THE EFFECT OF TRAINING AND DEVELOPMENT ON EMPLOYEE PERFORMANCE A Study of First Bank Nigeria Plc.

ABSTRACT

The study examined the training and development on employee performance, a case study of First Bank of Nigeria. The study employed the survey design and the purposive sampling technique to select 450 staff across management, senior and junior level. A well-constructed questionnaire, which was adjudged valid and reliable, was used for collection of data from the respondents. The data obtained through the administration of the questionnaires was analyzed using the Pearson correlation analysis.

 

The results showed that there is a positive and significant relationship between Mentoring has significant effect on employee commitment (r=0.772; p<0.05)., Also, a positive and significant relationship exists between Job Delegation and employee commitment (r=.896; p<0.05)., Furthermore, a positive and significant relationship exists between Job Empowerment and employee commitment (r=.896; p<0.05). Lastly, a positive and significant relationship exists between Job rotation and employee commitment (r=0.772; p<0.05). This implies that training and development are crucial factors and strong predictors of employee performance.

The results were found to be consistent with empirical findings of past studies in literature.

It is therefore concluded that training and development as significant effect on employee performance in First Bank of Nigeria. The study suggested that; Training and development should be employed by the management of every bank, to ensure that employ are safeguarded in area of adequacy; Training and development should be established in every bank, which should be headed by a qualified accountant; Bank employees should be adequately remunerated through attractive compensation packages after training in order to avoid temptation by the employees to defraud the banks; Standard personnel and recruitment policies should be formulated and maintained.

 

 

CHAPTER ONE

INTRODUCTION

1.0       Introduction

This chapter identifies and explains the basic information on which the entire research work is based. It identifies the background to the study, statement of research problems, the research questions, objectives, hypothesis, significance of the study, scope of the study, operationalization of research variables, historical perspectives of the study and definition of terms used in the body of the research work.

1.1.Background to the Study

Today in a world of competitive corporate environment, every organization, regardless of scales and markets is striving to gain competitive advantage(s), to perform better and to achieve productivity, profitability and efficiency. In order to do that, it is important for an organization to clearly define its objectives, and to know how to execute it well using the available resources. Organizations across the globe especially Europe considers their human resources as a central core of the business and must be able to manage their workforce towards organizational performance (Harrison, 2000).

Globally, organizations and their managers are faced with numerous challenges. One of such challenges is in the area of skills and knowledge development which refers to the training and development of employees in order to achieve an organizations goals and objectives. Some of these managerial challenges are obvious in matters concerning training and development such as mentoring, job delegation, job empowerment and job rotation (Burden & Proctor, 2000). Therefore, for organizations to survive and remain relevant and competitive, it is essential for them to be able to train its employees on the right skills and developmental programs in a bid to enhance their performance towards achieving organizational goals.

As in other parts of the world, organizations in Nigeria have increasingly become profit driven. This drive is primarily because organizations that do not make profit usually find it difficult to survive in the competitive economy of the 21st century. Central to this profit drive in organizations are the employees or human capital whose skills are required to manipulate other organizational resources (financial and material) and convert them into goods and services. This centrality of employees in work organizations as such elevated the benefits of efficiency as tools of performance (Bontis 1999, & Iheriohanma 2008). Hence, the recurring theme in current organizational literature has been in the area of human capital development, especially skills and knowledge development. As a result, less attention has been paid to some other employee challenges in the work organization which also affect their productivity and general performance such as training and development. This training and development encompasses mentoring, job delegation, job empowerment, job rotation, age, personality, cognitive style, tenure, organizational function, education, background and more.

Human capital is regarded as the key asset of an organization and businesses need to invest in that asset to ensure their survival, growth and overall performance. The organization should ensure that, it obtains and retains skilled, committed and well-motivated personnel it needs. This simply means taking steps to assess and satisfy future people needs and to enhance and develop the inherent capacities of people, their contributions, potential and employability, by the provision of learning and continuous development opportunities.

