[3] Human Resource Department (HRD)
CONTENTS
1. Human Resource Development (H.R.D.)
2. Human Resources Accounting and Audit
3. Knowledge Management
4. Human Resource Information System (HRIS)
5. International Human Resource Management (IHRM)
[4] Human Resource Department (HRD)
CHAPTER –1
HUMAN RESOURCE DEVELOPMENT
Concept & Definition
Human resource development is the key to enhancing and effective utilisation of
intellectual, technological and entrepreneurial skills of human resources. The concept of
Human Resource Development (HRD) is comparatively of recent origin and is now used at
both macro and micro levels. At the macro level, HRD is described as the core of all
developmental efforts in the sense of improvement of quality of life of people of a nation.
According to T.V. Rao, “HRD is a continuous planned process by which employees
are helped to :
(a) acquire or sharpen capabilities required to perform various functions associated with their
present or expected future roles;
(b) develop their general capabilities as individuals and discover and exploit their own inner
potentials for their own and organisational purpose; and
(c) develop [an organisational culture in which superior-subordinate relationships, team work
and collaboration among sub-units are strong and contribute to the professional well-
being, motivation of employees.
According to Ishwar Dayal, HRD involves:
(a) ways to better adjust the individual to his job and the environment,
(b) the greatest involvement of an employee in various aspects of his work; and
(c) the greatest concern for enhancing the capabilities of the individual.
Human Resource Development is an important part of human resource management
that specifically deals with training and development of the employees in the Organization.
Human resource development includes training a person after he or she is first hired,
providing opportunities to learn new skills, distributing resources that are beneficial for the
employee's tasks, and any other developmental activities.
Development of human resources is essential for any organisation that would like to
be dynamic and growth-oriented. Unlike other resources, human resources have rather
unlimited potential capabilities. The potential can be used only by creating a climate that can
continuously identify, bring to surface, nurture and use the capabilities of people
Human Resource Development (HRD) system aims at creating such a climate. A
number of HRD techniques have been developed in recent years to perform the above task
based on certain principles. This unit provides an understanding of the concept of HRD
system, related mechanisms and the changing boundaries of HRD.
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The concept of HRD was first introduced by Leonard Nadler in 1969 in a
conference in US. Human Resource Development (HRD) is the framework for helping
employees develop their personal and organizational skills, knowledge, and abilities. Human
Resource Development includes such opportunities as employee training, employee career
development, performance management and development, coaching, mentoring, succession
planning, key employee identification, tuition assistance, and organization development.
The focus of all aspects of Human Resource Development is on developing the most
superior workforce so that the organization and individual employees can accomplish their
work goals in service to customers
According to Leonard Nadler, "Human resource development is a series of organised
activities, conducted within a specialised time and designed to produce behavioural
changes."
According to M.M. Khan, "Human resource development is the across of increasing
knowledge, capabilities and positive work attitudes of all people working at all levels in a
business undertaking."
Human Resource Development (HRD) is the framework for helping employees
develops their personal and organizational skills, knowledge, and abilities.
Features of HRD
Main features of human resource development are as follows:
1. It is a planned and systematic approach to the development of the people
2. It is a continuous process of developing the competencies, motivating them to continuous
improvement in their efficiencies
3. It is based on the belief system that the development of an individual is a never-ending
process
4. It is an interdisciplinary concept and involves confluence of idea from many sciences.
5. It is concerned with improving the skills, attitudes and behaviors of employees to benefit
both the individual as well as organization.
Importance of HRD
The importance of human resources development can be understood through following
points.
1) Develops Hidden Potential - enhances the capabilities of people by exploring their
hidden potentials and shaping them to achieve organizational goals.
2) Improves the Communication System - improves the communication system to open
the channel of communication so that everyone understands the other person in a better
way and there is no chance of ambiguity.
3) Enhances Employee Morale - enhances the employee morale as well as develops the
same of belongingness as proper rewards are being given to the star performer.
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4) Improves Coordination and Cooperation leads to cohesive groups and terms
5) Achieving Organizational Goals - ultimately leads to overall growth and development of
the employee through the above mentioned techniques.
