Transfer of Training - Human Resources/Psychology

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Is transfer of training related to firm performance?

Alan M. Saks and Lisa A. Burke-Smalley

The purpose of this study was to bridge the gap between micro- training research on the transfer of training and macro-training research on training and firm performance by testing the rela- tionship between transfer of training and firm performance. Training and development professionals completed a survey about the training methods used in their organization (on-the- job, classroom, computer-based), the transfer of training, and their firm’s performance. The results indicated that transfer of training was positively related to firm performance and mediated the relationship between training methods and firm performance. The results also suggest that among the three training methods, on-the-job training was the most strongly related to transfer of training and firm performance. These results highlight the importance of transfer of training for firm performance and suggest that meaningful organizational out- comes can be obtained by implementing training programs and strategies to facilitate and improve the transfer of training.

Introduction Research in human resource management has become increasingly concerned about measuring and demonstrating organizational value produced by human resource interventions and practices (Aguinis & Kraiger, 2009; Becker & Huselid, 2006; Chuang & Liao, 2010). Not surprisingly, as organizations continue to invest billions of dollars in training and development, there is a growing concern that these investments be justi- fied in terms of improved organizational performance (Salas & Cannon-Bowers, 2001).

There is a strong belief that training is imporatnt not only because it is necessary for building and maintaing an effective workforce, but also because it drives corporate well-being and provides organizations with a competitive advantatge (Salas et al., 2012). However, if training is to provide organizations’ with a competitive advantage and improve firm performance, trainees must first apply and transfer what they learn in training on-the-job.

❒ Alan M. Saks, Professor, Centre for Industrial Relations and Human Resources, University of Toronto, 121 St. George St., Toronto, Ontario, Canada M5S 2E8. Email: [email protected]

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International Journal of Training and Development 18:2 ISSN 1360-3736 doi: 10.1111/ijtd.12029

104 International Journal of Training and Development

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Transfer of training refers to the application, generalization, and maintenance of learning, trained skills, and behaviors from the training environment to the work environment (Baldwin & Ford, 1988). For several decades it has been reported that there is a transfer of training problem in organizations, and that a very small perentage of what is learned in training is ultimately applied on the job (Baldwin & Ford, 1988; Burke, 2001; Ford & Weissbein, 1997; Grossman & Salas, 2011).

As a result, there is a paradox about organizational expectations that training interventions will improve firm performance. This is because transfer of training is considered to be the primary leverage point by which training can influence organizational-level outcomes. In other words, without transfer, training efforts cannot contribute to organizational effectiveness (Kozlowski et al., 2000). Thus, if training is to have a postive effect on a firm’s performance, then employees must first apply learned knowledge and skills on their jobs. However, if the rate of transfer of training in organizations is in fact low, then there exists a training-firm performance paradox because a low rate of transfer of training means that training programs and investments will not lead to an improvement in an organization’s performance.

Surprisingly, previous research has not paid much attention to this paradox as researchers have not examined the relationship between transfer of training and firm performance. However, there is a stream of training research that has investi- gated the relationship between training efforts and firm performance, independent of transfer. Thus, there exists two independent but related streams of training research.

The first stream of research which we will refer to as ‘micro-training research’ focuses on the transfer of training and can be found mostly in the industrial/ organizational psychology literature. A second stream of research that we will refer to as ‘macro-training research’ focuses on the relationship between training and firm performance and can be found in the strategic human resource literature. Micro- training research focuses on the individual level of analysis and is concerend with the prediction of the transfer of training among samples of trainees. Macro-training research focuses on the organizational level of analysis and is concerned with the prediction of firm performance and other organizational outcomes among samples of organizations.

Because these two streams of research exist independently and involve different levels of analysis, there has been little attempt to integrate them. As a result, previ- ous research on transfer of training has not tested the hypothesis that transfer of training is related to firm performance. Furthermore, because the link between individual-level and higher-level training outcomes has been neglected (Kozlowski et al., 2000), the link between transfer of training and firm performance has received very little attention in both the micro and macro training literature. In their review of research on training and organizational-level outcomes, Tharenou et al. (2007) emphasized the need for research to integrate these two streams of training research and bridge the micro-macro gap in the training literature. As stated by Tharenou et al. (2007),

. . . training research on transfer of training and organizational-level outcomes has progressed independently and in isolation of each other. Therfore, future research needs to integrate these two streams of research and investigate the link between transfer of training and organizational-level outcomes . . . (Tharenou et al., 2007, p. 268).

