Reference no: EM13948137

CHAPTER 6: LEARNING AND PERFORMANCE MANAGEMENT CASE STUDY

American Express: Challenges in Managing Learning and Performance

American Express (AMEX), a company with operations in over 130 countries around the world, was founded in 1850 to provide freight forwarding and delivery services. AMEX has evolved over the past 150 plus years into a global financial services company.

Like other organizations, enhancing the performance capabilities of employees is an important concern at AMEX. Developing and maintaining employee competencies and skills can be a daunting challenge, as two different challenges in managing learning and performance at American Express illustrate.

Learning to Manage the Managers of Learning

Not only must the learning operations of an organization address the training and development needs of other units within the organization, but the organizational unit responsible for employee learning must also be concerned with developing the talents of its own staff members. In 2005, this lesson came to the forefront at American Express as the company's Learning Network evaluated its practices. The AMEX Learning Network discovered that it was not doing a satisfactory job of addressing the training and development needs of its own staff members - those AMEX employees directly charged with providing training and development experiences for the rest of the AMEX organization. The American Express Learning Network subsequently took appropriate steps to improve performance of the Network and craft a new vision and mission for the Network.

A crucial problem for the AMEX Learning Network was that it "had been so focused on the learning and development of others that its members had not devoted enough attention to their own knowledge and skills development." Consequently, the Learning Network began to focus efforts on the development of its own staff members. The Learning Network staff participated in various programs designed to elevate their skill levels. They also earned additional certifications from appropriate professional organizations. The Network also reviewed its compensation policies and practices to ensure they were in line with AMEX's pay-for-performance compensation model. Finally, to better link its own activities with the rest of the AMEX organization, the Learning Network also improved its measurement of training metrics. To better respond to the needs of AMEX's managers, the training metrics technology team developed what it called "metrics central," which is a Web-enabled tool that can be accessed by both Learning Network staffers and other AMEX managers.

Mode of Leadership Development at AMEX

Another learning and performance management issue at American Express involved the Learning Network's efforts in the leadership development arena. AMEX was seeking to ascertain the most effective manner in which to conduct leadership training.

In 2006, AMEX implemented a new model of leadership development across the entire AMEX organization. Three groups of trainees (or learners) were formed and each group was exposed to a different training venue. One group had only online delivery of learning materials and these were studied through self-direction without any supporting events like peer discussion, formal meetings, or talks by
senior organizational leaders. Another group of learners experienced traditional classroom training without any support of online materials or other formal events. The third group of learners experienced a blended learning approach that combined classroom or Web-based interaction with senior leaders, selfdirected online learning, and encouragement of discussion among learners.

In evaluating the three different approaches, AMEX assessed employee training responses - called learner responses - at five different levels. Level 1 measured learner reaction, wherein the trainees indicated the level of satisfaction they had with the learning experience. Level 2 focused on learner knowledge, or an assessment of the acquisition of new knowledge and skills. Level 3 addressed the learners' behavior by evaluating their observed improvement in leadership skills three months after the training sessions. Level 4 focused on the business impact of the training on the learners in terms of improved productivity of the learners' direct reports (i.e., those people for whom the learner has immediate supervisory responsibility). Level 5 targeted return on investment (ROI) via a cost/benefit analysis of the sales productivity of the learners' direct reports over the preceding three-month period. Assessments at levels 1 and 2 were based upon the learner's self-report; at levels 3 and 4 the assessments were conducted via self-report from the learners and reports from the learners' supervisor and direct reports; and at level 5 it was based upon objective data.

Little difference was found among the three learning approaches - online self-directed, traditional classroom, and blended - for levels 1 and 2. However, blended learning proved to be the superior training approach at evaluation levels 3, 4, and 5.

CHALLENGES TO ORGANIZATIONAL LEARNING

How to effectively manage the managers of organizational learning and ascertaining the most effective mode of leadership development are only two of many challenges that can influence the effectiveness of learning and performance management activities in an organization. The manner in which an organization addresses these challenges can make a major impact on the effectiveness of organizational learning within a company.

Suggested Discussion Questions

1. How has the American Express Learning Network utilized learning theory, goal setting, and reward systems in addressing the challenge of its own staff members' training and development needs?

2. How is the use of learning theory and goal setting theory evident in the design of AMEX's leadership development program?

3. Using relevant concepts from Chapter 6, explain why you think the blended learning approach to leadership development produced the best results for evaluation levels 3, 4, and.

Optional Quiz Questions-

True/False

1. American Express recognizes the need for ongoing learning in the workplace, which can be described
as a change in behavior acquired through classical conditioning.

2. American Express uses a pay-for-performance compensation model. In a study of pay for
performance, more productive employees chose fixed compensation when given a choice.

3. The AMEX Learning Network chose to set ambitious goals for itself because goals crystallize all of the things
an organization has been doing wrong in the past and helps it to avoid those mistakes in the future.

4. American Express employees who are introverts are most likely to learn best on their own through
the online delivery of materials without any supporting events like peer discussion.

5. Research confirms that the personality functions of intuition, sensing, thinking, and feeling do not
affect employees' preferred modes of learning, which explains why so little difference was found

among the three learning approaches the Network offered (online self-directed, traditional classroom, and blended).

6. The AMEX Learning Network discovered that the higher the goal, the more likely people were to
become frustrated and give up before reaching it.

Multiple Choice-

7. Reinforcement theory is central to the design and administration of organizational _______________ at companies like American Express. When well designed, they attract and retain top employees.

a. operant conditioning programs
b. fixed compensation models
c. reward systems
d. disciplinary action committees
e. none of the answers are correct

8. Strategic awards go beyond cash at American Express to include:

a. fixed compensation models
b. training opportunities
c. educational opportunities
d. fixed compensation models and training opportunities
e. training and educational opportunities.