Most organizations in their own perspective, adopt training and development at their workplace or organization to become more creative and open to change. Increasing and improving workplace training and development has become an important issue for management in the recent years due to the recognition of how the workplace is changing and how it is important for employees to acquire the necessary knowledge and skills in order to carry out job effectively and efficiently.

In our today’s global age, one of the central challenges facing Africa is that of knowledge and skill development. The issue of globalization is certainly an issue of development both politically, technologically, economically, culturally etc. There is a link between skill, and knowledge development. This is especially when development is seen more broadly. This link between training and development could be seen from the point of view that training and development can serve as ultimate catalyst or even hindrance for development for any organization (Bell, & Richard, 2002).

The history of training and development in organizations is as long as the entire history of any business organizations (Miller, 2006). This is simply because the knowledge base or skills of the normal employees in the labour market is not sufficient for the specialized tasks within the organizations. However, the academic study of various forms of training did not start until about a century ago, when researchers started a branch of research under the name of “vocational training” (Salas & Cannon Bowers, 2001). The beginning of the twentieth century and especially after World War II saw the widespread of training and development programs among organizations, involving more and more employees and also expanding in content (Luo, 2000). As early as in the 1910s, only a few large companies such as Westinghouse, General Electric, and International Harvester had factory schools that focused on training technical skills for entry-level workers. Late 1990, forty percent of the Fortune 500 firms in America had a corporate university or learning center (Meister, 2007).

Global competition has caused organizations to focus on each aspect of their operations, questioning how each function and process can contribute to strategic goals. Training departments are also under pressure to demonstrate their organizational value in the same terms Steed, (2000) this is due to the fact that organizations spend a considerable time, effort and money in training their employees, and however the benefits from these efforts are not clearly visible in organizations in terms of improved performance. In order to make training and development very useful, it should be well planned and systematically implemented. The capacity of staff in an organization influences the ability to achieve the desired targets particularly in performance driven enterprises. Human resource is recognized as a critical resource for success in every organization. In order to sustain performance of the organization, it is important to optimize the contribution of employees towards achievement of the aims and goals of an organization (Armstrong, 2003).

Training and Development in Nigeria could be dated back to late 1960 when it was discovered that most of the top government and business positions were occupied by expatriates (Olalere & Adesoji, 2013). The departure of the whites after independence gave rise to a big vacuum of capable indigenous human capital. This facilitated the Federal Government of Nigeria to set up a Manpower Board in 1962 following the Ashby Commissions Recommendations (Olalere & Adesoji, 2013). Consequently, the Federal Government of Nigeria established complimentary institutions like the Centre for Management Development (CMD), Administrative Staff College of Nigeria, Industrial Training Fund (ITF), and Federal Training Centre to train and retrain employees as well as give orientation to fresh graduates of formal academic institutions (Olalere & Adesoji, 2013).

At present, we are witnessing an overwhelming number of research studies from both descriptive and prescriptive traditions, focusing on several characteristics of training and development programs as well as their costs and benefits for businesses and organizations (Becker & Gerhart, 2007). At the same time, organizations have come to better understand the importance of training and development for their survival in knowledge-intensive and volatile markets of this era, and therefore have increasingly acknowledged the profitability of developing their human resources through various forms of training (Berge, 2001; Salas & Cannon-Bowers, 2001). Human resource capital of any organization plays an important role, thus training and retraining helps in fortifying employees (Khan, Khan & Khan, 2011).

Despite the obvious significance of training, the enormous expansion in the content of training and development programs over time has largely been taken for granted. Some Human Resources Departments often question the necessity and appropriateness of training a particular employee at a particular time. Often times, there’re ulterior motives why employees are sent on training. Najeeb, (2013) found out that some of those organizations that neglect employee training do so simply because of the enormous cost of training and the fear of losing those employees to other organizations after training them.

