Introduction

Do you think these business literacy programs can help employees see the connection between individual/team performance and organisational profitability? Business literacy idea was first introduced by management guru Peter Drucker where he mentioned in his book that employees must know how their job can contribute to the company business and how to use financial and business information to achieve company success. . Without this information, they are unlikely to perform (Drucker, 2007). The objective of business literacy programs is to teach employee about their business. It helps employees understand and be cleared about the company mission, goals and values, illustrate how employees actions and behaviour could affect company goals and objectives, identify what employees can do to improve complement company objectives and to make them think like a business partner rather than an employee. There are many types of programs depending on company needs. Continuous changes in the business environment have somehow made these programs important in company. Changes could be anything that forced companies to continuously improve themselves to create and sustain its competitive advantage. One good example is globalisation impact where intense competition is inevitable in the global business arena. This means employees need to be trained to equip themselves with more knowledge and information. For example, imagine a business literate manager and a non-business literate one. Both are given a task to reduce expenses. The business literate manager is able to tell where to reduce by looking at income statement whereas the non-literate might not know where to start. What about employees at functional level? A research shows that about 60 percent of them do not know how to read an income statement, thus unable to tell the connection between work and revenue, expenses and profit. It also shows that about 70 percent cannot tell the difference between cash and profit and why the difference is important. It also stated that about 50 percent of them work hard but are unclear of company missions, thus making the effort worthless as the direction is wrong (Karen, 2001). Another survey performed to assess company results of business programs training shows that the business programs are effective not just in financial knowledge but also help employees to improve their knowledge in non-financial area. The survey was carried out with employees from various industries and company sizes.

The results shows 91 percent of the employee improves their business knowledge, 91 percent improves in communication, 89 percent improves in financial results sharing, 89 percent improves in information flow in the company, 86 percent increase in knowing company results and its metrics, 80 percent improvement in decision making, 74 percent improves in reducing expenses, 71 percent improves in trust between lower level and upper level employees, and 68 percent improvement in operations and processes (Karen, 2001). From the results, it clearly proved for example, why expenses reduced as a result of the program. With better information flow and sharing, and communication, employees see how expenses derail company bottom line and how to use their current role to control these expenses. The trust level improvement is due to increase in company transparency level. The programs encourage company management to share sensitive information employees at all times. As such, trust is communicated and built among employees. In conglomerate like PepsiCo, much success has been achieved with business programs. The company uses learning maps, that is, to manage change by dialogue and discovery, understand drivers of change as in why there are changes, what the changes are and how to connect employee to it and contribute. Visual learning is helpful in shared understanding and learning across diverse culture. Group discussions facilitates employees interaction and hence relationship as staff are grouped into team of 8 -10 of different level. Exercises to share observations and learn together concept foster employee working relationship with each other (Holman, 2007). Above practices allows employees to find out more from others as they are exposed to other department functions, work processes, customer requirements, and company financial status. As such, new ideas are formed when employees exposed to what if questions and scenarios that allows them to cope with changes if needed in future. The exposure has helped entire workforce understands and sees firm from different perspective. There are mainly business acumen, the system, interrelationships and personal roles and contribution. Employees are well prepared for critical matters and commitment. The results are improved performance and business results in PepsiCo. Connecting is one part but effectiveness of such program is another. Above cases are success stories. Lets look at company that failed to achieve its objectives. A very good example will be the company I worked for currently. It has been making losses for more than five years. Top management changes every three years when they failed to achieve stakeholders expectations. Later, the company was sold to a listed Japanese firm. New top management were sent over to head the acquired firm in Malaysia. Restructuring was carried out. New vision and mission was introduced. New program like Kaizen was implemented and

