Final Thesis - Andinet - 2

Alpha University College
School of Graduate Studies
EFFECTIVENESS OF TRAINING AND DEVELOPMENT ON

INFORMATION TECHNOLOGY STAFF PERFORMANCE AND
ORGANIZATION COMPETITIVENESS: INFORMATION TECHNOLOGY
STAFF OF SELECTED ETHIOPIAN PRIVATE BANKS
By
Andinet Endayilalu
August, 2017
Addis Ababa, Ethiopia
Effectiveness of Training and Development on Employees’ Performance and

Organization Competitiveness: The Case of Selected Ethiopian Private Banks.
By
Andinet Endayilalu
Advisor: Shiferaw Mitiku (Ph.D)
A Thesis Submitted to the School of Graduate Studies of Alpha University

College in partial fulfillment of the requirement for the Degree of Masters of
Business Administration with concentration in Project Management
July, 2017
Declaration
I, the undersigned, declare that the study entitled with “Effectiveness of training and
development on employees’ performance and organization competitiveness: The case of
selected Ethiopian private banks” is my work. I have undertaken the research work
independently with the guidance and support of the research advisor. That all sources of
materials used for the thesis have been duly acknowledged.
Declared by:
Name: Andinet Endayilalu
Signature: .......................................
Date: .......................................
Advisor:
Name: Shiferaw Mitiku (Ph.D)
Signature: .......................................
Date: .......................................
August, 2017
Effectiveness of Training and Development on Employees‟ Performance and

Organization Competitiveness: The case of Selected Ethiopian Private Banks
By
Andinet Endayilalu
This is to certify that the thesis prepared by Andinet Endayilalu, entitled: “Effectiveness of
training and development on employees’ performance and organization
competitiveness: the case of selected Ethiopian private banks” and submitted in partial
fulfillment of the requirements for the degree of Master of Arts in Business Administration in
concentration with project management complies with the regulations of the Alpha University
College and meets the accepted standards with respect to originality and quality.
Signed by the Examining Committee:
______________________ ____________ _____________
External Examiner Signature Date
______________________ ____________ _____________
Internal Examiner Signature Date
______________________ ____________ _____________
Advisor Signature Date
______________________ ____________ _____________

Dean of SGS or Graduate Program Coordinator
Acknowledgements
I would like to thank the Almighty God for his unlimited love and safety in my life and all the
way to my career path throughout my study to reach to this achievement.
Next, my unreserved thanks go to my Advisor, Shiferaw Mitiku (Ph.D), whose advice,

guidance, critical review and comments that dramatically adjust the way the thesis should be.
The process of doing this research cannot be realized without your contribution.
Finally, I would like to sincerely recognize and appreciate the efforts of people too numerous
to mention who have contributed immensely in one way or the other towards the successful
completion of this research work.
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TABLE OF CONTENTS
Acknowledgements .................................................................................................................... i
List of Tables............................................................................................................................ iv
List of Figures ........................................................................................................................... v
Abbreviation and Acronyms .................................................................................................... vi
Abstract ................................................................................................................................... vii
CHAPTER ONE: INTRODUCTION ................................................................................... 1
1.1 Background of the Study ........................................................................................ 1
1.2 Problem Statements ................................................................................................ 2
1.3 Research Question .................................................................................................. 3
1.4 Objective of the Study ............................................................................................ 4
1.5 Scope of the Study .................................................................................................. 4
1.6 Delimitations of the Study ...................................................................................... 4
1.7 Limitations of the Study ......................................................................................... 5
1.8 Significance of the Study ........................................................................................ 5
1.9 Organization of the Study ....................................................................................... 5
CHAPTER TWO: LITERATURES REVIEW ......................................................................... 7
2.1 Introduction ............................................................................................................. 7
2.2 Theoretical Literature Review ................................................................................ 7
2.3 Empirical Literature Review ................................................................................. 12
2.4 Conceptual Framework ......................................................................................... 17
2.5 Identified Literature Gaps ..................................................................................... 18
CHAPTER THREE: RESEARCH DESIGN AND METHODOLOGY ................................ 20
3.1. Introduction ........................................................................................................... 20
3.2. Background of Private banks in Ethiopia ............................................................. 20
3.3. Research Methodology ......................................................................................... 22
3.4 Population and Sampling Techniques ....................................................................... 22
3.5 Data Source and Type ........................................................................................... 25
3.6 Data Collection Procedure .................................................................................... 25
3.7 Method of Data Analysis ...................................................................................... 26
3.8 Research validity and Reliability Test .................................................................. 26
3.9 Ethical Considerations .......................................................................................... 27
CHAPTER FOUR: DATA ANALYSIS AND DISCUSSION OF RESULTS ...................... 28
4.1. Introduction ........................................................................................................... 28
4.2. Analysis of Findings ............................................................................................. 28
4.3. Performance Evaluation and Measurement .......................................................... 42
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4.4. Description and Analysis of Data Obtained from Supervisors ............................. 44
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION ................. 53
5.1. Introduction ........................................................................................................... 53
5.2. Summary of Findings............................................................................................ 53
5.3. Conclusions........................................................................................................... 55
5.4. Recommendations ................................................................................................. 55
5.5. Direction for Future Research............................................................................... 56
References ........................................................................................................................... 57
Appendices .......................................................................................................................... 60
Appendix A: Survey Questionnaire for IT experts ......................................................... 60
Appendix B: Survey Questionnaire for Managers .......................................................... 64
Appendix C: Results of Cronbatch's Alpha Reliability Test........................................... 65
Appendix D: List of Private Banks in Ethiopia .............................................................. 66
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List of Tables
1. Table 3.1 Population of the study .................................................................................... 23

2. Table 3.2 Stratum representation of sample size ............................................................. 24
3. Table 3.3 Respondent distribution among firms in banking industry .............................. 25
4. Table 4.1 Background Information of the Respondents .................................................. 29
5. Table 4.2 Respondents‟ Experience of the Training and Development Activities .......... 31
6. Table 4.3 Existing Training and Development Practices ................................................. 33
7. Table 4.4 Contribution of Training and Development to Organizational Goal .............. 36
8. Table 4.5 Employee Perceptions on Training and Development Program ..................... 38
9. Table 4.6 Employee Perceptions on Training and Development Expenditure. .............. 39
10. Table 4.7 Employee Perceptions on which they were sponsored .................................... 40
11. Table 4.8 Employee Perceptions on Training and Development Objective .................... 41
12. Table 4.9 Employee Perceptions on Quality of Trainers ................................................. 41
13. Table 4.10 Performance Evaluations and Feedbacks. ..................................................... 42
14. Table 4.11 Evaluation of Organizational Effectiveness by Managers ............................ 44
15. Table 4.12 Evaluation of Organizational Effectiveness by Managers ............................. 44
16. Table 4.13 Measuring Effectiveness of Training and Development................................ 51
iv
List of Figures
Figure 1 Conditions for Effective Training .............................................................................. 10

Figure 2 Proposed Study Model............................................................................................... 18
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Abbreviation and Acronyms
ICT: -------------------Information Communication Technology

IT: ---------------------Information Technology
BSC: ------------------Balanced Score Card
NBE: ------------------National Bank of Ethiopia
POS: ------------------ Point of Sale
HRM: ----------------Human Resource Manager
IBM: ------------------International Business Machines
SPSS: ----------------Statistical Package for Social Science
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Abstract
Employee training and development is a very critical factor on the performance of
commercial banks. Training and development is an instrument that aid human capital in
exploring their dexterity. Therefore training and development is vital to the productivity of
organization’s workforce. The main objective of this study is to examine the effectiveness of
training and development on IT staff performance and organizational competitiveness: the
case of selected Ethiopian private banks. This has been done by selecting three representative
private banks of Ethiopia (Awash International bank, Dashen bank and Bank of Abyssinia) as
sampling unit. Employees in these banks were given a structured questionnaire that was
designed to particularly measure the influence of training and development on respondents’
skills like Job knowledge, work quality and quantity, their motivation and others. The
population used for the study was 224 employees. A sample size of 155 was drawn. A
structured questionnaire with a five-point likert scale was used as the instrument of data
collection. A pilot study was conducted to help establish the reliability and validity of the
research tool. Analysis was done through the application of frequency tests in SPSS. Based on
the finding, the study concludes that if the right employees are sent on training through the
systematic training procedure of identifying and selecting employees for training, there would
be a significant improvement both on the employee’s performance and organizational
competitiveness. Finally, it is recommended that a mechanism should be created for proper
assessment, evaluation of employee performance and giving a regular feedback, after training
as this will ensure that only employees who require training are sent on training.
Keywords: Training, Development, Employee Performance, Organizational Competitiveness.
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CHAPTER ONE: INTRODUCTION
This Chapter presents a brief introduction to the subject of the study. It starts by presenting
the background of the study. It continues by providing the statement of the problem,
highlights the goals of the study, scope of the study, significance and a brief definition of the
key concepts and finally the structure of the study is presented.
1.1 Background of the Study
The survival of any organization in the competitive society lies in its ability to train its human
resource to be creative, innovative, inventive who will invariably enhance performance and
increase competitive advantage. Training and development is an aspect of human resource
practices that help in enhancing employees‟ skills, knowledge, and competence capable of
improving employees‟ ability to perform more efficiently. Training and development play a
vital role in the effectiveness of an organization. It is one of the most pervasive techniques for
improving employees‟ performance enhancing organization productivity in the work place.
Employees are the indispensable asset and key element of gaining competitive advantage of
any organization and training is essential tool for its actualization.
The level of competency, skills and ability of the workforces of an organization influences its
ability to preserve its obtained positions gain competitive advantage. Meanwhile, employees
competence, skills and pro-activeness is directly proportional to the level at which
organization can compete with others. Organizations are confronted with increased
competition resulting from changes in technology, economic environments, globalization etc.
The competitiveness and success of an organization therefore lies on the people who form and
work within the organization. So, human resource of an organization is the determinant for
the realization of its goals. At the same time, simply having this resource is not guarantee for
the organization to be successful unless and until the organization improves the performance
of the people time to time using different techniques. Among which training and development
is the one and it is the focus of this paper.
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Training and development is both time-consuming and expensive, the organization must be
effective in terms of the specified objective that a company planned to realize. Effectiveness
of the organization from the training and development expenditure is a measure of how well
training and development achieves its intended objectives, for example, to improve job
performance the effectiveness of the organization from the training and development
expenditure measures to what extent the training and development improve the job
performance in the organizations after the training and development program. Therefore the
success of training and development programmes in an organization depends on the Effective
implementation of its training and development plan.
1.2 Problem Statements

Employee training and development is recognized as crucial element in the attainment of
organizational goals and objectives. In order to sustain economic and effective performance,
it„s important to optimize the contribution of Employees to the aims and goals of an
organization Armstrong (2010). Like many organizations in Ethiopia, the Banking sector
considers training and development of its‟ Employees as a very important activity. This
activity of human resource management consumes significant portion of the organizations‟
fund to train their people. The main problem here is that not how much the organizations are
spend for training and development of their employees, but how much organizations are
effective from training and development expenditure? Meaning that at the same time the
organization are expected to be effective from the investment that they invest for training and
development, simply invest huge amount of Birr for training and development is not enough.
Organizations must measure the return on investment to check how much they are effective
from it and Assessing the Effect of the training and development on the Trainers performance.
Organizational effectiveness is the concept of how effective an organization is in achieving
the outcomes the organization intends to produce. The companies spend so much of their
budgeted Birr on Employees training and development, so it is crucial that they are able to
measure the added value from the expenditure. This can be measured through comparison of
costs and benefits associated with Training and development remains the best way to
determine.
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Evaluation of training and development success is the most important phase in order to assess
whether an organization is achieve the desired goal or not. Evaluation of training compares
the post-training results to the objectives expected by managers, trainers, and trainees. In
many organizations, large expenditures are made on training and development. But whether
those expenditures produce value and an economic impact for the organizations that make the
expenditures and their impact on the Employees performance have not been identified clearly.
On the other hand training activities are not tailored towards employee job needs. There is a
gap between employee job needs and training activities making it very difficult to facilitate
performance in Banks. This has advance implications on the growth of the banking industries.
This is against any known management training principles. In such programmes, lobbying,
corruption and nepotism is persistent as training would be used to compensate selected few.
The impact of training and development on organizational objective in the Ethiopian private
banking industry has not been substantially investigated and documented. This is in spite of
the significant contribution of this sector to economic development; training and development
activities have been shown to be unreasonably low. In this industry, the success of the banks
is thus dependent on the quality of its employees and how effective they are trained in order
that they help the organization achieve its objectives.
There are several studies that have been done on training and development of staff but none of
them integrate their impact on organizational competitiveness, specifically in Ethiopian
private Banking Sectors. This study will address the existing problems.
1.3 Research Question