Armstrong, (2009) defines training as the formal and systematic modification of behavior through learning, which occurs as a result of education, instructions and development and planned experience. Training is the process of equipping the personnel with the needed knowledge, skills and right attitude to tackle the job responsibilities. Staff development on the other hand is improvement of the employees’ competences for future environmental demands and adaptability. Beardwell and Holden (2002) consider training and development as a planned process to modify attitude, knowledge or skill behavior through learning experiences to achieve effective performance in an activity or range of activities. Corporations are offering a variety of training programs to meet their organizational needs. These include content on IT and systems, processes, procedures and business practices, industry-specific trainings, managerial or supervisory training, interpersonal skills, compliance, sales, executive development, basic skills, new employee orientation, customer service and quality. As Reynolds (2004) points out, training has a complementary role to play in accelerating learning. It should be reserved for situations that justify amore directed expected approach rather than viewing it as a comprehensive and all-pervasive people development solution. He also commented that the conventional training model has a tendency to emphasize subject –specific knowledge rather than trying to build core learning abilities.

Development is a long term education process utilizing a systematic and organized procedure by which managerial personnel learn conceptual and theoretical knowledge for general purpose. According to Campbell (2006) development implies an individual growth and self-realization in a brand base. Cole (2002) suggests a broader view of knowledge and skills acquisition training. He suggests that he is more concerned with employee potential than immediate skills and views employees as adaptable resource aiming at personal growth and realization of potential of an employee. Armstrong (2001) indicates individual development is the progression by individuals in their career with guidance encouragement and help from the manager.

Training and Development improves the workforce competence in order to create a competitive advantage and contribute to organizational success. Training and development is also a means for employers to address the employees’ needs. By offering the training and development opportunities employers help employees develop their own competitive advantage and ensure long term employability, Jackson (2008). Development implies it is an ongoing process and that progress is made over time and this fits also with the emphasis on long life learning.

1.2. Statement of the Problem

Staff training and development is recognized as crucial element in the attainment of organizational goals and objectives. In order to sustain economic and effective performance, it‘s important to optimize the contribution of employees to the aims and goals of an organization Armstrong (2003). Training and development activities have implications for attempts to motivate and involve the workforce with an aim of improving performance. One of the primary objectives of human resource management is the creation of conditions whereby the latent potential of the employees will be realized and their commitment to the success of the organization secured. Chang (2005) points out that the scope of evaluating the training effort should explain how training contributes to the ‘big picture’ as it is implemented to bring about improvement in job performance. The ultimate purpose of training is to help organizations achieve their performance results. Training activities have effect on relative competitiveness and economic performance, at both the aggregate level of the national economy or industrial sector, and at the level of individual enterprises.

The recognition of the importance of training in recent years has been heavily influenced by the intensification of competition and the relative success of organizations where investment in employee development is considerably emphasized. Of recent, banking sector faces problems which in turn might lead to employee retrenchment, these challenges portray the sector’s dire need of highly skilled bank employees that are up to the present challenges, hence the employees need training for effective functioning bringing us to the main objective of this study which is to investigate the effects of training and development on employees’ job performance.

Mentoring: In recent years there has been an increasing need trend for organizations to implement mentoring programs to improve employee morale and productivity by reducing absenteeism and turnover (Torrington 2005). However, very little effort was implemented by the banking sector to improve job retention and improving job satisfaction through mentoring programs.

Job Delegation: There are many problems associated with delegating of authority with regards to making good decisions for the organization. Especially as there are many individual differences. Employers know the importance of employees’ participation and satisfaction and their effects in the achievement of organizational objectives. To be able to achieve better results with minimum supervision and attention, the manager should ensure that he or she delegates his authorities to a capable hand and at the same time, authority should be delegated with the same time and should be delegated equal responsibility Noe, (2006).

Job Empowerment: Employee empowerment is a philosophy associated with real benefits for an organization. The entire benefits enable an organization achieve a competitive advantage and improve its performance. There has been a growing interest in the concept of empowerment and related management practices among both management researchers and practitioners (Gilaninia, 2012). This interest is due to the fact that the practice of empowering subordinates is a principal component of managerial and organizational effectiveness and empowerment techniques play a crucial role in group development and maintenance. This study will seek to investigate the practice of employee empowerment in First Bank Plc, Lagos state.

