understanding a process, or performing certain procedures (for
example, cashing up).

Development is more about the individual making him or her more efficient at a
job or capable of facing different responsibilities and challenges. Development
concentrates on the broader skills that are applicable to a wider variety of situations,
such as thinking creatively, decision-making and managing people. In short, training
is typically linked to a particular subject matter and is applicable to that subject only,
while development is based on growing broader skills which can be used in many

Training and Development is the framework for helping employees to develop their
personal and organizational skills, knowledge, and abilities. The focus of all aspects
of Human Resource Development is on developing the most superior workforce so
that the organization and individual employees can accomplish their work goals in
service to customers.

All employees want to be valuable and remain competitive in the labour market at all
times. This can only be achieved through employee training and development.
Employees will always want to develop career-enhancing skills, which will always lead
to employee motivation and retention. There is no doubt that a well trained and
developed staff will be a valuable asset to the company and thereby increasing the
chances of his efficiency in discharging his or her duties.

Trainings in an organization can be mainly of two types; Internal and External training
sessions. Internal training involves when training is organized in-house by the Human
resources department or training department using either a senior staff or any
talented staff in the particular department as a resource person.

On the other hand External training is normally arranged outside the firm and is
mostly organized by training institutes or consultants. Whichever training, it is very
essential for all staff and helps in building career positioning and preparing staff for
greater challenges.

Employers of labour should enable employees to pursue training and development

in a direction that they choose and are interested in, not just in company-assigned
directions. Companies should support learning, in general, and not just in support of
knowledge needed for the employee's current or next anticipated job. It should be
noted that the key factor is keeping the employee interested, attending, engaged,
motivated and retained.

For every employee to perform well especially Supervisors and Managers there is
need for constant training and development. The right employee training,
development and education provides big payoffs for the employer in increased
productivity, knowledge, loyalty, and contribution to general growth of the firm. In
most cases external trainings for instance provide participants with the avenue to
meet new set of people in the same field and network. The meeting will give them
the chance to compare issues and find out what is obtainable in each other's
environment. This for sure will introduce positive changes where necessary.