1. What are the existing training and development practices of the selected private
banks?
2. How the organizations evaluate their effectiveness from the training and
development program
3. How training and development of employees contribute to the achievement of
organization goal?
4. What is the perception of the employees on the training and development?
5. What are the internal factors that affect effectiveness of training and development?
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1.4 Objective of the Study
1.4.1 General Objective
The major objective of this study was to examine the effect of training and development on
employees‟ performance and examining of how much organizations are effective form
training and development expenditure in selected private banks of Ethiopia.
1.4.2 Specific Objective
Specifically, the research seeks:

1. To assess the existing training and development practices of the selected banks under
study in Ethiopia.
2. To identify the criteria used by the organizations to measure their effectiveness from
training and development program.
3. To find out how the training and development of employees contribute to the
achievement of the goals of organizations
4. To analyze employee perception on training and development program
5. To assess internal factors that affect the effectiveness of training and development.
1.5 Scope of the Study
The study is focused on the investigation of the effectiveness of training and development on
employees‟ performance and on organizational competitiveness. The geographical scope of
the work is Addis Ababa city. Only three (3) banks located in Addis Ababa city were chosen
for the study. They are: Awash International Bank, Dashen Bank and Bank of Abyssinia.
1.6 Delimitations of the Study
The study will not include all departments‟ employees of the Bank; it focuses only on the IT
department. The study will not include all banks of the country and only focuses on selected
private banks.
The study deals only with employees training and development, hence other factors that may
have the same impacts on the commercial banks as employee training are not looked at.
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1.7 Limitations of the Study
The major limitation were time and the other one was non-availability of adequate published
and documented data about training Program of the organizations which would be useful,
but the data which were not available as required.
1.8 Significance of the Study
Training becomes inevitable the moment an organization realizes the need for improvement
and expansion in the job. But often times, organizations embark on job enlargement and
enrichment to promote employees' morale, motivation and satisfaction when in the fact the
real problem with work performance lies in capacity development. The study becomes
necessary because many organizations in this contemporary world are striving to gain
competitive edge and there is no way this can be achieved without increasing employees'
competencies, capabilities, skills etc through adequate training designs. However, the study
results will help the management to identify the challenges effects of employees‟ training on
organizational performance, hence determine the areas where improvements through training
can be done. It will also help the management in planning for the development and
implementation of effective and efficient training needs that will lead to increased
performance of the banks. The study would further serve as a reference guide for researchers
in doing further studies of the same.
1.9 Organization of the Study
This study is structured into five chapters;

Chapter one gives a brief introduction to the subject of the study. It starts by presenting the
background of the study. It continues by providing the statement of the problem of the study,
highlights the goals of the study, scope of the study, Delimitation of the study, significance
and a brief definition of the key concepts is presented. At the end of the chapter the structure
of the study is described.
Chapter Two and Three discuses the theoretical and Empirical positioning of the study. The
focus is mainly on any issues related to HRM practices for example included herein is
literature on human resource needs, training methods, employee performance, effects of
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training on performance, organizational Competitiveness and identifies the gap of the
previous studies.
Chapter Four presents the research methodology and discusses the procedures used to obtain
the data, the reason for using this method, reliability and validity including the Ethical
consideration of the study. In the end the limitations of this study will later be discussed.
Chapter five gives a presentation of the study results and their analysis and discusses
managerial implications and provides the conclusion to this study. Towards the end of the
chapter, future research will be suggested.
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CHAPTER TWO: LITERATURES REVIEW
2.1 Introduction
This chapter presents the theoretical and empirical literature review of the study. The focus is
mainly on any issues related to human resource management practices for example included
herein is literature on human resource needs, training methods, employee performance,
effects of training and development on employees performance and organizational
competitiveness. Finally identify the literature gap of the previous studies.
2.2 Theoretical Literature Review
There are two main theoretical approaches towards employee training, namely, the human
capital approach and the technology-based approach. The human capital approach regards
training as investment in human capital. Thus, training is provided only when the benefit from
productivity gains is greater than the cost of training. On the other hand, the technology-based
approach regards training as a skill formation process. According to this approach, the
expanded training in the contemporary period is driven by the rapidly changing technologies
and work reorganization. Thus, training is provided because it satisfies the functional needs of
an organization and equally contributes to human capital accumulation or skill formation.
These approaches however, to a large extent overlooked the content of employee training,
which could be a resultant effect of training design and training delivery style.
This study is based on human capital theory proposed by Schultz in 1961 and developed by
Becker in1994. According to the theory, Human capital theory suggests that education or
training raises the productivity of workers by imparting useful knowledge and skills, hence
raising workers‟ future income by increasing their lifetime earnings (Becker, 1994). The
human capital model suggests that an individual's decision to invest in training is based upon
an examination of the net present value of the costs and benefits of such an investment.
Individuals are assumed to invest in training during an initial period and receive returns to the
investment in subsequent periods. In his view, human capital is similar to "physical means of
production", e.g., factories and machines: one can invest in human capital (via education,
training, medical treatment) and one's outputs depend partly on the rate of return on the
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human capital one owns. Thus, human capital is a means of production, into which additional
investment yields additional output. Human capital is substitutable, but not transferable like
land, labor, or fixed capital.
Olaniyan and Okemakinde (2008) in their studies titled „Human Capital Theory: Implications
for Educational development‟ focused on the benefits of human capital to the nation as a
whole. They pointed out the relationship between education and economic growth. According
to Olaniyan and Okemakinde (2008) ‘Many of the classical economists argued strongly for
government‟s active support of education on the grounds of the positive externalities that
society would gain from a more educated labor force and populace‟. While formal education
has expanded rapidly in many countries, a large portion of human capital accumulation in the
forms of on-the-job training and other modes for working adults actually take place both
inside and outside the workplace..
Role of Training and Development in Organizations

Organizations reap undeniable fruits from training and development. Most important
advantages are in the terms of improved productivity and customer services. Productivity is
no doubt increased due to the enhanced performance of the workers attending various training
and development programs. So, there is no question in it that training and development uplifts
both the employee work performance and organizational productivity but together with this
while designing training and development programs it must be kept in the strategic purposes
of training to generate creative thinking and innovativeness. These will then strengthen the
organization‟s knowledge base enabling it to establish a competitive advantage. Training and
development also makes ways for employees to take an active part in the decision making
process. Moreover, Saleem et al., (2011) have proposed that continuous training caters for
bringing employees‟ motivation, confidence, their general behavior, and self esteem up.
Similarly, they are of the view that it is training and development that increase employees‟
satisfaction towards their job, improves their work efficiency, and gives return on investment
(ROI) in terms of making the employees more knowledgeable, skilled, and productive. It also
makes them more loyal, committed, and contributing to the organization. Batool & Batool
(2012) also support this view that job satisfaction, confidence on self, and sense of self worth
is given a boost up among the employees through training. Zenger (1989, as cited in Batool &
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Batool, 2012) points out that providing expert skills makes the workers to energetically take
part in the process of improving quality. In the same way, Saleem et al., (2012) have put
forward the benefits of training and development as improvement in human, theoretical, and
managerial competencies, enhanced skills, work efficiency, knowledge, mind-set and
punctuality (including be on time and less absenteeism), expertise in operating technology and
handling machines with reduced wastage, and also decreased level of skill obsolescence. So,
training is and should be meant to enhance the skills and performance level of employees in
all ways (Obisi, 2011). The central role of training and development in bringing
transformational reforms to the organizational strength and capabilities in terms of making the
employees competent, hence, gets proven. Although each of the HRM practices is vital at its
place in supporting the advancement of its workforce but training plays the most vital role of
all in developing an organization‟s leveraging factor for progress i.e. its human asset. The
positive outlook of the job gained through training and development generates feelings of
loyalty in the employees who then perform well in terms of serving the customers better.
Hence, training promotes loyalty that in turn stimulates to perform up to the mark. Better
performance of employees is significant as according to Khan et al., (2011), employee
performance drives performance of the organization.
Training and Development Effectiveness

Hung (2010) has proposed four categories of factors that can describe the effectiveness of a
training and development program being implemented. These categories are: Behavioral
changes, Improvements in knowledge, skills and attributes, Substantial and measureable
outcomes, and Reaction of the trainees (employees) in terms of perceived training benefits
and improved performance. On the other hand, Noe (2008) presented some conditions that
need to be fulfilled for making a training and development program efficient and beneficially
effective. These are: employees who get training must be provided with sufficient chances to
put the learned things into work and then get review response (feedback) on that; complete,
relevant, and interesting training material should be delivered while keeping in view the
outcomes expected from the training program; the basic requirements must also be met to
ensure the smooth completion of training event and then getting transfer of learned skills;
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observation and practice based learning opportunities must be given to the individuals
attending the training session. These all factors can help to develop and successfully
implement a training program that will aid the employees to literally advance in their
knowledge, skills and attributes (KSAs). For making training effective following points have
been given by Armstrong (2010):
Appropriate and
2. in order to entrench
relevant training
1. Clearly defined training, all the
methods are used
objectives & purpose possible ways be used
to ensure transfer
of training at
workplace
Effective
Training &
Development
Figure 1 Conditions for Effective Training

Source: Armstrong, 2010
Employee Performance
There is no doubt in it that employees are the building blocks of an organization. As put
forward by Hameed & Waheed (2011), the most value adding possessions (assets) available
to any firm, business, or organization are its workforce. The performance on part of the
workforce is the driving force behind the survival of any business firm. Further, they are of
the view that well performing employees contribute to the efficiency and success of the
organization. So, performance is crucial for the organizations and making strategies to
improve performance and measuring it from time to time are a basic step that is to be taken.
Without desired performance results, it is of no use continuing to invest in processes and
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projects. If we define employee performance then we may say that “the set of employee
behavior, results, and outcomes that come after completing the job tasks using certain
competencies and that are measured through different metrics constitute employee
performance.”
Two types or dimensions of performance are being given by Aguinis (2006): Tasks
Dimension of Performance (includes all those work activities that allow the completion of
tasks in a job); Contextual Dimension of Performance (includes all those behaviors that make
an employee act responsibly toward the organization).
Measuring Employee Performance
Employee performance is measured using several methods based on the organizational

preferences and the performance management system in practice over there. The performance
management system defines the performance measures for employees i.e. the criteria to
quantify and calculate the level of performance. the BSC transforms the mission and strategic
vision of the firms into metrics that can aid in measuring and quantifying performance of both
the organizations and their workforce. Dessler (2005); Aguinis (2006); and Dessler &
Varkkey (2010) have discussed the various methods for measuring the performance of
employees: Alternate ranking (ranks employees from best to the worst performer), Graphic
rating (rank employees based on the score won in the list of traits included on the rating
graph), paired comparisons (making pairs of employees by deciding on certain traits then
measuring the individuals‟ standing on each trait and declaring who is better), Forced
distribution (employees are to be ranked on predefined criteria), Critical incidents (manager
notes down the incidents of critical importance both good and bad and then evaluate the
employee), and behaviorally anchored rating scale (it uses a combination of rating methods
and critical incidents). These methods are selected by supervisors based on the evaluation
policies of the organization. Also the selection of measure method could be based on the
approach being preferred by the performance management system in practice in any
organization. Aguinis (2006) identified three basic approaches to performance measurement:
Approach of traits is during the year approach and deals with measuring the individual
characteristics indicating the performance; Approach of behavior deals with evaluating the
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ways employee uses to carry out his/her job; Approach of results that is an end of the year
evaluation approach and deals with evaluating the employees based on achievement of
targets.
Organizational Effectiveness
Composition of people which formulate independent business identity for some specific
purpose is commonly known as organization and getting desired outcome within defined
resources is treated as effectiveness. Organizational effectiveness is the measure of how
successfully organizations achieve their missions through their core strategies.
There are many ways to measure the effectiveness of an organization from training and
development. Rational perspectives emphasize goal attainment and focus on output variables
such as quality, productivity, and efficiency. Natural system perspectives focus on the support
goals of the organization such as participant satisfaction, morale, interpersonal skills, etc.
Open system perspectives focus on the exchanges with the environment -- this includes
information processing, profitability, flexibility and adaptability
Measuring the Effectiveness of Training
An organization can have various advantages through the assessment of training viability. A
valid example, it can be used as a logical framework as a piece of appeal to meet certain
destinations and destinations. Measuring the training, suitability should be a crucial asset to
the organizations. There are some criteria for measuring the achievement of training
including; direct cost, backhanded expense, effectiveness, execution to timetable, responses,
learning, conduct change, performance change.
2.3 Empirical Literature Review
Most of the leading writers have done the research in this regard. They have strong belief and
statistic prove to the importance of training and development for the growth of organization as
well as the economy. training and development programs is one of the vital human resource
management practices that affects the value of the workforce‟s knowledge, capability and
skills positively, ultimately consequences are higher on job employee performance and
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superior organizational performance. Kinnie et al. (2003) state that studies in prove that the
existence of strongly positive relationship among HRM practices and organizational
performance.
Sultana et al. (2012) studied the training practices that are taking place in Pakistan‟s
telecommunication sector. Also the impact of these training practices on employee
performance has been analyzed. The research was conducted based on a mixture of
questionnaires surveys and literature review. The research paper emphasized on planned and
systematic training design and its implementation, customized exclusively for performance
enhancement and productivity improvement, in order to successfully attaining the training
program‟s objectives. The target of the study was to conduct a 360 research and for this
purpose respondents were selected from five companies of telecommunication industry of
Pakistan. It was observed by the researchers that mostly the organizations are dependent on ad
hoc and disorganized path to meet the requirements of training whereas there are some
organization set certain identified training need analysis and procedure, design the activities
of training in rational and calculated manner and evaluates the results on cost-benefit analysis.
The research explores that if companies spend their resources in precise and accurate category
of employee training it may develop employee performance along with their skills and
competencies. Moreover, training is visualized as a helpful way of deal with the changes
cultivated through technological advancement and innovation; market rivalry, organizational
configuration and most prominently it performs a vital role in enhancing employee
performance.
Fakhar et al. (2011) conducted a research on impact of training on employee performance in