6) Brings Innovation:
It creates trust and openness among employees and develops analytical and rational skills
among employees which help them in becoming more innovative, proactive and risk
taking.
7) Helps in Bringing Change makes employees ready to change and undergo
transformation and relearn after unlearning what they had already learnt.
Functions of HRD
1. Training and Development:
Training and Development focus on changing or improving the knowledge, skills and
attitudes of individuals. Training typically involves providing employees the knowledge
and skills needed to do a particular task or job. Developmental activities have a longer
term focus on preparing for future work responsibilities while also increasing the
capacities of employees to [perform their current jobs.
2. Employee Orientation:
When a new employee enters the organization, usually in the form of employee
orientation and skills training. Employee orientation is the process by which new
employees learn important organizational values and norms, establishing working
relationships, and learn how to function within the jobs. The HRD staff and the hiring
supervisor generally share the responsibility for designing the orientation process,
conducting general orientation sessions and beginning the initial skills training.
3. Coaching:
In the coaching process, individuals are encouraged to accept responsibility for their
actions, to address any work related problems and to achieve and sustain superior levels of
performance. Coaching involves treating employees as partners in achieving both personal
and organizational goals.
4. Counselling:
Techniques are used to help employees deal with personal problems that may interfere
with the achievement of these goals. Counselling programs may address such issues as
substance abuse, stress management, smoking cessation, or fitness, nutrition, and weight
control.
5. Management Development Program:
To ensure that managers and supervisors have the knowledge and skills necessary to be
effective in their positions. These programs may include supervisory training, job rotation,
seminars or college and university courses.
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6. Organization Development:
It is defined as the process of enhancing the effectiveness of an organization and the well
being of its members through planned interventions that apply behavioral science
concepts. The role of the HRD professional involved in an OD intervention is generally to
function as a change agent. Facilitating change often requires consulting with and
advising line managers on strategies that can be used to effect the desired change.
7. Career Development:
It is “ongoing process by which individual‟s progress through a series of stages, each of
which is characterized by a relatively unique set of issues, themes and tasks.” Career
development involves two distinct processes; career planning and career management.
Career planning involves activities performed by an individual, often with the assistance
of counsellors and others, to assess his or her skills and abilities in order to establish a
realistic career plan. Career management involves taking the necessary steps to achieve
that plan, and generally focuses more on what an organization can do to foster employee
career development.
Human Resource Development Process
Major adjustments in the external and internal environments necessitate corporate change.
Human Resource Development Process
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One the need for change is recognized, the process of determining training and
development needs begins. Essentially, two questions must be asked: “What are our HRD
needs?” and “What do we want to accomplish through our HRD efforts?” The objectives
might be quite narrow if limited to the supervisory ability of a manager. Or they might be
broad enough to include improving the management skills of all supervisors.
Step-1 Determining Human Resources Development Needs
Three types of analysis are required in order to determine an organization‟s HRD
needs: organization analysis, task analysis, and person analysis.
(a) Organization analysis examines the entire firm to determine where training and
development should be conducted. The firm‟s strategic goals and plans should be studied
along with the results of human resource planning.
(b) In conducting task analysis, two primary factors should be determined: importance and
proficiency. Importance relates to the relevance of specific tasks and behaviors in a
particular job and the frequency with which they are performed. Proficiency is the
employees‟ competence in performing these tasks. Job descriptions, performance
appraisals, and interviews or surveys of supervisors and job incumbents should provide
the data needed.
(c) Person analysis, which focuses on the individual employee. The first step in a person
analysis is to compare employee performance with established standards. If the person‟s
work is acceptable, training may not be needed. However, if the employee‟s performance
is below standard, further investigation will be needed to identify the specific knowledge
and skills required for satisfactory job performance.
Step-2 Establishing Human Resource Development Objectives
Clear and concise objectives must be formulated for HRD. Without them, designing
meaningful HRD programs would not be possible.
Reorientation
While orientation programs are typically conducted for new employees, programs
designed for employees who have been on the payroll for a longer period may also be
needed. As organizations change, different management styles may develop, communication
methods may be altered, and the structure of the organization itself may, and typically does,
take on a new form. Even the corporate culture may evolve into something different over
time. Any of these changes may warrant reorientation. Without it, employees may find
themselves in organizations that they do not even recognize.