Job Rotation: Making employees perform the same transactional duties everyday usually makes them tired, bored and unsatisfied with the jobs they are performing. Thus, the importance of job rotation is introduced to reduce the physical and mental stress endured by employees when working in the same job position, year after year. This study will also look into the effectiveness of job rotation in First Bank and ways to create awareness of job rotation (McCourt & Eldridge 2003).

This study seeks to determine the effects of training and development on employees’ job performance by determining the relationship between training methods such as mentoring, job rotation, job empowerment and delegation and employees’ job performance in first bank plc.

 

 

1.3. Objectives of the Study

The main objective of the study is to establish the effect of training and development on employee performance among the employees of First Bank, Lekki, Lagos State. However, to achieve this main objective, the following sub-objectives will be considered;

  1. To determine the effect of mentoring on employee commitment
  2. To investigate how job delegation can affect employee commitment
  3. To examine the effect of job empowerment on employee commitment
  4. To find out the effect of job rotation on employee commitment

1.4 Research Questions

The questions of interest in the study are:

  1. To what extent is the effect of mentoring on employee commitment?
  2. What is the role of job delegation on employee commitment?
  3. To what effect does job empowerment have on employee commitment?
  4. What effect does job rotation have on employee commitment?

1.5 Research Hypotheses

Based on the objectives, the following hypotheses were developed in order to make valid conclusions on the subject matter. The hypotheses are expressed in their null form:

H01: Mentoring has no significant effect on employee commitment

H02: Job Delegation has no significant impact on employee commitment

H03: Job Empowerment has no significant effect on employee commitment

H04: Job Rotation has no significant effect on employee commitment

 

 

1.6. Rationale for the Hypotheses

The rationale for the research is a set of reasons offered by the researcher for conducting a research into the effect of training and development on employee performance, using a descriptive survey design. Hypothesis testing is an essential procedure in statistics. A hypothesis test evaluates two mutually exclusive statements about a population to determine which statement is best supported by the sample data. It refers to the comparison of the assumption and the same results. The rationale is to identify the null hypothesis, alternative hypothesis, test statistics, P-value, conclusion about the null hypothesis, and final conclusion that address the original claim of the study.

1.6. Operationalization of the Variables

The dependent variable is employee’s job performance, represented by employee commitment (EC). On the other hand, training and development, being the independent variable, is proxied by Mentoring (M), Job Delegation (JD), Job Empowerment (JE), and Job Rotation (JR).

Where Y= Dependent variable

             X= Independent variable

Y= f(X)

X= Training and Development

X = f(x1, x2, x3, x4)

x1= Mentoring

x2= Job Delegation

x3= Job Empowerment

x4= Job Rotation

 

 

Y= Employee’s Job performance

                        Y= f(y1)

y1 = Employee Commitment

The four specific objectives are operationally expressed as:

To determine the effect of Mentoring on Employee Commitment

y1= f (x1)

y1= b0 + b1x1 + u

To investigate how Job Delegation can affect Employee Commitment

y2= f (x2)

y2= b0 + b1x2 + u

To examine the effect of Job Empowerment on Employee Commitment

y3= f (x3)

y3= b0 + b1x3 + u

To find out the effect of job rotation on employee commitment

Y4= f (x4)

Y4= b0 + b1x4 + u

1.8. Scope of the Study

The study is streamlined to training and development variables such as mentoring, job delegation, job empowerment, job rotation, and employee performance variable namely employee commitment. The study is carried out in First Bank Plc, Lekki, Lagos State. The unit of analysis of the study is the employees of First Bank at Junior, middle level, senior and management level positions.

1.9. Significance of the Study

The findings from this study will help to highlight those areas where there are problems among employees and thus will be of great benefit to the management of organizations, employees, human resource department, stakeholders, scholars and the researcher. The results of this study would hopefully be significant in the sense that it would enable the bank management to better understand how the training and development programs could be harnessed to inspire staff to increase and sustain organizational performance.