context of Pearl Continental Hotel, Karachi Pakistan. The research was examined on the basis
of age, experience, gender, no. of trainings attended, time spent on these training and overall
performance scores acquired through training examination. Six dimensions of performance
were analyzed namely; job preparedness, work safety, physical maintenance of rooms, hotel
hygiene, preparation for serving customers in several ways and communication with the
guests. A questionnaire was developed in order to obtain primary data that was comprised of
performance inventory and employees training profile. Several regression models were used
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to examine the acquired data and calculated the R2 values for each training factor and develop
a relationship among the performance dimensions as well as analyzing the extent of strength
of relationship. The results imply that there is essential and strong relationship among
variables. Also, those employees who have attended huge number of trainings were found
more capable while performing the assigned tasks as compare to those who didn‟t attend any
training. Author further emphasized that the problems existing in the hotel such as service
delivery issues might be tacked by conducting a proper need assessment process, designing of
training as per the results of assessment and delivering the training programs accordingly.
That helps a training to be more effective and increases the chances of getting expected
results. Moreover, a training program must be focused and evaluated in order to cross check
the effectiveness. This evaluation might be done through performance appraisals and key
performance indicators. This process provides further solutions to tackle the problem or cope
up with similar issues arising in the future. The participation of employees in such training
programs not only enhances the training process and results but also help in increasing
motivational level of employees.
Bartel (1994) gauged the gains in terms of productivity as a result of implementing certain
training programs for employees. The study relied on the data acquired from the personnel
policies and economic features of the companies of manufacturing segments. The effects of
formal trainings courses on productivity of labors were evaluated. The results signify that the
companies that were functioning lower than there perceived level of productivity of labors in
1983 has developed new policies for training programs and implemented these programs in
the companies in 1983. The results were largely influenced with profitability. The labor
productivity has showed a considerable rise from 1983 to 1986. That increase in growth of
productivity was quite enough to boost up the overall companies‟ growth and productivity.
Acemoglu and Pischke (1998) surveyed fresh researches of that time illustrating the theories
and importance of training practice within the organizations that are interested in training
investment. The authors argued that to understand any model regarding firm‟s believe on
spending on trainings is not possible unless the imperfections in labor market exists. These
imperfections broadens the discussion paths on labor market establishments, their effects on
14
wage structures and the way these things influence the firms to acquire investment decisions
in human capital. It was evident from the research that the labor markets where competition is
low companies squeeze the labor wages and also spends less on their training. That means
training is an essential component to create a competitive edge in the industry. On the other
hand, the firms that squeeze the labor wage might invest in general training as well. As the
wages are low the companies have more money to invest in training programs. Thus a low
wage might increase the training programs investments of the firms. The research also
emphasized a proper training procedure to be followed to attain required research such as
training need assessment, training designing and development, effective delivering and
controlled evaluation to conduct cost-benefit analysis. These gauging of return of training, by
and large, requires productivity‟s straight measures.
Khan M. I (2012) examined the training and motivation‟s impact on employee performance
and what role does training and motivation has to enhance the employee performance. A
correlation existence among training and employee performance was also gauged. Author
argued that there are multiple factors that have a great influence on employees for instance
motivation, training, work environment, technology and behavior of management. Each factor
has different level of impacts on the performance of employee. It depends on employee to
employee that which factors have greater importance to him that ultimately have greater
impact on his/her performance. The study results illustrate that among all the factors such as
technology, motivation, behavior of management and work environment, there is a huge
impact of training on the employee performance. A strongly positive correlation exists
among training, motivation and employee performance. The result emphasizes that factors,
motivation and training, impacts the employee performance positively. Moreover, an effective
training program of the organization means effective enhancement in the employee
performance. Author further suggest focus on effective training program and motivation of
employee is the key to increase the employee performance.
Elnaga and Imran (2013) studied the impact of training on employee performance and
provide suggestions in order to enhance the performance of the employees via effective
training courses. Authors resembled the employees with the blood stream of business. The
success and failure of the company is highly dependent upon its employee performance.
15
Therefore, top level management must realize the significance of investment for training and
development in order to enhance the performance of the employee. The research is comprises
of qualitative research approach. It analyzes the literature aspects and the several case studies
discussing the importance of training to enhance employee performance. Moreover, the
analysis of theoretical framework was also the part of research in which models regarding
employee development, training and development, several programs of training and
development, impact of these programs on employee performance were considered.
Furthermore, a review of recent scenarios and researches on these relationships were
analyzed. Authors imparted their suggestions keeping in mind recent scenarios. However, the
study‟s limitations are inadequate to illustrate the relationship between two variables, training
and employee performance. Therefore, they suggest an empirical study to make the research
more reliable.
Farooq and Aslam (2011) did an empirical research to examine the imact of training and
feedback on employee performance. The authors also conducted a thorough literatural review
that illustrates the importance of both factors to influence the employee performance. The
review further highlighted the improved quality of task performance and processes because of
training and feedback that causes the employee performance enhance. the research was based
on questionnaires as well. The findings of the research were more or less the same as previous
authors. The results show that training programs are effective for employee performance
keeping the arrangement and adaptation of training as a planned procedure to make the
performance more effective, however the study implies little features of training and
feedback. One more point was that the results can easily be applied to all sorts of
organizations.
Hameed A. and Waheed A. (2011) wrote a research evaluating the theoretical framework
and models that are linked with the development of employee and the impact of these models
on the performance of employee. The authors stated that employees are essential element for
an organization. The employee performance has such a significant impact that an
organization‟s success or failure is dependent on it. For that reason, companies are highly
engaged in employee development and investing large lump sum of money in this regard. The
research had proposed certain identified key variables. The variables were namely; skill
16
growth, employee learning, employee attitude, self directed learning and employee
performance. The proposed model was also discussed in the paper to explain the relationship
of the identified variables with the employee development. The paper also stated that
employee‟s performance ultimately affect the organizational effectiveness. There were three
parts of the research. First part was comprises of introduction that gives a concise outline of
employee development and its impact of employee performance. The next part examined the
outlook and past research studies that belong to the employee performance and employee
development. Under the last part of the research, the model was proposed and a discussion
was made to further explain the model. One of the research findings identifies training and
development is essential for employees development and thus for employees performance.
And an increased effectiveness of employee‟s performance results in increased organization‟s
overall effectiveness.
2.4 Conceptual Framework
The proposed model is self made looking at the literature review their gaps between training
and employee performance. Employee performance and organizational competitiveness are
dependent variable and training and development is the independent variable. Training and
development variable is measured by the following variables; Employee development which
is subdivided into; Employee learning which increase the abilities and competency of the
employee. The abilities and competencies are helpful in employee performance and
productivity. Skill growth is possible through training and coaching. The skill level will
impact employee performance.
Training is also another variable subdivided into; off-the-job training, usually designed to
meet the shared learning needs of a group rather than a particular individual‟s needs. Lectures,
computer-based training, games and simulations help the employee to acquire skills and leads
to high performance. On-the-job training session provide employees with task-specific
knowledge and skills in work area. They include job instruction technique, job rotation,
coaching and apprenticeship training. Off-the-job training and on-the-job training are best for
knowledge development and skills development making employees perform highly,
Government, labor laws and culture serve as intervening variables. Employee performance
17
means employee productivity and output as a result of training and development. Employee
performance leads to high productivity, effective performance and low wastage of resources.
As obtained in the literature reviewed above, I proposed the following model depicted in
below figure.
On-The-job
Training
Organizational
Training Employees‟
competitiveness
and Performance
Development
Off-The-job
Training
Figure 2 Proposed Study Model
Organizational competitiveness is one of dependent variable, that measured by the Annual

profit of the respective bank, Employee performance (dependent variable), was measured by
predetermined or identified standards of accuracy, completeness, cost and speed.
Training and development (Independent variable), was measured by organizational

commitment to training and development, types of training and development provided access
to modern training and development facilities.
2.5 Identified Literature Gaps
Technological changes are very rampant in the banking industry, e.g. the introduction of
electronic funds transfer, e-banking, mobile banking and POS etc. This has led to the need
for improving the employees training in the banking sector as per the improved technology
so as to provide quality services to the banks‟ customers as well as to avoid errors that will
18
lead the bank to undergo losses and thereafter failing to meet its customers‟ needs. This will
make the customers to lose their confidence with the bank. The result of this study will help
to provide awareness to the banks‟ managements to evaluate their existing training and
development policy they follow to fill their employee skill at the same time to calculate
their ROI expenditure.
Despite the limited number of research works on the topic within the nation, there is no
adequate research that has tried to illustrate the effectiveness of training and development on
employee performance and organizational competitiveness of Ethiopian private commercial
banks.
There are other studies have been done concerning the training and development, their
impact on the employees motivation and skill and their findings of the research were more or
less the same. The researcher thought that is happened due to:-
 Most of them focused only on the importance of the training for the employee to
enhance employee‟s performance, they neglected how much the organization is
benefited from the expenditure of training and development program.
 Most studies were done on other industry/area (other than banks).
19
CHAPTER THREE: RESEARCH DESIGN AND METHODOLOGY
3.1. Introduction
This chapter presents the research design, target population, sample size and sampling
techniques, data source, type, collection procedure, ethical consideration, method of data
analysis and presentation and validity and reliability test.
3.2. Background of Private banks in Ethiopia
There are five principal events, which may conveniently be taken as dividing Ethiopian
banking history into periods. The first event was establishment in 1905 of the Bank of
Abyssinia, marking the advent of banking into the country. The second event was Italian
occupation in 1936, when, following liquidation of the Bank of Ethiopia, a broad colonial
banking network, extended to encompass all Italian possessions in the Horn of Africa (Eritrea,
Ethiopia and Somalia) and closely linked with the metropolitan financial system, was set up in
the country. The third event was, in 1943, establishment of the State Bank of Ethiopia,
marking the rebirth of the Ethiopian independent banking. The fourth event was the
revolution of 1974, which wiped out the monarchy, nationalized companies and shaped a
“socialist banking” two-tier model “suited” to Ethiopia, the whole credit system being based
on the central bank and three state-owned financial institutions, each of them enjoying
monopoly in its respective market. The fifth event was the collapse of socialist regime
followed by a financial sector reform and liberalization according to Monetary and Banking
Proclamation of 1994 (Becker, 1994). This condition a pave away for the emergence of
private banks in Ethiopia for the first time and at the same year the 1st private bank that is
Awash International Bank is formed and followed by Dashen bank.
In Ethiopia, proclamation no., 591/2008 has paved the legal framework for the banking
industry. The proclamation has given powers and duties to the NBE to regulate, license and
supervise banking industry so as to play an important role in economic development, in
payment and settlement system, in macroeconomic stability, and to ensure safety, soundness
and stability of the banking system of the country.
20
According to recently availed information from the regulatory organ (NBE), there are
eighteen banks in Ethiopia. Among the total eighteen banks two of them are owned by the
government and the remaining sixteen are privately owned and listed in Appendix D: List of
Private Banks in Ethiopia.
Out of the total sixteen private commercial banks, only three (3) senior private commercial
banks that had been in operation for the past 21 or more years were selected for the purpose of
the study (purposive sampling). In other words, the bank selection is done following the
historical time formation of banks. Accordingly the Private Banks that selected for this study
are: - Awash International Bank, Dashen Bank and Bank of Abyssinia.
Research Approach and Design
Research design is the structuring of investigation aimed at identifying effectiveness of

training and development program on employee‟s performance and organizational
competitiveness. Questionnaires are used for the purpose of obtaining data to enable the
researcher answer the research questions. It is an outline or scheme that serves as a guide to
the researcher in his effort to generate data for his study.
The questionnaire was self-administered. It helped to explain to respondents the essence of

the research and to assure them that it was purely for academic purpose. Respondents were
assured that all information provided by them would be confidential and not used for any
other purpose except that which was stated and also assured the respondents of anonymity.
The questionnaire was distributed for IT staffs of the respective bank and their managers or
supervisors.
Why Questionnaires were mainly adopted for this study:

