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Do organizations spend wisely on employees? Effects of training and development investments on learning and innovation in organizations

Year: 2013

Type: article

Abstract: The present study examines the effects of training and development on organizational innovation. We specifically suggest that the training and development investments of an organization affect its innovative performance by promoting various learning practices. We empirically tested our hypothesis by using time-lagged, multi-source data collected from 260 Korean companies that represent diverse industries. Our analysis showed that corporate expenditure for internal training predicts interpersonal and organizational learning practices, which, in turn, increase innovative performance. The data also revealed that the positive relationship between interpersonal and organizational learning practices and innovative performance is stronger within organizations that have stronger innovative climates. By contrast, investment in employee development through financial support for education outside an organization poses a significant negative effect on its innovative performance and no significant effect on learning practices. The present study provides a plausible explanation for a mechanism through which the investment of an organization in employees enhances its innovative performance. Copyright © 2013 The Authors.

Source: Journal of Organizational Behavior

DOI: 10.1002/job.1897

Authors: Sun Young Sung, Jin Nam Choi

Institutions: Nanjing University, Seoul National University

Language: English

Topic: Human Resource Development and Performance Evaluation

Subfield: Applied Psychology

Field: Psychology

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $4,250