Employees perception towards training in IT sector.

Abstract:
Employees training in IT sector help companies as well as employees to improve their performance. Hence, keeping
these in mind, the companies are eager to go for the training programs for their employees with regular intervals in
the IT sector. These training programs definitely result in skill enhancement, improved efficiency and productivity and
growth opportunities for employees. This paper attempts to study the factors which affect the employee's perception
towards training in IT sector. In this respect different IT companies in NCR region were selected and data was
collected from 170 employees of different IT companies through a structured questionnaire. The data collected was
then subjected to Factor Analysis i.e. Principal Component Analysis with Varimax rotation. A total of seven factors
affecting employee's perception came to the forefront from this study of IT sector.
Keywords: Employee Training, Factor Analysis, Likert Scale, Principal Component Analysis.

Authors:
Agarwal, Manish
Nayak, Tapan Kumar
Gupta, V.P.
Pub Date:
04/01/2008
Publication:
Name: Asia-Pacific Business Review Publisher: Asia-Pacific Institute of Management Audience: Academic Format: M
agazine/JournalSubject: Business; Business, international Copyright: COPYRIGHT 2008 Asia-Pacific Institute of Ma
nagement ISSN: 0973-2470
Issue:
Date: April-June, 2008 Source Volume: 4 Source Issue: 2
Accession Number:
198547952
Full Text:
Introduction
The Indian IT industry has a prominent global presence today largely due to the software sector. Promotion of the
software industry and protection of the hardware industry from external competition has resulted in this skewed
growth. More recently however, policy changes have led to a tremendous influx of leading multinational companies
into India to set up manufacturing facilities, R&D Centers and offshore software development facilities. The domestic
market for both software and hardware is getting revitalized. All these developments have had a significant impact not
only on the economy but also the environmental and social milieu.
The vision of Information Technology (IT) policy is to use IT as a tool for raising the living standards of the common
man and enriching their lives. Though, urban India has a high internet density, the government also wants PC and
Internet penetration in the rural India. In Information technology (IT), India has built up valuable brand equity in the
global markets. In IT-enabled services (ITES), India has emerged as the most preferred destination for business
process outsourcing (BPO), a key driver of growth for the software industry and the services sector. India's most
prized resource in today's knowledge economy is its readily available technical work force. India has the second
largest English-speaking scientific professionals in the world, second only to the U.S.
The share of hardware and non-software services in the IT sector has declined consistently every year in the recent
past. The share of software services in electronics and IT sector has gone up from 38.7 percent in 1998-99 to 69.2
percent in 2006-07. However, Electronic hardware exports have logged a growth rate of 38.8% at $2.1 billion during
April-December FY07, compared to $1.5 billion grossed in the corresponding period of the previous year. IT software
and IT-enabled services exports, which enjoy a lion's share of the high-tech export booty, registered $21.5 billion
during the period, a growth of 28.2% over the year-ago period. In rupee terms, the growth in software and BPO
exports was an estimated 30.3% during the period in reference. Meanwhile, the growth in hardware exports was an
estimated 41.1%, according to export statistics by the Electronics and Computer Software Export Promotion Council.
Export Markets Continue to Dominate the Domestic Segment
It is found that India's overall export during the year 2006-07 is estimated to be Rs. 9,53,050 crore (US$ 220.36
billion) registering a growth of 19.16 percent (21.97 percent in US$ terms) over the year 2005-06 when India's over all
export was estimated to be Rs. 7,99,818 crore (US$ 180.67 billion). The share of Services in India's overall export is
estimated to be Rs. 3,89,250 crore (US$ 90 billion). There has been a growth of 9.91 percent (12.50 percent in US$

