Development and Training Employees as a Method of Retention

Employee retention guarantees companies remain high performance organizations. Crucial to retention is identifying talented employees who possess potential, showing them how they add value to the organization, and using their talents, so not only

the employees remain engaged, but also the company benefits from the employees’ contributions. Oftentimes, if employees lack engagement, they seek out opportunities with other companies. Since companies cannot afford to lose talented employees to competitors, proper training and development is critical (Noe, Hollenbeck, Gerhart, and Wright, 2003).

Although geared toward companies’ future needs, developing employees aids in retention because development shows employees that they have a future with the company. Conversely, training focuses on employees’ present positions. However, training is as important as development since succession planning highlights high-potential employees, allowing employers to earmark employees for development. Development is not necessarily the employer’ responsibility, as employees aspiring to better positions can and should make their intentions known (Noe, Hollenbeck, Gerhart, and Wright, 2003).

Training an employee to function properly at a given task requires planning and foresight. Desiring to become an Employer of Choice, Lincoln Electric has made a commitment to provide quality training to its employees. This paper will analyze the training and development plan of the following five training issues; needs assessment, design, development, implementation and evaluation of training provided to employees of Lincoln Electric.

Employee development is more than just training; it must become the way the company runs. Companies hire people from all skill levels, even those people who possess little more than a high school diploma or GED. Companies provide these talented individuals with challenging opportunities for personal and professional growth and development. In business training, communicating the importance of accomplishing tasks is paramount. Effective training starts with pinpointing the current skill set of each individual employee. One of the first steps of effective training is finding out what each employee’s current skill set is. The next step is to find out which parts of the job need to be taught to that individual. The team needs to develop a company-wide development and training program for all of the employees at Lincoln Electric. The result will be an organization of talented, engaged and committed employees. The training program will address the training needs for potential, existing, and newly hired employees as well as supervisors and directors (Noe, Hollenbeck, Gerhart, and Wright, 2003).

Lincoln Electric’s pay-for-performance system (Lincoln Electric Company, 2007) is well known; however, Lincoln Electric oftentimes encounters difficulties in recruiting employees (Prizinsky, 1994 & Narisetti, 1995). While most people seek positions at Lincoln Electric because of their infamous holiday bonus, which is really profit sharing dividends, many applicants do not meet the position requirements (Narisetti, 1995). Moreover, Lincoln Electric is not capitalizing on its most valuable asset: the employees. Investing in employees makes business sense for the employer. While Lincoln Electric laments the number of skilled workers available to them, they forget that they already have those skilled workers: current employees. Lincoln Electric’s issues with training and development are solvable, and the solution starts with the initial problem, which is the lack of qualified, entry-level applicants (Narisetti, 1995).

The better the employee, the better the company runs. Lincoln Electric is doubtlessly aware of this concept. Training and developing employees from the onset guarantees Lincoln Electric remains successful in the future. The first way to hook potential recruits is to catch their attention. Lincoln Electric does this rather well by promising no lay-offs, and sharing the company’s profits with the employees (Lincoln Electric Company, 2007). Perhaps even more important is the employer’s willingness to help maximize employees’ potentials. Although Lincoln Electric promotes employees based on experience, as opposed to seniority, there are no systems in place to ensure employees garner enough experience to realize a promotion. If only a small number of applicants can perform basic math skills, and the results are worse every year, Lincoln Electric has to begin training and development before applicants begin working at Lincoln Electric (Narisetti, 1995). This training ranges from refresher courses in mathematics for new applicants to specialized courses such as tool and die, computer-controlled machining, and welding for present employees.