It enabled the respondents fill them at their own convenience and in a relaxed manner where
relevant information could be checked before data was provided. Hence, giving more accurate
answers to questions. Again, the respondents might be confident due to anonymity assured
them and thus, feel free to express views they fear may be disapproved of. Furthermore, it is
an efficient way to collect statistically quantifiable information.
21
3.3. Research Methodology
The empirical data for the study were collected through a well-structured questionnaire, which
was prepared and distributed among the members of IT staff in selected banks in Addis
Ababa, Ethiopia. Effectiveness of training and development was measured using part I and II.
Part I aimed to gatherer bio data information from the respondents such as their age, sex,
education background, position, working experience; Part II used to constructs of the subject
matter such as frequency of training, training expenditure (training input), and training out
comes measurement, evaluation models, training methods and others. Five point Likert scale
(strongly disagree = 1, disagree = 2, Neutral = 3, agree = 4 to strongly agree = 5) that best
describes the extent to which the respondents agree with each items in the questionnaire was
used. Therefore, through this strategy researcher could recognize the status of the
organizational effectiveness from the training and development that they offer for their
employees based on the information which were collected through this strategy. Descriptive
methods of analysis were used to analyze the data.
3.4 Population and Sampling Techniques
3.4.1 Population of the study
The target population for this study was IT employees and IT supervisors/Managers in the
selected three (3) private banks of Ethiopia.
The population consists of:
a. 69 Junior, officer, senior and Principal staff of Awash International Bank
b. 63 Junior, officer, senior and Principal staff of Dashen Bank
c. 71 Junior, officer, senior and Principal staff of Bank of Abyssinia
Total: - 203
22
1. Table 3.1 Population of the study
Population
Bank Name Junior Officer Senior Principal Managers
Awash International Bank 24 20 18 7 7
Dashen Bank 26 18 14 5 5
Bank of Abyssinia 32 16 14 9 9
The categorization of the population as Junior, officer, senior and principal is based on the
fact that they are classes of employees in the organizations under study. Therefore the total
population size of the study includes 203 employees and 21 managers of the respective banks.
3.4.2 Sampling and Sample Techniques

Determination of Sample Size
Considering the fact that it would be cumbersome to study the entire population due to time
and cost, a subset of the population i.e. sample size was chosen so as to represent the whole
population. Sample is viewed not as a whole in itself but as an approximation of the whole.
To ensure all categories of employees (Excluding managers) were represented in the sampling
process, stratified random sampling technique was used to sample the survey respondents
from the target population. The employees were categorized into five strata of junior, officer,
senior and principal. In this research the sample size for the IT employees is calculated
through the Taro Yamane formula
Equation.. 1
𝑁
𝑛=
1+𝑁∗(𝑒) 2
Where n = the sample size

N = the population of banks
e = the acceptable sampling error
23
Where n was the optimum sample size, N the number of target population of employees at
selected three (3) banks, e the probability of error (i.e., the desired precision, e.g., 0.05 for
95% confidence level). Target population of 203 employees, implying n was approximately
134 as derived in equation 2 below:
Equation… 2
𝑁
𝑛= = 134 staff
1+𝑁(𝑒) 2
Sampling Method
For a high degree of accuracy and adequacy in presentation of the sample the stratified
sampling method (proportional allocation) was adopted. The sample size representing the
number of staff who received questionnaires was divided into stratum. This is shown below
using the following formula:
Equation… 3
(𝑛)(𝑁)
𝑛𝑥 =
P
Where nx is sample size in each level, n the total sample size for the study, N the population
size of staff in each stratum and P the total population of the study
2. Table 3.2 Stratum representation of sample size
Population Sample size nx

Total Population
Total Population
Bank Name
Principal
Principal
Officer
Officer
Junior
Junior
Senior
Senior
Awash International Bank 24 20 18 7 69 16 13 12 5 46

Dashen Bank 26 18 14 5 63 17 12 9 3 41
Bank of Abyssinia 32 16 14 9 71 21 11 9 6 47
Total Population 203 Total Sample size nx 134
Source: survey 2017
24
3. Table 3.3 Respondent distribution among firms in banking industry
Bank Name Number of respondents

Manager Employees Total
Awash International Bank 7 46 53
Dashen Bank 5 41 46
Bank of Abyssinia 9 47 56
Total 21 134 155
Source: survey 2017
3.5 Data Source and Type

Sources of Data
The methods of data collection for this research are from primary and secondary sources of
data. The reasons for selecting the above sources of data collection among other methods of
data collection can be explained as follows:
1. Primary Source
Primary data are firsthand or raw data, original records and materials created by participants
or witnesses of the event(s) under study. For the purpose of this study, primary data comprise
responses obtained through questionnaires administered to sample respondents under study.
2. Secondary Source
Secondary data are information that has been gathered and often interpreted by other
researchers and recorded in books, articles, banks annual reports and other publications. In
collecting secondary data, the data from the sample banks were gathered from published
financial statements of the respective private commercial banks & respective websites of the
banks to be investigated, and different bulletins and publications of the NBE.
3.6 Data Collection Procedure
This study will relies on both primary and secondary data. The primary data were be collected
through questionnaire. The questionnaire is prepared separately for the IT staff having two
25
parts; Part I covering the general information (Demographic characteristics) of the
respondents, On the other hand Part II contained questions on both dependent and
independent variables to answer the research objective which aimed to find out the effect of
training and development on employees performance and organizational competitiveness.
Separate questionnaire is also prepared for IT supervisors/managers and the human resource
managers. As stated earlier, the secondary data was collected from respective websites of the
banks of private commercial banks, annual reports, financial statements and other published
sources.
3.7 Method of Data Analysis
The data which were obtained from sample selected Private Banks were analyzed according
to the objective of the study. In order to ensure completeness and logical consistency of
responses, data editing was carried out each day by the researcher. Identified mistakes and
data gaps were rectified as soon as possible. Once editing was done with, the data were
analyzed using quantitative techniques. The analysis was done using Statistical Package for
Social Sciences (SPSS IBM Version 20). The summary of results would be presented in the
next chapter using frequency distribution tables and analyzed by the use of simple percentage
techniques, which was used to determine the proportion of respondents choosing the various
responses.
3.8 Research validity and reliability test
Validity refers to the extent of accuracy of the results of the study. Validity of the results can
either be internal or external. Internal validity refers to the analysis of the accuracy of the
results obtained.
The researcher established the reliability of the questionnaires by computing the alpha
coefficient of the items (questions) that constituted the dependent variable and that of the
items that constituted the independent variable. The tool was piloted using 20 (10 males and
10 females). The responses of respondents were scored and the reliability of the tool was
determined using Cronbach‟s Alpha.According to the alpha value more than 0.6, shows that
26
the scale can be considered reliable. The result shows that the Cronbach‟s alpha value is 0.738
which show the scale is reliable.
3.9 Ethical Considerations
A researcher needs to carefully consider any ethical issues which are likely to arise during the
course of the research before commencing the study. Unethical practices that could have
adverse effects on the respondents and the organization were avoided from the
commencement of the research project to the writing up of the results. The researcher
obtained the approval of his advisor which represents the university college‟s ethics
committee to use the questionnaire before commencing data collection.
The researcher ensured that the participation of the respondents was based on voluntary,
informed consent and was straightforward and honest in all his professional dealings with the
respondents. Respondents were informed of the subject and purpose of the research study
beforehand. They were also assured of their anonymity and of the confidentiality of all
responses. The researcher informed all respondents of their right to ask questions or seek
clarification where necessary at any time, throughout the research process have the right to
contact with the researcher advisors or with the University college research committee.
27
CHAPTER FOUR: DATA ANALYSIS AND DISCUSSION OF RESULTS
4.1. Introduction
This chapter deals with the presentation and analysis of the data obtained from the
respondents in the selected private banks on the effectiveness of training and development on
employees‟ performance and organizational competitiveness, in selected Ethiopian Private
Banks. A total of one hundred and fifty five (155) copies of questionnaires were distributed
and all one hundred and fifty five questionnaires were fully completed and returned.
4.2. Analysis of Findings
The data were analyzed giving thought to the main research question: the effectiveness of
training and development on employee‟s performance and organizational competitiveness in
the selected Ethiopian private banks. Each assessment was looked at individually and
descriptive statistics were computed for each. Tables and descriptive explanations were
employed to illustrate data collected from the field to make the research findings more
meaningful.
Findings from Employees
A total number of one hounded fifty five (155) employees were selected to provide answers to
the structured questionnaire. Out of these 21 were managers and the remaining 134 were
information technology employees.
28
4. Table 4.1 Background Information of the Respondents
Demographic variables Category Frequency Percentage
Gender Male 93 69.4%
Female 41 30.6%
In which age group are you 18-25 53 39.6%
26-35 81 60.4%
What is your highest level of First Degree 121 90.3%
Education Second Degree 13 9.7%
Your field of specialization for your Computer Science 85 63.4%
Highest Educational Status IT 35 26.1%
MBA in Project
1 0.7%
Management
IS 3 2.2%
IMS 10 7.5%
What is your position in the company Junior 56 41.8%
officer 36 26.9%
Senior 28 20.9%
Principal 14 10.4%
How long have you been working Less Than 1 years 27 20.1%
with these company 1 - 3 years 77 57.5%
4 - 7 years 30 22.4%
What is your Current job position System Administrator 17 12.7%
Hardware Engineer 15 11.2%
Network Administrator 11 8.2%
Storage management 2 1.5%
web admin 2 1.5%
DBA 12 9.0%
System Support 21 15.7%
MIS 3 2.2%
Software Engineer 12 9.0%
IT Security Expert 15 11.2%
E-Banking Technical
15 11.2%
Support
ICT Vendor Management
2 1.5%
Officer
System Analyst 7 5.2%
In which department are currently Core System 27 20.1%
working Information System 29 21.6%
IT Security 15 11.2%
E-Banking 15 11.2%
IS Project 12 9.0%
MIS 1 0.7%
Hardware and Networking 18 13.4%
system administrator and
5 3.7%
database
Network Infrastructure 12 9.0%
Source: Own Survey, 2017.
29
Interpretation
A total number of one hundred fifty five (155) employees were selected to provide answers to
the structured questionnaire out of these one hundred thirty four (134) are experts and the
remaining twenty one (21) are the managers.
According to Table 4.1 above the variable Gender indicates that out of the 134 respondents,
93(69.4%) of them are males and 41(30.6%) of them are females. This is in line with the
gender distribution of staff. Since a number of responses in this study relied on the perceptual
measures of the respondents, the findings accommodated the opinions and views from both
genders.
Regarding the age composition of the respondents, the largest group the respondents
81(60.4%) of the respondents are between 26-35 years. The remaining 53(39.4%) of the
respondents are between 18-25 years. And none of them are above 36 years. From this result,
we can see that the highest share of the respondents are between 26-35 years followed by 18-
25 years and this suggests that majority of staff in the sample selected banks are relatively
young and energetic and when exposed to the training regimen could be maximized for the
long term objectives of the institutions.
The study was also keen in finding out the education level or qualification of respondents in
the field. More than a half of the respondents were degree holder that is 121(90.3%) and the
remaining group of participants 13(9.7%) are masters holder. Based on the field of
specialization 85(63.4%) of the respondents specialized in Computer Science, 35(26.1%)
Information Technology, 1 (0.7%) MBA in Project Management, 3(2.2%) Information system
and 10(7.5%) Information Management System. The findings were an indication that the
respondents are well educated and had technical expertise required to handle tasks and
responsibilities assigned to them.
Table 4.1a shows that out of 134 respondents, 56(41.8%) are junior staff, 36(26.9%) are
officers, 28(20.9%) are senior staff and 14(10.4%) are principals. This shows that more of the
sample selected bank employee‟s fall within the junior staff rank.
30
Regarding the work experience, more than a half of the respondents, that is 77(57.5%)
indicated that they had been working in the organization for 1 up to 3 years. 30(22.4%) and
27(20.1%) respondents indicated a tenure with the organization of between 4 and 7 years and
less than a year respectively. None of the respondents reported their stay in the organization 8
and longer than 8 years. This implies that 20.1% of the employees continued working in the
organizations until 7 years of service and rather than find job elsewhere having undergone
training. With regards to the current position of respondents, 17(12.7%) of sampled
respondents were system administrator, 15(11.2%) Hardware engineer, 11(8.2%) Network
Administrator, 2(1.5%) storage management, 2(1.5%) web administrator, 12(9%) Database
Administrator, 21(15.7%) system support, 3(2.2%) Management information system,
12(9.0%) software Engineer, 15(11.2%) Information Technology security expert, 15(11.2%)
E-banking technical experts, 2(1.5%) ICT vendor management officer and 7(5.2%) system
analysts.
The response received from the employees regarding the types of departments they belong
27(20.1%) of the respondents are working in core system, 29(21.6%) Information system,
15(11.2%) Information Technology security, 15(11.2%) E-banking, 12(9.0%) project office,
1(0.7%) Management Information system, 18(13.4%) Hardware and Networking, 5(3.7%)
system and database administrator, 12(9.0%) Network Infrastructures department.
5. Table 4.2 Respondents’ Experience of the Training and Development Activities