terms) in export of services over the preceding year when the export of services was estimated to be Rs. 3,54,160
crore (US$ 80 billion).
Furthermore, India's electronics and computer software/services industry is estimated to be Rs. 249800 crores (US$
57.76 billion) during the year 2006-07. The share of electronics hardware industry is estimated to be Rs. 66000
crores (US$ 15.26 billion) and that of computer/services sector is Rs. 183800 crores (US$ 42.50 billion). In
percentage share terms, production of electronics hardware accounts for a share of 26.42 percent and
software/services accounts for 73.58 percent. Production of electronics and computer software/services sector during
the year 2006-07 registered a growth of 30.65 percent (33.73 percent in US$ terms) over the year 2005-06 when the
total production of electronics computer software/services was estimated to be Rs. 1,91,200 crores US$ 43.18 billion.
Moreover, computer software/services excluding ITES valued at Rs.1,05,000 crore (US$ 24.28 billion) is the top item
of export in this sector during the year 2006-07. ITES/BPO valued at Rs. 41,000 crore (US$ 9.48 billion) is the second
top item of export. Followed by are the items under the electronics hardware category. With a very high growth of 129
percent (135 percent in US$ terms) CD recordable has emerged to be the top item of export.
According to a NASSCOM-McKinsey report, annual revenue projections for India's IT industry in 2010 are US$ 100
billion and market openings are emerging across four broad sectors, IT services, software products, IT enabled
services, and e-businesses, thus creating a number of opportunities for Indian companies. In addition to the export
market, all of these segments have a domestic market component as well.
IT-enabled service industry in India began to evolve in the early nineties, when companies such as American
Express, British Airways, GE and Swissair set up their offshore operations in India. Today a large number of foreign
affiliates operate IT-enabled services in India. The different service lines of It-enabled services offshored to India
include customer care, finance, human resources, billing and payment services, administration and content
development.
Literature Review
Fitz-enz (1984) distinguishes between education and training. He remarked that "education is the presentation of
concepts and information to people for the purpose of imparting knowledge, while training is an interactive exercise
with a goal to develop skills and competencies within the workforce. Collett (1998) refers to the need to "keep the twin
activities of training and development in balance--to develop capability [for future work] not just competence [for
current position]".
Silva (2000) used a list of 18 categories for employee participation in training and development in her research on
human resource development in public sector organizations. Becker (1975) distinguished between general and
specific training. He applied an economic approach to training, looking at the incentives for funding training that apply
to employers and to employees in terms of the relative benefits and risks accruing to each. Becker defined general
training as that useful in many firms besides those providing it, and specific training as that which increases the
productivity of employees in that particular firm--but not in others.
His hypothesis was that employees would bear the costs of general training, because it increased employability in
many firms, while employers would bear the cost of specific training because it equipped the employees to work more
productively in their specific firm, without increasing the risks of the employees quitting to take their new skills
elsewhere. However, subsequent research has found that the actual behaviors of employers and learners/employees
do not fit this model particularly well (Stern and Ritzen, 1991).
Kirkpatrick (1994) has developed a model for evaluating the effectiveness of training within organizations. It has four
levels:
Level 1: Reaction--a measure of how participants feel about various aspects of the program (i.e. "happy sheet",
customer satisfaction measure);
Level 2: Learning--a measure of the knowledge acquired, skills improved or attitudes changed during training;
Level 3: Behavior--a measure of the extent to which participants change their behavior because of training (transfer of
training); and
Level 4: Results--a measure of the final results for the organization that occur due to training, including increased
sales, higher productivity, and reduced employee turnover (Kirkpatrick 1996).

Sveiby (1997) defined an individual's competence as comprising knowledge, skill, experience, value judgments and
social network. He suggests that indicators are needed of growth, of efficiency, and of stability for all the intangible
assets of organizations, including staff competence.
Frazis (1998) investigated both formal and informal training, using data collected from establishments (with 50 or
more employees) and their employees through the 1995 US Survey of Employer-Provided Training. Employees were
asked to record any activity in which they were taught a skill or were provided with new information to help them to
their job better over a 10-day period. On the basis of descriptive information provided about the activities, they were
then classified by the researchers as formal training, informal training or self-learning.
Need of the Study
A training program can serve a range of diverse purposes, and organizations initiate training programs for many
different reasons. As in IT technology changes at an increasingly rapid pace, it requires new skills. The resulting
changes in job descriptions frequently blur boundaries between previously distinct jobs, producing greater demands
for a multi-skilled staff. In any event, many persons will need to be trained in the new skills required by technology
changes, and some of that retraining will be conducted within their organizations. Therefore, it is necessary for the
HR department to keep in mind the various factors which affect employees' perception towards training program.
Objective of the Study
Based on the above background studies, the objective of this study is to identify the factors, which affect employees
perception towards training program in the IT companies in India. Particularly, the purpose of this study is to define
these factors so that a holistic development of the employees should take place. Further, it also helps in designing
training programs in such a way that it result in skill enhancement, improved efficiency and productivity and growth
opportunities for the employees. A statistical approach, 'factor analysis' has been used for the study.
Research Methodology
The study is based on primary data collection with a sample size of 150 respondents residing in 'National Capital
Region' of New Delhi, India. The questionnaire used for the sample survey is a structured and nondisguised
questionnaire and consisted of two major sections. The first section intended to collect the various demographic
factors, the second section intended to collect the various opinions containing questions about the various factors
affecting the employee's decision towards training. A five point Likert scale was used to capture the consumers
responses ranging from strongly agree to strongly disagree. The different statements regarding the various factors
affecting the employee's decision towards training were generated based on literature review in an iterative manner.
The statistical method such as 'factor analysis' is used to analyse the data. Data has been collected by personally
contacting the respondents and explaining in detail about the survey. A total of 170 employees from different IT n in
Table 1.
companies in Noida, Greater Noida, Delhi, and Gurgaon were contacted and 150 correctly completed questionnaires
were obtained from all the employees, the break-up of which is given in Table 1.
Analysis and Interpretation of Data
The Data collected through the questionnaires was coded using SPSS. Factor analysis is used to identify the factors
affecting the choice of mobile handset.
Factor Analysis
The explanatory factor analysis is used in order to identify the factor affecting the choice of mobile hand sets with
special reference to youths from 150 respondents in NCR region. To test the suitability of the data for factor analysis,
the following steps have been taken:
* The correlations matrices are computed and examined. It reveals that there are enough correlations to go ahead
with factor analysis.
* Anti-image correlations were computed. These showed that partial correlations were low, indicating that true factors
existed in the data.
* Kaiser-Meyer-Olkin measure of sampling adequacy (MSA) for individual variables are studied from the diagonal of

