European Journal of Scientific Research ISSN 1450-216X Vol. 37 No. 3 (2009), pp. 351-360 © EuroJournals Publishing, Inc. 2009 http://www. eurojournals. com/ejsr. htm Training Needs Assessment and Analysis: A Case of Malaysian Manufacturing Firms Haslinda Abdullah Faculty of Economics and Management 43400 Selangor, University Putra Malaysia E-mail: hba@putra. upm. edu. my; drhaslinda@gmail. com Abstract This paper aims to investigate the extent to which participating organisations have carried out needs analysis in accordance with their objectives and projected growth.

The four areas that will be examined include: first, the proportions of organisations that have performed HRD needs analysis and the frequencies at which these needs analyses were conducted; second, approaches used in identifying HRD needs; third, the levels in needs analysis and; fourth, methods used in analysing HRD needs. A combination of quantitative and qualitative research methods was employed. Survey data was obtained from 365 HRD practitioners and supplemented with interview results from 36 HRD practitioners in manufacturing firms in Malaysia.

Training needs assessments in the manufacturing firms are found to be generally performed informally through observations. Size of firms had an effect on the way training needs is being assessed and analysed. The absence of needs assessment and analysis is due to lack of expertise and it is irrespective of the size of firms. The results of this study were obtained from HRD practitioners’ perspective. Caution is advised when generalizing the results, as the employees’ stance was not obtained. This study contributes to HRD practice in several ways.

First, it conforms that HRD practitioners do recognize the importance and power of effective needs assessments in helping them plan and strategize for effective HRD activities. Second, it observes a lack of effective resources to help HRD practitioners in conducting needs assessment. Most of the studies on HRD and training are researched in Western countries. Limited empirical evidence can be obtained in Malaysia, particularly from the manufacturing industry. This study presents a comprehensive empirical survey and interviews on HRD needs and assessment in manufacturing firms in Malaysia.

Keywords: HRD, Training, Needs Assessments, Manufacturing Firms, Malaysia 1. 0. Introduction Today, more and more companies are interested in intangible assets and human capital as a way to gain competitive advantage. Training and development can help in supporting company’s competitiveness by increasing the company’s value through contributing to its intangible assets. However, in designing effective training and development programs and activities, the first step in the instructional design process is the most crucial process in which it has to be properly and correctly conducted.

Indeed, improperly and incorrect training needs assessments can lead to disastrous effects. Training Needs Assessment and Analysis: A Case of Malaysian Manufacturing Firms 352 In Malaysia, the Government has emphasized on the importance of training and development for employees in the manufacturing sector through various initiatives. For example, in 2007, the Government, through the HRD Council provided about 45 million ringgit of monetary assistance to the manufacturing sector for employees’ training.

More than one 1,186 training institutions were also established to support the manufacturing sector other than the introduction and implementation of the HRD Act, 1992. This is because the Government believes that investment in human capital is the key to the success of the country’s economic growth (Ministry of Human Resources, 2009). Hence, with these support from the government and legislations in place, a systematic approach to human resource development is pertinent towards the success of HRD interventions.

A systematic approach to HRD should begin by identifying the organisation’s business objectives or strategy. Hence, needs assessment and analysis is recognised as the first step in any HRD intervention (Leigh, et al. , 2000). This paper aims to investigate the extent to which participating organisations have carried out needs analysis in accordance with their objectives and projected growth. The four areas that will be examined include: first, the proportions of organisations that have performed HRD needs analysis and the frequencies at hich these needs analyses were conducted; second, approaches used in identifying HRD needs; third, the levels in needs analysis and; fourth, methods used in analysing HRD needs. 2. 0. Training Needs Assessments and Analysis Leigh, et al. , (2000) stressed the importance of assessing and analysing needs because this stage builds the foundation by identifying the kinds of HRD intervention needed for an effective effort. However, Desimone, et al. , (2002) contested that in analysing HRD needs, four levels of needs has to be analysed.

They include assessing the needs of the organisation, individual employees’ skills, knowledge and attitudes, and their functional responsibilities as well as departments’ needs (Wilson, 1999 and Harrison, 2000). This proposition is argued by Kerr & McDougall (1999), that most companies do not analysed all the four levels, but rather emphasised on individual employees’ needs. Turning to the methods used in accomplishing the identification of needs within organisation. Wilson (1999) suggested the conventional and simpler methods such as interviews, questionnaires, observations, and focus groups to gather information for HRD needs analysis.

On the contrary, Gilley, et al. , (2002) suggested the more analytical method such as is/should analysis, critical analysis and root-cause analysis methods to gather information. However, Reid and Barrington (1994) argued that methods of identification depend on the focus of investigation, and have proposed referencing to strategic planning documents relating to marketing, production, and staffing; analysing minutes of management meetings, and analysing operational and personal records. Indeed, Wilson (1999) has agreed that it is important to include the HR plan and the organisation’s strategic plan in needs analysis.

