Individual Assignment 4 - HRD

Human Resource Development of professionals in an emerging economy

You are an expatriate sent by SAP to one of the major construction companies in Tanzania. You have Debrah/Oforis article and USD 1 Mio to set up an “ideal” HRD-program for this company that should facilitate as a prime example in the whole industry. Draft your concept!
Be as concrete as possible and mind your line of argumentation.

It is usually the professional bodies that provide appropriate training and education to their members, which, however, mostly results in compartmentalisation, a very common and well-known problem in Tanzania and other developing countries. Therefore it may be more reasonable to rather establish systematic and coordinated training programs and a unified approach for each industry. Such a development of employees would ensure their ability to perform successfully in an international setting, enhance their productivity as well as competitiveness.
Formerly, the Tanzanian government was expected to provide training and facilities. However in recent years the role of the private sector for financing and providing such training has more and more been acknowledged, since the sustainability of funding and with that the guarantee of a structured and continued training is essential and one of the biggest problems faced in HRD. Therefore it may be necessary to complement external funding with the development of domestic funding in order to secure and ensure that training will be continued once external, international donors have backed out.
Debrah and Ofori mentioned in their article that there are some obstacles to the implementation of a levy-grant system, which is favoured by most developing countries to finance training programmes. Such obstacles are i.e. the „fragmentation of national and specific industrial sectors’ training systems, weak information links between training providers and employers, and weak institutional capacity“ (Debrah, Oforis, 2006, p.443).
According to the study conducted by Debrah and Ofori training in its entirety does not seem to be considered of high importance in the construction industry. This can be seen in the lack of structured CPD which includes both IPD and continuing professional development in the following years, as well as in the lack of formal post-graduate training.
„The interviewees regarded the lack of a coordinated, structured, integrated training programme for local construction professionals as one of the greatest problems facing the industry.“ (Debrah, Oforis 2006, p.445) This of course has a negative impact on the skills and competencies of professionals in the construction industry, which is a constantly changing industry. In addition there are also new threats arising from globalisation, regionalisation, privatisation and the transformation from socialism to a free enterprise economy.
According to Debrah and Oforis the main areas that need training and development are Business Development, Practices & Management, Finance and Accounting, Computer Technology, Project Management, Quality Management as well as Technical engineering (Meghji (1996), Norenco (1996) and Hollway (2001b)).
Debrah and Oforis concluded that this lack of a systematic and coordinated training programme is due to the absence of strategic HRM in the construction industry and suggested that the training of professionals should be made a national priority issue to induce companies as well as individuals to training and development. However, due to a hidden rivalry and the lack of cooperation in the Tanzanian construction industry no nation-wide training programme has been established so far, only some fragmented and individual training programmes (i.e. Professional training programmes, NCC training programme, Tanzania Civil Engineering Contractors Association (TACECA) training, or the Association of Consulting Engineers (ACET) training).
Nevertheless, this is not the most serious problem faced. The most important factor that is accountable for the absence of training programmes is indeed the lack of sustainable funding. According to Debrah and Oforis, if training programmes exist, they are mostly only short-term or project specific and the fear exists that most of them won‘t even be brought to a conclusion or won‘t be extended. Also, most training programmes depend on foreign donors to finance them. Therefore, in order to establish a continuous and sustainable training programme it is indispensable to develop some kind of permanent funding, as i.e.a levy-system or a training fund. However there are already lots of construction-related levies and it is more advisable that the existing ones should be used more effectively rather than bring new ones into being. Furthermore there are no proper mechanisms for the administration of such funds as well as no basis, which could either be a percentage of payrolls, turnover, contract sums or annual registration fees, or it could be taken from existing levies, funds, and fees. In addition, indifferent of the form of administration or the basis, a close supervision of the fund, strict guidelines and rules are necessary, since corruption is one of the biggest issues and a major problem in developing markets such as Tanzania.
Another important finding of the study is that the reasons for the lack of structured and integrated training forces can be found in internal rather than external factors, a „result of the inability of the professional bodies to come together to devise a strategy on training and its appropriate funding“ (Debrah, Oforis, 2006, p. 458) as well as on weaknesses within the industry itself. Firms therefore have to find a structured and proactive way to respond to external pressures.