partial correlation matrix .it is found to be sufficiently high for all variables. The measure can be interpreted with the
following guidelines: 0.90 or above, marvelous; 0.80 or above, meritorious; 0.70 or above, middling; 0.60 or above,
mediocre; 0.50 or above miserable, and below 0.50, unacceptable.
* To test the sampling adequacy, Kaiser-Meyer-Olkin measure of sampling adequacy is computed, which is found to
be 0.606. It is indicated that the sample is good enough for sampling.
* The overall significance of correlation matrix is tested with Bartlett test of sphericity for choice of mobile phone
(approx. chi square = 856.566 significant at 0.000) as well as support for the validity of the factor analysis of the data
set.
Hence, all these standards indicate that the data is suitable for factor analysis. For extracting factors we have
employed principal components analysis and latent root criterion. Rotation methods, orthogonal rotation with Varimax
were also applied. As per the latent root criterion, only the factors having latent roots or Eigen values greater than one
are considered significant; and all the factors with latent roots less than one are considered insignificant and
disregarded.
Factor Affecting Perception of Employees towards Training
There are only seven factors each having Eigen values exceeding one for mobile handset purchase. The index for
the present solution accounts for 69.900% of the total variations for the Training Program. It is pretty good extraction
because we are able to economize the number of choice factors (i.e. from 19 statements to 7 underlying factor). The
percentage of variation explained by factor one is 15.776% and that of 2, 3, 4, 5, 6 and 7 are 12.298%, 10.983% ,
10.012%, 8.645%, 6.369% and 5.817% respectively.
Large communalities in Table 4 indicate that a large number of variance has been accounted by the factor solution.
They are bigger than 0.5 for all the questions. This is the indicator of suitability of the questions.
Table 6 has been formulated from SPSS data output. The variables are extracted from the graph with factor loading
greater than 0.4. The employees considered training duration as the first dominating factor. They were of the opinion
that long duration training to be provided to new employees. Further for enhancement of new skills short term
duration training program should be for experienced employees. The second significant factor was the Training
Method. It indicated that they were very much concerned about the way the training is provided. Method of training
should be devised in such a way that it helps the employees to learn new skills in an easy and interesting manner.
The third significant factor is the Training Impact. Employees pre-determined how training helps them in learning skills
and accordingly they show their interest towards the training program. The fourth factor namely Training Outcome
implies how training is meaningful in motivating and sharpening skills of the employees. The fifth factor is the Job
Performance indicated that training program is useful only when it adds to performance and widens horizon. Training
Benefit is the sixth significant factor. It implies if employees are not benefited both in terms of financial and nonfinancial gain after the training program, they show less interest in the same. Training effectiveness is the last factor
which implies that employees are of the opinion that training programs enhances organizational effectiveness and
helps in building the confidence of employees.
Conclusion
The study shows that there are seven major factors which affect the perception of employees towards training in the
IT sector. These factors include Training Duration, Training Method, Training Impact, Training Outcome, Job
Performance, Training benefit and Training Effectiveness. These seven factors include all the factors that were aimed
to study the factors affecting perception towards training in IT sector. Moreover, the study suggests that IT companies
should be able to understand the different factors, which affects employee's perception towards training.
As we have studied the employees of IT sector, we came to know that they support the costs of their general training
by accepting a wage below their potential current marginal product during the training period. Further, they reap the
full return from their investments through higher wages after the training period, even if there is job turnover. The
training level reached corresponds to the socially optimal condition, although under-investment in general training
may occur if workers face wage inflexibility or are liquidity constrained. Furthermore, employees are predicted to
invest wisely according to their own expected rates of return. Concentrating training amongst workers who perform
complex tasks and have high levels of formal education may create a virtuous circle for these high skill workers
resulting in higher wages, further training opportunities, longer tenure and greater social status.
References