Step- 3 Selecting Human Resource Development Methods
HDR methods are used both on and off the job. Often it is not feasible to learn while
doing. Thus, although a large portion of training and development takes place on the job,
many HRD programs occur away from the work setting.
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A firm‟s future lies primarily in the hands of its management. This group performs
certain functions that are essential to the organization‟s survival and prosperity. Managers
must make the right choice in most of the numerous decisions they make. Otherwise, the firm
will not grow and may even fail. For these reasons, it is imperative managers keep up with
the latest developments in their respective fields and-at the same time-manage an ever
changing workforce operating in a dynamic environment. Thus, many organizations
emphasize training and development programs for managers. Management development
consists of all learning experiences resulting in an upgrading of skills and knowledge
required in current and future managerial positions. While critical knowledge and skills are
provided by organizations in development programs, the process also requires provided by
organizations in development programs, the process also requires personal commitment of
the individual manager. In fact, taking responsibility for one‟s own development may be the
most important aspect.
First-line supervisors, middle managers, and executives may all be expected to
participate in management development programs. These programs are offered in-house or by
professional organizations, colleges, and universities. In-house programs are planned and
presented by a firm‟s HRD specialists from the human resource department. Line managers
are also frequently utilized to conduct segments of a program.
Step-4 Human Resource Development Media
Organizations utilize various media to enhance their HRD programs. In this context,
media are special method of communicating ideas and concepts in training and development.
Multimedia presentations, using the computer in conjunction with video and/or other media,
appear to offer tremendous potential. More conventional media include videotapes, films,
closed-circuit television, slide projectors, overhead and opaque projectors, flip charts, and
chalkboards.
Step-5 Implementing Human Resource Development Programs
Implementing HRD programs is often difficult. One of the reason is that managers are
typically action oriented and feel that they are too busy for HRD. Another difficulty in
program implementation is that qualified trainers must be available. In addition to possessing
communication skills, the trainers must know the company‟s philosophy, its objectives, its
formal and informal organization, and the training program‟s goals. Human resource
development requires more creativity than perhaps any other human resource specialty.
A new program must be monitored carefully, especially during its initial phases.
Training implies change, which employees may resist vigorously. Others may sit back
waiting, perhaps even hoping, that the program will fail. Participant feedback is vital at this
stage because there will be bugs in any new program. The sooner these problems are
resolved, the better the chances for success.
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Another difficulty in implementing HRD programs is record keeping. Records should
be maintained on all training the employee receives and how well he or she performs during
training and on the job. This information is important in terms of measuring program
effectiveness and charting the employee‟s progress in the company.
Step-6 Evaluating Human Resource Development
The credibility of HRD can be greatly enhanced by showing that the organization
benefits tangibly from such programs. Thus, the HRD department must document its efforts
and clearly show that it provides a valuable service. The documentation should be in the form
of memoranda to management, written reports of activities, and any other evidence that
indicates a quality product.
Organizations have taken several approaches to determining the worth of specific
programs. These involve evaluations of (1) the participants‟ opinions of the program, (2) the
extent to which participants have learned the material, (3) the participants‟ ability to apply the
new knowledge, and (4) whether the stated training goals have been achieved.
(1) Participants’ Opinions
Evaluating an HRD program by asking the participants‟ opinions of it is an
inexpensive approach that provides an immediate response and suggestions for improvement.
The basic problem with this type of evaluation is that it is based on opinion rather than fact.
(2) Extent of Learning
Some organizations administer tests to determine what the participants in an HRD
program have learned. The pretest-posttest, control group design is one evaluation procedure
that may be used. In this procedure, the same test is used before and after HRD training.
(3) Behavioral Change
Test may indicate fairly accurately what has been learned, but they give little insight
into desired behavioral changes. For example, it is one thing for a manager to learn about
motivational techniques but quite another matter for this person to apply the new knowledge.
(4) Accomplishment of HRD Objectives
Still another approach to evaluating HRD programs involves determining the extent to
which stated objectives have been achieved. In evaluating HRD programs, managers should
strive for proof that the program is effective. While such proof may be difficult to establish,
the effect on performance should at least be estimated to show whether the GRD training
achieved its desired purpose.
