Individual learning occurs when people get better at a particular activity. If you practice or study an area, you are likely to improve over time. Your performance – such as accuracy in completing an activity may increase, or the time it takes you to complete it may decline.
Such learning occurs continually within firms. New employees are likely to start off at a lower level of performance than more trained employees and gradually improve as they get used to the job.
While firms benefit as employees get more experience, a level of learning can also occur beyond this. Better routines and ways of operating can be developed, creating a level of learning that transcends any one employee. Employees may develop better ways of operating, and the operations, especially if codified into formal routines, can persist even if that employee were to leave the firm.
Organizational learning connects with the idea of the organizational learning curve. It is common in industries to see firms gradually improve over time – their performance after one year, five years, or several decades each being more efficient than previously. This captures organizational learning – new more efficient ways of operating are developed over time.
Individual learning vs organizational learning
A good way of identifying whether learning is occurring at the individual or firm-level is to consider whether the learning would reset if that employee were to leave the firm. If a new employee would start at the same level, resetting any gained progress, then the learning is more individual. If on the other hand, new ways of operating have been developed that persist past any individual employee, then the learning is more captured at the organizational level.
The importance of both individual and organizational level learning for firm success
Both individual and organizational learning are important for firms. Individual learning is important to move each individual down the learning curve. Training for example allows the employees to undertake their job more effectively than when they start. Beyond that though, for the firm to improve, it must also lock-in some organizational level learning. Simply training employees does not itself cause the firm to get better over time, with turnover resetting such individual learning each time an employee is replaced.