The impact of training and development practices on innovation and financial performance

Abstract

Purpose

Over recent years, firms have been implementing novel human resource practices. The purpose of this paper is to analyse four specific training practices to determine if and up to what extent the adoption of such practices affects innovation and financial performance.

Design/methodology/approach

A Spanish sub-sample of the European Manufacturing Survey is used to contain the responses of 162 manufacturing firms.

Findings

The positive relation between T&D practices and innovative performance was partially accepted, as new-to-the-firm products and new services had a significant relation with these practices. Conversely, the hypothesis stating that there is a positive relation between a new-to-the-market product and the aforementioned T&D practices was rejected. Furthermore, the positive relation between these and financial performance was partially accepted.

Research limitations/implications

This research presents the following limitation: the small number of responses restricts the general reliability of the findings. The inclusion of other countries’ data using the same questionnaire would further enrich the analysis.

Practical implications

First, general training and development is not enough; thus, the present study evidences the positive results of specific training practices such as training and development for creativity and innovation (TD4CI) on firm performances. Second, it also reveals a relation between training practices and innovation by differentiating among the three dimensions of innovation (new product to the firm, new product to the market and new services). Moreover, the present research highlights the benefits of implementing these types of practices, not only for innovation performance but also for financial performance. This paper also suggests that not all the training practices have the same impact on firm performance. Consequently, the company should be clear about their main aim to obtain the highest performance. The third contribution is based on the Spanish context wherein training is not considered as an important organisational function. Thus, this study provides positive results showing that TD4CI might enhance firm performance. Last, the degree of detail of the different training practices analysed, the recent nature of the data related to their implementation and the link between implementation and organisation performance are also part of the contribution of the present analyses.

Originality/value

This research offers recent and relevant data about implementing novel T&D practices and their relation with firm performance.

Citation

Manresa, A., Bikfalvi, A. and Simon, A. (2019), "The impact of training and development practices on innovation and financial performance", Industrial and Commercial Training, Vol. 51 No. 7/8, pp. 421-444. https://doi.org/10.1108/ICT-04-2019-0035