Section Onehave to be prepared to trade off current costs for long-term
strategic benefits, such as a more flexible, committed workforce
and related positive aspects of the organizational culture to
which such policies contribute.^9
Economic Rationale for Investment in Training
Because human resource investments frequently involve
training, it is instructive to consider the difference between
specific and general training. Nobel Laureate economist Gary
Becker has written extensively on this subject. His distinction
between specific and general training in human capital theory
provides guidance for understanding when employers will
provide training. The decision whether to invest in training and
development depends, in part, on whether the education
imparts skills that are specific to the employing organization
(specific training) or are general and transferable to other
employers (general training). Employers generally invest in or
pay part of the cost of specific training because employees
cannot readily transfer such skills to other employers.
Employers recoup their investments after employees complete
training by paying employees only part of the revenue derived
from their increased productivity (marginal product).
Conversely, conventional human capital theory predicts that
employers will pay for none of the cost of general training
because employees can transfer skills developed at employers’