For more than four decades, learning and development (L&D) is a critical agenda issue for senior managers in organisations (Garavan et al. 2020a). There is an important recognition that organisations require a skilled and motivated workforce in order to achieve firm performance and competitive advantage (Hughes et al 2019; Tharenou et al 2007). Through investment in structured and formal L&D, organisations enhance employee and organisational human capital which leads to enhanced performance (Jiang et al 2012).
For the purpose of this monograph, we define L&D effectiveness as the extent to which it leads to intended firm-level performance gains and results. However, we also acknowledge consistent with Kirkpatrick (1987) that L&D also leads to more proximal outcomes such as feelings and reactions about the activities, enhanced knowledge, skills and abilities and learnings for teams and organisations, including HR outcomes such as job satisfaction, employee engagement and lower levels of absenteeism (Sitzmann et al. 2008; Kraiger et al. 1993). However, the ultimate outcomes that firms expect from investment in L&D are outcomes such as productivity, innovation, customer service and financial performance (Garavan et al. 2020a; Ployhart and Hale 2014). Therefore, for L&D to be effective, it is necessary to have a high degree of transfer in the form of job performance.
Despite the popularity of L&D in both research and practice, there is a great deal yet to know about the effectiveness of these practices. The lack of compelling evidence for the effectiveness of L&D (defined as ‘formal on- and off-the-job structured activities focused on the development of the knowledge, skills and abilities (KSAs) for current and future job roles’ (Garavan et al. 2020a: 2), has heightened recent debates about whether L&D is a worthy and valuable investment for organisations. Addressing these sorts of issues, as well as reaching consensus about L&D research and practice in general requires an evaluation of where we are at this time. This is the primary purpose of this monograph, which identifies a pressing need based on an extensive review of the L&D effectiveness literature. We provide a theoretically grounded, comprehensive and integrated framework to understand L&D and its outcomes for organisations.
We propose that there is a need for this framework based on recent discussions. For example, Garavan et al. (2019) questioned whether sufficient empirical attention has been given to justifying the contribution of L&D to firm performance in organisations. Similarly, there has been a push to justify L&D as an important strategic activity in organisations (Garavan et al. 2020b). More generally, commentators have highlighted that there is a need to improve the research base to establish the impact of L&D practices and the justification of many of the normative best practice recommendations that are found in the L&D literature (Garavan et al. 2020b). An important challenge concerns the many different ways in which ‘value’, ‘impact’, ‘return’ and ‘bottom line’ are defined and what they mean in the context of L&D. Researchers have historically argued for different dimensions of value including human resource outcomes (Tharenou et al. 2007), operational outcomes (Garavan et al. 2020a) and financial outcomes (Garavan et al. 2020b). For example, a proximal outcome perspective emphasises KSAs, cognitive, affective and behavioural outcomes (Tharenou et al. 2007); a distal perspective on the other hand argues that investment in L&D is a vehicle to improve operational and financial firm performance. This strategic view prioritises financial outcomes and argues that profitability and return on equity (ROE) represent the ultimate criterion (Kim and Ployhart 2014; Garavan et al. 2020b).
Relatively few models exist that explain the factors that are relevant to explaining the effectiveness of L&D in organisations (Garavan (2007) is perhaps one example). In response, as part of this monograph, we created a comprehensive theoretical model to understand L&D effectiveness. This model is derived from a combination of theoretical and empirical work conducted to date. Therefore, the creation of a comprehensive model is our primary contribution and represents a significant step forward on prior work in a number of important ways. First, we integrate the findings from both research and practice, which is considered a longstanding gap in the literature. We seek to integrate theoretical perspectives and both macro environmental and micro organisational factors to understand L&D effectiveness. We argue that to better understand the effectiveness of L&D, it is necessary to incorporate external and internal macro and micro level constructs in addition to understanding the roles of L&D processes in linking them to firm performance outcomes. We are therefore able to more clearly articulate how various external and internal contingencies are linked, in addition to understanding the various dynamics that underpin the effectiveness of L&D in organisations.
Our model (Fig. 4.1) has important imp...