No Item Scale Frequency Percent
Have you had any form of Yes 134 100.0
1 training since you joined the No 0 0
organization
Total 134 100.0
How were you selected for On joining the company 35 26.1
2 Training Supervisors recommendation 78 58.2
Don‟t know 21 15.7
Total 134 100.0
What Kind of Training On the Job Training 63 47.0
3 Methods were used Off the job Training 71 53.0
Total 134 100.0
How many times do you have 1-3 95 70.9
4 taken training 4–6 38 28.4
7–9 1 .7
Total 134 100.0
31
For how long you had been in Less than 15 days 74 55.2
training on average 16 – 30 days 32 23.9
5
1 – 2 months 20 14.9
3 – 5 months 8 6.0
Total 134 100.0
How many times you have Only once 87 64.9
6 taken training per year on 2 – 3 Times 43 32.1
average 4 – 6 Times 4 3.0
Total 134 100.0
Source: own survey, 2017.
The results in the table above show that 134 respondents representing a 100% have undergone
training since they joined the organization with the respective case companies. This reveals
that all respondents have ever participated in training programs in one form or the other. At
least all staff goes through induction training after joining the organization. The result shows
that training issues are not new things to majority, if not all, of the employees.
In order to be effective from the training program which offered by the organizations for their
employees, organizations should implement right training methods and should be aware of the
training methods and their effectiveness (Alipour et al, 2009). As the above table showed that
organizations were used different methods of training to train the employee as 63(47.0%) of
the respondent responded that they have taken the training on-the-job training and the
remaining 71(53%) of the respondents responded that they have taken off the-job training.
Furthermore, Table 4.2 above indicated that out of 134 respondents, who have participated in
the training and development program, 95 respondents representing 70.9% have participated
between 1-3 times, 38 respondents representing 28.4% have participated between 4-6 times,
and the remaining 1 respondent representing .7% have participated between 7-9 times.
As the above table describes 32(23.9%), 20(14.9%) and 8(6%) of the respondents were
responded that they have taken the training for 16-30 days, 1-2 months and 3-5 months
respectively. While the remaining 74(55.2%), of the respondent were responded that the span
of the training that they have taken was less than 15 days.
32
The study also sought to find out the frequency of employee training within the organization.
Figure 4.6 shows that majority of the respondents at 87(64.9%) attend staff training only once,
43(32.1%) of the respondents attend between 2 and 3 times, while 4(3%) of the respondents
attend training between 4 and 6 times.
6. Table 4.3 Existing Training and Development Practices
No Item scale Frequency Percent Mean Std.

Deviation
1 Do you think the Strongly disagree 0 0
training program Disagree 26 19.4
designed based on the Neutral 29 21.6
3.54 .963
requirements of the job Agree 60 44.8
Strongly Agree 19 14.2
Total 134 100.0
2 Is the type of training Strongly disagree 1 .7
you have taken Disagree 25 18.7
applicable for the job Neutral 17 12.7
3.58 .936
after the training Agree 77 57.5
Total 134 100.0
3 Do you known the Strongly disagree 0 0
objective of the training Disagree 29 21.6
Neutral 8 6.0
3.61 .941
Agree 83 61.9
Total 134 100.0
4 Do you have enough Strongly disagree 20 14.9
training that enables you Disagree 70 52.2
to do your job as
Neutral 7 5.2 2.48 1.095
required Agree 34 25.4
Total 134 100.0
5 Does the training Strongly disagree 5 3.7
program evaluate during Disagree 37 27.6
or at the end of the Neutral 10 7.5 3.04 1.146
program
Agree 78 58.2
Total 134 100.0
33
Usually, before training programs are organized efforts are being made through individuals
and organizational appraisals to identify the training needs (Olaniyan et al 2008; Mathis, et al,
2008).
Based on the feedback obtained through appraisal the training program should be designed
accordingly. Within this fact the researcher asked the employees of the sample organizations
to rank how training program designed by their organizations and 29(21.6%), 60(44.8%),
19(14.2%) and 26(19.4%) of the respondent replied that; Neutral, agree, strongly agree. and
never the training program in the organization was design based on the requirements of the
job respectively. As the responses showed that the either the organizations were not in a
position to design the training programs based on the requirements of the job or employees
are not aware the training program design of the bank. So, they should think over it again and
again.
If training is not linked to that which an organization uses, does, and delivers, the investment
is better made elsewhere (Kaufman, 1985). The respondents were asked to rank the
applicability of the training that they have taken at the end of a program in accordance with a
five point scale ranging from strongly disagree (1) to strongly agree (5) based on this as the
above table portrays 1(.7%), 25(18.7%), 17(12.7%), 77(57.5%), and 14(10.4%) ranked as
strongly disagree, disagree, Neutral, agree and strongly agree respectively. In these respect 91
respondents representing 67.9% of the respondent agreed that the training that they attended
was applicable for their job after the training program. In other word if it is applicable in the
organizations the expenditure on it delivers a result to the organization.
Training is given to staff anytime if there is a change in technology and employees skill gap to
help employees possess the knowledge, skills and abilities needed to handle the new
processes. To coordinate the overall efforts of the training participants for the effectiveness of
the organization from the training expenditure, everybody in the training should knows the
objective of the training. Within this fact, the researcher was asked the respondents whether
they had known the objective of the training, and 29(21.6%), 8(6%), 83(61.9%) and
14(10.4%) of the respondents responded that disagree, Neutral, agree and strongly agree if
they know the objective of the training, respectively. Even if, some of the respondents
34
responded that they didn‟t know the objective of the training, more than a half of the
respondents were know the objective always and often.
The effectiveness and success of any organization depends on the people who form and work
within the organization. It follows therefore that the employees in an organization to be able
to perform their duties and make meaningful contributions to the success of the organizational
goals need to acquire the relevant skills and knowledge (Olaniyan et al 2008; Armstrong,
2010). If the organization wants to be competent; it should give enough training for its
employees. The above table depicts the view of employees in their respective organization
about the training they got, and 20(14.9%), 70(52.2.4%), 34(25.4%), and 3(2.2%) of the
respondents responded strongly disagree, disagree, agree, and strongly agree, respectively,
with the statement the training that offered by the organization was enough. But only 7(5.2%)
said did Neutral. More than a half of the respondents responded that the training offered by
the organization was not enough for their job requirement. But 37(27.6%) of the respondents
believe the training offered by their organization was enough for their job requirement.
therefore, the position of the organization in this aspect the organizations were not often
offered enough training for their employees.
Since the organization spends huge amount of birr for employees‟ training, therefore there
must be evaluation system in the organization to know how much organization is effective
from the investment. Company management wants to know that the money they are spending
on training is well spent. They want to know that they are getting a sufficient return on their
training investment (ROI). Measurement of training ROI starts with defining the reasons and
goals for the training, determining how much the training costs and verifying the amount of
return (Kurtus, 2001) is very important for managers and determining the exact effects and
results of training course on participants and their performance in returning to their
organization therefore, this possible through evaluation.
As the respondents replicated that 5(3.7%) of them strongly disagree with the statement of
training program will evaluated during or after the program, 37(27.6%) of the respondents
disagree, 10(7.5%) of the responded are Neutral, 78(58.2%) of them argued that training
program was evaluated during or after the program, and the remaining 4(3%) strongly agree
35
with the presence of training evaluation during or after the program. From the above analysis,
it can be seen that, much focus has been placed on training evaluation or even if it is being
done; staff should be made aware of the evaluations and the planned training programmes.
This shows that much focus is placed on training evaluation. Since training evaluation is one
of the important factors of training process. It helps determine the progression of employees
after every training session. The evaluation helps a manager to determine whether training
goals are being met. Therefore, evaluation is the way of measuring the effectiveness of a
training program.
7. Table 4.4 Contribution of Training and Development to Organizational Goal
Std.
No Item Scale Frequency Percent Mean
Deviation
1 Does the training Strongly disagree 0 0
increase your Disagree 34 25.4
motivation to the job Neutral 0 0
3.66 1.040
you do Agree 77 57.5
Total 134 100.0
2 Does training Strongly disagree 0 0
improves your skills, Disagree 13 9.7
knowledge, attitude Neutral 4 3.0
4.09 .854
change, new Agree 75 56.0
capability Strongly Agree 42 31.3
Total 134 100.0
3 Does the training lead Strongly disagree 0 0
you to be satisfied Disagree 17 12.7
with your job Neutral 38 28.4
3.46 .711
Agree 79 59.0
Strongly Agree 0 0
Total 134 100.0
Aggregate Mean = 3.7367

From the above table the respondents over all mean regarding to the Contribution of training
and development to Organizational goal was 3.7367 implies that the mean result is average
36
Concerning the Contribution of training and development to Organizational goal, The mean
result varies between 3.46 -4.09 and the highest mean result was Training improves skills,
knowledge, attitude change, new capability. The standard deviation varies between 0.711 –
1.040 this shows that the individual response is not deviates from the mean. And variable
which have the lowest standard deviation is training lead you to be satisfied with your job
and this implies the individual response is relatively the same.
There is documented evidence that training activities have a positive impact on the
performance of individuals and teams. Training activities can also be beneficial regarding
other outcomes at both the individual and team level (e.g. attitudes, motivation, and
empowerment) (Charles R. Greer, 2003). Training plays important role towards increasing the
employees‟ motivation in the organization. According to (Cole 2002), employees who receive
training have increased confidence and motivation. Therefore, employees who are well
trained must have higher motivation and morale. As respondents from sample organizations
responded that 34(25.4%), 77(57.5%) and 23(17.2%) disagree, agree and strongly agree with
the statement training increases my motivation to my job. As the majority of the respondent
proof that the training program can increases the employees‟ motivation to the job they do. In
this aspect the organizations are effective even if the response of some was disagreeing.
Training leads to an increase in the quality of labor, by equipping employees with greater
skills and knowledge (and possibly fostering greater effort) (Laplagne et al, 1999). Training is
give to any employee by any organization with the intention of improving skills, knowledge,
and to bring attitude change and new capability. By keeping in view such truth the researcher
asked question the employees of sample organizations to rank the position of the
organizational training programs by using the given scale how much the it improves their
skills, knowledge, attitude and new capabilities and 13(9.7%), 4(3%), 75(56%) and 42(31.3%)
of them responded that disagree, Neutral, agree, and strongly agree, respectively if the
training improves their skills, knowledge, attitude and new capabilities. From the above
response we can understand the organizations were effective from the training since majority
of the respondents agreed that the training enables them to improve their skills, knowledge,
attitude, and new capability. The implication of the results confirms that training adversely
impacts on work performance (Arvey and Faley, 1988).
37
There are many ways to measure the effectiveness of an organization. Natural system
perspectives focus on the support goals of the organization such as participant satisfaction,
morale, interpersonal skills, etc. Therefore, the training that offered by the organization
should create satisfaction in the mind of the employees in their job that they have doing. As
the above table depicts that 79(59%) of the respondents answered agree that the training lead
employees‟ job satisfaction. Whilst the remaining 38(28.4%) said that Neutral and the
remaining 17 respondents of which 12.7% was disagreed. As the above figure shows us the
organization should do more on the employees‟ training in respective of employees‟
satisfaction aspect to be more effective from the training expenditure.
8. Table 4.5 Employee Perceptions on Training and Development Program