Therefore, the purpose of this study was to bridge the the micro-macro training research gap by investigating the relationship between transfer of training and firm performance in a sample of organizations. In particular, we aim to answer two key questions that have not been previously studied in the training literature: is there a relationship between transfer of training and firm performance and if so, does transfer of training mediate the relationship between training programs and firm perfor- mance? Answers to these questions will help to shed light on the training-firm performance paradox and the the role that transfer plays in linking training to firm performance.

Research on transfer of training In response to the long-standing concern that there is a transfer of training problem in organizations, there has been a great deal of research on the factors and interventions that can best predict and improve the transfer of training (see Burke et al., 2013). Furthermore, a key driver behind transfer research is the belief that transfer of training is key for improved firm performance. As noted by Blume et al. (2010),

The escalating level of investment made in training and the accompanying expectations of that investment enhancing firm performance have combined to create greater urgency in the search for evidence and tools to improve the transfer of training (Blume et al., 2010, p. 1097).

Research on the transfer of training has its basis in Baldwin and Ford’s (1988) transfer of training model. According to Baldwin and Ford, there are three training-input factors that are important for transfer of training: trainee characteristics, training design, and the work environment. These three factors along with trainee learning and retention are believed to influence transfer. Although there have been several updates and extensions of the Baldwin and Ford model (e.g. Burke & Hutchins, 2008; Ford & Weissbein, 1997), the emphasis has remained on these three input factors.

A recent meta-analytic review of transfer research investigated the primary predic- tors of transfer of training. Based on 89 empirical studies, Blume et al. (2010) found that both trainee characteristics (e.g. cognitive ability, conscientiousness, and motivation) and work environment factors (e.g. transfer climate, supervisor support) are positively related to transfer. Furthermore, the relationship between the predictor variables and transfer was moderated by several variables (e.g. whether the trained skills were open or closed).

Thus, the primary emphasis and objective of transfer of training research has been the prediction of transfer of training or what is generally known as horizontal transfer of training. Horizontal transfer of training refers to transfer across settings or contexts at the same level (Kozlowski et al., 2000). There has been little attention on whether or not transfer of training is related to organizational-level outcomes, or what is known as vertical transfer of training. Vertical transfer of training refers to the ‘upward transfer across different levels of the organizational system. Vertical transfer is concerned with the link between individual-level training outcomes and outcomes or results at higher levels of the organizational system’ (Kozlowski et al., 2000, p. 159). Interestingly, as described in the next section, a great deal of research has been conducted on the relationship between training and organizational-level outcomes such as firm performance.

Research on training and firm performance In contrast to the micro-level research on transfer of training, a macro stream of training research has focused on the relationship between various indicators of training and organization-level outcomes. The focus of this research is the relationship between training and firm performance at the organizational-level of analysis.

In the macro training research, the measurement of ‘training’ has varied considerably from study to study and has included absolute measures (e.g. amount of training), proportional measures (e.g. per cent of workers trained), content measures (e.g. type of training provided), and emphasis measures (e.g. perceived importance of training) (Tharenou et al., 2007). Most studies have used general or absolute measures of training that focus on the amount of training employees receive or the number of employees who participate in training. Regardless of how training has been measured, there is general support for a positive relationship between training and firm performance.

In one of the earliest studies, Russell et al. (1985) found that the percentage of retail store employees who received basic sales training was positively related to store performance. Harel and Tzafrir (1999) found that organizations that invest more in training had significantly higher perceived organizational performance and market performance. Aragón-Sánchez et al. (2003) found that on-the-job training provided by

in-house trainers was the method with the strongest influence on training effective- ness. More recently, Ubeda-Garcia et al. (2013) found that training policy was positively related to objective (e.g. financial performance) and subjective (e.g. perceived financial performance) measures of organizational performance among a sample of hotels in Spain.