Training of the employees of SAP in Tanzania therefore needs to be established and conducted in the 6 main areas that have been identified by Debrah and Oforis as well as „training in current technological, economic and social developments in the industry“ (Debrah, Oforis, 2006, p.455) has to be installed. The available $1 million will be sufficient to start suitable measures and training programmes for the first 3 to 4 years. Afterwards, various mechanisms will be set up by SAP to ensure a continuation of the initiated programmes.
Firstly, in order to be able to identify training needs etc. SAP is going to establish a separate HRD department and manager who will be responsible for the whole Tanzanian divisions, departments and operations. This HRD department will also be connected to other SAP HRD managers in various other African states, EU, America and Asia. This will ensure that the quality of HRD in Tanzania will be similar, or even equal to other development programmes in industrialised countries. In addition, besides ensuring the quality of training programmes in Tanzania, also open up possibilities of international assignments and international training, such as inpatriates and expatriates, who will further enhance training possibilities for the Tanzanian SAP subsidiary. This way it would also be possible to exchange ideas or concept for training programmes on an international basis. SAP Tanzania will, always for 4 to 6 months enable one manager to be an inpatriate at SAP headquarters, while his position in Tanzania will in the meantime be filled with an expatriate from there. This will further enhance SAP‘s compliance with international management standards as well as promote SAP‘s global strategy, development and goals.
In addition, SAP Tanzania will set up the SAP university concept, which is a „marketplace for e-business knowledge, and is cooperating internationally with renowned universities, institutes, and partners throughout the IT world. [...] In 2000, SAP University is building up the technical infrastructure for instructors to deliver taught course content – the Virtual Classroom. An additional major task is to contribute to the further market penetration of mySAP.com by providing the necessary employee and customer training courses.“ (SAP homepage, Human resources)
The HRD department will furthermore ensure that all training programmes will be connected to each other (i.e have a special „team-building weekend“ for trainers at the beginning) and that there will be a collaboration of the various departments to guarantee a well-structured overall training by providing trainers the possibility of job rotation to spend some time in every department and experience the work there.
Connected to the SAP university concept, the HRD manager will also try to establish a collaboration with local universities once a year, such as workshops, field days or recruiting days on campus to get in touch with students and soon-to-be graduates. In this way SAP will be able to pick the best students, being assessed on the basis of their education and competencies and every year, some students will have the opportunity to do an internship at SAP Tanzania.
The data of these top students will then be saved and monitored by the HRD manager and once they have finished their education at university they will receive an invitation for an interview at SAP.
After entering the the company new employees, students as well as other new employees, have to participate in some further training, which will start with a job rotation, in order for every employee to get to know the whole company and the operations of the other departments, as well as some theoretical off-the-job training.
After this IPD that will last for about 2 weeks employees will continuously have some „follow-up“ training every year, part of which, approximately 4 days, will be mandatory for every employee.
Supplementary, a reward system will be introduced to SAP by the new HRD department to create incentives for employees to participate in training programmes in addition to the mandatory training days every year. Every employee who is willing to participate in another programme or in a SAP university programme will, for one thing, receive a bonus of 1.479 Tanzanian shilling per training day (approximately $1[Loobiz.com]; GDP $255,97 per person [NationMaster.com]) and, secondly, a certificate of completion/license of this very course. The bonus received per day will rise in accordance to the number of certificates already achieved to assure a lifelong learning process within SAP Tanzania as well as up-to-date knowledge. In addition, the certificates and licenses will be taken by the HRD department to base their decision about promotion or international assignments on. This system of certificates and licenses will be the first of its kind in Tanzania and therefore work as the prime sample for the whole construction industry.
According to the six major areas of training mentioned before, the IPD will contain training on business development, practice and management as well as project management. The „follow-up“ training programmes will mostly consist of training on IT, quality management and technical engineering. Possible selective trainings will cover the field of finance and accounting in combination with environmental impact management, management training, as well as current technological, economic and social developments.
After the completion of a certain number of programmes an employee will also be granted the chance to participate in the SAP university programmes in other countries, which also enhances the prevalence of SAP‘s global strategy, development and goals.
The HRD will also closely monitor the development of each employee, by having an annual performance review with every individual to talk about career management, promotion possibilities and possible international assignments. This close monitoring will also allow the HRD department to asses further training needs (strategic approach to training), and the HR department to find suitable employees for vacancies, even in other states or countries.
The biggest challenge, however, will be to assure the continuation of the training programmes after the first four years, after the $1 million have been spent. To ensure this the HRD management will launch a close collaboration with their client companies after the first year, after clients have seen that SAP training programmes greatly enhance the performance and skills of their employees and therefore the quality of their work. SAP will include their clients in the training programmes. The prices for clients will rise by about 0,5%, which will be immediately attributed to a training programme connected with the job done for this very customer, which will amount to 1 or 2 days off-the-job training, depending on the size of the job. This way SAP can ensure their customers that they will always receive the highest quality, that SAP‘s products meet international standards and that their training will always be effective and meet market demands. Such trainings will contain environmental impact management, project management as well as quality management and technical engineering. The incorporation of client companies into the training programme will also receive attention from the public, other companies as well as the government and therefore contribute to the initiation and establishment of a nation-wide training programme.
Another way how SAP and the HRD management will ensure the continuation of training programmes is with a small „levy-system“, a training fund inside SAP Tanzania. 0,1% of each salary will be taken to fund the training programmes after the third year of the launch of these programmes. This decrease in salary, however, will be compensated with the bonuses employees receive with additional training programmes and certificates as well as with higher salaries once they have been promoted. In this way SAP will devote employees even more to its training programmes.

SAP will, with such a structured and systematic training approach, set an example for the whole Tanzania construction industry on how training programmes can be implemented and conducted, how one entire company or even industry can be integrated in the training as well as on how such trainings can be funded, which all leads to the improvement of performance and quality and therefore to a rising demand in the products. In this way such a concept will represent an incentive to the introduction of a strategic HRM concept in the industry.

Resources
Debrah, Yaw; Ofori, George: Human resource development of professionals in an emerging economy – the case of the Tanzanian construction industry; Int. Journal for HRM; No 17, Issue 3; 2006, 440-463
SAP homepage, Human resources http://www.sap.com/about/investor/reports/annualreport/1999/pdf/human_res.pdf, December 6th, 2010
NationMaster.com, Economic Statistics, Gross National Income (per capita)(most recent) by country, http://www.nationmaster.com/graph/eco_gro_nat_inc_percap-gross-national-income-per-capita, December 7th, 2010
Loobiz.com, Wechselkurse US Dollar - Tansania-Schilling, http://de.loobiz.com/wahrungsrechner/us-dollar+tansania-schilling, December 7th, 2010