is compulsory for all to attend. The purpose of Kaizen is to keep on improving not only process but any aspects that can contribute to the firms purpose. In the Kaizen meeting which was held once a month, all departments will share their achievements on key performance indicators (KPI) set with the entire workforce. For those failed to achieve, they need to justify what are the reasons behind for not achieving. For those who achieved, they will share their success stories and share how they do it. For example sales department review sales target, production review productivity and internal rejection rate, finance review its company monthly profitability, human resource department reviews on employee turnover rate and staff constraints, purchasing review inventory write off and so on. All the reviews comes with example on how to improved detrimental areas. For example, production floor understand how minor mistake they make could affect company bottom line. Rather than just talking about process improve, how well to run machine, the programs relate quality issue means more less output hence high rework cost and high cost means high selling price to customer and customer buy from competitors who offers cheaper price. Customer not satisfies leave and company lose a long term customer and long term stream of income. As a result, company has less money to pay worker and last resort to retrench. Over time, the firms business has not improved with such program in placed. From my observation, it is not that the program failed to connect the people with the business. In fact I find it very useful as it keeps me aware of current affairs. We all know our performance will link to firm profitability. But why are we not doing it? Why is it not effective as compared to above cases in PepsiCo and Sears? The answer lies in the firms culture. Yes, the beliefs system of the entire workforce. The firm has operated for 30 years since inception and most employees work more than 10 years. Here lives a culture of complacency and high reluctance to change. Besides culture issue, top management do not focus on accountability and responsibility so much. This perhaps due to Japanese culture where it favours people oriented style rather than results oriented. A case in point is production floor failed to achieved productivity target for few quarters or has been repeating the same quality mistake for more than 3 times, rendering high wastage and customer dissatisfaction due to delayed delivery. Even so, no one was held accountable and responsible for this costly mistake but a few reminders to production floor to be more careful next time.

This follows by lack of top management participation and commitment towards the importance of such program. The importance comes only when problem such as huge quality claims from customers arises. Very often, top management didnt walk the talk. They should act like role model to all employees. There is a Chinese saying that if the top management is unclear of the objectives, how one would expect the bottom level to understand their objectives. Next is lacking of follow up and lack of communication skills. During transition phase, there should be following up and feedback on targets or action plans discussed and not forget all about it after the meeting, which is the case here. The meeting has become more like reporting meeting rather than an improving one. In addition, communication between Japanese and locals are not effective due to language barrier. Very often wrong message is passed on and create misunderstandings. Next is failed to link people to business strategies. The company mission statement is to become best quality supplier in ASEAN countries. With such strategy, the workforce should focus on reduce cost, improve efficiency and quality and reduce waste. Unfortunately, this is not the case also. There were visual representations in the factory showing how much a minor mistake in production can lead to high cost later. So production workers are like to be careful in carrying out their job. Next is lack of resources such as capital to invest in employee training and development. New programs with new objectives required new skills to perform. Hence training is important in acquiring new skills. Without such resources, employees will not able to perform, thus unable to contribute constructively and improve current standard. Next are political constraints. For example, managers identified business risk and report it to his new supervisor. New supervisor is power crazy type and do not listen to manager advices. Based on this experience, manager does not dare to be truthful to his supervisor since then, in order to please him and to protect his own position. For those managers who insists (that is favour the big picture), they ended up being dispel or freeze. Last but not least, lack of motivation is another reason that failed the program effectiveness. There are no incentive programs available to motivate and encourage performers or valued behaviour. With above discussion, in my opinion, business literacy programs effectiveness and success in helping employee to understand the relationship between performance and profitability depends very much on many factors as discussed above. There are the firms culture, top management commitment and participation towards it, alignment between programs objectives with firms business strategies, design of how such program being carried out,

encourage, support and motivational factors, a good feedback and assessment system, suitable work environment, readiness of individuals towards such change, lack of resources and so on. As programs are created by human being, the overall effectiveness at the end of the day will be based on how cycle how well the people identify the change, drive the change, manage the change and reward the change. And this should start from top to bottom.

