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TO Train or Drain: Is the Training Only Solution for Organizational Performance?

Recently due to the announcement of Vision -2030 by the government, along with the reforms: the country has witnessed the never before attention. The business community in Saudi Arabia got realized its role in the new scenario.

(The names of the characters and company used in this case study are fictitious. In case by chance any resemblance is not intentional. The case discussed below only for academic purposes.)

Mr. Mohammed a successful software professional in US returned to Saudi Arabia and assumed his responsibility as Project Leader in Sarabnet Ltd, one of the top three companies in Saudi Arabian IT and Software Industry and certified with CMM Level 5 certification. He is trained in US and worked in US, UK & Germany and has impressed with the countries reforms under the new leadership in Saudi Arabia. He is very much delighted with Vision 2030 of Saudi Arabia. Vision 2030 is a blueprint setting out long-term goals and expectations. The government has flagged that it will pursue public-private partnerships, continue to facilitate the flow of private investment and improve the nations competitiveness a Haroun Khwaja (2017).

Mr. Mohammed first day went on well with on boarding program and second day too went on with meeting different teams working under him and meetings with other projects leaders and Architect of the project.

Mr. Mohammed who is a go getter is decided to involve fully in the companys project from the day one; so called all his teams one by one to understand the team dynamics and progress in work. Having allotted one hour each for each team he received the 3rd team at 11 am since started from 9 am, after introduction of the team members by the team leader Mohammed learnt that a team member Mr. Nassar is absent when asked about him all the team members started smiling and team leader with hesitation said, no Sir he is not absent he will he will come.

The team leader quickly came to him and said, Sir I noticed that Mr. Nassar reached the office and Mr. Nassar is a Wasta (one who hired due to high recommendation) candidate.

Mr. Mohammed shocked to listen this and started thinking in office as how his team will achive its goals with such a weak link in the team and how the company can achieve its strategic objectives with such kind of practicesnow Mr. Mohammed is totally a worried man he knew well about the Wasta culture in Saudi Arabia.

INTRODUCTION

In Saudi Arabia until the 1960s, most of the population was nomadic or semi nomadic. "Saudi Arabia is the world's largest producer and exporter of total petroleum liquids, the world's largest holder of crude oil reserves, and the world's second largest crude oil producer behind Russia" (Nalband et al, 2015), Saudi Arabia is shifting its stand from mere producer and supplier of petroleum to establishment of industries in all the sectors including IT and software. The visionary leadership has laid down the best base for development of business; well-articulated five year plans of the country brought a huge change in its human resources from dependence on expatriate workforce to almost 80% self-sufficient and in some occupations 100%.

Though Saudi Arabia is a young country because of its Petro dollars could build the infrastructure quickly and within no time has become a destination for business. Presently Saudi Arabia is one of the business-friendly nations with a potential to attract foreign direct investment. The Saudization policy of the country one way or the other discouraging the organizations to recruit expatriate workforce and encouraging the Saudis to become part of countrys economy building.

Organization culture mostly aligned with social culture. In Saudi Arabia we can see HRM practices in its puberty stage in some organizations and too advanced in some other organizations a kind of bizarre situation.

Over the past couple of decades, we can see a steady stream of research emerging related to HR issues in the Middle East. Moreover, in the absence of robust information, it is not clear about the nature and intensity of forces determining the approaches adopted to managing human resources and their suitability for firms operating there; and to highlight the context-specific nature of the HRM function and the prevalence of dominant indigenous HRM approaches for the region (Afiouni et al., 2014; Budhwar & Mellahi, 2016, Budhwar et al. 2019).

Wasta has its strong routes in the social as well as organizational culture of Saudi Arabia its influencing organizations in every decision of HRM. (Maryam Aldossari & Maxine Robertson, 2016) i.e., R-R (recruitment to retirement)

Wasta is defined as connections, network, contact and nepotism (Hutchings and Weir, 2006.Is also translates as going in-between and so highlights the importance of mediation (Smith et al. 1999) (Maryam Aldossari & Maxine Robertson, 2016). Wasta is then a form of social capital, associated with loyalty and solidarity, resulting in an unwritten social contract and a hidden force or an invisible hand, which is not confined to support, and favoritism provided to family members, such as nepotism, but involves several other relationships such as cronyism, kinship, colleagueship, friendships, and business relationships (for details see TaAmnha et al., 2016) (Pawan Budhwar et al. 2019).

BACKGROUND

The world is going global, digital, herbal and spiritual. In the 21st century, the predominance of brain power as the value and growth creator at the global level has been widely accepted.

Research indicates that the annual investment in the intangible assets - R&D, business processes and software, brand enhancement, employee training, etc., was very high and in many countries, it is almost equal to investment of the manufacturing sector in physical assets.

The shifting stands of time have underscored the importance of brainpower as the prime driver of value creation. Beginning from the indispensability of land at Adam Smiths time, the prime value-generating tool has traversed through physical assets to culminate in the value creation through intangible means (PVL Raju, 2002). Human resources play a crucial role in the development process of modern economies. Arthur Lewis observed: There are great differences in development between countries which seem to have roughly equal resources, so it is necessary to enquire into the difference in human behaviour (Arthur Lewis, 1965).

The human resource of an organization represents an enormous, unrealized potential for profit it is neither the capital nor material resources alone that bring about development. Primarily the effective and efficient human resource management plays the key role in increasing productivity, ensuring fair growth of enterprises, and meeting the legitimate needs of workers. Managing the human resource is the central, important, and unique management task.

