brm final report

Business Research Method

Research Proposal

The impact of employees training on the performance of SMEs in Gujranwala

Department: Gift Business School

Gift University Gujranwala

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Executive Summary

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Table of ContentsExecutive Summary.....................................................................................................................................2

Chapter: 1....................................................................................................................................................5

Introduction:............................................................................................................................................5

Objectives of the Study:...........................................................................................................................6

Scope of the Study:..................................................................................................................................6

Literature Review:...................................................................................................................................6

Theoretical Framework:..........................................................................................................................8

Research Hypotheses:.............................................................................................................................9

Chapter 2.....................................................................................................................................................9

Methodology:..........................................................................................................................................9

Type of Study:..........................................................................................................................................9

Unit of Analysis:.......................................................................................................................................9

Data Analysis Technique:.......................................................................................................................10

Data Preparation and Entry...................................................................................................................10

Reliability of data...................................................................................................................................10

Descriptive Analysis...............................................................................................................................10

Anova Test:............................................................................................................................................10

Chi-Square Test;....................................................................................................................................10

Chapter: 4..................................................................................................................................................11

Findings:................................................................................................................................................11

Descriptive Statistics:.............................................................................................................................11

Normality of Data:.................................................................................................................................12

Welch Test.............................................................................................................................................14

Ta mhane and Dunnet T3......................................................................................................................16

Company Efficiency after Training.........................................................................................................16

Chapter 5...................................................................................................................................................17

DISCUSSION AND CONCLUSION.............................................................................................................17

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Chapter: 1

Introduction:

Small and medium enterprises are the backbone for any economy. These SMEs contribution in

the gross domestic product is greater than large firms in under develop economies. The

sustainability of small and medium enterprise is very important because these SMEs contribute

larger portion in the economic development of any country. The performance of these small and

medium enterprises is very important. These SMEs have many different problems in today

world. The performance of these SMEs varies due to the employees issues. There is also a lack

of technical labor for these small medium enterprises.

Small companies have less capital for advance machinery to improve the production process and

that’s why relying mostly on the labor skills. To gain the competitive advantage the skilled and

technical labor is required. But the demand for skilled laborers exceeded the supply in today

competitive labor market. The Gujranwala region has a large number of entrepreneurs.

At present time most small companies are focusing on employees training. The changing nature

of work in SMEs requires the employees training. The newly hired employees also need very

deep training about the production processes and how to use the equipment.

The employee’s absenteeism due to lack of required skills also causes to stop the production in

the small companies and may result in greater cost for running the company. The absenteeism

occurs due to the many factors like anxieties about the job performance which mostly new

employees have.

These small and medium enterprises are trying to reduce the cost to earn more profit and to

capture the larger market share. The total cost of these SMEs has significant portion of labor

cost.

These SMEs have some control over the internal factors that effect SMEs performance like

employees training. The performance of these SMEs also depends on the many different factors

like employee morale, commitment, productivity and the employee’s turnover etc. Some

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companies are now investing on training, so measuring the impact of training on small and

medium enterprise is a very crucial for these SMEs.

Objectives of the Study:

The objectives of the study are as follows:

i. To examine the relationship between employees training and SMEs performance

ii. To examine the relationship between employees training and defects in the production

iii. To examine the relationship between training and employees productivity

iv. To examine the relationship between training and stress on employees.

Scope of the Study:

The impact of employees training on small medium enterprises will be analyzed in Gujranwala

region in different industrial areas. These small and medium size companies will include the

registered and unregistered companies which are located in different areas of city.

Literature Review:

James, (2013) said that the well-trained employees are the key to your small business success.

The most successful, productive employees are those who have received extensive training.

They’re the cream of the crop, often having the strongest stake in the company’s future.

As Brume (2007) said that, Training can have a considerable influence on company finances as

there are several potential training costs that companies may incur. One type of training related

cost is direct cost. This may include instructor salary, materials, and follow-up supervision. A

second type of training related cost is indirect cost. These costs are related to worker output and

productivity during and upon completion of the training.

Becker (1964) made a distinction between firm specific and general training. General training

results in skills that are equally applicable at other firms while skills acquired through firm

specific training are lost when the trained worker leaves the firm that provided training.

