unit 12

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Human ResourceDevelopment SystemUNIT 12 HUMAN RESOURCE

DEVELOPMENT SYSTEM

Objectives

After going through this unit, you should be able to :

l understand the concept of Human Resource Development (HRD) system;

l define HRD;

l Appreciate the need for HRD;

l list the various HRD systems;

l describe sub-systems of HRD; and

l discuss the changing boundaries of HRD.

Structure

12.1 Introduction

12.2 The Concept of Human Resource Development

12.3 The Need for HRD

12.4 HRD Functions

12.5 Human Resource Development Systems

12.6 Principles in Designing HRD Systems

12.7 Changing Boundaries of HRD

12.8 Summary

12.9 Self Assessment Questions

12.10 Further Readings

12.1 INTRODUCTION

Development of human resources is essential for any organisation that would like tobe dynamic and growth-oriented. Unlike other resources, human resources have ratherunlimited potential capabilities. The potential can be used only by creating a climatethat can continuously identify, bring to surface, nurture and use the capabilities ofpeople. Human Resrouce Development (HRD) system aims at creating such a climate.A number of HRD techniques have been developed in recent years to perform theabove task based on certain principles. This unit provides an understanding of theconcept of HRD system, related mechanisms and the changing boundaries of HRD.

12.2 THE CONCEPT OF HUMAN RESOURCEDEVELOPMENT

Increasingly, more importance is being given to “people” in organisations. This ismainly because organisations are realising that human assets are the most important ofall assets. This emphasis can also be partly attributed to the new emerging values ofhumanism and humanisation. Moreover, with the increased emphasis on creativity,and autonomy, which people are increasingly acquiring and enjoying in the society, theexpectations of people are fast changing. People cannot be taken for granted any more.

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Human ResourceDevelopment

In the past, people working in organisations were given attention merely inadministering the necessary conditions of work. The traditional concept of personnelmanagement was based on a very narrow view of human motivation. The basicassumption underlying that view was that human beings are primarily motivated bycomforts and salary, and necessary attention may be given to rationalise these, so thatpeople do not get dissatisfied. Most of the attention, therefore, was on administrationof salary and other benefits. It is now being increasingly realised that people workingin organisations are human beings. They have their own needs, motivation andexpectations, and that their contribution to the organisation is much more than that ofany other resource being used.

The concept of Human Resource System (HRS) assumes that human beings are agreat asset to an organisation. They are not merely necessary evils to be reckonedwith; in fact they can contribute a great deal to the achievement of organisationalgoals. This positive view of people working in the organisations as an asset withunlimited potential is the core of the concept of the human resource system.

Another underlying concept of the system is that investment in human beings isnecessary. Investment for increasing the resource is important, and the more anorganisation invests in its human resources, the greater the return from the investmentis likely to be. This realisation of the need for continuous investment, and thepossibility of substantial return, is an important concept of the human resourcesystem. There is also one more reason why investment in human resource is necessary.It is also being realised that organisations have an obligation to the society, that theyshould also contribute to the development of people, and operate with the new valuesof treating people as human beings, as well as contribute to this value of creatingtraditions and culture of respecting people as human beings.

Human resource development in the organisation context is a process by which theemployees of an organisation are helped, in a continuous and planned way to:

1) Acquire or sharpen capabilities required to perform various functions associatedwith their present or expected future roles;

2) Develop their general capabilities as individuals and discover and exploit theirown inner potentials for their own and/or organisational development purposes;and

3) Develop an organisational culture in which supervisor-subordinate relationships,teamwork and collaboration among sub-units are strong and contribute to theprofessional well being, motivation and pride of employees.

This definition of HRD is limited to the organisational context. In the context of astate or nation it would differ.

HRD is a process, not merely a set of mechanisms and techniques. The mechanismsand techniques such as performance appraisal, counselling, training, and organisationdevelopment interventions are used to initiate, facilitate, and promote this process in acontinuous way. Because the process has no limit, the mechanisms may need to beexamined periodically to see whether they are promoting or hindering the process.Organisations can facilitate this process of development by planning for it, byallocating organisational resources for the purpose, and by exemplifying an HRDphilosophy that values human beings and promotes their development.

12.3 THE NEED FOR HRD

HRD is needed by any organisation that wants to be dynamic and growth-oriented orto succeed in a fast-changing environment. Organisations can become dynamic andgrow only through the efforts and competencies of their human resources. Personnel

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Human ResourceDevelopment System

policies can keep the morale and motivation of employees high, but these efforts arenot enough to make the organisation dynamic and take it in new directions. Employeecapabilities must continuously be acquired, sharpened, and used. For this purpose, an“enabling” organisational culture is essential. When employees use their initiative,take risks, experiment, innovate, and make things happen, the organisation may besaid to have an “enabling” culture.