Certainly, it was suggested by several theorists the various methods of identifying needs analysis from the simpler methods suggested by Wilson (1999) to the more technical and complicated method by Gilley, et al. , (2002). However, researchers have argued that organisations would rather much preferred methods such as performance appraisals, informal feedback from line managers and individual employees (Tregaskis & Brewster, 1998; Madsen & Larsen, 1998; Baalen & Hoogendoorn, 1998; Kjellberg, et al. , 1998; Heraty & Morley, 2000; Elbadri, 2001; and Morrow, 2001).

Particularly, in organisations adopting the ISO policy, Vinten (2000) claimed that employees’ training needs through line managers’ requests are highly associated with ‘non-conformance’ that is identified upon completion of the ISO auditing procedure. Even though, it was deliberated by theorists and researchers on the importance of analysing needs, it was implied that many companies do not regard performing HRD needs analysis as a priority (Anderson, 1994; Smith, 1999; Bhatta, 2002 and Budhwar, et al. 2002), and this phenomenon is particularly obvious in small firms (Sadler-Smith, et al. , 1998; Kerr & McDougall, 1999; Vinten, 2000; Hill & Stewart, 2000; Sadler-Smith & Lean, 2004). Indeed, there are various reasons why needs assessment is not conducted as it is described as being a difficult process, time consuming and lack of 353 Haslinda Abdullah resources in carrying out the tasks (Anderson, 1994; Sadler-Smith, et al. , 1998; Madsen & Larsen, 1998; Smith, 1999; Heraty & Morley, 2000; Elbadri, 2001; Budhwar, et al. 2002; Hansen, 2003; Hill & Stewart, 2000, and Hill, 2004). On the other hand, Desimone, et al. , (2002) argued that incorrect assumptions are usually made about needs analysis being unnecessary because the available information already specifies what an organisation’s needs are. Furthermore, it was contested that there is a lack of support for needs assessments as HRD professionals are unable to convince top management of its necessity (Reid & Barrington, 1994; Wilson, 1999; McGoldrick, Stewart & Watson, 2002).

This view is criticised by Smith (1999) because most companies do not employ qualified HRD professionals or trainers to manage their HRD functions, despite the fact that performing the complex task of analysing needs can be difficult. 3. 0. Methods Data for this study was collected from manufacturing firms in Malaysia, listed in the Federation of Malaysian Manufacturers Directory. Questionnaires were distributed to 2,350 firms and 365 questionnaires were returned (16 percent response rate). The respondents were key executives responsible for employees T&D function in the participating companies.

The data and information were collected using a structured written questionnaire. It consists of questions: have performed HRD needs assessments; the frequencies at which these needs assessments were conducted; approaches used in identifying HRD needs; the levels of needs assessments; and methods used in assessing HRD needs. Data from questionnaire survey was analysed descriptively to identify the difference of responses in the large-scale industries (LSIs) and small-medium industries (SMIs). Interviews were also performed with HRD practitioners in 36 randomly selected firms.

Interview data was analysed and then categorized into themes and categories to supplement quantitative survey findings. The use of quantitative and qualitative research methods is to strengthen the validity of data and to corroborate survey findings (Creswell & Miller, 2000; Creswell, 2003). 4. 0. Findings and Discussions 4. 1. Provision and Frequencies of Needs Assessments and Analysis The HRD practitioners in the participating companies were questioned as to whether they had ever conducted HRD needs assessments and analysis in their organisations.

The results of the analysis suggest that a majority (92. 0 percent) of the LSIs had their HRD needs assessed and analysed, of which 74. 3 percent of these organisations performed such assessment and analysis at least once a year. On the other hand, more than 60 percent of the SMIs had their HRD needs assessed and analysed, but only 39. 4 percent of these companies conducted annual needs assessment. The remaining companies in both the LSIs and SMIs had their HRD needs assessed once every two to three years or even on an ad-hoc basis (5. 9 percent in the LSIs and 18. 4 in the SMIs).