Tharenou et al. (2007) conducted a review and meta-analysis of the research on training and organizational-level outcomes. Based on the results of 67 studies, they found that training was positively related to human resource outcomes (e.g. turnover), organizational performance, and to a lesser extent financial outcomes. Furthermore, training was positively related to both objective and perceptual measures of organi- zational performance although the effect size was greater for perceptual measures. Research in the strategic human resources management literature has also found a positive relationship between training and organizational performance (see Becker et al., 2001; Delaney & Huselid, 1996; Huselid, 1995).

Thus, there is strong support for a positive relationship between the provision of training and firm performance. In fact, one study found that extensive training was more strongly related to organization productivity than operational management practices such as advanced manufacturing technology (Birdi et al., 2008). Much fewer studies, however, have investigated the mechanisms that might explain or mediate the training – firm performance relationship (Tharenou et al., 2007). A recent exception is a study by Park and Jacobs (2011) on workplace learning and organizational performance. Park and Jacobs (2011) found, in a sample of South Korean organizations, that the relationship between the investment in workplace learning methods (both formal and informal) and organizational performance was mediated by workplace learning.

However, we are not aware of any study that has investigated the role of transfer of training in the training – firm performance relationship. We would expect transfer of training to play an even more important role in the training – firm performance relationship than learning given that learning precedes transfer of training, transfer is more proximal to firm performance, and learning is only one of several variables that is necessary for transfer (Baldwin & Ford, 1988; Ford & Weissbein, 1997). As described by Baldwin and Ford (1988), learning is a necessary but not a sufficient condition for transfer of training.

In the next section, we describe why we expect transfer of training to be related to firm performance and to mediate the relationship between training methods and firm performance.

Study hypotheses As indicated earlier, in order for training to lead to firm performance, it must first be used and applied by trainees in the work environment. Thus, as noted by Kozlowski et al. (2000), training cannot contribute to organizational effectiveness without horizon- tal transfer. This suggests a mediated model in which transfer of training mediates the relationship between training interventions and firm performance.

Our model begins with a direct relationship between training and transfer of train- ing. Organizations that provide more training and place a greater investment or effort in training should have a higher rate of transfer of training. While prevoius studies have mostly used general measures of training that fail to identify what it is about training that influences firm performance (Tharenou et al., 2007), in the present study we operationalized training in terms of types of training methods, given that training design is included across all transfer models as an important antecedent of transfer (Baldwin & Ford, 1988; Burke & Hutchins, 2008; Ford & Weissbein, 1997). Indeed, Burke and Hutchins (2008) found that training design strategies accounted for 46 per cent of trainers’ reported best practices for influencing transfer.

More specifically, in the present study we assessed the extent to which organizations provide three primary and commonly-used methods of training (ASTD State of the Industry Report, 2011), including on-the-job, classroom, and computer-based training.

For example, in one study of 78 employers (totaling 950,000 workers), for non- managerial staff, on-the-job training was reported as the most popular method of training (94 per cent), and in-house classroom-style training was used by 92 per cent (Williams, 2009). Organizations that use a variety of training methods increase stimulus variability which makes it more likely that trainees will be able to apply what they learn in training to their work environment. Indeed, stimulus variability has received empiri- cal support with respect to maximizing transfer (Baldwin & Ford, 1988; Ellis, 1965). Therefore, our first hypothesis is as follows:

Hypothesis 1: Organizations that use more (a) on-the-job, (b) formal classroom, and (c) computer-based training methods will have a higher rate of transfer of training.

Second, research on training and firm performance suggests that organizations that invest more in training or provide a greater amount of training will have higher firm performance (Harel & Tzafrir, 1999; Huselid, 1995; Russell et al., 1985; Tharenou et al., 2007). The basis for this relationship comes from the literature on strategic human resource management. Training is considered to be a best practice that along with other key HR practices comprises a high performance work system or a system of human resource bundles (Chuang & Liao, 2010; Di Milia & Birdi, 2010). Organizations that provide extensive training to their employees will have a competitive advantage that will result in superior firm performance (Huselid, 1995). This is because training can improve employees’ job-relevant knowledge and skills and key worker behaviors (such as innovation, customer service, quality, or reliability) required by an organization to achieve its business goals, thereby improving firm performance (Becker et al., 2001; Tharenou et al., 2007). Hence, our second hypothesis is as follows:

Hypothesis 2: Organizations that provide more (a) on-the-job, (b) formal classroom, and (c) computer-based training will have higher firm performance.