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Miller (2012) said the initial investment in training may seem costly; the long-term benefits play

an integral role in the success of an organization. Improving employee communication skills will

improve employee engagement and reduce employee turnover. But the most significant benefit is

the increase in revenue.

Another benefit of training includes that it helps SMEs to cope with the latest accounting

systems, information technology, management concepts and production techniques (Jones,

2004).

In addition to the training other factors such as relevant education and experiences are required

to cope with work and environment changes (Bryan, 2006). The training seemed to be ignored

and is not regarded as an activity that could help SMEs create value and help them to

successfully deal with competitive and environmental challenges. Noe (1998) found that

enterprises that use innovative training practices are more likely to report better financial

performance than their competitors who lack such training.

Bryan (2006) also said that the Impact of training need to be assessed, its effectiveness and

impact of training on SMEs performance.

Therefore, this study will fill the gap because there is no research study available for the SMEs

of Gujranwala region. The study will examine the relation between different variables like

training impact on employees and the performance of the company.

Definition of Key Terms:

Small and medium enterprise:

According to the approved SME Policy 2007 a company which has employees up to 250 or paid-

up capital up to 25 million or annual sales up to 250 million will fall in the SMEs category.

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Theoretical Framework:

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Company efficiency in production

Defects in production

Productivity of employees

Commitment of employees

Stress on employees

Turnover of employees

Production cost of the company

Training of employees Performance of the Company

Moral of employees

Quality of products

Profit of the company

Research Hypotheses:

H0; there is no association between the employees training and SMEs performance

H1; there is association between the employees training and SMEs performance

Chapter 2

Methodology:

To conduct this research the informal interviews of employees in small and medium size

enterprises conducted to form the questionnaire. The questionnaire made after conducting and

analyzing the employees thinking.

Our research is hypothesis in which we measured the impact of employees training on employees

and company performance. The relation of training with performance was analyzed with the help

of different hypothesis after that the hypothesis was checked by some statistics Also the data of

questionnaires was analyzed in the SPSS software and different graphs were used.

The data was collected during the working hours of employees because at that time they were

easily showing some real aspects of training and the stress they feel during work. The

questionnaire was given to the employees in two languages so that the illiterate workers can

easily understand the important questions.

Type of Study:

This research is a hypothesis testing study. It explains the impacts of employees’ training on the

performance of SMEs in the Gujranwala region.

Unit of Analysis:

Only the manufacturing SMEs in Gujranwala were considered for this study. The target

respondents for this study were employees and employers who have filled the questionnaires

with different opinions.

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Data Analysis Technique:

Data Preparation and Entry

The data from the respondents was collected through the questionnaires which were provided

them during workplace. After that collection the data was putted into the SPSS software

Reliability of data

The reliability of the data is checked by the Normality assumption and by the leven,s statistics to

check the equality of variances.

Descriptive Analysis

The descriptive statistics of different variables were collected through the SPSS software like

mean, stander deviation, variances and charts like histogram

Anova Test:

To check the hypothesis the analysis of variance test was applied to compare the variances of

different variables.

Chi-Square Test;

The chi-square test was used to check the association between the employees training and

performance of small and medium enterprises.

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Chapter: 4

Findings:

Descriptive Statistics:

Descriptive Statistics

N Range Mean Std. Deviation Variance Skewness

Statistic Statistic Statistic Statistic Statistic Statistic Std. Error

Skills of employees after

training

30 4 1.73 .980 .961 1.760 .427

employees performance

after training

30 4 2.40 1.380 1.903 .814 .427

company efficiency after

training

30 4 2.23 1.251 1.564 .772 .427

defects in production after

training

30 4 2.10 1.094 1.197 1.145 .427

employees productivity after

training

30 3 2.03 .850 .723 .655 .427

employees commitment

after training

30 4 2.13 1.042 1.085 .894 .427

stress feeling of emplyees

after training

30 4 2.10 .960 .921 1.295 .427

cost of production after

training

30 4 2.23 1.251 1.564 .772 .427

products quality after

training

30 4 2.03 1.033 1.068 1.537 .427

employees turnover after

training

30 4 2.07 1.202 1.444 1.398 .427

employees moral after

training

30 3 1.83 .874 .764 .676 .427

is training benefial for both

employee and company

30 1 1.20 .407 .166 1.580 .427

impact of training on

company profits

30 1 1.20 .407 .166 1.580 .427

age of the respondents 30 10 25.13 2.751 7.568 .149 .427

gender of the respondents 30 1 1.20 .407 .166 1.580 .427

Valid N (listwise) 30

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Normality of Data:

