ELEMENT OF GOOD HRD :-NEED FOR REALIGNMENT

HRD has been defined as process by which the employees of an organization are helped, in a
continuous, planned way to acquire or sharpen capabilities required to perform various functions
associated with their present or expected future roles.

HRD also means competence building, commitment building and culture building.

ELEMENTS OF GOOD HRD

The elements of good HRD are:

1. Corporate-strategy- and business-linked HRD

2. Systems-engineered and systems-driven HRD
3. Appropriately structured and competently handled HRD
4. Appropriately rooted (in terms of culture and values) HRD

1.Corporate-strategy- and Business-linked HRD

HRD and HR practices should be linked to business goals and corporate strategy. As indicated by
Pfeffer (1998) irrespective of the business strategy human resources should be continuously aligned
with it. The organisation may use a variety of strategies. Some of these include:

• Change in technologies or introduction of new technologies

• Change in markets
• Acquisitions and mergers
• Internationalisation of business
• Addition of new products and services
• Cost-reduction efforts
• Quality-enhancement programmes
• Reorganisation or rationalisation of organisational structure including downsizing or upsizing.

2. Systems-engineered and Systems-driven HRD

HRD cannot be a series of ad hoc decisions and practices. It has to be based on a set of predictable
practices and measures. HRD literature identifies a number of systems and subsystems.

Pareek and Rao (1992) have developed the following systems framework of HRD which is useful for
an in-depth understanding of HRD.
Component Systems of HRD (Pareek and Rao's Framework)

Career system- Attracting and retaining the right kind of people can be ensured through manpower
planning, recruitment, career planning, and development activities. These constitute career
subsystems of the HRD system.

Work-planning system -Employees will effectively contribute to organisational goals if they are
helped to understand organisational needs, plan their work to meet these needs, and review their
work and make improvements. These activities can grouped under the work planning subsystem.

Development system- That the required competencies are available continuously for the present as
well as the future can be ensured through training counselling and other development mechanisms.
These constitute the development subsystem.

Self-renewal system -That the organisation as a whole, and its sub-units, are constantly kept
dynamic, responsive, as well as proactive, can be ensured through team building, survey feedback,
research and other related activities. These, and other activities, constitute the self-renewal system

Culture subsystem- A climate that sets norms, values and culture and ensures a high level of
motivation for employees constitutes culture building subsystems.

3. Appropriately Structured and Competently Handled HRD

HRD has a critical role in helping the organisation to achieve and maintain excellence. Good people
and a good culture make good organisations. Good people means competent, committed, learning
and team-oriented people.

HRD has the role of getting the right kind of people, creating a culture that nurtures and retains
talent, providing avenues for competence development at all levels, ensuring utilisation of talent,
and aiding in renewal of various productive human processes.

4.Appropriately Rooted HRD

The culture of an organisation plays an important role in ensuring the capability on an organisation
to achieve excellence. To gain competitive advantage through people, it is necessary to have human
processes and value systems that enable the organisation to be customer-focused, cost-conscious,
quality-driven, innovative, proactive, leading in technology, etc.
Uday Pareek and TV. Rao, at the time of setting up the first HRD department in India in 1975,
identified the following principles to design the HR system (Pareek and Rao 1998).

1. Enhance the enabling capabilities of people

2. Integrate the development of people with that of the organisation

3. Maximise individual growth and autonomy with increased responsibility

4. Decentralise through delegation and shared responsibility

5. Encourage participative decision making

6. Balance adaptability to change and changing the organisational Culture

7. Balance differentiation with integration

8. Balance specialisation with diffusion of the function

9. Build feedback and reinforcement mechanisms

10. Ensure continuous review and renewal

These principles are the roots of organisational culture.

The Balanced Score Card Approach

The name, the balanced score card, reflects the balance provided between short- and long-term
objectives, between financial and non- financial measures, between lagging and leading indicators,
and between internal and external perspectives.