1.9.1. Management

The study will help the top management in taking strategic decision that affect training and development for the overall growth of the industry. It will able be of use to management by encouraging them to embrace training and development to increase competitiveness, it will also help to establish how training has impacted on performance of its employees and what improvements can be done to help equip the agents further as well motivated them to work better for better performance

1.9.2. Employees

Members of Staff of the Bank will have adequate knowledge as to the importance of training and why it is necessary that they are trained from time to time

1.9.3. Human Resource Department

The study will help the Human Resource Department in proper planning and execution of training and development programmes

 

1.9.4. Stakeholders

The study will also be useful to stakeholders who will be able to identify with a growing organization as a result of good performance. This will ensure that they invest in an organization whose performance is promising as a result of effective training and development of its staff

1.9.5. Scholars

Scholars will find it important as it will increase the body of knowledge in this area

1.9.6. Researcher

The study will also add value to the researcher in the area of training and development, and could also assist the researchers in doing further studies of the same. Also this study will be useful to the researcher as it will help him in actualizing his dream and lead him to the completion of B.Sc. program in Business Administration.

1.10. Historical perspectives of First Bank

First Bank of Nigeria Ltd – Keeping You First

First Bank of Nigeria Limited (First Bank) is Nigeria’s premier commercial bank and most valuable banking brand. With over 10 million active customer accounts and more than 750 business locations, we provide a comprehensive range of retail and corporate financial services to customers and investors wishing to explore the vast business opportunities available in Nigeria and our business locations across Africa, Europe, Middle East and Asia. To live our promise of ‘YOU First’, we design products and services to support your personal, family and business needs. Our array of products – cards, channels, transfer services, loans & advances, deposit products, guarantees, distributorship financing, cash management and foreign trade service – create convenience for your transactions, empower your businesses and offer flexibility of choice. We are leveraging on technology to drive optimized and cost effective service delivery, enhance transaction efficiency, risk management as well as entrench collaboration, innovation and creativity across the group.

Our Purpose and Values

First Bank has been named “The Best Bank Brand in Nigeria” six times in a row – 2011, 2012, 2013, 2014, 2015, 2016 – by the globally renowned “The Banker Magazine” of the Financial Times Group; and “Most Innovative Bank in Africa” in the EMEA Finance African Banking Awards 2014.

Our brand purpose is to always put its customers, partners and all stakeholders at the heart of our business.

We are poised to standardize customer experience and excellence in financial solutions across Sub Saharan Africa, in consonance with our brand vision “To be the partner of first choice in building your future”. Our Purpose and Values

Our History

Founded in 1894 as The Bank for British West Africa, FBN Group’s First Bank was the very first banking institution to be established on the African continent.

With over 120 years of shared history, we have more memories than we could possibly share.

We have sought to showcase some of the key milestones in our history and to demonstrate our enduring commitment to value creation for all of our stakeholders.

Our Vision

To be the clear leader and Nigeria’s bank of first choice

Our Mission

To remain true to our name by providing the best financial services possible

1.11. Definition of Terms

Human Resource Management: is the way organizations manage their employees and help them to develop in order to be able to execute organizations’ missions and goals successfully.

Training: is a type of activity which is planned, systematic and it results in enhanced level of skill, knowledge and competency that are necessary to perform work effectively.

Development: is a broad ongoing multi-faceted set of activities (training activities among them) aimed at bringing someone or an organization up to another threshold of performance, often to perform some job or a new role in the future.

Employee Performance: is defined as the outcome or contribution of employees to make them attain goals while performance may be used to define what an organization has accomplished with respect to the process, results, relevance and success.

Mentoring: this involves having the more experienced employees coach the less experienced employees

Job Rotation: is a way of developing employee skills within organization involves movements of employees from one official responsibility to another for example taking on higher rank position within the organization, and one branch of the organization to another.

Job Empowerment: collection of required capacity in staff for enable them to creating added value in organization and role playing and responsibilities are responsible in the organization, with efficiency and effectiveness

Job Delegation: involves training and development techniques that attempt to capture and bring forth decision making situations to the employee being trained

Employee Commitment: is a psychological state that characterizes the employees’ relationship with the organization and has implication for the decision to continue membership in the organization.

 

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