Deviation
1 Do you think that the Strongly disagree 0 0
organization is effective Disagree 25 18.7
from the training Neutral 31 23.1
3.11 .690
expenditure Agree 78 58.2
Strongly Agree 0 0
Total 134 100.0
2 Are you satisfied with Strongly disagree 5 3.7
the overall aspect of the Disagree 40 29.9
training programs Neutral 8 6.0
2.99 1.117
Agree 74 55.2
Total 134 100.0
As the respondents replicated that 25(18.7%), 31(23.1%) and 78(58.2%) of the respondents
replayed that they are, disagree, Neutral and agree, with the statement that the organization is
effective from the training expenditure, respectively as the respondents. While, 31(23.1%) of
the respondents didn‟t knows anything whether the organization was effective from training
expenditure or not. With this respect we can understand there were only 78(58.2%) of the
respondents responded that the organization were effective from the employees‟ training
38
expenditure therefore, the organization should analysis the training of employees in different
aspects of training to be more effective form employees‟ training expenditure.
The respondents specified the rank of their level of satisfaction from the overall training
aspects of the training program. 5(3.7%), 40(29.9%), 8(6.0%), 74(55.2%), and 7(5.2%) of the
respondents were strongly disagree, disagree, Neutral, agree, and strongly agree, respectively
regarding to if they are satisfied with training that offered by their organization since they
have joined their organization. Even though the majority of the respondents replayed that they
are satisfied with the overall aspect of the training program, 45(33.6%) of the respondents
were not satisfied from the employees‟ training that offered by their respective organizations
as employees replied. Therefore, the organization to be effective from the training they should
design the over all aspects of the training by keeping in view the interest of the employees.
9. Table 4.6 Employee Perceptions on Training and Development Expenditure.

Deviation
1 Do you think the Strongly disagree 11 8.2
expenditure for employee
training is enough Disagree 52 38.8
Neutral 38 28.4
2.81 1.138
Agree 17 12.7
Total 134 100.0
Current practices in many organizations indicate that employees are viewed as valuable
investments (Greer, 2003). Due to these changes, most pioneers and effective organizations
and institutes have paid their attention to planning training courses in order to improve human
resources more than before (Farahbakhsh, 2010). Heavy investments in training will be
necessary for future strategies and competitive advantage (Greer, 2003).To offer training the
organization should allocate budget for the training. the above table shows the perception of
the employees about the amount of training expenditure by the organization in which they
have been working, based on this 11(8.2%), 52(38.8%), 38(28.4%), 17(12.7%), and
39
16(11.9%) of the respondents responded that strongly disagree, disagree, Neutral, agree, and
strongly agree regarding to the training expenditure invested by the organization was enough,
respectively. However, from the we can under the expenditure to employees‟ training
allocated by the organization was not sufficient or very low as over 47% of the respondents
replied.
10. Table 4.7 Employee Perceptions on which they were sponsored
No Item scale Frequency Percent

1 Do you Know the Bases on which Yes 64 47.8
you were sponsored to training No 70 52.2
Total 134 100.0
Selecting participants through a careful process of training needs identification is therefore the
proper process of initiating training. Subsequently, respondents were asked a series of
questions to determine the flow, planned and systematic nature of the training and
development process at sample selected private banks. The starting point was to know how
respondents were selected for inclusion in the training programs they participated in. The
above indicates that 70(52.2%) respondents do not know how they are selected for the
training programs they participated in. Only 47.8% responded in the affirmative to the
question. This shows that even though staffs participate in training programmes, their
inclusion for such programmes is not clear to them.
40
11. Table 4.8 Employee Perceptions on Training and Development Objective

1 have you ever see or receive training and Yes 80 59.7
development objectives for the before the No
54 40.3
training station have been started
Total 134 100.0
In training practice, it is also good to have trainees know the objectives for each training
program they participate in. The respondents were asked if they were always received the
objectives of training program they participated before the training station have been started.
The table above shows that the responses from the 134 respondents who have ever
participated in training 80(59.7%) of the respondents replayed that had been received the
objectives of training program they participated before the training station have been started
and the remaining 54(40.3%) responded that they will not received the objective of the
training program they participated before the training session.
12. Table 4.9 Employee Perceptions on Quality of Trainers

1 Does the bank have the right trainers Yes 80 59.7
No 0 0
Neutral 58 43.3
Total 134 100.0
A good trainer should stimulate hearts and minds of the employees‟ by fulfilling their
learning needs and making them more productive at their work. Accordingly 76(56.7%) of
the respondents agreed that the bank has the right trainers and the remaining 58(43.3%) of
the respondents replayed that I don‟t know.
41
4.3. Performance Evaluation and Measurement
The performance evaluation system covered the following; evidence of methods for the
evaluation, fairness of the performance evaluation system, performance set against objectives
and feedback on performance.
13. Table 4.10 Performance Evaluations and Feedbacks.

How is your Performance Through Performance 80 59.7
1 Evaluated Special Report Format 0 0
Total 134 100.0
Do you consider Your Yes 81 60.4
2 Performance Evaluation
No 53 39.6
processes fair
Total 134 100.0
Is your performance Yes 48 35.8
3 evaluated against your set
No 86 64.2
objective(s)
Total 134
How often do you get Never 68 50.7
feedback on your Always 29 21.6
performance Sometimes 37 27.6
Total 134 100.0
The performance of employees is evaluated annually/semi-annually through various

performance management systems. As shown in the above table, 80 respondents, constituting
59.7 % said that their performance is evaluated by the use of appraisal system. The remaining
54 respondents, constituting 40.3% indicated that their performance was evaluated through a
special format.
42
When employees consider their performance evaluation process to be fair they cooperate with
management and commit themselves to performance management systems in the
organization. In above table, when respondents were asked about their opinion on the fairness
of the performance evaluation process, 81 respondents constituting 60.4% indicated that the
performance evaluation process was fair. The remaining 53 respondents representing 39.6%
disagreed that the evaluation process was fair.
To ensure that the performance process is objective and reflective of actual performance, it
must be evaluated against set objectives. As indicated in the above table, 48 respondents,
representing 35.8% indicated that their performance is evaluated against set objectives when
appraising their performance. 86 respondents representing 64.2% do not have their
performance evaluated against set objectives.
When employee‟s feedback on how they are doing, it helps them to improve or maintain
performance depending on whether it is good or bad. When respondents were asked whether
they get feedback on performance, as shown in the above table, 68 respondents representing
50.7% said they never had feedback. 29 respondents, representing 21.6% indicated that they
always had feedback on performance. And the remaining 37 respondents, representing 27.6%
also said they sometimes get feedback on performance.
Armstrong (2010) said that the purpose of performance management is to establish a high
performance culture in which individuals and teams take responsibility for the continuous
improvement of the business process and their own skills and contributions within the
framework provided by effective leadership.
It can be deduced from the above statement that performance management concept is
creating a shared vision for both individual employee or teams and leadership of the
organization to recognize their contribution in the realization of common objectives. From the
analysis, it could be said that the performance system in the research organization is weak.
Both the individual (team) and the leadership do not share the vision of realizing a common
goal. For example, there are lapses in the feedback system, as much as 68 respondents
(50.7%) said they never had feedback of their performance and 37 respondents, representing
27.6% also indicated that they sometimes get feedback. if the feedback system were effective,
43
the employees would have been motivated to perform better. it could be possible that the
design of the appraisal did not make it possible for appraises to note the ratings by their
managers.
4.4. Description and Analysis of Data Obtained from Supervisors
The managers were asked to rank the position of the organizational effectiveness in
accordance with a five- point scale range from strongly disagree (1), disagree (2), Neutral (3),
agree (4), and to strongly agree (5) based on the following aspects of training.
14. Table 4.11 Evaluation of Organizational Effectiveness by Managers

1 Have you ever seen any form of training for Yes 21 100.0
employees under your supervision since you No
0 0
have became a manager
Total 21 100.0
To access the effectiveness of the organization from the training expenditure, 5 likert scale
questioner was distributed for the respective manager‟s if they have seen any form of training
for the employee under his/her supervision since he /she becomes a manager and all
respondents replayed that yes. For these the researcher conclude that the respondents are the
right person to answer the questionnaires.
15. Table 4.12 Evaluation of Organizational Effectiveness by Managers
No Item Scale Frequency Percent Mean Std.

Deviation
1 Enhanced quality of Strongly disagree 0 0
product/service Disagree 0 0
Neutral 0 0
3.19 .402
Agree 17 81.0
Total 21 100.0
2 Improves skills, Strongly disagree 0 0
knowledge, attitude Disagree 0 0
change, new Neutral 5 23.8
3.62 .865
capability Agree 13 61.9
Total 21 100.0
44
Deviation
3 Strongly disagree 0 0
Enhance the use of Disagree 0 0
tools and machine, Neutral 0 0
operational safety 3.00 .000
Agree 21 100.0
Strongly Agree 0 0
Total 21 100.0
Disagree 0 0
Reduces Risks
Neutral 0 0 3.00 .000
Agree 21 100.0
Strongly Agree 0 0
Total 21 100.0
5 Reduces lateness, Strongly disagree 3 14.3
absenteeism Disagree 9 42.9
Neutral 4 19.0 2.67 1.317
Agree 5 23.8
Strongly Agree 0 0
Total 21 100.0
6 Eliminates obsolesce Strongly disagree 0 0
in skills Disagree 0 0
Neutral 0 0 3.38 .498
Agree 13 61.9
Total 21 100.0
Deviation
7 Reduction in errors Strongly disagree 0 0
Disagree 0 0
Neutral 0 0
3.24 .436
Agree 16 76.2
Total 21 100.0
8 Less supervision Strongly disagree 0 0
necessary Disagree 0 0
Neutral 0 0 3.24 .436
Agree 16 76.2
Total 21 100.0
45
Deviation
9 Strongly disagree
Reduction in turnover Disagree 11 52.4
Neutral 6 28.6 3.05 1.322
Agree 4 19.0
Strongly Agree
Total 21 100.0
Disagree 0 0
Improved work
motivation Neutral 0 0 3.00 .000
Agree 21 100.0
Strongly Agree 0 0
Total 21 100.0
11 Decreased resource Strongly disagree 0 0
wastage Disagree 0 0
Neutral 0 0 3.10 .301
Agree 19 90.5
Total 21 100.0
12 Increased job Strongly disagree 0 0
satisfaction Disagree 0 0
Neutral 3 14.3 3.29 .717
Agree 18 85.7
Strongly Agree 0 0
Total 21 100.0
13 Increased work Strongly disagree 0 0
efficiency Disagree 0 0
Neutral 0 0 3.43 .507
Agree 12 57.1
Total 21 100.0
14 Improved Strongly disagree 0 0
profitability Disagree 0 0
Neutral 0 0 3.29 .463
Agree 15 71.4
Total 21 100.0
46
Training adds value to the operations of an organization in ways that are difficult to measure
with empirical precision. Training is commonly used to promote customer service, goodwill
towards the organization, productivity, operating proficiency and efficiency, safety, and
awareness of policies (security, diversity, etc.), which can contribute to increased sales,
profitability, and morale as well as reduced turnover, absenteeism, etc. the extent of both the
effectiveness of training and its relative contribution to organizational performance are still
highly unresolved issues. Henry Ford once said something to the effect of: I know that only
half of my advertising dollars makes a difference, but I don't know which half. This same
sentiment could be expressed about training. Nonetheless, the fact that management
professionals ask the question how much does training contribute to organizational
performance is an indication in and of itself that training does contribute to it and is more than
simply an expense; it can be a long-term investment in organizational performance. With this
fact the researcher tries to examine the effectiveness of the organization from the training
expenditure. As the above table depicts that 17(81%) and 4(19%) of the respondents agreed
and strongly agree that the effectiveness of the organization from employees training
expenditure in relation to increasing productivity of work force is high.
In fact training is a systematic development of knowledge, skills and attitudes required by

