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7.2 Developing Employees

Learning Objective

  1. Explain how companies train and develop employees, and discuss the importance of a diverse workforce.

Because companies can’t survive unless employees do their jobs well, it makes economic sense to train them and develop their skills. This type of support begins when an individual enters the organization and continues as long as he or she stays there.

New-Employee Orientation

Have you ever started your first day at a new job feeling upbeat and optimistic only to walk out at the end of the day thinking that maybe you’ve taken the wrong job? If this happens too often, your employer may need to revise its approach to orientationActivities involved in introducing new employees to the organization and their jobs.—the way it introduces new employees to the organization and their jobs. Starting a new job is a little like beginning college; at the outset, you may be experiencing any of the following feelings:

  • Somewhat nervous but enthusiastic
  • Eager to impress but not wanting to attract too much attention
  • Interested in learning but fearful of being overwhelmed with information
  • Hoping to fit in and worried about looking new or inexperienced“Induction: Orienting the New Employee,” HRM Guide Network, (accessed October 9, 2011).

The employer who understands how common such feelings are is more likely not only to help newcomers get over them but also to avoid the pitfalls often associated with new-employee orientation:

  • Failing to have a workspace set up for you
  • Ignoring you or failing to supervise you
  • Neglecting to introduce you to coworkers (or introducing you to so many people that you have no chance of remembering anybody’s name)
  • Assigning you no work or giving you busywork unrelated to your actual job
  • Swamping you with facts about the companySusan Heathfield, “Top Ten Ways to Turn Off a New Employee,” About, Inc., (accessed October 9, 2011).

A good employer will take things slowly, providing you with information about the company and your job on a need-to-know basis while making you feel as comfortable as possible. You’ll get to know the company’s history, traditions, policies, and culture over time. You’ll learn more about salary and benefits and how your performance will be evaluated. Most importantly, you’ll find out how your job fits into overall operations and what’s expected of you.

Training and Development

It would be nice if employees came preprogrammed with all the skills they need to do their jobs. It would also be nice if job requirements stayed the same: once you’ve learned how to do a job (or been preprogrammed), you’d know how to do it forever. In reality, new employees must be trained; moreover, as they grow in their jobs or as their jobs change, they’ll need additional training. Unfortunately, training is costly and time-consuming.

How costly? On average, for every $1 in payroll, large companies spend close to $0.03 in employee training and development.“2010 Training Industry Report,” Training Magazine, November 2010, (accessed October 9, 2011). The consulting firm Booz Allen Hamilton invests almost $0.08 in employee training and development. At Pfizer, the world’s largest pharmaceutical company, the total is $0.14 out of every payroll dollar.“Top 100: Top Five Profile and Rank,” Training Magazine, March 2004, 42. What’s the payoff? Why are such companies willing to spend so much money on their employees? Pfizer, whose motto is “Succeed through People,” regards employee growth and development as its top priority. At Booz Allen Hamilton, consultants specialize in finding innovative solutions to client problems, and their employer makes sure that they’re up-to-date on all the new technologies by maintaining a “technology petting zoo” at its training headquarters. It’s called a “petting zoo” because employees get to see, touch, and interact with new and emerging technologies. For example, those attending the “petting zoo” several years ago got to try out the Segway Human Transporter even before it hit the market.Tammy Galvin, “The 2003 Training Top 100,” Training Magazine, March 2003, 2.

At Booz Allen Hamilton’s technology “petting zoo,” employees are receiving off-the-job trainingFormal employee training that occurs in a location away from the office.. This approach allows them to focus on learning without the distractions that would occur in the office. More common, however, is informal on-the-job trainingEmployee training (often informal) that occurs while the employee is on the job., which may be supplemented with formal training programs. This is the method, for example, by which you’d move up from mere coffee maker to a full-fledged “barista” if you worked at Starbucks.Brooke Locascio, “Working at Starbucks: More Than Just Pouring Coffee,” Tea and Coffee, January/February 2004, (accessed October 9, 2011). You’d begin by reading a large spiral book (titled Starbucks University) on the responsibilities of the barista. After you’ve passed a series of tests on the reading material, you’ll move behind the coffee bar, where a manager or assistant manager will give you hands-on experience in making drinks. According to the rules, you can’t advance to a new drink until you’ve mastered the one you’re working on; the process, therefore, may take a few days (or even weeks). Next, you have to learn enough about different types of coffee to be able to describe them to customers. (Because this course involves drinking a lot of coffee, you don’t have to worry about staying awake.) Eventually, you’ll be declared a coffee connoisseur, but there’s still one more set of skills to master: you must complete a customer-service course, which trains you in making eye contact with customers, anticipating their needs, and making them feel welcome.Howard Schultz and Dori Jones Yang, Pour Your Heart into It: How Starbucks Built a Company One Cup at a Time (New York: Hyperion, 1997), 250–51.