Indeed, about a third (38 percent) of the SMIs reported that they had never had any needs assessment, whilst only a small number (7. 9 percent) of the LSIs reported the same. Hence, further statistical test showed that there is significant difference between the LSIs and SMIs in their needs analysis (? 2=40. 48, p=. 000) and the frequencies at which it is assessed (? 2=78. 82, p=. 000). Therefore, it could be implied that many companies, particularly the SMIs, do not regard performing needs analysis as a priority. And this proposition was also shared by researchers of HRD in the small and medium ndustries (see for example, Sadler-Smith, et al. , 1998; Kerr & McDougall, 1999; Vinten, 2000; Hill & Stewart, 2000). For on the basis that most manufacturing companies in Malaysia were not systematic in analysing their HRD needs, it could be construed that employees were not provided with the necessary and appropriate training and development efforts and the training provided was on an ad-hoc basis. However, studies have also shown that many organisations do not perform needs analysis as frequently as they should (see for example, Anderson, 1994; Sadler-Smith et

Training Needs Assessment and Analysis: A Case of Malaysian Manufacturing Firms 354 al, 1998; Smith, 1999; Bhatta, 2002; Budhwar, et al. , 2002) and in such circumstances, it would be difficult to envisage how HRD can make a strategic contribution to effective organisational goals. Table 1: Frequency Distribution on the Provision and Frequencies of HRD Needs Analysis Organisation Size SMI Performed HRD needs analysis Review Frequencies Yes No Total Once a year Every 2 years Every 3 years Ad-hoc Total N 132 81 213 84 9 39 132 % 62. 38. 0 100. 0 39. 4 4. 2 18. 3 62. 0 N 140 12 152 113 6 12 9 140 LSI % 92. 1 7. 9 100. 0 74. 3 3. 9 7. 9 5. 9 92. 1 4. 2. Strategic Approaches in Identifying HRD Needs Given that quite a large proportion of the manufacturing companies surveyed performed some kind of needs analysis in their organisations, it is pertinent to examine the various approaches that HRD practitioners deployed in identifying their HRD needs.

The five approaches in needs identification include: 1) examining top management and senior managers’ opinions and perceptions on the organisations’ future direction; 2) taking into account employees’ opinions and perceptions of the organisation; 3) examining top management strategic directions, goals, objectives and financial situation; 4) examining the business processes and changes in the organisation; and 5) taking into consideration internal and external business needs and challenges.

When an HRD practitioner takes into account all five approaches in identifying their HRD needs, the organisation can be viewed as having a strategic approach in its needs identification. The results of the analysis showed that a majority of the HRD practitioners agreed there was an examination of the business processes and changes in the organisation and examination of internal and external business needs and challenges in both the LSIs and SMIs in their needs identification (mean ranging from 3. 57 to 4. 4, illustrated in bold in Table 2). On the other hand, it appears that examination of top management opinions on the organisation and taking into account employees’ opinions of the organisation was not typical according to HRD practitioners in both organisation sizes (mean ranging from 1. 54 to 2. 32). However, more than 60 percent of HRD practitioners in the LSIs agreed that there was an examination of top management strategies and the financial situation though the situation was different in the SMIs.

Evidently as seen in Table 2, the overall significant difference testing for organisation sizes indicated that the approach employed by the SMIs is significantly different than the LSIs (p=. 000). 355 Table 2: Haslinda Abdullah Means Comparison, Frequency Distribution and Independent Sample T-test for Strategic Approaches in Identifying HRD Needs Organisation Size LSI Mean SD 2. 32 1. 81 3. 74 4. 24 4. 16 . 776 . 761 1. 12 . 746 . 767 Mean Examine top management opinions on 1. 2 the organisation Take into account employees’ opinions 1. 54 of the organisation Examine top management strategies and 1. 94 financial situation Examine business processes and changes 3. 59 in the organisation Examine internal and external business 3. 57 needs and challenges Note: % represents percentages of agreed responses SMI SD . 624 . 625 . 604 1. 25 1. 34 t-test % 9. 9 3. 9 62. 5 88. 2 87. 5 t -5. 456 -3. 639 -17. 761 -6. 203 -5. 347 p . 000 . 000 . 000 . 00 . 000 % 66. 7 70. 0 Generally, the above analysis suggests that the approach employed by practitioners in identifying their HRD needs are mainly an examination and assessments of the business processes, changes and also the overall business needs as and when required for the business environment. Indeed, this amplifies literature that identifying human resources’ HRD needs are at least in part strategic (Anderson, 1994; Garavan, 1995; and Horwitz, 1999). 4. 3.

Levels of Needs Identification Needs analysis is viewed as a process in which the HRD needs of both the employees and the organisations are identified in order to address the gap between employees’ abilities and performance and the organisation’s requirements. Hence, the four levels of identification, namely, 1) organisations’ overall performance; 2) the departments’ requirements; 3) individual employees’ skills, knowledge and attitudes; and also 4) employees’ jobs and functionalities, were examined.

As indicated in Table 3, it was observed that more than 20 percent of the LSIs analysed all four levels of needs identification, whereas the SMIs are only likely to analyse their employees’ skills, knowledge and attitudes (32. 4 percent). As such, the Chi-Square test showed that the levels of needs identification are significantly different between the LSIs and the SMIs at the organisational level (? 2=29. 02, p=. 000, p