Emergence of Human Resource Development :
During the 1960s and 1970s, professional trainers realized that their role extended beyond
the training classroom. Training and Development Competencies therefore expanded to
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include interpersonal skills such as a coaching, group process facilitation, and problem
solving. This additional emphasis on employee development inspired the ASTD to rename
itself as the American Society for Training and Development (ASTD).
Further in the 1990s and up to today, efforts were made to strengthen the strategic role of
HRD that is how HRD links to and supports the goals and objectives of the organization.
There was also an emphasis within ASTD on performance improvement as the particular
goal of most training and HRD efforts, and on viewing organisations as high performance
work systems.
Emergence of Human Resource Development in India
The concept of HRD was introduced in India by T V Rao. He is regarded as the father
of HRD in India. Larsen and Toubro was the pioneer in India to design and implement
an integrated HRD system in the 1970s. Slowly other companies also started establishing
it. The concept of HRD scorecard was introduced in India by T.V. Rao and Dr. Udai
Pareek.
HRD scorecard is an indicator of the level of HR maturity of an organization and its
alignment with the organization‟s strategy. The model is based on the assumption that
competent and motivated employees are needed to provide quality products and services
at competitive rates and ways that enhance customer satisfaction. In the HRD scorecard,
the maturity level of HRD in an organization is measured on four dimensions.
Four indicators, as described after this, are used to arrive at a comprehensive score for
HRD maturity.
a) HRD Systems Maturity Score:
Employee competency and commitment can be developed through appropriate HRD
mechanisms (tools and systems). In an HRD mature organization, there will be well-
developed HRD systems such as:
Human Resource Planning and Recruitment
Performance Management System
Training
Career Development and Succession Planning
Job Rotation
OD Interventions
HR information systems (HRIS)
b) HRD Competence Score:
The competencies of the staff from different groups (HRD department, top management,
line managers and supervisors, trade union leaders, and blue / white collar employees) are
measured. Each group is assessed on the following dimensions:
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The level of HRD skills they possess.
Attitudes and support to learning and their own development
Extent to which they facilitate learning among others in the corporation and those
who work with them
Their attitudes and support to HRD function and system
c) The HRD Culture:
The HRD culture measures values and processes created by the HRD tools. Employees
and their styles also play a crucial role in building sustainable competencies in the
organisation, these needs to be measured and monitored. It is possible for some
organizations to have minimal formal HR systems and yet have a high level of HR
competencies and HRD culture. Specialized questionnaires have been developed for
measurement of HRD culture for such organizations.
d) Business Linkage Score:
This score indicates the extent to which HRD efforts (tools, processes, culture, etc.) are
driven to achieve business goals or goals of the organization. The business linkage goals
include:
Business excellence including profitability and other outcomes the organization is
expected to achieve
Internal Operational Efficiencies
Internal Customer Satisfaction
External Customer Satisfaction
Employee Motivation and Commitment
Cost-effectiveness and Cost-Consciousness among Employees
HRD Culture
In the fast changing environment, the organisations have to develop and maintain an
enabling culture to become dynamic and growth oriented. The purpose of HRD is to facilitate
development of such a culture in the organisation. An enabling culture is one where
employees use their initiative, risk, experiment, innovate and make things happen.
HRD Culture Variables
The term OCTAPACE has been coined to denote the characteristics of HRD culture which
include:
a) Openness: The term „openness‟ refers to “freedom to express ideas, opinion, views”,
“frankness”, “outspoken”, “straightforwardness”.
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b) Confrontation: The term confrontation refers to “conflict”, “encounter”, “dispute”,
“estrangement”, to evolve effective and efficient suggestions and solutions to a given
problem.
c) Trust: Trust means “belief”, “confidence”, “faith”. One cannot order others to trust, it
comes only through their experience.
d) Autonomy: The word autonomy refers to “freedom”, “independence”. Freedom to do a
thing in the way one wants tends to act as a morale booster.
e) Proaction: The term “pro-action” generally refers to “planning in advance”, “lead from
the front”, “the state of alertness / preparedness”.
f) Authenticity: The term “authenticity” refers to “genuine”, “factual”, “legitimate”,
“actual”. Every institution has a goal and various departments are used in the process to
achieve the objectives through their varied and specialised skills.
g) Collaboration: The term “collaboration‟ refers to “cooperation”, “participation”,
“teamwork”, “association”. Cooperation means working together.
h) Experimentation: Modern organisations are often systems and to cope with
environmental challenges, they allow their members to experiment with new ideas.
