ORGANIZATION AND EMPLOYEE EDUCATION

Organization Does Not Pay Tuition For Employee Education

Organization Does Not Pay Tuition For Employee Education

Summary

Few studies have examined the relationship between on-the-job productivity and graduate education using single-firm data. This paper studies the effect of graduate education on job performance using a unique micro-database consisting of military officers. Supervisor ratings and promotion probabilities are examined for professional and technical officers in the US Navy, a hierarchical organization with an internal labor market and up-or-out promotion policies. Single-stage estimates indicate that, among those eligible to be considered for promotion to grade 4, the up-or-out point, those with any graduate degree are more likely to be promoted. The effect is especially pronounced for those who receive a degree via the Navy's sponsored, full-time program. However, when instruments that are uncorrelated with promotion are used to predict graduate degree status, the results suggest that a sizeable portion of the relationship between graduate education and promotion is due to unobserved attributes that lead some people to attend (or to be selected for) graduate school and to be more promotable. The selection-corrected estimates of the promotion effect of graduate education are reduced by between 40 and 50%

Table of Content

Summary2

Table of Content3

Introduction4

Problem Statement5

Purpose5

Significance6

Methodological Approach6

Research Findings9

Conclusion16

References18

Introduction

For employers, tuition reimbursement is the key for increasing employee loyalty and obtaining the latest information about business and technology. For employees, it's a way to better serve their company, get a degree and prepare for the future. In the face of a queasy economy, many large organizations are holding strong to established tuition reimbursement policies, but others are changing them. So employees and job-seekers need to be savvy if they want to earn while they learn.

Many large corporations provide tuition reimbursement rather than lose trained employees and undergo the chancy and expensive hiring and re-training process. Some sources contend that a bad hire is three times as costly as a good hire. Companies with big budgets may pay up to $10,000 per year for tuition reimbursement, while smaller ones may pay $1,500 or less. Reimbursement policies vary according to industry and size of the organization. Plans may include repayment for books, parking and other expenses. Aside from the difficulty of determining whether current wages measure productivity, a key issue in the debate is whether the link between education and productivity is causal in nature. Empirical studies using direct measures of productivity have produced inconsistent results. Indeed, the direct link between bachelor's and master's degrees and on-the-job productivity has not been studied extensively. Given the growing emphasis in the work force on formal education, additional research on the direct effect of postsecondary education appears warranted. This study examines the specific relationship between graduate education and on-the-job performance for professional employees in a single large, hierarchical organization.

Problem Statement

What are the disadvantages for the employees when their organization does not pay tuition for employee education?

Purpose

The study examines the effect of graduate education on job success using a unique micro-database consisting of military ...