Section OneOn-the-Job Training
On-the-job training is another way in which an employer may
invest in human capital needed for strategic advantage. Such
investments may be made by structuring a job so that
employees learn while they work. For example, employees’
skills may be increased by learning how to perform new tasks
or operate new equipment. Employers may structure jobs so
that these skills may be learned from other employees. They
may also give employees time to learn new procedures or how
to operate new equipment through self-instruction, such as by
reading technical manuals, or by learning new software through
self-instruction. Employers may also absorb the costs of lower
productivity while workers lacking relevant skills learn through
interaction with skilled employees or through trial-and-error
processes.
Gary Becker has noted that on-the-job training’s impact
on workers’ productivity levels is frequently underrated.^30
Likewise, economist Lester Thurow argues that on-the-job
training provides the bulk of skills used on the job while formal
education serves a signaling function of communicating to
employers the trainability of job applicants.^31 Economists calling
attention to the importance of on-the-job training point out that
a worker’s productivity is determined by the capital intensity of
the job; type and extent of on-the-job training provided; the