Third, as discussed earlier, transfer of training is a key leverage point in the organi- zational system, enabling employees to improve their own work performance and ultimately that of their business unit. According to Kozlowski et al. (2000), the combi- nation of individual-level knowledge and skills, which are imparted through training and integrated into daily workplace task performance, will lead to higher-level organi- zational outcomes such as firm performance. Thus, if individuals apply their new skills and behaviors on the job and improve their own job performance, this should translate into higher department and ultimately firm performance. Therefore, we tested the following hypothesis:

Hypothesis 3: Organizations that have a higher rate of transfer of training will have higher firm performance.

Finally, we have suggested that training is related to firm performance because train- ees use newly acquired knowledge and skills on the job and exhibit new behaviors that result in improved job performance. This proposition, along with the previous hypoth- eses, suggests a mediation model such that the higher use of commonly-used training methods (classroom, on-the-job, and computer) leads to transfer of training and trans- fer of training leads to firm performance. Thus, transfer of training is proposed to be the mechanism through which training will be positively related to firm performance. Along these lines, our final hypothesis is the following:

Hypothesis 4: Transfer of training will mediate the relationship between training methods and firm performance.

Method Participants

The participants of this study were training and development professionals who were members of a national training and development association in Canada. They were asked to complete a survey on training in their organization. Fifty-seven per cent

were female; the average age was 42; and 72 per cent had a university degree. Respon- dents had experience with and knowledge of training practices in their firm with an average of 4 years experience in their current job, 10 years in their organization, and 10.5 years experience in training and development. Thus, the participants are subject matter experts who are responsible for the design, delivery, and evaluation of training programs in their organization. As a result, they are in the best position to know the outcomes of training programs and the extent to which training programs in their organization transfer. Respondent organizations had on average between 500–1000 employees and represent over a dozen sectors including manufacturing, service, and government. Forty-two per cent of the organizations produce a product and 88 per cent deliver a service.

Procedure

Surveys were sent to all members of the training and development association. Partici- pants were told that the purpose of the survey was to better understand training programs and to improve training effectiveness. They were told that their individual survey responses would be anonymous and confidential and only be seen by the researchers. They were asked to answer the survey questions as accurately as possible with respect to training in their organization. Participants were provided with a self- addressed and postage-paid envelope and asked to return the completed survey to the researchers.

In total, 150 completed surveys were returned out of approximately 1300. This represents a response rate of 11.5 per cent. This rate is similar to the sample size and a response rate of other organizational-level studies in both the strategic human resource literature as well as the training literature. For example, in a study on high- performance work systems, Datta et al. (2005) obtained a sample of 132 firms and a response rate of 15 per cent which is similar to other survey-based studies of high- performance work systems. Aragón-Sánchez et al. (2003) obtained a response rate of 9 per cent in a study on training and business results. In their review and meta-analysis of research on training and firm performance, Tharenou et al. (2007) found that the average response rate for 44 studies was 34.3 per cent but that rates ranged from 3.5 per cent to 75.5 per cent. Thus, our response rate is comparable to other organizational-level surveys in the macro-training literature.

Measures

Training method Participants were asked to indicate the extent to which each training method (on-the- job training, classroom training, and computer-based training) is used for training in their organization. Participants responded using a 5-point scale, with anchors (1) = to a very little extent, to (5) = to a very large extent.

Transfer of training Participants were asked to estimate the percentage of employees in their organization that effectively apply and make use of what they learn in training programs on-the-job immediately after training, six months after training, and one year after attending a training program. We used a 10-point response scale that ranged from (0) = 0 per cent to (10) = 100 per cent. Responses to these three time periods were averaged to form the measure of transfer of training (α = 0.87).

Firm performance We used Delaney and Huselid’s (1996) 7-item measure of perceived organizational performance. They described their measure as being ‘relative, or benchmarked, in the sense that they are derived from questions asking informants to assess organizational performance relative to the performance of industry competitors’ (p. 953). Participants were asked to assess their organization’s performance over the past three years

compared to other organizations that do the same kind of work by responding to a 5-point scale with anchors (1) = Much worse, to (5) = Much better. Sample items include: ‘Quality of products, services, or programs’ and ‘Satisfaction of customers or clients’ (α = 0.87). Previous research has found perceptual measures of organizational performance to be moderately to strongly correlated with objective measures of firm performance (Delaney & Huselid, 1996).