The balanced score card approach of Kaplan and Norton (1992) attempts to measure organisational
performance from four distinct perspectives:

(i) Financial- The financial measures of performance indicate whether a company's strategy,
implementation and execution contribute to improvements in the bottom line. Financial
measures relate to profitability and can include operating income, return on capital
employed, etc.
(ii) Customer- On customer perspective, the measures include: customer satisfaction,
customer retention, new customer acquisition, customer profitability, and market and
accounted share in targeted segments.
(iii) Internal- The internal business process measures focus on the internal processes that
will have the greatest impact on customer satisfaction and achieve an organisation's
financial objectives. Measures of quality, response time, cost and cycle time, and new
product introductions are some examples.
(iv) innovation and learning- The fourth perspective of learning and growth focuses on the
infrastructure the organisation should build to create long-term growth and
improvement-people, systems and organisational procedures. Employee-based
measures include employee satisfaction, retention, training and skills
The Strategic HR Framework

The strategic HR framework (Ulrich and Lake, 1990) aims to leverage HR practices to build critical
organisational capa bilities that enable an organisation to achieve its goals. Three components in
aligning business strategy with HR practices are given below:

1. Business strategy What is the business strategy of our company? How do we win in the
marketplace with regard to customer-buying criteria, competition, government regulations, supplier
situation, etc.?

2. Organisational capabilities In order to implement the business strategy what are the critical
organisational capabilities we need to develop? (These can include speed, a competitive mindset,
innovation and quality.)

3. Human resource practices How should HR practices be designed and delivered to build these
organisational capabilities? How do we motivate and build our leadership capabilities, and also
empower people to contribute towards the development of organisational capabilities?

The Integrative Framework

The integrative framework has been offered recently by Yeung and Berman (1997) and builds on
earlier approaches. This framework identifies three paths through which HR practices can contribute
to business performance

1. By building organisational capabilities

2. By improving employee satisfaction

3. By shaping customer and shareholder satisfaction.

The integrative framework proposes three sets of measures:

1. Internal operational measures dealing with how well HR practices are designed and delivered

Some examples of these are meaning the efficiency, quality and speed of delivering HR practices and
managing the HR function as a whole. These measures include process measures, such as cycle time,
quality and cost of HR practices.

2 Internal strategic measures dealing with how effectively HR practices build desired organisational
capabilities and how effectively they increase employee satisfaction

Eastman Kodak has identified three critical organisational capabilities:

1.Leadership effectiveness (measured by 360-degree assessment

2. Workforce competencies (measured by percentage of employees with documented development

plans; number of hours devoted to development

3. Performance-based culture (measured through surveys and by performance tracking)

3. External strategic measures dealing with how well

HR practices increase customer and shareholder satisfaction. The measures include customer
satisfaction-enhancement programmes, executive education programmes to provide customer
satisfaction, incentive compensation plans, and so on.

Arthur Anderson's Human Capital Appraisal Approach

Arthur Anderson, have outlined an approach to assess the human capital in any corporation. The
approach is based on the belief that there are five stages in the management of human capital.

1. The clarification stage -The firm identifies and confirms the overall business direction. An appraisal
of this stage focuses on the business goals of the company, its culture and values, and, its
management philosophy and its impact on human capital.

2. The assessment stage-The firm calculates the cost of investment on the human capital, and the
value placed by employees on this investment.

3. The design stage -The firm creates programmes that can yield better returns on human capital.

4. The implementation stage- The firm puts the proposed changes into practice.

5. The monitoring stage -The firm checks the new system against strategy

The five areas of human capital are:

1. Recruitment, retention and retirement

2. Rewards and performance management

3. Career development, succession planning and training

4.Organisational structure

5. Human capital enablers

HRD Score Card: A Proposed Model

This book proposes an HRD Score Card to measure the HRD maturity level of an organisation. The
HRD maturity level depends on the following four factors:

1. HRD systems maturity

2. HRD competencies of the employees including the HR department

3.HRD culture

4 Business Linkages of HRD

The proposed model for the HRD Score Card draws heavily from the conceptualisation of HRD
stated earlier (Pareek and Rao, 1992). The model is based on the following assumptions:

1. Competent and motivated employees are needed to provide quality products and services at
competitive rates and in ways that enhance customer satisfaction.
2. Competencies and commitment can be developed through appropriate HRD mechanisms. In
an HRD-mature organisation, there will be well-developed HRD systems, and the maturity of
HRD systems can be measured through HRD audit
3. HRD competencies of the HRD department and the line managers play a significant role in
implementing the systems and processes in ways that can ensure employee satisfaction,
competence building and customer satisfaction linkages.
4. The HRD culture, values and processes, created by the HRD tools, and the HRD staff and their
styles, also play a crucial role in building sustainable competencies in the organisation. These
need to be measured and monitored.