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In the past decade, many companies operating in India witnessed tremendous year-over-year growth and a consequent surge in stock prices. This delighted executives and shareholders alike -- but the good news represented only one side of the story.

This growth resulted in enormous gains in job creation. The downside to this success has been its accompanying problems: finding the right people in a tight job market, managing double-digit attrition levels, and keeping employees who can easily jump to another company engaged in their work.

Subsequently, a curious paradox emerged. India -- the world's second most populous country, with more than 48.7 million college graduates -- faced a talent crunch. To tackle this problem, most companies followed a conventional path: They created internal learning departments. To cater to this demand, an entire training industry took shape. An estimated 1 billion USD or more is spent by India, Inc. each year on various people-development interventions.

Human capital research indicates that in some leading IT companies, employees spend up to 5% of productive time in development interventions. Indian companies in the services industry are estimated to spend approximately 2% of their annual revenues on training and learning.

It's time for a reality check.

Despite enormous budgets for learning centers, executive education, assessment centers, and psychometric profiling, the return on the investment in training seemed to yield very little besides burnishing a company's r茅sum茅 or boosting its employer branding efforts. Very few companies can link this investment to improved profitability, productivity, or any other corporate performance measure. So in spite of the best intentions of management teams to create a beneficial learning climate, development programs aren't producing the desired results. What went wrong?

A defective approach

For starters, many Indian companies adopted a one-size-fits-all approach to creating learning solutions. Packaged workshops on topics such as communication skills and effective negotiation became the norm. This was perpetuated by "cults of personality" -- enthusiasm for trainers who possess an extraordinary ability to dazzle. They leave behind an admiring audience but ultimately instill very few improvements in relevant knowledge or skills of the participants. Inevitably, leaders realized that the impact of such sessions was minimal, and their lack of measurable results reduced these interventions to feel-good sessions.

In response, companies adapted constructs such as competency frameworks, performance benchmarking, job shadowing, and the like to measure the efficacy of developmental interventions. Those approaches are similar to the assembly-line method that manufacturing organizations employ in production. They follow a model that emphasizes getting all employees in a role to adopt a "right" set of behaviors, rather than pointing them toward attaining outcomes that will move their team or the organization forward. There are several problems associated with this approach:

• Requiring all employees to perform a rote set of behaviors isn't just impossible -- it's counterproductive. Yet far too many management approaches try to enforce standards by asking employees to follow a fixed set of actions in a given situation. Decades of studies in positive psychology indicate that people are far more likely to perform their best when managers define the right outcomes then let employees find the shortest and best path to those outcomes.
• Most competency frameworks are limited in their effectiveness because they don't link to measurable performance outcomes. These programs might start with good intentions; they often begin by defining a few strong core competencies. But over time, they become simply a list of behaviors that employees must follow. The end result is that performance suffers. (See "Good Competencies, Bad Competencies" in the "See Also" area on this page.)
• The ratings tend to be perception-based rather than performance-based. In our experience, most such frameworks were used largely for end-of-cycle assessment as part of a performance management review and not employee development. Some companies even went to the extent of providing a drop-down menu in their appraisal forms that would help the manager identify the competencies they wanted to develop in an employee from a predetermined list. This discourages employees from coming up with innovative ideas and encourages them to perform tasks at a rote or minimum level -- and nothing more. And the arcane language used in the frameworks made using a competency system difficult for managers.

Keeping in mind that many companies are invested in these approaches, what is the solution to getting the best out of learning and developmental programs? Here are two options to consider:

• Create learner accountability
• Use outcome-based assessments

Creating learner accountability

In most businesses today, corporate learning is "owned" by the organizational development or HR teams. And most often, needs assessment for training is done by managers. Managers determine a worker's "areas of weakness," then consult with employees on how to improve. This approach can be self-defeating and demoralizing for the workers, leaving them disinterested or uncommitted to the process.

If companies want development to be real and lasting, it's crucial to engage employees in the learning process rather than arbitrarily directing them to attend learning events. Employees should be given an opportunity to articulate their development needs because they know what skills and knowledge they need to acquire to improve their performance.

Managers must also be open to employees' learning style preferences, matching employees' developmental experiences with how they learn best -- whether that's on the job, in a classroom, or through one-on-one coaching. And when employees advocate for specific training programs for themselves, they should connect that program to a key business measure that they are responsible for achieving and present a case for why this program will help them achieve it.

After training occurs, the organizational development team or manager should create opportunities for employees to apply their new learning so the organization can reap the benefits of the investment. The organization should also build a framework for providing feedback to the employees on their performance following the training experience, which completes and reinforces the learning cycle.

A vice president of one of India's leading beverages company, a man who has "seen it all," now swears by the effectiveness of driving learning from the bottom up. "My team members are people who do their jobs well and know what they have to accomplish, so they tell me what they need to learn to fulfill their goals," he says. "I ensure that they get the learning opportunities [that] they feel will work best for them." He notes that this might mean facilitating a management development program for one employee, an assignment abroad for another, and structured mentoring for still another. "It's all about finding what works best for each individual," this executive says.

The more involved employees are in identifying their development needs, the more involved they feel in the learning process. This can create greater buy-in into existing frameworks. When employees become responsible for their learning, they may be able to see how improving their skills and knowledge can increase their contribution to the organization.

Using outcome-based assessments

From the perspective of both managerial action and employee engagement, it's important for companies to focus on the outcomes that need to be achieved -- for the employee and for the organization at large -- then let employees find their own best way to achieve those outcomes. This will encourage employees to think flexibly in the methods they employ -- and about the training and development they may need to achieve those outcomes. Defining the expected outcomes also provides an excellent framework to measure an employee's success using a "management by objectives" approach.

Much remains to be done to develop and engage talent in India. Human capital is still India's most valuable and least understood asset. But one thing seems crucial for every manager to ponder: how best to encourage each employee to define his or her own development needs.

This process will not be quick or easy. It will demand significant realignment of the role that the manager and learning teams will play in the employee's career. But the good news is, the companies that are able to make this transition will stand to gain the best of what each person has to offer.

"The steps in our work, and indeed that of most businesses, are so dynamic that there is no need to standardize them for team members," says the executive vice president of a leading IT services firm. "It binds them and tests their patience. The key to success from here on is in letting them find their own path." In this executive's experience, every person whom he believed knew the steps well and was encouraged to find his or her own way to do the work better delivered extra value to the organization -- whether it was in cost reduction, productivity, or innovation.

There can be no better endorsement of this approach. It remains to be seen, however, whether more leaders will follow it in the future.