It is often felt that, though the exploitation of natural resources, availability of physical and financial resources and international aid play prominent roles in the growth of modern economics, none of these factors is more significant than efficient and committed manpower. A nation with an abundance of physical resources will not benefit itself unless human resources make use of them (Leon C. Megginson, 1972).

In essence, the difference in the level of economic development of the countries is largely a reflection of the differences in quality of their human resources. The key element in this proposition is that the values.

The shift from manufacturing to service and the increasing pace of technological change are making human resources the key ingredient to the nations well-being and growth. And in a service-oriented industry, like software, the quality, quantity and utilization of human resources become all the more important (Levitan, Garth L, Mangum and Ray Marshal, 1972)

Mr. Mohammed could not sleep the last night was memorizing the lectures he had from his professors on importance of human resource management and decided to be a catalyst in the process of increasing the performance of the organization.

The next day morning his first priority was to meet the higher officials and fix the attitude of Mr. Nassar.

Mr. Mohammed visited the HR department and requested the general manager of HRM to provide details of Nassar in specific and in general about wasta employees.

The GM-HR has given a glamorous picture about the practices that they are in place in Sarabnet Co.,

He said we have a beautiful practice of need analysis and identification of individuals for training by SKILL WILL - MATRIX he explained further with the help of following Figure-1.1

High skill- high will No problem - plan for potential skill training

High skill- low will Problem exists plan for motivation sessions

Low skill- high will Problem exists plan for training to improve the skills.

Low skill- Low will problem exists

1. suggest the concerned department for resource action

2. Retrain and motivate.

Mr. Mohammed quickly grasped the situation and came back to his cabin and called for the 3rd team leader and requested him to honestly speak about Mr. Nassar. The team leader looked back and forth two three times and said sir this is the third year of Nassar with us he joined fresh from the campus he is a very good guy tries to help out our colleagues from any social problems with his social network mostly he will be busy with his phone and always hang on with people from inside and outside of the organizationmost of the time we find him in our staff refreshment roomon your first day of joining also he was in refreshment room with one of our company Director.

With the feedback Mohammed visited his boss i.e., the Architect of the company. The moment he stepped in boss office, the boss with a smile on face asked did Nassar meet you on the first day? he was telling he has a meeting with you. Mohammed breathed in despair and smiled forcibly by telling yes sir yes, he was very sorry about his absence due to an informal meeting with one of our Board of Directors and Mohammed continued explaining about Nassars hiring, his performance and his compensation (increase in his salary every year despite of minimal to no performance.

The boss listened carefully and said dont worry I know that we are running out of time with your project at this juncture we need the full-fledged performance from every team member.

Now the boss is thinking about Mohammed and turnover rate among repatriates of Saudis. Management often assumes that it is unproblematic when repatriates return to the home organization (Paik, Segaud, & Malinowski, 2002). However, research has shown that turnover rates amongst repatriates range from 20 to 50% within the first year of return (Lee & Liu, 2007; Stahl, Chua, Caligiuri, Cerdin, & Taniguchi, 2009). The organizational costs of repatriates turnover are therefore massive, both financially and strategically (Stroh et al., 2000). High turnover rates suggest the need for a critical investigation of repatriate-organization relationships across contexts. Wasta plays a significant role in career success. It plays a critical role in hiring and promotion decisions in Saudi Arabia, therefore, job security and advancement are generally based on wasta rather than technical competence or management performance (Rice, 2004) Maryam Aldossari & Maxine Robertson (2016).

IT INDUSTRY IN SAUDI ARABIA

The present era is the era of information technology the country like Saudi Arabia made its moves compatible with the todays global competition and has been adapting the technology which is up to date including software. Technology is a global game now. It is borderless and Saudi Arabia today is making efforts to establish its software and services major.

Saudi society is young and growing rapidly, its consumer market is packed with technologically literate early adopters. The IT activities enjoy strong growth prospects due to this large emerging market and the increasing supply of qualified software engineers coming available due to public and private training initiatives.

Saudi Arabia is the largest IT market by far in the Middle East. Numerous Saudi Arabian IT industries show clear signs of rapid growth, driven by the committed presence of major multinationals like Microsoft, IBM, Ericson, Wipro, Oracle etc., and by the expanding skills and confidence of local companies like Elm, Advanced Electronic Company, Tamkeen, Thiqah, Etabadul etc.,

Technology industry has a fundamental role in every aspect of Saudi Vision 2030. The role of technology will not be limited to providing devices and their accessories, but the human element plays the large and fundamental role in directing and adapting technical devices and programs supporting them. Thus, the human element is the basic to build the technology to achieve Vision 2030.

According to BMI Research as per figure 1.2& 1.3 the value of the information technology (IT) market in Saudi Arabia will account for approximately 1.6 percent of GDP in 2018. IT market value is going to increase by 9.5 percent in 2018, reaching a value of SR44.6 billion ($11.9 billion). By 2022, the value of the IT market is expected to reach SR63.5 billion ($16.9 billion) and the sales in IT industry clearly depicted in figure 1.3.

The next week Vice-president of HR called by Architect and other top executives to fine tune their business strategy by aligning with countrys Vision 2030; in the meeting it was unanimous opinion to increase the performance of the employees/organization to align with vision 2030 to their business strategy.

At the conclusion of the meeting in a low voice when the Architect sought about how to deal with Wasta employees? One of the top executive in a loud tone said why this topic Wasta is a problem only to our company and to Saudi Arabia only? why not people talk about networking, References and Recommendations in other so called developed and developing countries???nepotism..is there everywhere with different labels, Just because we are a small & traditional country and trying to develop as quickly as possible the people are not able to digest and pointing to Vice President HR said study those countries how they are managing.