Even an organisation that has reached its limit of growth, needs to adapt to thechanging environment. No organisation is immune to the need for processes that helpto acquire and increase its capabilities for stability and renewal.

12.4 HRD FUNCTIONS

The core of the concept of HRS is that of development of human beings, or HRD. Theconcept of development should cover not only the individual but also other units in theorganisation. In addition to developing the individual, attention needs to be given tothe development of stronger dyads, i.e., two-person groups of the employee and hisboss. Such dyads are the basic units of working in the organisation. Besides severalgroups like committees, task groups, etc. also require attention. Development of suchgroups should be from the point of view of increasing collaboration amongst peopleworking in the organisation, thus making for an effective decision-making. Finally, theentire department and the entire organisation also should be covered by development.Their development would involve developing a climate conducive for theireffectiveness, developing self-renewing mechanisms in the organisations so that theyare able to adjust and proact, and developing relevant processes which contribute totheir effectiveness.

Hence, the goals of the HRD systems are to develop:

l The capabilities of each employee as an individual.

l The capabilities of each individual in relation to his or her present role.

l The capabilities of each employee in relation to his or her expected future role(s).

l The dyadic relationship between each employee and his or her supervisor.

l The team spirit and functioning in every organisational unit (department, group,etc.).

l Collaboration among different units of the organisation.

l The organisation’s overall health and self-renewing capabilities which, in turn,increase the enabling capabilities of individuals, dyads, teams, and the entireorganisation.

Such a concept of development will focus on the different units available in theorganisation for different purposes. The individual and his role are important units forsome purposes. For others, groups, departments and the entire organisation are morerelevant units. The concept of development should therefore cover all such possibleunits.

Development in this sense becomes a massive effort. While training may play themajor role in designing and monitoring development efforts in the organisation, otherparts of the organisation have to share in such an effort. In fact, the person, or thegroups for whom the efforts of development are made, is also a partner in this processof development. The four partners or agents of development can be identified as: (a)the person or role, (b) the immediate boss of the person, (c) the human resourcemanagement department, and (d) the organisation. The various foci and the fouragents of development are shown in Exhibit 1.

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Exhibit 1 The Development Dimensions of the Personnel Function

1) Analysing the Role

a) Task analysis

b) Key performance areas

c) Critical attributes

d) Job evaluation

2) Matching the Role and the Person

a) Selection/recruitment

b) Placement

c) Potential appraisal

d) Promotion

e) Career Development, career and succession planning

3) Developing the Persons in the Role

a) Performance appraisal

b) Feedback and counselling

c) Mentoring

d) Career development

e) Training

4) Developing the Role for the Person

a) Job rotation

b) Job enrichment/ redesigning

c) Role effectiveness and efficacy

5) Developing Equitability

a) Management of salary and amenities

b) Management of incentives and rewards

c) Standardising and administering procedures

6) Developing Self-renewing Capability

a) Communication

b) Organisation development

c) Organisational learning

d) Developing culture and climate

7) Coping with Collective Power

1) Analysing the Role

One of the main aspects of HRM is to analyse the role in terms of responsibilities orkey functions/ performance areas of the role, and the competencies required toperform the role effectively.

2) Matching the Role and the Person

Once the organisation is clear about the dimensions of the roles or the jobs, it tries toget the best people for these jobs. After people are recruited they are put in differentplaces. Recruitment and placement are important aspects of HRM. Placement isuseful for giving varied experiences to people being recruited. Another aspect ofmatching role and person is reflected in potential appraisal, finding out who haspotential to match the requirement of the job. Unit 10 deals with potential appraisal.Obviously, the next step is promotion of people by placing them in appropriate rolesfor which the organization is searching people. Promotion is only one part oflongterm and succession planning.

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3. Developing the Persons in the Role

Individuals develop not only through training, but, and in fact more through effectivesupervision, by helping them to understand their strengths so that they can leveragethem for better performance. Similarly, they are helped to find out in what they haveto be more effective in their jobs. Performance appraisal is not complete unless theperformance is properly reviewed and feedback is given, and people are helped tounderstand their strengths and weaknesses. We are discussing this aspect in Unit 14 inthis block, along with performance coaching or counseling. It is also important togive opportunity to young and bright persons to deal with their problems; such help isprovided generally by senior persons who are not necessarily related in job with theperson seeking help. This process of mentoring is also discussed in Unit 14 of thisblock. One important aspect relating to employee development, but unfortunately notadequately dealt with, is training. Unit 13, devoted to this important aspect in thisblock.

4) Developing the Role for the Person

Very little attention has been given to role, although job rotation is being practiced inmost of the organizations, and some organisations have also tried out job enrichmentbased on Herzberg’s concept of motivators. Unit 15 discusses development of roles,including role effectiveness and role efficacy. Traditionally HR function has givenattention to individual employees and teams have been generally neglected. It isevident now that most of the work is done by teams, and team effectiveness isimportant for all organizations. We have devoted sufficient attention to this aspect inUnit 15 of the block.