Control variables We controlled for two organizational variables (age and size) that might be related to the transfer of training and firm performance. Older firms (i.e. the year that the organization was founded) and larger organizations (1 = Less than 100 employees, 9 = 100,000 or more) might have higher rates of transfer of training and firm perfor- mance due to their more advanced and sophisticated human resource practices and systems.

Results Table 1 presents the means, standard deviations, reliabilities, and intercorrelations of the study variables. First as shown in Table 1, on-the-job training methods were used to the greatest extent by organizations in our sample (M = 3.88, SD = 1.05), followed by classroom training (M = 3.05, SD = 1.09) and computer-based training (M = 2.02, SD = 1.11). Second, of the three training methods, only on-the-job training was sig- nificantly positively correlated with transfer of training (r = 0.30, p < 0.001). Third, on-the-job training and computer-based training were both positively correlated with perceived organizational performance (r = 0.24, p < 0.01 and r = 0.19, p < 0.05, respec- tively). Finally, as expected, transfer of training was positively related to perceived organizational performance (r = 0.35, p < 0.001).

To test the study hypotheses, multiple regression analyses were conducted. First, transfer of training was regressed on the three training methods. Second, perceived organizational performance was regressed on the training methods and transfer of training. Third, in accordance with Baron and Kenny’s (1986) test for mediation, per- ceived organizational performance was regressed on the training methods with trans- fer of training held constant. In all of the regression analyses, the two control variables were entered in the first step.

The results of the regression analyses are shown in Table 2. As predicted by Hypoth- esis 1, training methods explained a significant amount of the variance in transfer of

Table 1: Means, standard deviations, reliabilities, and intercorrelations of study variables

Variable M SD 1 2 3 4 5 6 7

1. On-the-job training 3.88 1.05 – 2. Classroom training 3.05 1.09 −0.09 – 3. Computer-based

training 2.02 1.11 −0.02 0.02 –

4. Transfer of training 4.61 2.12 0.30*** 0.13 0.04 (0.87) 5. Perceived

organizational performance

3.48 0.70 0.24** −0.02 0.19* 0.35*** (0.87)

6. Organization size 3.28 1.72 0.04 0.13 0.15 0.01 −0.17* – 7. Organization age 55.66 45.04 −0.04 0.13 −0.11 −0.11 −0.23** 0.38*** –

N = 130–150. * p < 0.05. ** p < 0.01. *** p < 0.001.

training (ΔR2 = 0.10, p < 0.01). However, only on-the-job training was a significant pre- dictor of transfer (β = 0.31, p < 0.001) in support of Hypothesis 1a. For firm perfor- mance, the training methods explained a significant amount of the variance (ΔR2 = 0.10, p < 0.01). On-the-job training (β = 0.25, p < 0.01) and computer-based training (β = 0.22, p < 0.05) were both significant predictors in support of Hypotheses 2a and 2c. As predicted by Hypothesis 3, transfer of training explained a significant amount of the variance in perceived organizational performance (ΔR2 = 0.10, p < 0.001, β = 0.32, p < 0.001).

Finally, to test the mediation hypothesis (Hypothesis 4), organizational performance was regressed on the training methods again but this time with transfer of training held constant. As shown in Table 2, training methods did not explain a significant amount of the variance in perceived organizational performance when transfer of training was controlled (ΔR2 = 0.04, n.s.). Further, only transfer of training (β = 0.22, p < 0.05) was a significant predictor of perceived organizational performance. These results indicate that transfer of training fully mediated the relationship between training methods and perceived organizational performance in support of Hypothesis 4.

Discussion Research on the transfer of training has treated transfer as the primary outcome of training or as Salas et al. (2012) state, the ‘endgame’ of training. However, much of the practical interest behind improving transfer of training is that it is a necessary condi- tion for training to improve organizational performance. Indeed, organizations expect their training investments to be justified with improved performance. This study is the first to investigate the relationship between transfer of training and firm performance and extends the literature on transfer of training as well as research on training and firm performance.

