The Development of Management and Leadership Capability and its ...

Training and organisational performance
A limited amount of research has been conducted which focuses on the organisational impact
of employee (rather than management) development or training. Although these studies do
not differentiate managers from other employees, they do throw further light on the ways in
which development can enhance performance.
Dearden et al. (2000) used longitudinal data from the Labour Force Survey and industrylevel
productivity data to show that investment in training increased the value of each worker
in productivity terms far more than it cost in increased wages.
In a study of 319 US business units, Koch and McGrath (1996) investigated whether the
amount of formal training undertaken and the extent to which firms promoted from within
improved their productivity. They concluded that such effects were indirect because they
only occurred when other, more sophisticated HR planning and evaluation, recruitment and
selection strategies were used in combination with training.
Macdonald and Smith (1995) found that firms, in their sample of 437 publicly traded
companies, with performance management systems (explicit job goals, incentives and
feedback mechanisms) and ample learning opportunities to achieve these goals, performed at
or above industry averages. This study had a longitudinal element, pointing to a likely causal
effect.
Rix et al (1993) conducted a qualitative study of 24 groups of employers and 19 groups of
employees, some committed to IiP and others uninvolved. About half of those committed to
or recognised by IiP, saw the enhancement in training activity bringing business benefit,
although this was not measured in financial terms.
4.2.3 Wider HRM and organisation performance, and management and leadership
Although there are relatively few, though cautiously positive, studies of the impact of
management and leadership development on organisational performance, there is a large and
increasingly coherent body of data on the link between HRM practices more widely and
organisational performance.
There is a ‘double relationship’ between management and leadership development and HRM
in relation to performance. On the one hand HRM is a major area of the application of
management and leadership development – HRM is managed and lead, and the evidence that
HRM contributes to performance supports the case that good management and leadership in
this area contributes to performance. On the other side, from a traditional point of view,
management and leadership development is one of many HRM practices, and the evidence
that it plays a part in HRM effect, alongside other strands of HRM, is also of importance.
Finally, the HRM – performance research is amongst the most thorough, extensive, and
international, so we can draw important lessons from it methodologically.
This field of research is important to the management and leadership development debate in
several ways:
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