5) Developing Equitability

Satisfaction level of employees depends to a great extent on their perceived justicebeing done to them without any discretion, as reflected in practices like managementof compensation, rewards, and various amenities. People have high performance anddevelop competencies only if these are rewarded by the organisation. Reward does notmean financial reward only, many rewards may be non-financial also. Equitability canalso be developed by standardising administrative procedures, so that people do nothave any feelings that decisions are subjective.

6) Developing Self-renewing Capability

An organisation should be concerned not only with its growth, but also with its health.It needs to diagnose its problems from time-to-time and take steps to develop newcompetencies to cope with the various problems and challenges it would be facing.This can be done through action research that is concerned with development ofcompetencies through effective teams to diagnose the problems and initiate the processof collaborative work to deal with such problems. In Organisation Development (OD),the focus is on developing process competency to increase organisation effectiveness.OD aims at maintaining profiles of organisational health, monitoring organisationalhealth, assisting sick departments, helping interested units and departments inself-renewal, conflict management, creation of strong teams and so on, andestablishing processes that build a climate to promote enabling capabilities in theorganisation. OD in the earlier years, mainly in the 1960s (and partly in the 1970s)was team/group-based. Most of the OD interventions in organisations started withdeep process work beginning at the top level. OD has now widened considerably,it is no more confined to managers, it has been attempted with workers also.Attention has also been given to organisationaI learning, to develop the competenceof an organisation to analyse its experience and learn from it. This has beendiscussed in Unit 13. The third aspect of self-renewal is research orientation in

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HRD, which means consciously and continually collecting data in order to understandthe various issues, and designing on-going interventions based on such data. Forexample, data were collected. and used effectively in L&T on the working of theappraisal system including counselling. Such data can help to improve implementationof the appraisal system. HRD related research is important, it helps in analysing dataand information generated by the HRD sub-systems. HRD in L&T has alreadyestablished the orientation and several other organisations are in the process ofintroducing such “Research-orientation”. For example, data related to HRD are beingsystematically analysed in Eicher on a regular basis.

Communication and development of culture, two often neglected aspects, arediscussed in some details below:

Communication: Many organisations have paid attention to communication. Over theyears, some innovative and successful practices have been evolved in a number ofIndian organisations. For example, in BHEL (Bhopal Unit), Management EmployeesCommunication Meetings (MECOMs) have been effectively used. A MECOM as anopen forum, in which more than 700 persons participate. It has contributed to mutualsharing of information and concerns and better understanding between managementand employees. It has helped in effective implementation of decisions. Establishingthis system was not easy: a great deal of OD work had to be done prior to and duringthe evolution of MECOM.

In Tata Iron and Steel Company (TISCO) the Chairman keeps communication withhis employees by answering every letter that is addressed to him (some 80,000 in ayear) and has an open house at his residence between 7 and 9 every morning whereanyone can walk in and discuss personal or work-related problems. He also holdsdialogues with large groups, sometimes consisting of as many as 2500 persons. Avery systematic attention has been paid to communication in VSAT Industries(including regular business-related communication with the union) with great benefits

Communication ensures the flow of goal-oriented information and messages betweendifferent individuals and groups. in all directions, to help them perform their rolesmore effectively. Communication minimizes distortion of information (studies haveshown that in downward communication the information loss in terms of originalmessages is about 40 per cent by the time it reaches GMs. 60 per cent by the timeplant managers receive it. 70 per cent by the time general foremen get it, and theloss is as high as 80 per cent by the time it reaches the worker). Communication alsominimises hierarchical and psychological distance and maximises collaborationamongst individuals and teams in an organisation. More specifically, the following arethe objectives of communication in an organisation: information sharing, feedback,control, influence, problem solving, decision making, facilitating change, andfacilitating group development. There are mainly four directions of organizationalcommunication:

i) Downward communication: The following types of communications aresuggested along with some mechanisms:

a) Diffusion of routine information: This can be better done throughcirculars, bulletin boards and so on.

b) Diffusion of procedural information: This can be done by circulars,especially prepared notebooks and manuals.

c) Socialisation: As already suggested, socialisation of individuals in the valuesystem of the company should be done through induction booklets, specialprogrammes, and meetings. Sharing of information from higher levels withthe employees may also help employees to feel they are a part of theorganisation.

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d) Job-related information: This needs to be done by interpersonalcommunication between the job holder and his reporting officer.

e) Feedback on individual performance: The most effective way of thiscommunication is the appraisal review and coaching meetings held on thebasis of performance appraisal results.