Do you think the credibility of pay for performance plans improves or decline as a result of these programs? Explain. Performance plans are used to motivate employees by rewarding them for what have achieved beyond expectations. The rewards can be extrinsic (money, recognition) or intrinsic (personal satisfaction or pride). There are different kinds of performance plans, namely merit pay, incentive pay, profit sharing, ownership, gain sharing, and skills based. Different programs are used to achieve different objectives. Some are used to foster teamwork and cooperation while others used to improve individual performance. A combination could be used to achieve a balance in between individual and group performance. I believe literacy programs compliments performance plans. However, I believe its true effectiveness relies very much on various factors. First, with literacy programs, one knows where to improve. Hence, one should link performance plans to literacy programs objectives. If this is done properly, then performance plans improve. Assuming a company business strategy is low cost, then the business objectives should rely on waste reduction, cost savings, and improve efficiency and quality. Performance plans are to be linked to these objectives. When performer achieved the objectives, they get rewarded. With that, they feel appreciated for what they have achieved and will continue with the good work or performing even better in future. On the other hand, if it is done inappropriately, the performance plans will decline. For example, if the performance plans are linked to wrong business objectives, employee still perform and get rewarded for irrelevant objectives. The downside is the performance achieved do not contribute to the firms objectives and hence its profitability. The problem lies with design of the performance plan linkage. When there is flaw in designing performance plans, the problem lies with the creator of such design. This implies the creator is not clear with company business strategies. Secondly, firm must know what employee wants also, that is what motivates them. According to Maslow theory of motivation, every human being is motivated by a hierarchy of needs ranging from low to high. There are five needs, mainly physiological needs, security needs,

social needs, esteem needs, and self-actualisation needs. When one of these needs is fulfilled, next higher need arises. Production workers needs might be different from managers. To motivate employees effectively, one must know what employee current needs are. Assuming a salesperson need can be motivated by monetary reward and literacy program shows customer service is one important area for the company. In that sense, performance plans should reward the salesperson who satisfy customers or receive customers compliments with incentive. This improves the performance plan. If you reward the salesperson with recognition, the performance plan decline because that do not satisfy the salesperson. There are cases where above factors are solved by performance plans still decline. When this happen, one should assess other factors like working environment, task and equipment, staff skills, financial resources just to name a few.

Results from a preliminary company needs assessments indicate that managers have a negative opinion of the training offered by the firm, think the training is waste of time, and are resistant to attend future training by the training staff. What additional information would you want to collect from the managers before sending them to a training program? Effective training involves three stages, mainly, needs assessments, implementation and evaluation. Training needs assessment (TNA) commonly involves 3 kinds of analyses, mainly, organisational, task, and person. Organisational analyses determine the business appropriateness of training. Task analysis identifies the tasks, knowledge, skills, and attitude that need to be trained. Person analysis determines whether training is necessary, who needs training, and whether employee is ready for training. Whether training is necessary, we must assess whether lack in performance is a cause of deficiency in knowledge skills or ability or due to motivational or working environment problem. Very often, organisational analysis will be conducted first for couple of reasons. First firm like to ensure it has enough resources such budget, time, expertise for training. Second, managers and peers participations and support to trainees which prove to be critical success factors to training (Gerhart, 2006). Third, intended training should help firm achieve business strategy. Both person and task analysis is done at the same time because there are many times is hard to determine whether performance deficiency is caused by lack of training without assessing the task and work environment. The outcome of these analyses tells you who need training, what knowledge, skills and behaviour trainee should learn in order to perform better and other job requirements. Getting this step right is utmost important to company. Failing to do so will render company to waste time, effort and money on training programs that do not jive with firm goals and objectives or do not fit individuals. Imagine sending staff to wrong training programme, or failed to identify more effective method other than training, or training too short or too long or failure to get feedback on training. These are all very costly mistake which can be prevented. So, a correctly done analysis will provide company the accurate information needed to design and focus on areas that really needs attention and support firms business strategies.

