This study sought to identify the effectiveness of training and development practices of Ghana Insurance companies. The objective of the study is to ascertain, identify and find out the perceptions of staff about the effectiveness of training and development practices in the insurance industry in Ghana. The study employed the qualitative approach, cross-sectional design and sampled thirty (30) respondents (staff) from three insurance companies in Ghana using an interview guide as the data collection instruments. By employing the thematic analysis, the study revealed that staff perceived training as an activity which enhances their performance, equips them with skills and imparts knowledge into them. The study also disclosed that development was an activity that leads to succession plan and improving human resource capacity. The study further revealed that firms dimension of training practices to include on-the-job training and off-the-job training with coaching and mentoring as the dimensions of development practices. With regard to relative strengths of training and development practices, the study showed that training of new recruits was rated as the most frequent training practice, while coaching was rated as the most frequent development practice. The study however ascertained that the meaning of effectiveness from staff perspective occurs at a point where organisation attains its goals as well as when staff practice what they have learnt at training and able to transfer the knowledge obtained unto their job. The meaning of development effectiveness was also seen to relate to leadership competence and succession plaining. The study therefore recommended that management of the insurance companies adopt training and development practices as indicators for the success in the insurance industry as a whole.
CHAPTER ONE INTRODUCTION
Background of the Study
The fast pace at which the world is globalizing has caused organisations to be faced with intense competition on all sides especially in the political, economic and technological environments. One of the ways organisations can keep up with this pace is to adequately prepare their employees through training in order to enhance their job performance. Job performance is hinged on the effectiveness of human capital management and human resources are very vital to the success of any organisation. This realization has propelled many employers to focus attention on employee development through training with the aim of keeping them motivated (Antwi & Analoui, 2008). However, the core purpose of training and developing employees is to improve their performance resulting in enhanced organisational performance (Elnaga & Imran, 2013).
Organisational training is of utmost importance, thus, many organisations invest in training. A survey in 2011 by the American Society of Training and Development estimated an expense of 156.2 billion dollars on employee training in the United States (Towler, Watson, & Surface, 2014). Suazo, Martinez, and Sandoval (2009) view training and development as a very vital component of HR. According to them, it serves as a means of communicating to employees what their expected roles are, the skills and abilities needed to effectively perform at their various positions.
Training and development has several benefits both to the employees and organisation at large. Employees who go through frequent training tend to benefit from a number of areas such as enhancement in career competencies, employee satisfaction, and employee performance, just to mention a few (Acquah, 2015; Armstrong, 2010; Bohlander & Snell, 2010). Making reference to career competencies, employees are empowered to acquire both the soft and
technical skills necessitated by their jobs (Jehanzeb & Bashir, 2013). Davis and Yi (2004) maintained that through training, technical skills such as the improvement in computer literacy of employees have been enhanced. Reassuringly, Hill and Lent, 2006 state that, the ultimate or bottom line of training is to inspire positive changes in employees as well as to improve their career or job competencies.
Employees do not only acquire skills to enhance their career competencies but also experience a sense of satisfaction. According to Garger (1999), employees do not attach any emotions to organisations which have no interest in their personal development. When organisations position training as a means of only achieving organisational goals, the intended purpose of training would be defeated. Conversely, when training is communicated to employees or staff as a win-win situation, that is, the employees benefit through personal development as well as overall organisational benefit, some level of satisfaction will be experienced by the employees (Logan, 2000; Aguinis & Kraiger, 2009). In a nutshell, employees in the end perform better when their career competencies are enhanced, and are satisfied at work.
Training occurs in all spheres of business operation both in service and non-service sectors. The insurance industry in Africa is said to be growing at a relatively slow pace in comparison with those of developed nations (Allen et al., 2011). Though Ghana has quite a huge insurance sector employing a number of highly skilled employees, a number of actors in the country have indicated that majority of the citizens do not have total trust in insurance companies (Daily Graphic: 3rd January, 2012). These facts go to prove the need for adequate effective training and development of human resources in the insurance companies which would develop the required skill needed to attract and encourage individuals to patronize insurance products.
Scholars and practitioners in recent times are increasingly acknowledging the importance of human resource development and training (Hitt, Biermant, Shimizu, & Kochhar, 2001; Kum,
Cowden & Karodia, 2014; Argaw & Bayissa, 2015). McDowell and Saunders (2010) attribute this realization to the intense competition many organisations are faced with.
In a similar vein, Sanjeerkumar and Yanan (2011) opine that employee training has an unmistakable reflection on job performance thus, receiving a lot of attention from a myriad of business sectors. They stress that one of the ways of ensuring business survival is to focus on employee training and development for an increase in job efficiency.