(f) Employee development: Employee development is done through dyadiccommunication, based on trust between a manager and his employee,training programmes. and group meetings. A more effective communicationfor development is by the model set by senior managers.

ii) Upward communication: Upward communication is as necessary as downwardcommunication. There are several purposes for such communication. These aresuggested below, along with possible mechanisms of developing them.

a) Management control: Use of management information ensuring regularflow of information helps in achieving effective management control.

b) Feedback: Feedback from lower levels to higher levels is very useful. Suchfeedback can be provided by use of special questionnaires and interviews.Exit interviews conducted when people are leaving the organization are usedfor feedback on important aspects which the people at higher level mustknow.

c) Problem solving and involvement: The effective mechanism for solvingperson related problems of lower level management by the higher levels aregrievance procedures and periodical meetings called by the higher levelmanagement. Another good method which may help the people at lowerlevels in the organisation to participate in problem solving is a suggestionscheme, which however, needs to be well designed, properly executed, andperiodically reviewed to save it from becoming ritualistic. A small TaskForce may be constituted to prepare a scheme, and monitor it for sometime.Periodical meetings allowing all employees to express their feelings and givefeedback. to the management, to help them to take follow up action onproblems has been found to be useful in some organisations. VST Industrieshave introduced the scheme in a planned way (Vidyasagar , in NHN, 1989:150).

iii) Horizontal communication: Communication across business groups, regions andunits is very important to develop collaboration and reduce bureaucratisation.The following tasks can be achieved, with different mechanisms as suggestedbelow:

a) Experience sharing: Functional group meetings (like those of Finance,HRD, R&D, EDP people and others) from different business groups, alongwith other relevant people from the corporate departments may be helpful.

b) Problem solving: Participation of people from different business groups insolving common problems can be achieved by setting up a special TaskForce (group to work out details and, in many cases, to implement actionplans) and a Problem Clinic (group to diagnose problems and suggestalternative solutions, using special techniques of diagnosis).

c) Coordination: Standing committees are meant to make coordination moreeffective.

iv) External communication: Communication with external agencies, like currentand potential customers, government agencies. competitors and potentialcollaborators, resource providers (banks and financial institutions) is veryimportant, but often gets little attention. The following purposes can be served bythe suggested mechanisms:

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a) Image building: Annual reports, balance sheets, brochures. advertisementsand the like are important mechanisms, deserving detailed planning in termsof form and content. Participation of Company Executives in professionalbodies like Management Associations, Chambers of Commerce Sub-Committees also help significantly.

b) Credibility building: Balance Sheet and correspondence (prompt,purposive, and precise) contribute to the credibility of the company.

c) Influencing: An organisation should not shy away from its role ofinfluencing policies and decisions in the concerned industries and otherforums. Well-prepared dialogue by the top management and participation inconferences and forums must receive the attention they deserve. One generalweakness of Indian companies is the lack of expertise and seriousness ininfluencing external agencies. One of the most important roles of CorporateManagement is to develop an aggressive (in the positive sense) posture andcompetence to deal with critical issues. This ability has been amplydemonstrated by many organisations.

Organisational Culture: Culture has remained the most neglected part of HRD, buthas attracted some attention in the last few years. Interest in culture has been arousedby the examples of Japanese successes. Some organisations in India have adoptedJapanese practices, notable among them being Maruti Udyog and Sundaram Clayton.Maruti Udyog adopted some practices because of the positive pressure of Suzuki.These practices are a 7 hours 45 minutes shift, zero-defect production, cost cutting,and discipline. This helped in the development of a new organisational culture.

Organisational culture can be defined as cumulative ways of thinking and behavingwhich the values, attitudes, rituals, and sanctions in an organisation shape.Operationally, development of culture would involve developing a strong corporateidentity, development of important values, building healthy traditions and developingconsistent management practices. Cultural systems are concerned with development ofappropriate organisational culture. Creating conducing organisational climate.Improving communication and evolving effective reward systems. It is to be noted thatwhatever is rewarded in an organisation gets reinforced. Therefore, a reward system(including incentives) both for individuals and teams deserves careful attention.Rewards can facilitate and promote good work but if not designed properly, can do agreat deal of harm to the organisation. Systematic attention has been given to thereward systems in the construction group of L&T, where a need-based system wasevolved.

Organisational climate is another concept close to culture that has received attention inrecent years. Different approaches have been adopted to create a climate conducive towork. An instrument for assessing appropriate HRD climate has been developed andused in many organisations and some instruments to measure ethos and, atmosphereare available. Development of appropriate culture has attracted a great deal ofacademic attention in the past few years. Some companies have paid deliberateattention to developing an appropriate culture (viz. C-Dot, Modi Xerox, SundaramClayton, Eicher). Some have made attempts to improve their cultures (viz. Procterand Gamble, Ballarpur Industries Ltd., Indian Farmers’ Fertiliser Cooperative(IFFCO).