Becker, G. S. (1975), "Human Capital: A Theoretical Analysis with Special Reference to Education", Columbia
University Press, New York
Collett, R. (1998), "Modern Approaches in Training and Development in the New Zealand Public Sector", Unpublished
SSC paper for presentation to Hong Kong Civil Service Seminar.
Fitz-enz, J. (1984), "How to Measure Human Resource Management", McGraw Book Company, New York.
Frazis, H. J. (1998), "Results from the 1995 Survey of Employer-provided Training" Monthly Labour Review, June 313.
Kirkpatrick, D. L. (1994), "Evaluating Training Programs. The Four Levels", Berret-Koehler Publishers, San Francisco.
Silva, L. D. S. (2000), "A Study of Factors Influencing Human Resource Development Practices and their Effects on
some Public Sector Organisations in New Zealand", Uunpublished paper for Diploma in Human Resource
Management, Victoria University of Wellington.
Stern, J. and Ritzen, J. M. M. (1991), "Market Failure in Training"? New Economic Analysis and Evidence on Training
of Adult Employees, Springer-Verlag, Berlin Heidleberg.
Sveiby, K. (1997), "The New Organizational Wealth: Managing and Measuring Knowledge-based Assets", BerrettKoehler Publishers Inc, San Francisco CA.
Manish Agarwal *, Tapan Kumar Nayak ** and V. P. Gupta
Institute of Management Studies, Lal Quan, Ghaziabad--201 009, Uttar Pradesh, India
* E-mail: magarwal75@rediffmail.com, ** E-mail: tapug@rediffmail.com

Table 1: Demographic Profile of Respondents (n = 150)

Number of
Respondents
Age
Gender

Percentage

18-25
26-35
36-50

81
54
15

54%
36%
10%

Male
Female

132
18

88%
12%

Table 2: KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of
Sampling Adequacy.
Bartlett's Test
of Sphericity

0.606

Approx.
Chi-Square

856.566

Df
Sig.

171
0.000

Table 3: Total Variance Explained

Initial Eigen values
Total

% of
Variance

Cumulative
%

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

2.997
2.337
2.087
1.902
1.643
1.210
1.105
.916
.710
.678
.644
.579
.407
.395
.360
.311
.280
.254
.186

15.776
12.298
10.983
10.012
8.645
6.369
5.817
4.821
3.736
3.570
3.389
3.047
2.141
2.077
1.894
1.635
1.472
1.339
.978

15.776
28.075
39.057
49.069
57.715
64.083
69.900
74.721
78.457
82.027
85.416
88.464
90.605
92.682
94.576
96.211
97.683
99.022
100.000

Extraction Sums of Squared

Loadings

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

Total

Cumulative
%

Cumulative
%

2.997
2.337
2.087
1.902
1.643
1.210
1.105

15.776
12.298
10.983
10.012
8.645
6.369
5.817

15.776
28.075
39.057
49.069
57.715
64.083
69.900

Rotation Sums of Squared

Loadings

1
2
3
4
5

Total

% of
Variance

Cumulative
%

2.240
2.140
1.969
1.918
1.893

11.791
11.263
10.365
10.094
9.965

11.791
23.054
33.419
43.513
53.478

6
7
8
9
10
11
12
13
14
15
16
17
18
19

1.600
1.520

8.423
8.000

61.900
69.900

Table 4: Communalities

Training program adds to the

performance of employees
Training enhances organizational
effectiveness
Training motivates employees to deliver
to their fullest
Training helps confidence in employees
Training sharpens skills of employees
Training impacts job knowledge to
employees
Training helps in holistic development
of employees
Training widens horizons of employees
Training provides job satisfaction to
employees
Training helps in getting better
remuneration
On the job training method is the
best training method
Off the job training method is the
best training method
Special assignment are the best
methods of on job training
Case study approach is the best way
to make employees more creative
Simulation training is the best method
for the off the job training
Induction training must be made
compulsory in organization
6 months training should be imparted
to new employees
2-4 weeks should be the duration of
training period on delegation of
new project
Training should be an ongoing process
in an organization
Table 5: Rotated Component Matrix