Person Analysis Before sending managers for training, I would like to find out is training necessary for managers. And if it is necessary, what training should manager attend and what need to be learned. Person analysis tells you just that. Whether training is necessary for employees depends very much on their performancerelated and non-performance matters. Non performance related for example would be when company introduce new technology where new skills are needed to use the new technology, lets say customer relationship management (CRM) system. It could due to complain from customer or supplier, a change in legislation, business growth or contraction or even global business expansion. Where as for performance related matters would be staff performance in achieving the target or goals set for them. For example, sales target for salesperson, productivity for production people, debtors days for finance and so on. Very often employee performance goals are set based on their job descriptions (JD) and job specifications (JS). Both are components derived during job analysis (JA). Job analysis determined the duties and skills requirements of a job and the kind of person who should be hired for it. It is used to make recruitment and selection decision, performance appraisal, compensation decision and training requirements. JD states the task, duties, and responsibilities, reporting relationships, working conditions and supervisory responsibilities pertaining to a job. JS states the human requirements such as knowledge skills and abilities (KSA) required of the job holder. This includes also education personality and so on. Training is necessary when there is a gap in between employees desired performance and actual performance set based on their JD and JS. We need to find out the reason there is a gap in their performance. Is the decline in performance caused by employee such as skill, knowledge, ability and attitude or other factors such as working environment, mismatch for jobs? However, if the deficiency in performance is neither above causes, but due to staff not liking the job, it is a discipline issue. There are two ways to improve the situation that is coaching and disciplinary action. If employees do not accept help, company will have to use disciplinary action to enforce desired behaviour and actions. The worst situation would be to expel. Hence before send managers for training, the additional information we must gather includes managers respective JD and JS (if not presence) and managers performances set towards JD, JS and other jobs requirements. There are various methods to gather such information.

Each method has its own advantages and disadvantages and suitability under different situations. We will discuss more of these methods in the next section.

What methods would you use to collect the information? Methods to gather JD and JS There are many methods to collect data pertaining to JD and JS. There are interview, questionnaires, observation, and participant diary. They are use with different purpose. In Interview method, sources of information can come from individual employee, group employee or supervisor with knowledge of the job. The formats can be structured (checklist) and unstructured. This is quick way and direct way to find missed information but it is time consuming, information can be distorted and hard to analyse. Under questionnaire method, sources of information come from employees fill up questionnaires set to describe their jobs related duties and responsibilities. It formats can be structured or open ended questions. It is quick to use and efficient way to gather information from large number of employees but it is very time consuming in preparing and testing the questionnaires. With observation method, one gather information by observing and nothing the physical activities of employees while they doing their jobs. This method provides first hand information and reduces distortion of information but it is time consuming, hard to capture the whole job cycle, and not suitable to for job that involves high level of mental activity. In participant diary, workers will keep a diary or a log book which they used to keep track of what have been done and the time spent in each activity. Information is gathered by analysing the information jot down. This method produces a more complete picture of the job at the same time support and encourages employee participation. The downside is high chances of information being distorted and accuracy of information is based on employees memory recall of activities and writing skills.

Methods to appraise There are many methods to performance appraisal. There are written essays, critical incidents, graphic rating scales; behavioural anchored rating scales (BARS), multi-person comparisons, management by objectives (MBO), and 360 degree review.

Written essay is simple to use but actual performance of employees are very much influenced by evaluators writing skills. Critical incidents method focus very much on appraisee key productive and counter productive behaviour but it is very time consuming and lack of quantification. Graphic rating scales appraise identifies and rate from incremental style the performance factors based on both quantity and quality aspect such as work, knowledge and initiatives. It consumes less time compared to others but it fails to assess job behaviour. BARS is basically a combination of both critical incidents and graphic rating scales method. It is focused on specific and measurable job behaviours but is time consuming and measures are hard to develop. A multi-person comparison compares employee with one and another but is hard to use or handle or manage on large number of employees. consuming. In 360 degree review, one is appraised by different groups of people. They are customer, supervisors, peers, supervisors and suppliers. The method is much thorough but time consuming. Nevertheless, research shows this method is mostly used nowadays in most companies because it is believe to provide accurate feedback, allows employee empowerment, able to reduce subjective factors in evaluation and develop leadership in a company. MBO method is result oriented. It focuses on end results rather than how to achieve results and it is time

What recommendations would you offer to the firm to ensure that managers still receive the future training? Very often we heard training is a waste of time. In fact, a survey done by McKinsey Quarterly compliments this statement. The survey shows that of all the frontline managers being surveyed, only 10 percent of them regards training is effective (Smet, 2010). There are many reasons why people find training is a waste of time. Here is some of it.