HRD Climate
Organisational climate is the summary perception which people have about an
organisation. It is a global expression of what the organisation is. Organisational climate is
the manifestation of the attitudes of organisational members toward the organisation itself.
An organisation tends to attract and keep people who fit its climate so that its patterns are
perpetuated at least to some extent.
HRD climate may be defined as perceptions the employee have of the developmental
environment of an organisation. HRD climate contributes to the organisations‟ overall health
and self-renewing capabilities which, in turn, increase the enabling capabilities of individual,
dyads, teams and the entire organisation.
HRD Matrix
HRD Matrix identifies the interrelationships between HRD instruments, processes,
outcomes and organisational effectiveness. HRD instruments include performance appraisal,
counseling, role analysis, potential development, training, reward system, job enrichment, etc.
These mechanisms may vary depending upon the size of the organisation, the commitment of
the top management, the environment, the culture and climate, the perception of the people,
technology used, methods employed by the competitors etc.
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HRD Sub-Systems / Mechanisms / Instruments
T.V. Rao is of the opinion that HRD sub-systems comprise performance appraisal,
potential appraisal, career planning, training, performance coaching, organisation
development, employee welfare, rewards, quality of work life and human resource
information system. Udai Pareek refers to performance appraisal, feedback, counseling,
potential appraisal, career advancements, career planning and training as dimensions of HRD.
A well designed HRD programme should have the following sub-systems:
i. Performance Appraisal:
It is the process of determining how well a worker is performing his job. It provides a
mechanism for identification of qualities and deficiencies observed in an employee in
relation to his job performance. The object of appraisal is to determine the present
state of efficiency of a worker in order to establish the actual need for training.
ii. Potential Appraisal:
It provides necessary data which helps in preparing career plans for individuals. It
aims at development of latent abilities of individuals.
The HRD function has a long way to go in introducing a streamlined potential
appraisal system which ensures a good match between the employees and the job.
iii. Feedback Counselling:
Feedback of performance data can be used to monitor individual development and for
identifying training needs. Career counselling and verbal rewards are integral parts of
review discussions between the superior and the subordinate.
iv. Training:
It is a process that involves the acquisition of skills, concepts and attitudes in order to
increase the effectiveness of employees in doing particular jobs. Training is expected
to provide the needful stimulus to initiate impulses of changes in management and to
improve efficiency, productivity and administrative effectiveness.
v. Role Analysis:
It is a participatory process which aims at defining the work content of a role in
relation to all those with whom the role occupant has significant interaction in the
performance of his job.
vi. Career Planning:
It means helping the employees to plan their career in terms of their capacities within
the context of organisational needs. It is the planning of one‟s career and
implementation of career plans by means of education, training, job search and
acquisition of work experiences.
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vii. Job Rotation:
The work tasks should be rotated among the employees so as to broaden their field of
specialization as well as their knowledge about the organisation‟s operation as a
whole. The work-tasks, therefore, should be rotated once a year among the various
employees depending upon their qualifications and suitability to perform new roles.
viii. Quality Circle:
It is a small group of employees doing similar or related work who meet regularly to
identify, analyse and solve product-quality problems and to improve general
operation. The quality circles are relatively autonomous units (ideally about 10
workers), usually led by a supervisor or a senior worker and organised as work units.