Lincoln Electric cannot hire enough applicants for several reasons. First, most people have no manufacturing experience. Second, many high schools restructured their curriculums and no longer offer students exposure to vocational training programs (Prizinsky, 1994). Consequently, Lincoln Electric rejected a majority of the 20,000 applications received during an 18-month period because applicants lacked basic algebra skills (Narisetti, 1995). Lincoln Electric exhausted its hiring efforts by placing newspaper advertisements, retaining recruiting firms, and launching a mail marketing campaign (Prizinsky, 1994). While they did hire some workers using these methods, the original problem remained. Lincoln Electric can meet its hiring goals by sending new recruits to math refresher courses. As opposed to turning away all applicants who fail Lincoln Electric’s math assessment, Lincoln Electric should send those applicants to the math refresher courses. Doing so ensures a continual supply of entry-level workers. More important, Lincoln Electric can groom these employees for higher positions within the company.
Lincoln Electric currently affords employees the opportunity to develop their own career path, and promotes employees based on experience, not seniority (Lincoln Electric Company, 2007). Lincoln Electric should take this incentive a step further by offering tuition reimbursement to employees showing an interest in tool and die making, welding, computer-controlled machining, or any two-year college program that will help employees perform their job more satisfactorily. Tuition reimbursement often pays unforeseen dividends. An employee who realizes his or her true potential is bound to perform better. Although costly, this strategy offers Lincoln Electric a better return on investment than their direct mail marketing campaign. Carefully analyzing costs is one of the many reasons Lincoln Electric is a successful business. To ensure employees stay with Lincoln Electric after completing their degree or certificate, Lincoln Electric should have employees sign contracts that mandate employees remain under Lincoln Electric’s employ for a specified number of years in exchange for their education. Cleveland Clinic has a similar program; for every 2 years of education the clinic pays on an employee’s behalf, the employee owes the clinic 1 year of employment. If employees leave beforehand, they are liable for the cost of the education (C. Ormsby, personal communication, 2007). Implementing this strategy has a cyclical effect on the hiring, training, and development process. Once new employees enter entry-level positions, seasoned workers who have completed their schooling progress to higher positions, and the cycle continues.

As an alternative, Lincoln Electric can offer in-house training program that will inaugurate each January after analyzing contract bids from any area college interested in the advertisement. Participants must sign in for the lab, and take a pretest, which aids in future benchmarking. Lincoln Electric will test participants again after five math labs and participants must demonstrate significant improvement in order for the contract to remain viable. Participants gain no compensation, other than their respective gains in job skills and qualifications. This program will encourage, though not mandate, managers at Lincoln Electric to attend at least one lab a year.

The labs commence at Lincoln Electric twice a week at both 8:00 A.M. and 8:00 P.M., to compensate for Lincoln Electric’s rotating schedule (Lincoln Electric, 2007). The primary purpose of these labs is to focus on improving skills in two areas – mathematics and computers. The company will post the schedule on a bulletin board to encourage as many employees as possible to attend. Unfortunately, many ambitious adults do not possess adequate math or computer skills to help Lincoln Electric. This plan will provide otherwise-dedicated employees the basic skills needed for company growth and potential.

The evaluation process consists of a two-step process. During the training process, management focuses on the participation and enthusiasm of the employees. Next, employees describe the main points of the training. After the training and development process, the employees demonstrate their mastery of the training session, while management observes. This is an evaluation tool used for employees with direct observation performed by supervisors. While observing, supervisors, prepared with checklists evaluate whether employees demonstrate the desired and required behaviors and skills of the position (Noe, Hollenbeck, Gerhart, and Wright, 2003).
Businesses usually conduct annual evaluations on their employees rather than providing ongoing process of continuous feedback. A problem with annual appraisals is that the evaluation can sometimes focus on recent events as opposed to past events, which, depending on the details of the events, could be either good or bad for the employee. Both positive and negative feedback is recognized as effective when it is done shortly after completion of a task. Therefore, ongoing evaluations are required at Lincoln Electric. After completing training, employees have the opportunity to complete satisfaction surveys of the training.

Any feedback they have helps in their learning process and feedback also lets the employees know their opinions matter and the company as a whole will do their best to consider their opinion. After all, they are the ones using the information they gain from the training on a daily basis.

Any employment setting implementing a training program requires planning. For Lincoln Electric, the training and development processes begin at the hiring phase. By implementing training geared toward specific positions, Lincoln Electric can overcome its hiring issues and further develop career path incentives already in place. The institution of math classes and tuition reimbursement provides effective training, and ensures adequate delivery of the training to the employees. Moreover, once employees complete training, supervisors conduct evaluations on the effectiveness of the training, and employees have opportunities to provide feedback. These days, all industries including manufacturing need skilled employees. By providing adequate training to employees at the onset and further developing employees, Lincoln Electric can prepare employees and the company for future growth.

Lincoln Electric Company (2007). Incentive Performance – A Cornerstone of Our Culture. Retrieved November 27, 2007, from
Narisetti, R. (1995). Many workers are called . . . but few are qualified. The Wall Street Journal [Electronic Version]. Retrieved November 24, 2007 from ProQuest Database.
Noe, R.A., Hollenbeck, J.R., Gerhart, B., & Wright, P.M. (2003). Fundamentals of human resource management. New York, NY: McGraw-Hill
Prizinsky, D. (1994). Going to church gets new meaning: Lincoln electric tries varied venues to find employees. Crain’s Cleveland Business [Electronic Version]. Retrieved November 24, 2007 from ProQuest Database.