Development of culture takes a long time and involves complex processes. Thefollowing aspects deserve attention in this regard.

a) Strong Corporate Identity: The sense of identity with the organisation developswhen the employees have a sense of belonging, and they feel proud to belong tothe organisation. Identity develops as a result of interaction of the employeeswith the organisation. The following action ideas help in developing strongcorporate identity.

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i) Developing an attractive booklet, giving basic information about thecompany. Indo-Burma Petroleum Company (IBP Co.) and several otherorganisations have developed good induction material.

ii) Films on success experiences in organisations, if shown on specialoccasions, may help build corporate identity. “Manthan” directed by ShyamBenegal for NDDB is a good example of such a film. By invitingsuggestions from the key divisions of an organisation, the HRD Departmentcan prepare a list of such video films to be developed.

iii) Company newsletters giving information about business development andsignificant information about the employees are being published by manyorganisations.

iv) Mobility of people (corporate field, division-unit, inter-division) has beenused among other things for the development of organisational identity.

b) Developing Important Values: Values related to organisationaI culture, such asvalues of excellence and human consideration do not develop through meredidactic exercises like lectures, talks, or writing, but by demonstrating thesevalues in action by the key role holders. The following practices have helped thedevelopment of relevant values.

i) Survey feedback of values, in particular, feedback on the gap between“espoused values” and “values in action” as reflected in the managementpractices. Seminars can be held at different levels to deal with the datagenerated on these gaps.

ii) Special value-orientation programmes in developing appropriate values, inwhich, instead of teaching what values are good, the programme helpsparticipants to examine the relevance and functionality of certain values andopenly questions and discusses the desirable value system and the one thatthey see in action. Such programs on value clarification help people tointernalise values by stating their own values without hesitation, byexamining openly and frankly the desirability of a different value system,and also by developing specific ideas of practicing such values in the workplace.

iii) Examining the various operating systems in the organisation. As forexample, a content analysis of the budgetary, MIS, appraisal, promotion,career planning and rewards system can indicate what values they reinforce.The concerned groups can then examine the data for insight anddevelopment of appropriate action plan(s).

iv) Special OD intervention in developing collaboration and concern forexcellence may help in anchoring appropriate value orientation through suchexercises as team building, achievement and extension motivationprogrammes and so on.

c) Building Healthy Traditions and Practices: Traditions in an organisation arebuilt on the basis of important rituals. Rituals or celebrations associated with thetransition of people from one state to another are important avenues foridentifying a culture. In Indian society for example, about 16 rituals areassociated with transition from one phase of life to another. These rituals docontribute to the development of social, and family traditions. Attention shouldbe given to the identification of functional rituals within the organisation. Someinteresting practices have already been found useful in some companies.

i) Induction programme for new entrants help the employees to develop a senseof belonging. Detailed planning is needed to help them develop pride and joyin becoming a member of the company that will reinforce the sense ofbelonging and identification with the company. Sundaram Clayton’s“acculturation workshops” for new entrants are very well designed andexemplary.

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ii) Promotions need to be treated as an important event of transition of a personfrom one stage to another. Instead of only written communication ofpromotion, a face-to-face conversation with the concerned chief may beuseful, before it is communicated in writing; the information of promotion isshared with the concerned employee along with its implications.

iii) Rituals associated with Old age and retirement of people should also receivedue attention from the HRD wing. The Malayala Manorama group hasevolved some rituals associated with an employee’s death and old age. Forexample, “senior members” (employees having completed certain years ofservice) are taken free on a Bharat darshan trip along with their spouses.(“senior couples”’).

iv) The exceptional behaviour of an employee in helping the organisation or insolving different problems and so on, must be recognised. rewarded andmade visible. This may help to develop the tradition of indulging in suchbehaviour more frequently. People find reasons to repeat a behaviour that isrewarded, and thereby, they are reinforced by the organisation. A behaviourrepeated by one is internalised over a period of time, and these internalisematerials in the collective sense from a sub-culture and eventually integratewith the culture in the organisation.

v) Celebrations of incidents significant to individual employees and theorganisation are important. Some interesting experiences in someorganisations have shown that these may help not only to develop a strongorganisational identification and thereby contribute to culture, but may alsomake organisations more akin to the Indian culture in a broader sense.Following are two such examples. Petrofils, a successful and fast expandingcompany in the joint sector has been using rituals involving the topmanagement, the employees, and their families. For instance, recordbreaking performances are celebrated by rewarding everyone in thecompany, so as to symbolise the contribution of all the employees.Transition from one productive year to the next is marked by a committee ofemployees selecting a gift for everyone. For example, in 1985 a new recordfor sales was set when a profit of Rs.36 crores on an investment of Rs. 67crores was made. That year everyone took home a mixer-grinder. A numberof such rituals are being designed, and care is taken to ensure that theyremain meaningful and do not degenerate into mechanistic rituals.Another interesting ritual is the celebration of birthdays in the Board roomfor all employees, from the Chairman to the Khalasi (helper), to strengthenthe feeling of the company being a family. Everyone is given a gift worthRs.51 and the item for the year is selected by a group of about 40employees.

