Investment in training: a matter for rational decision making?

Abstract

ABSTRACT

Vocational training has attracted increasing attention over the past two decades both in theoretical and policy terms. This study set out to raise questions about the management of such training. Evidence from previous work suggests that policy makers responsible for training are faced with exogenous forces that make decision making prone to irrational choices.

This study attempts to fill the gap in research on post entry screening by examining a series of longitudinal data. The approach has been through the use of interviews with trainees from selected industries (British Gas, the football industry and the provision of a public library service). Between them, these industries represent a large cross section of the British economy. British Gas is an example of a former nationalised industry that has been subsequently privatised. By contrast, the football industry is(and always has been) in private "hands". Finally, this study examined the provision of ICT training given to public library service personnel in both the UK and Finland.
The aim, in all cases, was to assess whether resources devoted to training were used efficiently. A second aim was to locate the findings in the context of a debate between the neoclassical school of economic analysis and its institutional rival, especially Internal Labour Market theory.

The evidence suggests that institutional theory explains post entry progression better
than its neoclassical rival. Furthermore, the research also concludes that managers charged with the task of implementing training schemes frequently do not evaluate
them and as a consequence, the stated aims of organisations' training strategies are not realised. This situation is likely to continue unless more thought is given to the issue of monitoring training carefully both at a micro and macro level. Ultimately, this research demonstrates that industry-wide (or macroeconomic) policies designed to increase employees' skills do not necessarily result in the desired gains at a local
(or microeconomic) level.