The workers, who have a shared area of responsibility, meet periodically to discuss,
analyse, and propose solutions to ongoing problems.
ix. Reward System: Rewarding employees performance over and above their normal
wages and salaries is considered to be an important task of the HRD. In any
organisation, the managers and workers have similar motivations, although the
manager controls the means of achieving need-satisfaction at work and each employee
seeks self-development to go as far as possible on his own ability.
x. Organisation Development (OD):
It is an organisation-wide, planned effort managed from the top, placing emphasis on
making appropriate intervention in the ongoing activities of the organisation. It
provides a normative framework within which changes in the climate and culture of
the organisation towards harnessing the human potential for realization of
organisational objectives is brought out.
xi. Quality of Working Life (QWL):
The conditions under which the workers work and live, assume the form of
another important factor contributing to workers satisfaction or otherwise and
consequently the job satisfaction.
For an employee to be able to work at his best, it is necessary to understand that
inadequate working and living conditions produce adverse mental and physical
effect on the employee, ultimately causing decline in the efficiency.
xii. Human Resource Planning:
It is the process aimed at ensuring that the organisation will have adequate number of
qualified persons, available at proper time, performing jobs which would meet the
needs of the organisation and also provide satisfaction for the individuals involved.
xiii. Recruitment, Selection and Placement: Recruitment is generation of applications
for specific positions for anticipated vacancies. The ideal recruitment efforts will be
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to generate adequate number of suitable applicants. Selection is the process of
ascertaining the qualifications, experience, skills, knowledge, etc. of applicants with a
view to appraising their suitability for a job. Placement is the process of assigning the
selected candidate with the most suitable job.
HRD Interventions
Interventions are challenges are hindrances which affect the HRD process directly or
indirectly. Some important HRD interventions are -
a. Increasing Workforce Diversity
b. Competing in a Global Economy
c. The Need for Lifelong Learning
d. Meeting the Need for Lifelong Individual Learning
a. Increasing Workforce Diversity:
The workforce has become increasingly more diverse, and this trend toward diversity will
continue. This includes increasing diversity along racial, ethnic, and gender lines, as well
as an increasing percentage of the workforce that is over age.
b. Competing in a Global Economy:
Competing in the global economy requires more than educating and training workers to
meet new challenges. In addition to retraining the workforce, successful companies will
institute quality improvement processes and introduce change efforts (for example, high
involvement programs). The workforce must learn cultural sensitivity to better
communicate and conduct business among different cultures and in other countries.
c. The Need for Lifelong Learning:
The challenge in HRD professionals is to provide a full range of learning opportunities for
all kinds of employees. One way that organisations are meeting this challenge is by
establishing multimedia learning centres (sometimes on the organisation‟s intranet).
These centres offer a variety of instructional technologies that can be matched to each
trainee‟s unique learning needs.
d. Facilitating Organisational Learning:
One challenge of HRD professionals is facilitating a transition from traditional training
programs to emphasising three things: learning principles and tactics; how learning relates
to performance; and more importantly, the relationship between learning and fundamental
change.
HRD vs. Personnel or HRM Function
Basically human resources consist of the total productive capacity of a firm‟s human
organisation. Human resource development efforts aim at providing conditions in which the
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employees can improve their skills, knowledge, energy and talents, which in turn may lead to
improve productivity.
Basis Personnel Management Human Resource Development
1. Definition Personnel management is the
recruitment, selection, development,
utilisation, compensation and
motivation of human resources by
organisation.
Human Resource Development (HRD) is
concerned with the development of human
resources in an organisation. It means
improving the existing capabilities of the
human resources in the organisation and
helping them to acquire new capabilities
required for the achievement of the
organisational and individual goals.
2. Orientation The traditional personnel function is
regarded as mainly a service
function responding to the demands
of the organisation.
HRD is regarded as a proactive function.
The function of HRD is not merely to cope
with the needs of the organisation but also to
anticipate them and to act on them in
advance.
3. Mechanisms The traditional personnel function
considers salary and other economic
benefits, as important motivators.
HHRD emphasises the importance of higher
needs in motivating individuals. It considers
autonomous work groups, job enrichment,
job challenge and creativity as the main
motivating forces.
4. Emphasis on
Culture
The emphasis in the traditional
personnel function is on increasing
people‟s efficiency.
The emphasis in HRD is on building the
right type of culture in the organisation-a
culture which has such characteristics as
mutual trust, openness, collaboration, clarity
of goals and risk-taking capacity.
5. Responsibility The personnel function is supposed
to be the responsibility of the
personnel department.