1) Lack of readiness and motivation - Staff not ready or motivated for training. 2) Lack of purpose staff do not why they are send for training, no needs assessment
performed, staff send to irrelevant training 3) Lack of clarity training objectives not specified clearly

4) Replacement to send someone for training just because someone else not able to
attend 5) Culture firms culture do not support training

6) Lack of resources firm is lack of budget, equipment or working environment. 7) Unable to apply what is learned rigid working environment or management style

8) Quality of training incompetent trainer, 9) Quality of learning material inappropriate learning material.
10) Incorrect training method participation when role play more effective

11) Lack of training coordination training is rushed 12) Lack of top management support and participation Google staff receive 100 hours
of training a year. 13) Training not strategic training programs are not tied to firm business strategies 14) Lack of reliable feedback system in working environment

Therefore to encourage managers still go for future training, company can reduce or eliminate above resistance factors faced by managers. Here are some recommendations Managers are ready and motivated to learn. Managers readiness and motivation to learn is important. Hence firm needs to ensure managers readiness and motivation to learn is at highest possible. This can be achieved by ensuring managers self efficacy, understand the benefits of training, being aware of training needs, career interest and goals, understanding of working environment characteristics and basic skills level. The purpose of self efficacy is to ensure managers who are intimidated by training due to threatening reasons, to belief in themselves that they can learn the content of the training program. The firm can increase self efficacy level by sharing with managers the purpose of training is to improve performance rather that than looking for their incompetents prior to training. Besides self efficacy, firm can increase managers motivation to learn by sharing the potential benefits they could reap after training and how these benefits gained could improve current working condition and enhance future career prospects. Potential benefits communicated should be realistic as unmet expectations tend to de-motivate. Other than readiness and motivation to learn, creating a learning environment is as important. For managers to apply what they learned (knowledge and skill) in training, the training must consists of specific learning principles. There are: Managers need to know the objective of training. This is because one learns best when they understand what they are learning than those who dont know. A good training programs should spell out it purpose and expected outcome after the training. To achieve this, training programs are based on needs assessments because it helps employees to understand why they need training.

Manager needs meaningful training content. Training content is important in helping managers to learn especially when the content is linked to their current job experiences and tasks. This means content is meaningful to them. To further enhance the meaningfulness of content, the concepts, terms, and examples quoted must be familiar to managers. Besides content, training context can improve learning as well. To make it more meaningful, the training context should resemble managers actual working environment. For example, to improve customer relationship, the content and context of training should use scenarios of unhappy customers faced by salesperson over the phone or at customer site. Managers need opportunities to practise. Managers are keen to learn when they can apply what they have learned in training. Otherwise it would be a waste of resources to send managers for training. Learning will not occur if managers practice only by talking and not actually doing what they are expected to do after the training. So, firm has to ensure there is room for manager to practise what they have learned. Managers need feedback. Feedback is important as it tells how well the managers are meeting the training objectives. It acts as a measuring device telling managers where they are standing and whether further improvements are needed. Without a good feedback system, even though if you have the best training program, it will be worthless. As the saying goes you cannot improve what you cannot measure. Managers need the training program to be properly coordinated and arranged. This is important as a poorly coordinated training program can interfere with learning. For example, uncomfortable room or poorly organised training material can distract managers. A good coordination provides full learning environment with the least distraction before, during and after training program. Managers need the training program to be fully supported by top management. Surveys show that company with the most effective training practises typically receives full support and commitment from top management. In these companies, training is part of the corporate culture. These companies includes Google, Disney, Marriot, and Hewlett Packard (Cascio, 2010)

Conclusion

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