Steel Tubes of India (STI) has evolved a governance-system suited to theIndian culture, consisting of joint committees (representatives ofmanagement and workers, elected by the entire work force) and Jan Sabha(representing elected members, departmental councils, best workers awardedduring the past seven years, employees with over 20 years service, seniormanagers, departmental heads and directors of the company).

7) Coping with Collective Power

Traditionally industrial relations have been dealt in the framework of Industrial andlabour laws. Unions and associations of employees use collective power to bargainwith the organizations. Although this aspect is undergoing a lot of change, it is stillvery important, and a whole block has been devoted to various aspects of workers andrelated issues.

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Activity A

Consider the development dimensions in above section and describe how do theseHRD functions are carried out in your organisation.

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12.5 HUMAN RESOURCE DEVELOPMENT SYSTEM

The combination of the four foci of HRD ( Individuals, Dyades, Collectives,and Organisation) with four agents of HRD (Self, Immediate boss, HR department,and Organisations) gives the HRD systems. In matrix representing the HRDsystem is given in Exhibit 2 . As will be seen, the elements in the cells are the variousdevelopment aspects discussed above. HRD system caters to all human resource unitsof the organizations, and all concerned are involved in runningthe system.

Exhibit 2 : Matrix of Human Resource Development *

Agents of the HRD Process Foci of HRD

Person Immediate Personnel or Organisation(Self) boss HRD Dept.

The Individual

Goal setting 1a, 3a 1a, 3a 3a, 3e 1a

Performance analysis 3a, 3b 3b 3e —

Performance improvement 3a 3b 3e 4a, 5b

Work humanisation 1a 1a 4b 4b, 4c

Education — — 3a 4a

Coping — 3b — 4c

Advancement — 3b 3d, 1b, 1c, 3e 1c, 2b, 2c, 3c,

The Dyad (employee-boss) 3d, 4a

Trust 3b 3b 6 6

Mutuality 3b 3b 6 6

Helping 3b 3b 6 6

The Collectives (teams)

Effectiveness 6, 7 6, 7

Collaboration 6, 7 6, 7

Department/Organisation

Climate 5a, 5b, 5c

Self-renewing 7

Process 6 6

* The numbers in the cells refer to the various development dimensions given inExhibit 1

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Activity B

Study the above exhibit and develop a similar matrix for your organisation showinglinkages of various development dimensions.

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12.6 PRINCIPLES IN DESIGNING HRD SYESTEM

Of course, HRD systems must be designed differently for different organisations.Although the basic principles may remain the same, the specific components, theirrelationships, the processes involved in each, the phasing, and so on, may differ fromorganisation to organisation.

Designing in integrated HRD systems requires a thorough understanding of theprinciples and models of human resource development and a diagnosis of theorganisation culture, existing HRD practices in the organisation, employee perceptionsof these practices, and the developmental climate within the organisation. Thefollowing principles related to focus, structure, and functioning should be consideredwhen designing integrated HRD systems.

Focus of the System

a) Focus on enabling capabilities: The primary purpose of HRD is to help theorganisation to increase its “enabling” capabilities. These include development ofhuman resources, development of organisational health, improvement of problemsolving capabilities, development of diagnostic ability (so that problems can belocated quickly and effectively), and increased employee productivity andcommitment.

b) Balancing adaptation and change in the organisational culture: Although HRDsystems are designed to suit the organisational culture, the role of HRD may be tomodify that culture to increase the effectiveness of the organisation. There always hasbeen a controversy between those who believe that HRD should be designed to suit theculture and those who believe that HRD should be able to change the culture. Bothpositions seem to be extreme. HRD should take the organisation forward, and this canbe done only if its design anticipates change and evolution in the future.

c) Attention to contextual factors: What is to be included in the HRD systems, howis it to be sub-divided, what designations and titles will be used, and similar issuesshould be settled after consideration of the various contextual factors of theorganisation—its culture and tradition, size, technology, levels of existing skills,available support for the function, availability of outside help and so on.

d) Building linkages with other functions: Human resource development systemsshould be designed to strengthen other functions in the company such as long-rangecorporate planning, budgeting and finance, marketing, production, and other similarfunctions. These linkages are extremely important.

e) Balancing specialisation and diffusion of the function: Although HRD involvesspecialised functions, line people should be involved in various aspects of HRD.Action is the sole responsibility of the line people, and HRD should strengthen theirroles.

