This study examines the link between organisations’ propensity to train their employees and workforce motivation. It argues that both outcomes may be influenced by organizational efforts to transform the human capital of individual workers into an organizational resource that can be leveraged for competitive advantage. These efforts are embodied in the employment relationship the organization establishes with its workforce, understood as the balance between requirements—expectations regarding performance—and inducements, broadly defined as incentives that support employees in meeting those expectations.

The central conjecture advanced in the paper is that an employment relationship combining high requirements with high inducements fosters the emergence of human capital as an organizational resource. Such a relationship is expected to elicit employee engagement; and because quitting represents an extreme form of withdrawal, organizational efforts aimed at strengthening engagement should reduce the likelihood of withdrawal behaviours, including turnover. In parallel, this kind of employment relationship is also expected to sustain organisations’ propensity to train as a means of expanding the organization’s human capital.

These relationships are empirically investigated using a large cross-section of European establishments. The associations uncovered in the empirical analyses are consistent with the proposed framework and illustrate how the employment relationship interacts with other organizational choices, such as the degree of employee influence and the use of variable pay.

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Short bio > My background is in labor economics and behavioral economics. I have a PhD in Economics from the VU University of Amsterdam. Before joining Cedefop in 2010 I was associate professor at Utrecht University. I am currently an Expert and my current main line of research revolves around Industry 5.0, workplace learning, and focuses on the importance of human capital for the competitiveness of EU establishments.