Tests of Normality

Kolmogorov-Smirnova Shapiro-Wilk

Statistic df Sig. Statistic df Sig.


training

.273 30 .000 .728 30 .000


after training

.281 30 .000 .829 30 .000


training

.207 30 .002 .853 30 .001


training

.236 30 .000 .820 30 .000


training

.282 30 .000 .841 30 .000

employees commitment after

training

.251 30 .000 .859 30 .001


after training

.342 30 .000 .793 30 .000


training

.207 30 .002 .853 30 .001

products quality after training .313 30 .000 .768 30 .000


training

.289 30 .000 .770 30 .000


training

.263 30 .000 .816 30 .000



.488 30 .000 .492 30 .000


company profits

.488 30 .000 .492 30 .000

age of the respondents .160 30 .049 .946 30 .133

gender of the respondents .488 30 .000 .492 30 .000

a. Lilliefors Significance Correction

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Homogeneity of Variances:

Test of Homogeneity of Variances

Levene Statistic df1 df2 Sig.


training

3.502 4 25 .021


after training

2.458 4 25 .072


training

1.288 4 25 .301


training

2.237 4 25 .094


training

1.389 4 25 .266


after training

4.737 4 25 .006


training

1.538 4 25 .222

products quality after training 2.795 4 25 .048


training

.677 4 25 .614


training

2.048 4 25 .118



1.909 4 25 .140


company profits

3.269 4 25 .028

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Welch Test

Robust Tests of Equality of Meansb,c,d,e,f,g

Statistica df1 df2 Sig.


training

Welch 2.288 4 4.946 .195


after training

Welch .663 4 5.530 .642


training

Welch 1.194 4 4.877 .417


training

Welch . . . .


training

Welch .558 4 4.874 .705


after training

Welch . . . .


training

Welch .432 4 6.069 .782

products quality after training Welch . . . .


training

Welch .724 4 4.928 .612


training

Welch . . . .



Welch . . . .


company profits

Welch . . . .

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a. Asymptotically F distributed.. Robust tests of equality of means cannot be performed for

employees productivity after training because at least one group has 0 variance.

c. Robust tests of equality of means cannot be performed for stress feeling of emplyees

after training because at least one group has 0 variance.

d. Robust tests of equality of means cannot be performed for products quality after training

because at least one group has 0 variance.

e. Robust tests of equality of means cannot be performed for employees moral after

training because at least one group has 0 variance.

f. Robust tests of equality of means cannot be performed for is training benefial for both

employee and company because at least one group has 0 variance.

g. Robust tests of equality of means cannot be performed for impact of training on

company profits because at least one group has 0 variance.

Ta mhane and Dunnet T3

ANOVA

Sum of Squares df Mean Square F Sig.


training

Between Groups 12.064 4 3.016 4.771 .005

Within Groups 15.803 25 .632

Total 27.867 29


after training

Between Groups 3.643 4 .911 .442 .777

Within Groups 51.557 25 2.062

Total 55.200 29


training

Between Groups 4.610 4 1.152 1.641 .195


Total 22.167 29


after training

Between Groups 5.200 4 1.300 1.512 .229


Total 26.700 29

Company Efficiency after Training

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Chi-Square Test

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)

Pearson Chi-Square 17.795a 16 .336

Likelihood Ratio 18.057 16 .321

Linear-by-Linear Association .189 1 .664

N of Valid Cases 30

a. 24 cells (96.0%) have expected count less than 5. The minimum

expected count is .07.