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Structure of the System

a) Establishing the identity of HRD: It is important that the distinct identity ofHRD be recognised. The person in charge of HRD should have responsibility for thisfunction exclusively and should not be expected to do it in addition to any otherfunction. Multiple responsibilites produce several kinds of conflict. This personshould report directly to the chief executive of the organisation.

b) Ensuring respectability for the function: In many companies, the personnelfunction does not have much credibility because it is not perceived as a major functionwithin the organisation. It is necessary that HRD be instituted at a very high level inthe organisation and that the head of the HRD department be classified as a seniormanager. Both the credibility and usefulness of HRD depend on this.

c) Balancing differentiation and integration: The human resource developmentfunction often includes personnel administration, human resource development andtraining, and industrial relations. These three functions have distinct identities andrequirements and should be differentiated witin the HRD department. One person maybe responsible for OD, another for training, another for potential appraisal andassessment, etc. At the same time, these roles should be integrated through a variety ofmechanisms. For example, inputs from manpower planning should be available to linemanagers for career planning and HRD units for potential appraisal and development.Data from recruitment should be fed into the human resources information system. Ifsalary administration and placement are handled separately, they should be linked toperformance appraisals. Differentiation as well as integration mechanisms areessential if the HRD system is to function well.

d) Establishing linkage mechanisms: HRD has linkages with outside systems aswell as with internal sub-systems. It is wise to establish specific linkages to be used tomanage the system. Standing committees for various purposes (with membership fromvarious parts and levels of the organisation), task groups, and ad hoc committees forspecific tasks are useful mechanisms.

e) Developing monitoring mechanisms: The HRD function is always evolving. Ittherefore requires systematic monitoring to review the progress and level ofeffectiveness of the system and to plan for its next step. A thorough annual reviewreappraisal every three years will be invaluable in reviewing and planning the system.It may be helpful to include persons from other functions in the organisation in theHRD assessment effort.

Functioning of the System

a) Building feedback and reinforcing mechanisms: The various sub-systems withinHRD should provide feedback to one another. Systematic feedback loops should bedesigned for this purpose. For example, performance and potential appraisals providenecessary information for training and OD, and OD programmes provide informationfor work redesign.

b) Balancing quantitative and qualitative decisions: Many aspects of HRD, such asperformance and potential appraisals, are difficult to quantify. Of course attemptsshould be made to quantify many variables and to design computer storage of varioustypes of information, but qualitative and insightful decisions are also necessary anddesirable. For example, in considering people for promotions, quantitative data arenecessary inputs, but other factors must also be taken into consideration. Thus abalance between the mechanical and the human factors is necessary.

c) Balancing internal and external expertise: A human resource developmentsystem requires the development of internal expertise and resources, specifically incontent areas that are used frequently within the organisation. For expertise that is

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required only occasionally, the use of external resources or consultants may be themost feasible. It is necessary to plan for an economical and workable balance betweenthe two. It is preferable to use internal personnel to conduct training; however, anorganisation that uses only in-house expertise may not benefit from new thinking inthe field. On the other hand, a company that relies solely on external HRD help doesnot develop the internal resources that are necessary for effective functioning.

d) Planning for the evolution of HRD: Various aspects of HRD can be introducedinto the organisation in stages, depending on its needs, size and level of sophistication.Some aspects may require a great deal of preparation. Rushing the introduction of anaspect of HRD may limit its effectiveness. Each stage should be planned carefully,with sequenced phases built one over the other. This may include:

i) Geographical phasing introducing the system in a few parts of the organisationand slowly spreading it to other parts. This may be necessary in a large or widelylocated organisation.

ii) Vertical phasing introducing the system at one or a few levels in the organisationand expanding up or down gradually.

iii) Functional phasing introducing one function or sub-system, followed by otherfunctions. For example, introducing job specifications (identification of criticalattributes of jobs) before introducing a complete potential-appraisal system.

iv) Sophistication phasing introducing simple forms of sub-systems, followed aftersome time by more sophisticated forms.

12.7 CHANGING BOUNDARIES OF HRD

Over time there have been many changes in the HR function. Slowly the termPersonnel Function has been replaced with the term Human Resource or HR Function,and Personnel departments and Personnel Managers have been re-designated asHuman Resource Departments or Human Resources Managers. The status of the HRfunction got very much uplifted across the world, and particularly in India. Lifting upthe HR function to the Director level in the corporations, and representation of HRDirectors on the Board are two significant indicators of the recognition of people as aresource and partners in business. This is what was envisaged in some ways when thefirst HRD department was designed in Larsen & Toubro in mid-seventies. The HRfunction also got expanded to include some new initiatives in a few organisations.Some of the new roles the HR functionaries started performing in the last decadeinclude the following. Most of these relate to human resource development.