Human resource development is regarded as
the concern of all managers in the
organisation. Every manager is concerned
with developing the competencies of all
those working under his guidance and
supervision.
HRM
Basically human resources consist of the total productive capacity of a firm‟s human
organisation. Human resource development efforts aim at providing conditions in which the
employees can improve their skills, knowledge, energy and talents, which in turn may lead to
improve productivity
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The HRD Models
There are a good number of models that have been postulated by various scholars to
describe the HRM concept.
However, as shall be seen these various models either fall under the soft or the hard
approach of HRM.
1. The Harvard Model
The Harvard Model was postulated by Beer et al (1984) at Harvard University. The
authors of the model also coined it the map of HRM territory. The Harvard model
acknowledges the existence of multiple stakeholders within the organization. These multiple
stakeholders include shareholders various groups of employees, government and the
community at large. The recognition of the legitimacy of these multiple stakeholders renders
this model a neo - pluralist model. This model emphasizes more on the human/soft side of
HRM. Basically this is because this model emphasizes more on the fact that employees like
any other shareholder are equally important in influencing organizational outcomes. In fact
the interest of the various groups must be fused and factored in the creation of HRM
strategies and ultimately the creation of business strategies.
Source : Beer et al (1984 : 16)
A critical analysis of the model shows that it is deeply rooted in the human relations
tradition. Employee influence is recognised through people motivation and the development
of an organization culture based on mutual trust and team work. The factors above must be
factored into the HR strategy which is premised on employee influences, HR flows, reward
system etc. The outcomes from such a set up are soft in nature as they include high
congruence, commitment, competencies etc. The achievement of the crucial HR outcomes
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has got an impact on long term consequences, increased productivity, organizational
effectiveness which will in turn influence shareholder interests and situational factors hence
making it a cycle. It is thus important to note that the Harvard model is premised on the belief
that it is the organization‟s human resources that give competitive advantage through treating
them as assets and not costs.
2. The Warwick Model
One of the major setbacks in the conceptual developments of the HRM concept up to
this time was that most of the earlier developments were within an American Context.
Approaches outside of this context required a perspective of the particular cultural context
that exists in different countries. The Warwick Model, which emanated from the Centre for
Corporate Studies and Change at the University of Warwick by Hendry and Pettigrew (1990)
differs from the Harvard models by reflecting European traditions and management styles.
The model (Figure 2) basically comprise five interrelated elements which allows an analysis
of how external factors impact upon the internal operations of the organization reflecting the
open system theory of organizational thinking.
The Warwick Model (Hendry and Pettigrew, 1990)
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Organizations in this case achieve an alignment between the external and internal
context to experience higher performance. The model recognizes the wider context in which
HRM operates and emphasizes the full range of tasks and skills that define HRM as a
strategic function (Loose more et al., 2003). Hendry and Pettigrew (1990)argue that, better
descriptions of structures and strategy making in complex organizations, and of frameworks
for understanding them, are essential under pinnings for HRM. In Armstrong (2003)‟s view,
Hendry and Pettigrew (1990) believe that as a movement, HRM expressed a mission, to
achieve a turnaround in industry: HRM was in a real sense heavily normative from the outset:
it provided a diagnosis and proposed solutions. Hendry and Pettigrew (1990) further added
that, what HRM did at this point was to provide a label to wrap around some of the
observable changes, while providing a focus for challenging deficiencies – in attitudes, scope,
coherence, and direction – of existing personnel management.
3. The Michigan/Matching Model
The Michigan model was propounded by Fombrun Tichy and Devanna (1984) at the
Michigan Business School. They also named this model a matching model of HRM.
Precisely, the matching aspect of this model demonstrates that the model is inclined towards
the harder side of HRM. This is because the matching model emphaizes more on “tight fit”
between the HR strategy and the buisness strategy. It demands that available human resources
must be matched with jobs in the organization. The HR strategy must be highly calculative in
terms of the quantity of the human resources required to achieve the objectives enshrined in
the business strategy. Business strategy takes the central stage in this model hence human
resources are taken like any other resource which must be fully utilised together with the
other resoruces to achieve organizational objectives.
