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Leadership and Development

Essay by   •  August 18, 2013  •  Research Paper  •  2,127 Words (9 Pages)  •  730 Views

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Introduction: In critical economic times, each and every possible section of the corporate budget comes under review. Since the banking crisis 2008, most of the organizations has had a negative impact around the world. According to Howard (2009) stated that the global financial risk are new threats but importantly new opportunities. In addition, Csath (2009) said that, most of the organisation caring about the tangibles result, money and they try to reduce cost without protecting some crucial assets that could be hope for the upcoming, the intangibles: employees training and development. It is wise, a 'best practice' approach to training and development as well as appraise its contribution use as opportunity, what creates lasting value may come out from the financial crisis well organized for new circumstances.

Training and development: is an investment not a cost. According to Porter (2003) stated that the training and development is an investment though many people considering as a cost. This investment is not like other investment in business neither possible to buy and sell nor the results are not immediately tangible. This would be the main reason many senior manager target for cuts downturns due to less visible effect in day to day life of the business. However, training and development is very crucial for future success of the business. If the business cut too far today than in long run unquestionably feel the effect. For example, due to lack of training and development program it would be difficult to compete with other competitor and the firm become increasingly vulnerable.

The importance of Training and development: in every organisation, employees need high level of training and development to provide them the necessary skills to perform organizational work efficiently. According to Pepper (2004) said that, the more training and development are the more effective the organisation. For example, if any technological, economical environmental changes, the trained and developed employees are able to adapt changed situation easily. Similarly, numerous scholars literature survey confirmed the significance of the training and development even in the financial crisis (Kenny and Donnay, 1972:Bannett, 1993; Rosow and Zager, 1988; Belcourt, 2006, Ismail et al, 2011 and others). In the United Kingdom, the trained employees are important to increase domestic competition, increase globalization of the world market, and other challenges.

Although, Since the banking crisis HRM, focuses four areas such as recruiting and selection, reward system, performance appraisal and the most important training and development to reduce cost. According to Vosa, 2010 suggested that, apart from training and development others can be minimized because training and development has the inevitable impact. Many businesses have found it is easier to reduce cost in training and development sector rather than any other sector. Training and development budgets have been minimized as the consequence of the banking crisis (Aljored, 2010). On the other hand, Vosa (2010) criticized that banking crisis badly affected the training investment budgets of many organizations which have been minimized dramatically. Mexia (2010) in a research showed that 51.9 percent of the businesses did not transform training budget, 15.2 percent of them developed it, 28.7 percent decreased training budget, and 4.1% completely stopped it completely.

It is not hard to understand that the training and development are crucial for any organisation. It can be propose to investment rather than reduce the cost in training and development because training and development have the power to improve an organisation. It can be a disaster if employees have not sufficient skills. A real example may clear the idea of Training and development needs could be clear; August 24, 2001 an Air Transat Airbus landed emergency due to both engines dead where it was the issue of lives of 293 passenger and 13 crew members. The Flight 236 landing after gliding for 19 minutes. Air safety investigators blamed that the mechanical engineers were not properly trained. However, it landed safely because the pilot was highly skilled and were hailed as hero for safety landing the plane. As a consequence, Transport Canada penalized Air Transat $250,000 and ordered to provide special training on fuel management and emergency landing (Norris, 2001) In 2004, it was revealed that if the pilot were proper trained than the flight would not needed to landed emergency. The pilot had not enough experienced to identify the fault. However, in 2005, Air Transat settled of £7.65 million to those passengers who were abroad and filed a class-action lawsuit against airline. This is one of many instances that shows how an organisation and peoples are badly affected in personal and organizational success (Koring, 2005).

Target of Reducing Budget: Many organisation found easier to reduce cost in training and development in financial crucial times, it can be reduce in considering travel, stay in hotel rather than provide training on site. Secondly, training and development can be provide by the skilled person inside the organisation who is working for the company for long time. Thirdly, in financial crisis it has been seen that many organisation reduced their unskilled employee those who does not have the ability to perform task but they could be an asset if they were provide training. But if an organisation consider to cut budget on training and development in terms of reducing training and development could have adverse affect on the organisation.

In 2008, bank crisis time, banks were becoming unstable and stopped providing loans and many cases withdraw loans, in that crucial time people were less likely to invest. Many companies closely monitored their employees and reduce employees those who are not skilled. It was difficult to provide training those who are not skilled in financial crisis time where maximum organisation seeking for the best way of reducing cost and many of them believe that reducing cost in training and development is easier. On the other hand, to get work done every organisation should create skilled workforce by providing appropriate training. Without proper training it would be difficult to compete in the technological changing world. Training and development is not cost it is invest. Investing in the right place in right time it could be reduce cost but not reducing training and development. For example, a training program, how to provide customer service in the shortest time or how to cooperate with colleagues. Attending these such training employees become skilled and able provide customer service in shortest time and customer becomes satisfied. As a consequence, an organisation could become more profitable. In this sense,

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