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Kruskal-Wallis Test

Ranks


training N Mean Rank


training

strongly agree 11 10.36

agree 8 23.13

neutral 6 14.50

disagree 3 16.67

strongly disagree 2 14.50

Total 30


training

strongly agree 11 13.64

agree 8 17.31

neutral 6 13.83

disagree 3 16.00

strongly disagree 2 22.75

Total 30

Test Statisticsa,b

Skills of

employees after

training

employees

productivity after

training

Chi-Square 11.984 2.832

df 4 4

Asymp. Sig. .017 .586

a. Kruskal Wallis Test

b. Grouping Variable: company efficiency after

training

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Chapter 5

DISCUSSION AND CONCLUSION

The above statistical calculation shows that the data in normal. The data has filled the

assumption of normality which we have checked through the Normality test in the spss. The p-

values in this test are very small and less than .05 so we reject H0 and accept H1. Finally we

conclude that our data is normal.

After the Normality test the test of Homogeneity of Variances is performed on the data which

shows that our homogeneity of variances assumption is not fulfilled. The variances of the

variables are not same so we cannot directly use Anova test.

For unequal variances we have used the welch test because our variances are not same in the

previous test. We have used the Ta mhane and Dunnet T3 test for unequal variances. Because

our means are not equal so we also used the Kruskal-Wallis Test for unequal means.

Finally our main issue was to check the association between the employees training and the

performance of the company. For this matter we have developed the hypothesis to check the

association between these variables. Our null and alternative hypothesis are clearly defined

above.

Also the p-value of the chi-squar coefficient is less than greater than .05 which shows that there

is no association between the training of employees and performance of the company.

Finally our analysis of Anova by using Welch test indicate that the mostly p-values are greater

than the .05 and falls in the acceptance region. This shows that our null hypothesis is accepted

and alternate hypothesis is rejected.

Finally we conclude that there is no association between the training of employees and the

performance of the company. These both variables are independent variable and does not have

any impact on each other. Some other variables may affect the company performance.

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References:

Becker, G.S. (1964). Human Capital. Chicago: The University of Chicago Press.

Jones. (2004). Training, Development, and Business Growth: A study of Australian

Manufacturing Small-Medium Sized Enterprises. Asia Pacific Journal of Human Resources.

42(1):96-121.

Bryan. (2006). Training and Performance in Small Firms. International Small Business Journal.

24 (6):635-660.

Noe, R., A. (2002). Employee Training and Development (2nd Edition), Boston:

Irwin/McGraw-Hill.

Brume, S. (2007). What impact does training have on employee commitment and employee

turnover. Schmidt Labor Research Center Seminar Research Series. Retrieved Nov. 4, 2013

from: http://www.uri.edu/research/lrc/research/papers/Brum-Commitment.pdf

James, S. (2013). Well Trained Employees are the Key to Small Business Success. Retrieved

Nov. 3, 2013 from: http://www.farmcentre.com/content/well-trained-employees-are-key-small-

business-success

Miller, R. (2012). Employee Training ROI: What You Need to Know [online] Available at

http://www.impactlearning.com

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http://www.uri.edu/research/lrc/research/papers/Brum-Commitment.pdf

Survey Questionnaire

I am a student of MBA. I am conducting a research to measure the impact of training on production cost in small and medium size enterprises in Gujranwala region. Your feedback will play an important role in increasing the performance of these SMEs.

For each question listed below, circle the numbers that best fits your judgment. Use the below mentioned scale to select numbers.

Strongly Agree Agree Neutral DisagreeStrongly Disagree

1 2 3 4 5

1. Training increases the skills of employees 1 2 3 4 5

2. Training improves the performance of employees 1 2 3 4 5

3. Training increases the company efficiency in producing products

1 2 3 4 5

4. Training reduces the defects in the production 1 2 3 4 5

5. Employees productivity increases after training 1 2 3 4 5

6. Employee’s commitment increases after training 1 2 3 4 5

7. Training reduces the stress on the employees in working places

1 2 3 4 5

8. Training of employees reduces the cost of production of company

1 2 3 4 5

9. Training improves the Quality of products 1 2 3 4 5

10. Employees turnover reduces after training 1 2 3 4 5

11. Employees moral increase after training 1 2 3 4 5

12. Is training beneficial for both employee and company Yes No

13. Does the trained employees increases the profit of the company Yes No

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Age: ………………………… Gender: …………

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brm final report

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