As predicted and consistent with previous studies, we found that training was positively related to firm performance. That is, organizations that use training to a greater extent report higher perceived organizational performance. In addition, this is the first study to show that organizations reporting a higher rate of transfer of training

Table 2: Multiple regression analyses for predicting transfer of training and perceived organizational performance

Training methods Transfer of training

Perceived organizational performance

β t-value β t-value β t-value β t-value

Organization size −0.10 −0.99 −0.15 −1.52 −0.03 −0.31 −0.09 −0.83 Organization age −0.09 −0.94 −0.19* −2.02 −0.12 −1.24 −0.14 −1.36 On-the-job training 0.31*** 3.31 0.25** 2.76 0.16 1.56 Classroom training 0.08 0.91 −0.03 −0.31 −0.03 −0.34 Computer-based

training 0.04 0.43 0.22* 2.34 0.13 1.24

Transfer of training 0.32*** 3.42 0.22* 2.09 R2 0.12 0.18 0.13 0.15 ΔR2 0.10 0.10 0.10 0.04 F change 3.86** 4.23** 11.72*** 1.25

N = 97–110. * p < 0.05. ** p < 0.01. *** p < 0.001.

report higher firm performance. Furthermore, transfer of training mediated the rela- tionship between training methods and firm performance. These results extend the transfer literature by showing that transfer of training is indeed positively related to firm performance.

This study also extends the macro-training literature on training and firm perfor- mance in several respects. First, previous research has used very general measures of training such as the number or per cent of employees who receive training. As a result, we know very little about the kind of training that is most important for producing training outcomes. The results of this study indicate that on-the-job training was the strongest predictor of transfer of training, and on-the-job training and computer-based training predicted perceived organizational performance. That on-the-job training pre- dicted both transfer of training and firm performance is perhaps not that surprising as on-the-job training is ‘close’ to the work environment, as outlined by identical elements theory (Thorndike & Woodworth, 1901). This is an important finding as many organi- zations, especially small organizations, rely heavily upon on-the-job training (DeRouin et al., 2005).

Second, previous research on training and firm performance has seldom investigated the intervening mechanisms that explain why training is related to firm performance. Our results are the first to show that transfer of training is a key mediating variable that intervenes between training and firm performance. As such, transfer of training remains a critical variable to practitioners and researchers since bolstering transfer can in turn increase organizational performance.

Finally, the finding that transfer of training is positively related to firm performance reinforces the notion of a training – firm performance paradox. In other words, if the rate of transfer of training remains low in many organizations and transfer of training is a necessary condition for training to improve firm performance, then there exits a training – firm performance paradox – training is not likely to improve firm perfor- mance if transfer of training is low. Thus, business executives, managers, training professionals, and learning specialists need to understand that their investments in training will only lead to improvements in firm performance if their training programs have high rates of transfer.

Study limitations This study has a number of limitations that should be considered when interpreting the findings. First, all of the variables were measured by self-report from a single source, which is a common practice in research on training and firm performance that can result in method bias and measurement error. However, although single respondent measures of training and other human resource practices are common and can contain measurement error, this is less likely when knowledgeable respondents are used (Wright et al., 2001). This problem was minimized in the present study because the participants were training professionals with an average of 10 years of work experience in training and development and in their organization.

Second, the measurement of transfer of training was based on participants’ estimate of the transfer rate across all training programs in their organization. As a result, it might suffer from some perceptual bias and might under- or overestimate the actual transfer of a particular training program. In addition, the measurement of transfer was quite general and it did not measure the acquisition and utilization of new skills on the job which is essential for transfer to occur. Thus, our measure of transfer of training assumes the acquisition and utilization of new skills.

A third limitation is the use of a subjective measure of organizational performance rather than an objective measure. However, while perceptual measures can suffer from inflation bias, it is worth noting that in their meta-analysis Tharenou et al. (2007) found that training was positively related to both objective and subjective measures of firm performance. Furthermore, Wall et al. (2004) compared the use of subjective and objec- tive measures of firm performance and found evidence of convergent, discriminant,

and construct validity. Thus, it appears that the relationships between training and perceptual measures of organizational performance are similar to objective indicators of firm performance.