Diversity in the Workplace

The makeup of the U.S. workforce has changed dramatically over the past 50 years. In the 1950s, more than 60 percent was composed of white males.Judith Lindenberger and Marian Stoltz-Loike, “Diversity in the Workplace,” The Economics and Policy Resource Center, (accessed October 9, 2011). Today’s workforce, however, reflects the broad range of differences in the population—differences in gender, race, ethnicity, age, physical ability, religion, education, and lifestyle. As you can see in Table 7.1 "Employment by Gender and Ethnic Group", more women and minorities have entered the workforce, and white males now make up only 36 percent of the workforce.U.S. Equal Employment Opportunity Commission, “Occupational Employment in Private Industry by Race/Ethnic Group/Sex, and by Industry, United States, 2006,” (accessed October 10, 2011). Their percentage representation diminished as more women and minorities entered the workforce.

Most companies today strive for diverse workforces. HR managers work hard to recruit, hire, develop, and retain a workforce that’s representative of the general population. In part, these efforts are motivated by legal concerns: discrimination in recruiting, hiring, advancement, and firing is illegal under federal law and is prosecuted by the EEOC.U.S. Equal Employment Opportunity Commission, “Federal Laws Prohibiting Job Discrimination: Questions and Answers,” Federal Equal Employment Opportunity (EEO) Laws, (accessed October 9, 2011). Companies that violate antidiscrimination laws not only are subject to severe financial penalties but also risk damage to their reputations. In November 2004, for example, the EEOC charged that recruiting policies at Abercrombie & Fitch, a national chain of retail clothing stores, had discriminated against minority and female job applicants between 1999 and 2004. The employer, charged the EEOC, had hired a disproportionate number of white salespeople, placed minorities and women in less visible positions, and promoted a virtually all-white image in its marketing efforts. Six days after the EEOC filed a lawsuit, the company settled the case at a cost of $50 million, but the negative publicity will hamper both recruitment and sales for some time to come.U.S. Equal Employment Opportunity Commission, “EEOC Agrees to Landmark Resolution of Discrimination Case Against Abercrombie & Fitch,” (accessed October 10, 2011).

Table 7.1 Employment by Gender and Ethnic Group

Group Total (%) Males (%) Females (%)
All employees 100 52 48
White 68 36 32
African American 14 6 8
Hispanic or Latino 13 7 5
Asian/Pacific Islander/Other 5 3 3

There’s good reason for building a diverse workforce that goes well beyond mere compliance with legal standards. It even goes beyond commitment to ethical standards. It’s good business. People with diverse backgrounds bring fresh points of view that can be invaluable in generating ideas and solving problems. In addition, they can be the key to connecting with an ethnically diverse customer base. If a large percentage of your customers are Hispanic, it might make sense to have a Hispanic marketing manager. In short, capitalizing on the benefits of a diverse workforce means that employers should view differences as assets rather than liabilities.

Key Takeaways

  • The process of introducing new employees to their jobs and to the company is called orientation.
  • An effective approach is to take things slowly, providing new employees with information on a need-to-know basis while making them feel as comfortable as possible.
  • New employees will need initial training to start their jobs, and they’ll need additional training as they grow in or change their jobs.
  • Off-the-job training allows them to focus on learning without the distractions that would occur in the office, but on-the-job training is more common.
  • In addition to having well-trained employees, it’s important that a workforce reflects the broad range of differences in the population.
  • The efforts of HR managers to build a workforce that’s representative of the general population are driven in part by legal concerns: discrimination is illegal, and companies that violate antidiscrimination laws are subject to prosecution.
  • But ensuring a diverse workforce goes well beyond both legal compliance and ethical commitment. It’s good business, because a diverse group of employees can bring fresh points of view that may be valuable in generating ideas and solving problems.
  • Additionally, people from varied backgrounds can help an organization connect with an ethnically diverse customer base.


  1. (AACSB) Reflective Skills

    Think about a full-time or part-time job that you’ve held. Was your orientation to the job satisfactory? If not, how would you have improved the process? Did you receive any training? Was it useful? What additional training would have helped you do a better job? How would it have benefited the company?

  2. (AACSB) Diversity

    While visiting a mall in Los Angeles, you noticed two stores located side by side selling electronic-entertainment products—CDs, DVDs, and so on. All the employees in one store were white males. The mix of workers in the other store—which happened to be more profitable—was more diverse. Why do you think the store with the diverse workforce did more business? In terms of diversity, what would be your ideal workforce in a store similar to these in Los Angeles?