Initial

Extraction

1.000

.717

1.000

.737

1.000

.761

1.000
1.000
1.000

.796
.555
.713

1.000

.521

1.000
1.000

.805
.664

1.000

.522

1.000

.720

1.000

.663

1.000

.723

1.000

.750

1.000

.650

1.000

.560

1.000

.792

1.000

.851

1.000

.782

Component

Training program adds to the

performance of employees
Training enhances organizational
effectiveness
Training motivates employees to deliver
to their fullest
Training helps confidence in employees
Training sharpens skills of employees
Training imparts job knowledge to
employees
Training helps in holistic development
of employees
Training widens horizons of employees
Training provides job satisfaction to
employees
Training helps in getting better
remuneration
On the job training method is the best
training method
Off the job training method is the best
training method
Special assignment are the best methods
of on job training
Case study approach is the best way to
make employees more creative
Simulation training is the best method
for the off the job training
Induction training must be made
compulsory in organization
6 months training should be imparted
to new employees
2-4 weeks should be the duration of
training period on delegation of
new project
Training should be an ongoing process
in an organization

.153

-.028

.037

-.041

.184

.484

.159

-.019

-.130

-.144
.093
-.012

.017
-.176
-.219

.067
.038
-.050

.001

.084

.683

.254
-.132

-.013
-.404

-.185
.499

.050

.171

-.125

.360

.100

.685

-.313

.393

-.234

.169

-.780

-.131

.334

.769

-.085

-.133

-.168

.461

-.173

.486

.312

.850

.001

.169

-.893

.001

.068

-.374

.445

.227

Component

Training program adds to the

performance of employees
Training enhances organizational
effectiveness
Training motivates employees to deliver
to their fullest
Training helps confidence in employees
Training sharpens skills of employees
Training imparts job knowledge to
employees
Training helps in holistic development

.316

.743

-.116

-.136

.823

.148

-.115
.624
-.109

.049
.152
.002

-.151

-.130

of employees
Training widens horizons of employees
Training provides job satisfaction to
employees
Training helps in getting better
remuneration
On the job training method is the best
training method
Off the job training method is the best
training method
Special assignment are the best methods
of on job training
Case study approach is the best way to
make employees more creative
Simulation training is the best method
for the off the job training
Induction training must be made
compulsory in organization
6 months training should be imparted
to new employees
2-4 weeks should be the duration of
training period on delegation of
new project
Training should be an ongoing process
in an organization

.062
.372

.815
-.268

-.039

.055

.041

.232

.419

-.219

.135

-.082

-.047

-.164

.318

-.399

.425

.100

.079

.169

-.055

-.184

-.237

.392

Component

Training program adds to the

performance of employees
Training enhances organizational
effectiveness
Training motivates employees to deliver
to their fullest
Training helps confidence in employees
Training sharpens skills of employees
Training imparts job knowledge to
employees
Training helps in holistic development
of employees
Training widens horizons of employees
Training provides job satisfaction to
employees
Training helps in getting better
remuneration
On the job training method is the best
training method
Off the job training method is the best
training method
Special assignment are the best methods
of on job training
Case study approach is the best way to
make employees more creative
Simulation training is the best method
for the off the job training

-.094

-.176

.434

.498

-.107

.085

.016
-.057
.793

.869
-.312
-.146

-.091

-.019

.118
-.143

.155
-.059

.627

.278

-.148

.182

.360

-.056

.174

-.119

.101

.016

.360

-.024

Induction training must be made

compulsory in organization
6 months training should be imparted
to new employees
2-4 weeks should be the duration of
training period on delegation of
new project
Training should be an ongoing process
in an organization

-.005

-.078

-.030

-.069

-.038

.105

.013

-.427

Table 6: Factors
Factor
Numbers

Name of Dimension

Factors

Factor Loading

F1

Training Duration

S17
S18

0.850
-0.893

F2

Training Method

S13
S14
S16
S19

-0.78
0.769
0.486
0.445

F3

Training Impact

S7
S9
S11
S15

0.683
0.499
0.685
0.461

F4

Training Outcome

S3
S5
S12

0.823
0.624
0.419

F5

Job Performance

S1
S8

0.743
0.815

F6

Training Benefit

F7

Training Effectiveness

S6
S10
S2
S4

0.793
0.627
0.498
0.869