1) Reorganisation and restructuring, including downsizing, rightsizing, flatteningthe structure, outsourcing etc.;

2) Managing mergers and acquisitions by changing HR policies, realigning andredrafting HR policies and practices;

3) Initiating and managing quality initiatives, including quality circles, smallgroup activities, ISO certification etc.;

4) Conducting a variety of surveys, including climate surveys, employeesatisfaction surveys, internal customer satisfaction surveys, and bench markingwith competitors and others globally;

5) Restructuring salary and reward systems through compensation surveys,introduction of stock options, performance-linked pay or pay-for-performance,compensation planning etc.;

6) Enhanced emphasis on recruitment or placement. With the recognition of theneed for competent people, the new economy industries like the IT, Telecom,Financial services, Insurance, BPO organisations (call centres) have furtherincreased their focus on recruitment and outsourcing of recruitment;

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7) Introducing new technologies of training, including e-learning, on-lineeducation, distance learning, off campus learning, web based learning and use ofother technologies for learning;

8) Starting of Corporate Universities and in-house training institutions andacademies to encourage continuous education programmes and competencybuilding;

9) Introduction of 360 Degree Feedback, including using it for leadershipdevelopment, evolving leadership models that fit into the company culture andtake care of the unique needs of the company, and exploring it as an individual aswell as performance development tools, experimenting with 360 degree feedbackby linking with reward systems;

10) Use of Assessment Centres or Development centres for identifying, developingand promoting talented individuals, starting of fast track systems, identificationof high potential employees and designing retention strategies;

11) Increased emphasis on mentoring and coaching;

12) Increased emphasis on training of all employees, particularly operators,workmen etc., through multi-skilling, etc.,

13) Emphasis on leadership and leadership development at all levels; and

14) Participation in strategic thinking, business planning, mergers, acquisitions etc.

15) Improving quality of work life. This has been has been brought into focus bythe IT industry where the environment becomes a critical factor in effectivefunctioning of knowledge workers.

All these new developments of the last decade are in the direction of making HR,morespecifically HRD, a strategic business partner. Recently HR team from one companyin India suggested seven ways of making HR a business partner (See Exhibit 3).

Exhibit 3: Making HR a Business Partner

1) Train HR people in business to get a holistic business perspectives

2) Get involved in larger organisational issues and handle coordination at that level

3) Align HR strategies with business strategies

4) Keep in mind business strategy while designing training programmes

5) Convene business strategies forums, hold strategic discuss meetings, and preparediscussion paper

6) Initiate process of discussion on strategy formulation from the front-line upward

7) Help in searching state of the art practices to discuss with the business team.

Source: HR Group of Turner-Morrsion, July, 1998.

These new functions fall into one or more of the categories of the HRD system,shown in Exhibit 2. The classification suggested earlier is only indicative.Organisation can structure their function the way that suits their requirements. Theprinciples remain the same. The boundary gets extended to participation in strategyand business planning (including planning of mergers, acquisitions, expansions,consolidations etc.). The HRD systems model is broad enough to include the new rolesof HR managers.

Researches have shown that effective firms adopt some of the following HRpractices:

l Financial incentives for excellent performance

l Practices that motivate employee effort and capture the benefits of know-how and skill

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l Rigorous selection and selectivity in recruiting

l Higher than average wages

l Plans of employee share of ownership

l Extensive information sharing

l Decentralisation of decision-making and empowerment

l Self-managing teams

l High investment in training and skill development

l Having people do multiple jobs and job-rotation

l Elimination of status symbols

l A more compressed distribution of salaries across and within levels

l Promotion from within

l Long-term perspective

l Measurement of HR practices and policy implementation

12.8 SUMMARY

Today every successful organisation pays adequate attention to their HRD functions.To obtain full benefits of HRD, it should be introduced as a system and should beupdated to keep track with the changing boundaries. If implemented, properly,integrated HRD systems can contribute significantly to positive cultural changes,increased productivity and excellence in organisation.

12.9 SELF ASSESSMENT QUESTIONS

1) Describe the concept of HRD and its need in present industrial scenario.

2) Write short notes on:

a) Communiction

b) Developing equitability

c) Coping with collective power

3) Discuss how organisational culture can be developed.

4) What are the principles in designing a HRD system?

5) Write an overview of the changing boundaries of HRD.

12.10 FURTHER READINGS

Pareek, V. and Rao, T.V. (1981). Designing and Managing Human ResourceSystems, Oxford & IBH Publishing Co., New Delhi.

Rao, T.V. and Pereira, D.F. (1986). Recent Experiences in Human ResourceDevelopment, Oxford & IBH Publishing Co., New Delhi.

Ulrich, D. (1997). Human Resource Champions , Harvard Business School Press.

Kaplan, R. (1992). “Balance Score Card”, Harvard Business Review,January-February.

Pfeffer (1994). Competitive Advantage through People, Harvard Business School Press.

Tripathi, P.C. (2003). Human Resource Development, Sultan Chand & Sons,New Delhi.

unit 12

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