“(Evans and Lorange, 1989) argue that the Michigan model is based on the
“product market logic” which demands that to gain high profits labour must be
obtained cheaply, used sparingly, developed and exploited fully.”
The Matching Model of HRM
Devanna (1984)
[21] Human Resource Department (HRD)
The point of departure in the Michigan Model is the pre-eminence and pre-dominance
of a business strategy, which must strictly be achieved by the available resources regardless
of whether, they are able to do so or not. In fact the business strategy must be achieved
through minimum labour costs enhanced by structural re-organization, Performance Related
Pay and staff reduction.
4. The Guest Model
The Guest model was propounded by David Guest in 1987. This model is a fusion of
aspects that resemble both a hard and a soft approach of HRM. Guest proposes 4 crucial
components that underpin organizational effectiveness. These 4 crucial components are:
(i) Strategic Integration
This is the ability of organizations to maintain a fit between the HRM strategy and the
business strategy. In other words, there must be congruence between business strategy and
the HR strategy for the organization to achieve its goals. Strategic integration shows the
harder side of the Guest Model. This is precisely because human resources are treated in a
similar manner like any other resource with the prime goal of achieving business objectives.
Thus there are implications of labour exploitation.
(ii) Flexibility
Flexibility is basically concerned with the ability of the organization and its people to
adapt to the changing business and work environment and to the capacity to manage
innovation. Flexibility can be numeric, functional, pay, distancing. Flexibility carries both
connotations of hard and soft HRM. Hard HRM for example can be seen through numeric
flexibility where employees are employed only when their production is required and when
their labour is not required they are discharged. This can be exemplified through seasoned
work. Flexibility can also show the soft side of HRM through the same example given above.
Flexibility in this case is not only concerned with the need to achieve business objectives but
also the need to treat its employees as fairly as possible.
(iii) High Commitment
This is concerned with the need to have both behavioural commitment, which is the
ability to go an extra mile, and attitudinal commitment, which is reflected through a strong
identification with the organization.
(iv) Quality
Quality is based on the assumption that provision of high quality goods and services
results from a quality way of managing people.
[22] Human Resource Department (HRD)
Using David Guest (1987)‟s Model and John Storey (1989)‟s model of HRM:
Critically demonstrate your understanding of Hard and Soft HRM.
(v) Model by John Sorey (1989)
John Storey emerged to be one of the strongest proponents of HRM as a completely
different discipline from the preceding disciplines embraced by the TPM approach. He
believed that HRM is a holistic approach with a set of interrelated policies with an
ideological and philosophical underpinning. Because of these ideological and philosophical
aspects, HRM does not only stand distinctively outstanding from TPM but also emerges to be
a much more humane approach to employment management. The model by John Storey is
based on four aspects.
1. Beliefs and Assumptions
The model is premised on the notion that HRM is based on a set of beliefs and
assumptions, which makes it a distinctive approach. Fundamentally it is believed that it is the
human resource among all the other factors of production, which gives the difference.
Successful organizations are distinguished from the rest by the capabilities and commitment
of the people who work for them. It is therefore imperative that the human resource ought to
be treated with great care and nurtured as valuable assets. Finally it is believed that the
employment relationship is based on commitment and not compliance.
2. Strategic Qualities
HRM is further distinguished by the fact that it is strategic in nature and therefore
requires the attention of senior management and top executives. The above-mentioned
assumption stems from the 1st belief that the human resource is the most important source of
competitive advantage. HR Policies are too important to be a product of prescribed best
professional practice only. In fact they must be sensitive to the demands of the competitive
business environment, business strategy and the HR strategy.
3. Role of Line Managers
Line managers have a very important role to play in people management. It is clear
from the HRM philosophy that people management is too important to be left to operational
[23] Human Resource Department (HRD)
personnel specialists. Fundamentally, the importance of line managers is seen through the
strong link that exists between them and their respective subordinates or employees.
4. Key Levers
There is a strong belief that culture management is important than managing
Procedures and systems. This is primarily important because culture management brings
consensus on overall organizational values, beliefs and assumptions. Culture management is
also believed to be essential in flexibility and commitment. Integrated action on all HRM
policies. Restructuring and job redesign to allow developed responsibility and empowerment.