employee training and development: token of trust or sign of incompetence?

Training and development of employees has become a key practice in modern human resources management, as empirical data indicates positive correlations of training and development on employee motivation and productivity. This thesis proposes that training and development may not have a unilaterally positive effect on employee motivation and productivity, but could also give rise to adverse effects given the circumstances under which the worker is provided with training. We propose a rank-order tournament model in which the relationship of training, worker motivation and worker productivity is examined. By extending this model with a discretionary training decision for the supervising manager we find that the marginal effect of training can be ambiguous for both worker motivation and productivity.