employees to perform adequately on a given task or job. Within this reality the researcher
asked the manager/ Managers of sample organizations how the organization was benefited
from employees training by improving employees skills, knowledge, attitude change, and
create new capability of the workforce in the respective organizations and the majority
13(61.9%) of the respondents agreed that the organization was highly benefited from the
employees training and 3(14.3%) of the respondents are strongly agree. The remaining
5(23.8%) respondents were Neutral. In this case, as the respondents proofed that the sample
organizations were effective from the training expenditure by achieving the intended objective
of the training that was improving skills, knowledge, attitude change, and create new
capability of the workforce.
The managers invited to evaluate the effectiveness of the organization from the training
expenditure in relation to the enhancement of the employees‟ skill, knowledge and ability
towards usage of tools and machine, and operational safety in the work place after the training
47
was 21(100%) of the respondents Agreed. As the respondent figure showed that the
researcher can conclude organizations were enabling to achieve the objective of the training
program which was improve employees‟ skill, knowledge and ability towards usage of tools
and machine, and operational safety in the work place as the participant proofed.
When the respondent asked to evaluate the role of training towards reducing risks in the work
place 21(100%) of the respondents were Agreed. In this case all of the respondents were
believed that the role of training in reducing accidences/risks in the work place was high.
The managers were inquired about how they evaluate the return of the training with respect to
reducing lateness and absenteeism rate of the employees form the work after the training and
3(14.3%), 9(42.9%), 5(23.8%), and 4(19%) of the respondent responded that Strongly
disagree, Disagree, Agree and Neutral, respectively. 12(57.2%) of the respondents said that
the organization will not effective. This indicates that the organizations were this much not
effective from the training through reducing lateness and absenteeism rate of the employees
form the work after the training.
The respondents were evaluated the organizational training effort to eliminates obsolesce in
skills and came back with Agree 13(61.9 %%) of the respondents and the remaining 8(38.1%)
respondents were strongly agree. As the whole respondents response fails in agree and
strongly agree the organizations were achieving the objectives from the training by
eliminating obsolesce in skills.
The researcher invited the respondent to rank with the given scale how much the organization
was effective from employees training that offered for them to reduce errors made by
employees while they are working and they responded that 16(76.2%) agree and 5(23.8%)
strongly agree. 100% of the respondent proofed that organizations were effective from the
training by reducing errors commit by the employees while they are working trough training.
For the question how the employees training in the organization reduce the extent of
supervision of employees by the immediate supervisor after the training and the participants
was responded that 16(76.2%) agree and 5(23.8%) strongly agreed that the training was
reduce the requirement of the supervision. The organizations were highly effective from the
48
training cost since the requirement of supervision by immediate supervisor is less after the
training as 100% of the respondents agreed.
When the respondents examine how the organizational training reduced the turnover rate of
the employees after the training program based on the objectives predetermined by the
organization they found that 11(52.4%) Disagree and 4(19%) Agree. Despite the fact that, the
rest 6(28.6%) of them Neutral. With respect to reducing turnover rate the organizations were
not these much effective.
As the respondent responded the position of organizational training towards improving

employees‟ work motivation was high as 21(100%) of respondents Agreed. The role of
training towards improving employees‟ work motivation was high in the sample organizations
as majority of the answerers replied. Therefore, organizations were effective from the training
expenditure in relation to motivations.
For the question of how do you evaluate the effectiveness of the organization in decreasing
material wastage by offering training for its employees, subsequently 19(90.5%) and 2(9.5%)
of the respondent replied that Agree and Strongly agreed respectively. In respect to reducing
material wastage training play an important role in the sample organization. As the entire
respondent proofed that organizations were in a good position to words reducing material
wastage in the respective organizations after the training. So, organizations were effective
from the training.
When the effectiveness of the organization from the employees training with reference to
increase job satisfaction by the respondents 18(85.7%) and 3(14.3%) of them agreed and
Neutral concerning training Increased job satisfaction contribution in increasing the
employees‟ job satisfaction in the organization after the training respectively. Training is play
a prominent role towards increase job satisfaction in the sample organization as 18(85.7%) of
the respondent verified that the sample organization were effective from the training
expenditure in relation to increasing employees satisfaction.
There is no doubt training can increase work efficiency of the work force. The researcher
asked the manager of the sample organizations to weigh up how the organization they are
49
working was effective from employees training in relation to increases work efficiency and
12(57.1%) and 9(42.9%) of them agreed and strongly agreed that the training Increased work
efficiency among the worker after the training they were lead/or supervise respectively. So,
organizations were effective from the training expenditure in relation to improving work
efficiency in the work place.
As the respondents evaluated the effectiveness of the organization from the employees
training with respect to improving the profitability of the organization 15(71.4%) and
6(28.6%) of them responded are agreed and strongly agreed that the improvement of the
profitability of the organization was high respectively after the employees‟ training. As the
response figure showed that the majority of the respondent said that the organizations had got
high benefited from the employees training. From this the researcher can conclude the
organizations were in good positions in relation to effectiveness from the training expenditure
towards improving profitability of the organization.
Generally, the returns from training are identified by different scholars According to Huang,
(2001) the returns are: enhanced product or service quality, improved work motivation,
reduced turnover rate, improved ability and knowledge, improved operational safety,
decreased material wastage, improved profitability, increased work efficiency, and increased
job satisfaction reduced absenteeism. For such and other objectives sample organizations are
spend considerable amount of money to train their employees. Based on the above analysis of
the data obtained from managers of sample organizations, the researcher conclude that the
organizations were effective from the training expenditure as majority of the respondents
were responded. Even if some of the respondents negatively replied because, this is what
actually happens to most training; by many research estimates, only 15 out of 100 people that
receive new training eventually use it in ways that produce valuable performance results
(Brinkerhoff, 2006).
50
16. Table 4.13 Measuring Effectiveness of Training and Development

1 Which Model used by the Kirkpatrick Model 6 28.6
organization to measure the Can't Measured
effectiveness of the organization 15 71.4
from the training expenditures
Total
21 100.0
Many training programs fail to deliver the expected organizational benefits. Having a well-
structured measuring system in place can help the organization to determine where the
problem lies. What was a successful organization from the employees‟ training expenditure
yesterday may not be a cost-effective tomorrow. Being able to measure and evaluate results
will help the organization adapt to such changing circumstances in order to be effective from
the training expenditure.
Training evaluation is a critical component of analyzing, designing, developing, and

implementing an effective training program that enables the organization to be cost effective.
Training evaluation determines an organizational effectiveness from the training expenditure
by meeting its intended purpose, which mainly is producing competent employees.
In fact, the selection of evaluation techniques/models for organizational effectiveness from

the training expenditure depends upon circumstances (Leigh, 2005) and what it wants to
measure and assess (Garrett & Taylor, 2005) as cited in (Ahmed et al, 2010). The objectives
of training also determine the most appropriate criteria for assessing the effectiveness of
training (Arthur et al, 2003). In line with this fact the researcher asked manager to identify the
models that they have using to evaluate organizational effectiveness from employees training
expenditure and to rank the usage rate of the models, 6(28.6%) responded that they were used
Kirkpatrick Model Methods and 15(71.4%) Can't measured organizational effectiveness from
the training expenditure. According to (Ahmed et al, 2010) organizations may select different
models to measure the effectiveness of organization from the training expenditure. The
selection of an evaluation model is very important as it show how organization is benefited
51
with training expenditure, what is the employee s reaction, how much did they learn, did they
change their behavior, and what is the result? In fact, all training objectives of the
organization are difficult to evaluate by the objective methods e.g. behavioral training.
Therefore, the organizations can use subjective method to measure and evaluate their
effectiveness from the training expenditure. But, absolutely depending up on the subjective
method for all training expenditure and ignoring the other methods is a weakness of the
organization as (Carr, 2002) said organizations administering the program not only are
accountable for what employees learn, they also are accountable for ensuring that employees
transfer their knowledge to their work performance. While traditional training evaluation
methods focus on using the assessment process to improve training delivery, information
should also be collected to determine whether training is assisting the organization to improve
its business performance. In terms of increasing productivity, reducing wastage, improving
quality, and etc… But, simply hinge on subjective method only to evaluate the effectiveness
of the organizations from the employees‟ training expenditure is difficult and inaccurate to
judge whether the organization is effective or not. For example, Kirkpatrick‟s model for
evaluation organizational effectiveness from the training has been used for 60 years to
measure training effectiveness. However only 28.6% of the respondents replied still they are
using it.
52
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION
5.1. Introduction
This chapter presents the summary of the findings from chapter four, and also gives
conclusions and recommendations of the study based on the objectives of the study.
5.2. Summary of Findings
After analyzing and interpreting the data, certain findings are drawn to make it clear about the
“Effectiveness of Training and Development Programmes and organizational
competitiveness” organized in the sample selected banks. As the literature identified there are
main reasons why organizations are initiate to give training for their employees, finding of
this survey revealed that the reason which initiated the sample organizations to gave training
for their employees with the objective of upgrade the skills, knowledge, capabilities, and
attitude of the employees in the area in which the employees had deficiency, in order to
improve the employees‟ performance in a given task or job that assigned for him/her, to
increase productivity, to reduce material wastage, supervision, risks to increase work
motivation, work efficiency and profitability and others.
Based on the responses the employees regarding the different aspects of training in the
organization, such how the training programs were designed, the role of training on the
improving their skills, ability and knowledge, applicability of it after the training on the job,
methods of training, its role on their motivation and satisfaction, their views about, amount of
budget for training, evaluation of the training and the effectiveness of the organizations from
the employees training. The research finding suggests that the firms were effective in
achievements of the above objectives in views of the employees, Even though some
employees are not aware on the training program design of the bank. Even though 60.4% of
employees satisfied with the overall training programme conducted by their organization,
more than 50% employees replayed that the expenditure for the employee training and the
amount of training is not enough. In line with the employee selection for training, 70(52.2%)
respondents do not know how they are selected for the training programs they participated in.
Only 47.8% responded in the affirmative to the question. This shows that even though staffs
53
participate in training programmes, their inclusion for such programmes is not clear to them.
Therefore the researcher concludes that, Even though the firms are effective from the training
expenditure, there is a high demand in training program.
Regarding to the evaluation of employees‟ performance, from the findings it is observed that
employee‟s performance was evaluated through appraisal system and through a special
format. 64.2% of the respondents replied that their performance was not evaluated against the
pre defined objectives and only 21.6% respondents replied that they always get feedback on
their performance.
Regarding to the evaluation of how much organizations were effective from the employees‟
training investments in terms of the objectives intend to achieve. The objectives which
initiated the organizations‟ to offer training for their employees were to Increase productivity,
Enhance quality of product or service, Improve quantity, Improves skills, knowledge, attitude
change, new capability, Enhance the use of tools and machine, Reduces Risks, Reduces
lateness, absenteeism, Eliminates obsolesce in skills, Reduction in errors, Reduce extent of
supervision, Reduction in turnover, Improve work motivation, Decrease material wastage,
Increase job satisfaction, Increase work efficiency, and Improved profitability. The finding
revealed that the banks were effective from the employees‟ training expenditure for all above
listed dependent variables excluding Reduces lateness and Reduction in turnover. The banks
were not effective in reducing lateness and absenteeism of employees after the training.
The improved performance of individuals leads directly to profit. Such a payback can be rapid
and significant, yet it is rarely measured or presented in financial terms. But in these
organization never presented in financial term. In fact they believed that training expenditure
had direct relationship with profitability of the organization in all firms as the finding suggests
that but the organization were unable to specify proportion of expenditure effect on
profitability of the organization. Since they were evaluate the effectiveness of the organization
based on the personal judgment with help of subjective methods.
54
5.3. Conclusions
Training is importation for the survival of any organization. It is also imperative for effective
performance of employees, enhancement of employees‟ ability to adapt to the changing and
challenging business environment and technology for better performance, increase
employees‟ knowledge to develop creative and problem solving skills. Training is of great
importance to the organization and as a result of this the training should be evaluated
regularly and several times during the process as well. Effective and efficient training goals
and objectives set by the organization for the training program should be duly followed and
the organization should be able to evaluate it employees by comparing the skills acquired
from their training to their performance on the job. In this case performance appraisal must
handled effectively and comprehensively. From the findings of the analysis, Most of the staff
do not know how they are selected for the training programs they participated in. Also they
are not getting feedback on their performance and their performance was not evaluated
against stetted objectives.
5.4. Recommendations
In light of the findings the researcher forwards the following suggestions for the concerned
body:-
 Training objectives should be clear to banks and staff because they can be used to
assess their success.
 Organization should allocate sufficient amount of budget to train this key resources of
the organization. Since investment on people, both in developing and maintaining the
appropriate skills, knowledge, and ability are vital part of the organization‟s strategy
for the future and it is a strategic weapon in the battle for competitive advantage.
 Since the organizations are investing considerable amount of resource for employees‟
training they have to get satisfactory return on investment. Means linking the training
function and activities to the company‟s overall business activity, to do so
organizations should use objective models in addition to the subjective methods to
improve the accuracy of the result of organizational effectiveness evaluation from the
employees training expenditure. Other ways a training program is not complete until
55
they have evaluated results with the help of precise method. A key to obtaining
consistent success with training programs is to have a systematic approach to
measurement and evaluation.
 Since the finding of study proofed that all sample selected banks were effective from
the training expenditure organization are expected to do more and more on this issue to
be more effective from the training expenditure towards achieving those objectives and
they are expected to see all factors which hinder them from the attainment of the
specified training objectives. Simply giving the training is not guarantee for
organizational success; therefore, organizations should consider all factors which
determine the effectiveness of the organization from the particular training program
(eg. method of delivery, content, duration, trainers, environment, number of participant
in a particular session and other factors). Special banks should think over on an aspect
of training effectiveness measure i.e. reduces lateness and absenteeism of employees.
 Any training should be takes place based on proper analysis of its contribution to the
effectiveness and efficiency of an organization unless and until the investment on it
should invest in another activity. Therefore, organizations should design their training
program based on this fact especially.
 Banks should provide performance feedback which will allow staff to be informed of
changes to both their work goals and the overall goals of the organization. Since the
finding of the study proofed that most of the employees performance evaluation was
not evaluated against stated objectives and they can‟t get feedback on their
performance, these will decline employees motivation that affect organizational
competitiveness.
5.5. Direction for Future Research
Training plays a major role on the employees‟ performance. This study reveals that the
effective training enhance the efficiency of employees and effectiveness of organizational
function. The organizations are investing huge amount on training. The measuring of Returns
on the Investment (ROI) make in banking sector can be studied through measuring the
profitability of the organization could be future scope of this study.
56
References
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markets. The Economic Journal, 109(453), pp.112-142.
Aguinis, H. (2006). Performance management. Denver, Colorado, USA: Prentice Hall, Inc.
Andrew Smith, Gerald Burke, Michael Long, Tom Dumbrell. (2008). Approaches to
measuring and understanding employer training expenditure. Bangalore, India:
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Armstrong, M. (2010). A Handbook of Performance Management, 4th edition. New Delhi:

Kogan Page Limited, London.
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Batool, A., & Batool, B. (2012). Effects of employees training on the organizational
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12.
59
Appendices
Appendix A: Survey Questionnaire for IT experts

School of Graduates Studies
MBA in Project Management
……………………………………………………………..
Dear Respondent,
This letter is an introduction to the main reason as to why your participation in this
questionnaire is required. This study is a research study on the thesis title Effectiveness of
training and Development on employee performance and Organizational Competitiveness. It
is in partial fulfillment of one of the requirements for the attainment of the award of the
Master‟s degree in Business Administration with Concentration in Project Management
Program from Alpha University College.
My research project endeavors to generate knowledge to be utilized in understanding training
and development of employees. If a report of the result is published, only summarized
information of the total group will appear. The study specifically focuses on determine how
training and development affect employees performance and organizational competitiveness.
As a representative of your company, your views are of importance in my study and I would
appreciate you responding to this questionnaire. This is purely for academic purpose and your
response will be kept confidential and anonymous.
To create a conducive environment for your free and genuine response, you are not required
to write your name. Thank you for your time, co-operation and contribution to my study. I
shall be pleased to send you a copy of the findings of the study if you desire so.
Yours faithfully,
…………………….
Andinet Endayilalu
Email:- andinet111@gmail.com
Skype:- andinet1.aniley
Mobile: - +251-912-466-127
60
Part I – Background of Staff [Please Tick Where Appropriate]
1. Gender
 Male  Female
2. In which age group are you?
 18 - 25  41 - 50
 26- 35  51 - 60
 36 - 40  61 and above
3. What is your highest level of Educational Achievement?

 Third Degree (PhD)  Certificates
 Second Degree  12 grade complete
 First Degree  Below grade 12
 College Diploma
4. Your field of specialization for your Highest Educational Status____________________
5. What is your position in the company?
 Junior  Principal
 Senior  Other [pls. specify]__________
6. How long have you been working with these company?
 Less Than 1 years  4 - 7 years
 1 - 3 years  More than 7 years
7. What is your Current job position? _____________________________
8. In which department are currently working? _________________________
Part II: Impact of Training & Development on employee job performance
9. Have you had any form of training since you joined the organization?
 Yes  No
If “yes” to the question above, please continue with the questions No.10, 11, 12, 13 &
14 below.
10. How were you selected for Training?
 On joining the company  Upon employee request
 Supervisors recommendation  Performance appraisal
 Compulsory for all employees  Don‟t know
61
11. What Kind of Training Methods were used
 On the Job Training  Off the job Training
12. How many times do you have taken training?
 1–3  7–9
 4–6  10 and More than
13. For how long you had been in training on average?
 Less than 15 days  3 – 5 months
 16 – 30 days  6 – 12 months
 1 – 2 months  More than 1 year
14. How many times you have taken training per year on average?
 Only once  4 – 6 Times
 2 – 3 Times  More Than 7
15. The following questions describe the organizations effort to train its employees.
Please put “X” in the space at the front of the questions under number you think
express the position of the organization in relation to the training program?
Keys: - 1 = strongly disagree,
2 = disagree,
3 = Neutral,
4= agree,
5 = strongly agree
62
S/N Questions
1 2 3 4 5
1. Do you think the training program designed based on the

requirements of the job?
2. Is the type of training you have taken applicable for the
job after the training?
3. Do you have known the objective of the training?
4. Does the training increase your motivation to the job you
do?
5. Does training improves your skills, knowledge, attitude
change, new capability
6. Does the training lead you to be satisfied with your job?
7. Do you think the method of training used by the
organization is effective
8. Do you have enough training that enables you to do your
job as required?
9. Do you think the expenditure for employee training is
enough?
10. Does the training program evaluate during or at the end
of the program?
11. Do you think that the organization is effective from the
training expenditure?
12. Are you satisfied with the overall aspect of the training
programs in the organization?
16. Do you Know the Bases on which you were sponsored to training?
 Yes  No
17. As a trine have you ever see or receive training and Development objectives for the
before or after the training station have been started?
 Yes  No
18. Does the bank have the right trainers who have adequate technical proficiency and
skills for the right Trainees?
 Yes  I don‟t Know
 No
19. How is your Performance Evaluated?
 Through Performance appraisal
 Special Report Format
 Other [please specify]________________________________________
63
20. Do you consider Your Performance Evaluation processes fair?
 Yes  No
21. Is your performance evaluated against your set objective(s)?
 Yes  No
22. How often do you get feedback on your performance?
 Never  Sometimes
 Always
Appendix B: Survey Questionnaire for Managers

1. Have you ever seen any form of training for employees under your supervision since
you have become a Supervisor/ Managers?
 Yes  No
If your answer for question No. 1 is yes, how do you evaluate the return of the training
after the training relative to the objective of training? Please answer by putting “X” in the
box you think represent the result of the training in front of each question.
Assume strongly disagree =1 disagree =2 Neutral =3 agree =4 strongly agree= 5
S/N Objective 1 2 3 4 5
1. Enhanced quality of product/service
2. Improves skills, knowledge, attitude change,
new capability
3. Enhance the use of tools and machine,
operational safety
4. Reduces Risks
5. Reduces lateness, absenteeism
6. Eliminates obsolesce in skills
7. Reduction in errors
8. Less supervision necessary
9. Reduction in turnover
10. Improved work motivation
11. Decreased material wastage
12. Increased job satisfaction
13. Increased work efficiency
14. Improved profitability
64
2. Which criteria organization use to measure the effectiveness of the organization from
the training expenditures, for its employees. Complete the table by put “X” in front of
the evaluation model based on the frequency of usage in the organization.
a) Kirkpatrick Model
i. Reactions Never Rarely Sometimes Often Always
ii. Learning Never Rarely Sometimes Often Always
iii. Behaviour Never Rarely Sometimes Often Always
iv. Result Never Rarely Sometimes Often Always
b) Cost – Benefit analysis Never Rarely Sometimes Often Always
c) Return on Investment Never Rarely Sometimes Often Always
d) Can’t Measured
e) Other[pls. Specify]_________________________________________
Appendix C: Results of Cronbatch's Alpha Reliability Test
Case Processing Summary

N %
Valid 20 100.0
a
Excluded 0 .0
Total 20 100.0
a. List wise deletion based on all variables in the procedure.
Reliability Statistics
Cronbach's N of Items
Alpha
.738 33
65
Appendix D: List of Private Banks in Ethiopia
Year of
No Bank Name Web Site Establishment
1. Awash International Bank http://www.awashbank.com 1994

2. Dashen Bank http://www.dashenbanksc.com 1995
3. Bank of Abyssinia http://www.bankofabyssinia.com 1996
4. Wegagen Bank http://www.wegagenbanksc.com 1997
5. United Bank http://www.unitedbank.com.et/ 1998
6. Nib International Bank http://www.nibbank-et.com/index.php 1999
7. Cooperative Bank of Oromia http://www.coopbankoromia.com.et 2004
8. Lion International Bank http://www.anbesabank.com/ 2006
9. Zemen Bank http://www.zemenbank.com/ 2006
10. Oromia International Banks http://www.orointbank.com/ 2008
11. Bunna International Bank http://www.bunnabanksc.com/ 2009
12. Berhan International Bank http://www.berhanbanksc.com/ 2010
13. Abay Bank http://www.abaybank.com.et 2010
14. Addis International Bank http://www.addisbanksc.com
15. Debub Global Bank 2012
16. Enat Bank S.C http://www.enatbanksc.com 2014
Source: - http://www.nbe.gov.et/financial/banks.html
66

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Alpha University College

School of Graduate Studies

EFFECTIVENESS OF TRAINING AND DEVELOPMENT ON

Effectiveness of Training and Development on Employees’ Performance and

Advisor: Shiferaw Mitiku (Ph.D)

A Thesis Submitted to the School of Graduate Studies of Alpha University

Effectiveness of Training and Development on Employees‟ Performance and

Signed by the Examining Committee:

______________________ ____________ _____________

External Examiner Signature Date

______________________ ____________ _____________

Internal Examiner Signature Date

______________________ ____________ _____________

Advisor Signature Date

______________________ ____________ _____________

Next, my unreserved thanks go to my Advisor, Shiferaw Mitiku (Ph.D), whose advice,

1. Table 3.1 Population of the study .................................................................................... 23

Figure 1 Conditions for Effective Training .............................................................................. 10

ICT: -------------------Information Communication Technology

Keywords: Training, Development, Employee Performance, Organizational Competitiveness.

1.1 Background of the Study

1.2 Problem Statements

1.3 Research Question

1.4.1 General Objective

1.4.2 Specific Objective

Specifically, the research seeks:

1.5 Scope of the Study

1.6 Delimitations of the Study

1.8 Significance of the Study

1.9 Organization of the Study

This study is structured into five chapters;

2.2 Theoretical Literature Review

Role of Training and Development in Organizations

Training and Development Effectiveness

Figure 1 Conditions for Effective Training

Measuring Employee Performance

Employee performance is measured using several methods based on the organizational

Measuring the Effectiveness of Training

2.3 Empirical Literature Review

Fakhar et al. (2011) conducted a research on impact of training on employee performance in

2.4 Conceptual Framework

Figure 2 Proposed Study Model

Organizational competitiveness is one of dependent variable, that measured by the Annual

Training and development (Independent variable), was measured by organizational

2.5 Identified Literature Gaps

3.2. Background of Private banks in Ethiopia

Research Approach and Design

Research design is the structuring of investigation aimed at identifying effectiveness of

The questionnaire was self-administered. It helped to explain to respondents the essence of

Why Questionnaires were mainly adopted for this study:

3.4 Population and Sampling Techniques

3.4.1 Population of the study

3.4.2 Sampling and Sample Techniques

Where n = the sample size

2. Table 3.2 Stratum representation of sample size

Population Sample size nx

Awash International Bank 24 20 18 7 69 16 13 12 5 46

Bank Name Number of respondents

3.5 Data Source and Type

3.6 Data Collection Procedure

3.7 Method of Data Analysis

3.8 Research validity and reliability test

__________ _

__________ _

__________ _

__________ _