Developing employees (Edexcel GCSE Business): Revision Notes
Developing employees
Why employee development matters
Employee development is crucial for business success because a company's performance directly depends on the quality of its workforce. When businesses invest in training and developing their staff, they enhance the overall knowledge and skills available within the organisation. This investment helps create a more capable and productive team that can drive the business forwards.
The relationship between employee development and business performance is cyclical - better-trained employees deliver improved results, which in turn provides more resources for further development initiatives.
Types of employee training
Formal training
Formal training involves structured learning programmes where employees attend organised courses designed to improve specific skills. This type of development has several key characteristics that distinguish it from other training approaches.
How it works:
- External training providers or industry experts often deliver these programmes
- Courses may lead to recognised qualifications or professional accreditation
- Training typically follows a set curriculum with clear learning objectives
Benefits:
- Provides recognised qualifications that add value to both employee and business
- Delivers specialist knowledge from industry experts
- Creates standardised skill levels across the workforce
Drawbacks:
- Can be costly for businesses to fund
- Takes significant time to complete courses
- May require employees to take time away from their regular duties, reducing immediate productivity
Informal training
Informal training focuses on learning through practical experience and workplace coaching. This approach allows employees to develop skills while continuing their regular work duties, making it particularly attractive for businesses with limited training budgets.
How it works:
- Employees learn by doing their job and gaining experience over time
- Colleagues or supervisors provide coaching and guidance
- Skills develop naturally through day-to-day work challenges
Benefits:
- More cost-effective than formal training programmes
- Requires less time investment compared to structured courses
- Provides immediate, practical experience that employees can apply straight away
- Allows learning to happen without disrupting workflow
Drawbacks:
- Can create pressure for employees who must learn whilst performing their duties
- May result in skills gaps if the job doesn't cover all necessary areas
- Places responsibility on employees and colleagues to actively seek and provide training opportunities
Performance management
Performance management creates a structured approach to employee development through goal-setting and regular review processes. This system helps businesses track and support their employees' professional growth while ensuring alignment with organisational objectives.
The process involves:
- Setting specific targets for personal development and job performance
- Employees working with their line manager to agree on realistic goals
- Regular meetings to review progress and provide support
- Using performance outcomes to inform decisions about promotions and salary increases
Key features:
- Creates formal documentation of agreements between employees and managers
- Links individual development to business objectives
- Provides a framework for ongoing training and skill development
- May include targets for gaining qualifications or completing external training courses
This approach ensures that employee development aligns with business needs whilst providing clear pathways for career progression.
Real-world application
Practical Example: Retail Business Training
Consider how a retail business might use external training courses. By sending employees on specialised programmes, the company can ensure staff develop new knowledge and skills that directly benefit customer service and sales performance.
Step 1: Identify skill gaps in customer service or product knowledge Step 2: Select appropriate external training providers Step 3: Employees attend structured courses and gain certifications Step 4: Staff return and apply enhanced capabilities immediately Result: Improved productivity and better business results
The investment in external training brings expertise into the business that might not exist internally, or enables employees to learn from recognised specialists in specific areas of the industry.
Key Points to Remember:
- Employee development is essential because businesses depend entirely on their workforce's capabilities and skills
- Formal training provides structured learning with qualifications but requires significant time and money investment
- Informal training offers cost-effective, practical learning through on-the-job experience and peer coaching
- Performance management creates a systematic approach to employee development through target-setting and regular reviews
- External training courses can bring specialist knowledge and skills into the business that enhance overall productivity