In an effort to try and minimize some of these limitations, we used different scale anchors to measure training methods, transfer of training, and perceived organizational performance (Podsakoff et al., 2003). In addition, the survey was anony- mous and participants were told to respond as accurately and honestly as possible. While we cannot completely rule out the limitations of this study, there is some evi- dence that the participants did respond in an accurate and meaningful manner. For example, the training methods were differentially related to transfer of training and perceived organizational performance. Only on-the-job training was related to transfer while on-the-job training and computer-based training were related to firm perfor- mance. If method variance was a serious problem then we would have expected all of the training methods to be similarly related to transfer of training and firm performance.

Finally, although we have implied causal relationships between the variables such that training methods lead to transfer of training and transfer of training leads to firm performance, the use of a cross-sectional design prohibits us from making causal conclusions even though the causal direction is consistent with the literature. Thus, although it is generally believed that transfer of training is related to improved firm performance, we cannot definitively conclude that training methods caused transfer of training and transfer of training caused firm performance. Rather, we can only con- clude that organizations that report a higher use of on-the-job training report higher transfer and those that report a higher rate of transfer of training perceive higher firm performance.

Implications for research and practice This study is the first to integrate the micro-training literature on transfer of training and the macro-training literature on training and firm performance and there is much more to be learned. For example, future research might provide a stronger test of vertical transfer of training by using multiple sources to measure transfer at the indi- vidual level of analysis and then linking it to various organizational performance measures, such as productivity and profit. Thus, a more complete integration of the micro and macro training literature would include data at the individual and organizational levels of analysis.

Future research might also measure other organizational-level outcomes. For example, training has been found to be positively related to human resource outcomes such as job attitudes and turnover (Tharenou et al., 2007). The relationship between transfer of training and human resource outcomes might be stronger than the results for firm performance given that they are more proximal to training. A third area for future research is to examine a greater variety of forms of workplace learning. For example, Park and Jacobs (2011) investigated both formal (e.g. classroom training) and informal learning (e.g. mentoring and coaching) practices and found that they were related to organizational performance and workplace learning mediated the relation- ship. Future research might examine the relationship between formal and informal learning practices and firm performance and test the mediation effects of workplace learning and transfer of training. It is possible that workplace learning mediates the relationship between workplace learning practices and transfer of training, and trans- fer of training in turn mediates the relationship between workplace learning and firm performance.

Finally, future research should consider the effects of different training variables on transfer of training and firm performance. As indicated earlier, many types of training variables have been investigated in research on training and firm performance. We suspect that the nature of the relationship between training and transfer of training will depend on the measure of training. While the present study focused on three types of training methods, future research might examine different types of training programs

(skill-based versus attitudinal programs), training design and instructional variables (e.g. the use of practice, feedback, role plays, simulations, etc.), as well as transfer of training strategies and interventions (e.g. relapse prevention, goal-setting) as they too have been found to be related to transfer of training.

In terms of practical implications, the results of this study provide additional support for the importance of transfer of training. Clearly, transfer of training has implications beyond individual trainees. Thus, if trainers want to produce metrics of training effi- cacy for their top management team, they must maximize transfer. Organizations must focus on the transfer of training every time they assess training needs and design, deliver, and evaluate a training program. The results of this study suggest that organi- zations might not realize the benefits of training for firm performance if they do not ensure that the trained knowledge and skills are used on the job. Based on the results of this study, one way for organizations to facilitate the transfer of training is by providing on-the-job training (see DeRouin et al., 2005). As such, an important impli- cation of this study is that organizations should use well-designed on-the-job training either as a stand alone training program or as a major component of classroom and computer-based training. Clearly, a blended approach to training (Bersin, 2004; Hovis, 2012), which makes use of several methods of training, is most likely to produce positive effects across various training-related outcomes.

Conclusion This study has taken the first step in an attempt to bridge the micro-macro gap in the training literature and is the first to test the relationship between transfer of training and firm performance. As expected, transfer of training was positively related to firm performance and mediated the relationship between training methods and firm per- formance. Our results reinforce the importance of research and practice on the transfer of training and indicate that organizations should implement strategies and interven- tions to facilitate the transfer of training if they want their training investments to result in improvements in firm performance. One way for organizations to do this is to provide effective on-the-job training which we found to be positively related to the transfer of training and firm performance.

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