Employee training also serves as a means of closing the gap between current performance and expected future performance (Weil & Woodwall, 2005). It is worth mentioning that while training focuses on passing on a specified skill to do a particular job, development, generally through conscious and unconscious learning enhances the growth of individual skills and abilities (Cole, 2006). It can be said that training takes place at a specific time where employees are equipped with skills. Development on the other hand is a gradual process where skills are improved through the process of continuous learning. Many benefits accrue organisations that provide training to their employees including: the provision of employees with skills that enhance performance, overall development of organisational performance as a result of enhanced employee skills and increase in productivity and performance among other benefits (Armstrong, 2010; Bohlander & Snell, 2010).
In a nutshell, it is an undeniable fact that employees are a vital, valuable and expensive resource for all organisations irrespective of their size and age. Thus, organisations that place an emphasis on the training and development of their employee stand to gain in diverse ways. Not only are employee job performances enhanced but organisational performance is also improved upon. Additionally, such companies are able to gain a competitive edge over other players in the industry. This obviously enhances employee satisfaction and eventually employee retention. However, for training and development programmes to give the needed benefits to
both employees and organisations, they must be effective (Falola, Osibanjo & Ojo, 2014). Haywood (1992 as cited in Saad & Mat, 2010) noted that several factors affect the effectiveness of training and development, despite the fact that in the working world, training is one factor that can enhance individual and organisational performance. Thus, the effectiveness of training and development involves the extent to which training and development programmes achieve their intended purposes and result in desired benefits for individuals and organisations (Falola et al., 2014). As such, there is the need for assessing the effectiveness of training and development programmes for employees so as to improve training and training-related activities such as mentoring and other transfer of learning support (Saad & Mat, 2010). It is therefore imperative to study the effectiveness of training and development practices in selected Insurance firms in Ghana.
Statement of the Problem
Kumplate (2007) suggests that managing human resource is admittedly a key component in knowledge based economies. Hence, it has been the desire for organisations to create a skillful workforce through training Nikandrou et al. (2009). It is for this reason that organisations go to a large extent (in terms of cost) in training their personnel/staff and offering developmental practices and investing heavily in training programmes (Grossman & Salas, 2011; Sung & Choi, 2009). For example, Hanson (2007) reported that close to 3 percent of wage bills is used as expenditure on training and so also in every year, nearly 45 percent of trainees are offered the needed training.
Training is often criticized and this is because most often its vision is something extremely costly and this does not transfer to the precise job or enhances the bottom line (Caudron, 2002; Kraiger et al., 2004). Moreover, training and development are also viewed as cost centers that need to be controlled or downsized during lean times.
Nevertheless, the extent to which training has impacted meaningfully on the desired results, that is, in terms of training effectiveness (e.g. enhanced human performance and superior organisational competitiveness) or the level to which the usefulness of knowledge, skills and attitude acquired during training sessions on the job, i.e., training transfer (Holton et al., 2000) has been a source of concern for most organisations due to the doubtful nature of the outcomes of these programmes (Arthur et al., 2003).
Thus, there is the need to evaluate human resource intervention to assess its impact on the objective or goals of business (Kaufman et al., 1995). Therefore, it is a great concern for these organisations to measure the effectiveness of the training output/results. Subsequently, institutions use models that have been developed for measuring effectiveness of training. Most often, these models measure effectiveness from the view point of management and neglect the views of staff or other interested parties (Guerci et al., 2010).
When training is organized by institutions, it is the staff that participate and therefore their views on how training should be organized are of critical concern. However, in most organisations training models or programmes are designed to suit the framework of management, and staff abide by them. However, Guerci et al. (2010) suggest that for a more effective training programme all stakeholders should be involved in the design.
Failure to incorporate their views can have implications for the organisation, the staff and the goals of the organisation. For example, if staff fail to corporate with training because they are uncomfortable with the training programmes. In other words, if they feel the training does not address their unique challenges in their day to day activities, it can lead to discontentment which can eventually demoralize staff from attending training. This can eventually make training and development organized by institutions for their staff less effective. In this way, the organisation stands a chance of incurring cost. That is, after all the expenditure (cost) incurred
in training the results amounts to nothing, the goals for which the training was intended might not be achieved, and the training programme may be deemed ineffective. It is in this direction that the current study finds it critical to understand staff perception on the effectiveness of training and development practices implemented by the insurance company and how it translates into the goals of these institutions.