2001 jan mar_49_63

focuses on the analysis and resolution of managerial issues based on analytical and
Research Article empirical studies.

A Study of HRD Concepts, Structure of HRD Departments,
and HRD Practices in India
T V Rao, Raju Rao, and Taru Yadav
Human Resource Development (HRD) as a
function has evolved in India indigenously from
the year 1975 when Larsen&Toubro (L&T)
conceptualized HRD as an integrated system
and decided to separate it from the personnel
A number of human resources development function. Since then, most organizations have
frameworks has come into existence in the started new HR departments or redesignated
last ten years from various parts of the their personnel and other departments as HRD
world. Indian organizations have begun to departments. Today, there are high expectations
use these for improving their HRD systems from HRD. Good HRD requires well-structured
and their impact. An Integrated HRD function, appropriately identified HRD systems,
Systems Approach was evolved for Indian and competent staff to implement and facilitate
organizations at the Indian Institute of the change process. This paper attempts to:
Management, Ahmedabad by Udai Pareek • Examine the way the HRD function is
and T V Rao for L&T. This paper examines structured in the Indian corporate sector.
the current status of structuring of the HRD
function and HRD subsystems in India • Highlight the current HRD practices in India
against this "Integrated HRD Systems" in relation to various HRD systems.
framework. The paper also comments on • Examine the extent to which HRD implemen
the recent approaches to HRD. Data from tation meets the criteria of the Integrated HRD
HRD audits of 12 Indian organizations Systems Approach of Pareek and Rao (1975,
indicated that HRD function is not well 1977), and using this analysis, comment on the
structured, is inadequately differentiated, prerequisites for the success of other recent
poorly staffed, and fails to meet the require- HRD frameworks for Asian countries.
ments of this framework. In the light of
these experiences of Indian organizations in Theoretical Frameworks of HRD
implementing this framework, the paper
points out the prerequisites for success of
Pareek and Rao's Framework
other HRD frameworks in India.
In 1975, L&T — a prominent engineering com-
T VRao is Chairman, Raju Rao is Consultant, and Taru pany in India — had appointed two consultants
Yadav is Research Associate at the T VRao Learning Sys- (Udai Pareek and TV Rao) from the Indian
tems Private Limited, Ahmedabad. Instifute of Management, Ahmedabad to study
the performance appraisal system and make
An earlier version of this paper with data from eight Indian
recommendations for improving it. They (Pareek
organizations has been submitted for presentation at the
Academy of HRD Research Conference, USA, Oklahoma, and Rao, 1975) studied the system through inter-
February-March 4, 2001. views and suggested a new system. They recom-
mended that "... Performance Appraisal, Poten-
tial Appraisal, Feedback and Counselling, Career
Development and Career Planning, and Training

Vol. 26, No. 1, January-March 2007 49 Vikalpa

and Development get distinct attention as unique linkages were outlined between various HRD
parts of an integrated system which we call the subsystems to have an integrated system. Pareek
Human Resources Development System" (see and Rao also outlined a philosophy for the new
Pareek and Rao, 1998, p 24). This system was HR system, which included 14 principles to be
proposed as a separate system with strong link- kept in mind while designing the HRD system.
ages with the personnel (human resources) sys- These principles deal with both the purpose of
tem. In their second report on the human resourc- HRD system and the process of its implemen-
es system in L&T, Pareek and Rao (1977) rec- tation (see Box).
ommended that the personnel function be In essence, the Integrated HRD Systems
viewed as Human Resources Function (HRF) and Approach of Pareek and Rao (1975) has the
suggested a trifurcated function: Personnel Ad- following elements:
ministration, HRD, and Worker Affairs. Adding
Organization Development (OD) also to the • A separate and differentiated HRD depart
HRD function, they recommended that "... Since ment with full time HRD staff.
OD is being added now, it is necessary to • Six HRD subsystems including OD.
strengthen that part of HRD. We, therefore, • Interlinkages between the various subsys
recommend that the company may appoint a tems.
Manager (OD) with two officers to do a lot of
research work which will soon start" (p 139). • Designed with 14 principles in mind.
The consultants differentiated HRD from • Linked to other subsystems of HRF.
other components of HRF and also integrated After L&T accepted these recommendations
structurally and system-wise. Structurally, HRD in full and started implementing them, the State
is to be a subsystem of HRF and integration Bank of India (the single largest Indian Bank)
of this with the other two subsystems (Personnel and its Associates decided to use the Integrated
Administration and Worker Affairs) is to be done HRD Systems Approach and created a new
by a person at the Director level (for example, HRD Department. By mid-80s, a large number
Vice-President — Personnel & HRD), through of organizations in India had established HRD
task forces and subsystem linkages. Inter-system departments.
Box: Principles of HRD System
1. HRD system should help the company to increase enabling capabilities which include: development
of human resources in all aspects, organizational health, improvements in problem solving capabilities,
diagnostic skills, capabilities to support all the other systems in the company, etc.
2. It should help individuals to recognize their potential and help them to contribute their best towards
the various organizational roles they are expected to perform.
3. It should help maximize individual autonomy through increased responsibility.
4. It should facilitate decentralization through delegation and shared responsibility.
5. It should facilitate participative decision-making.
6. It should attempt to balance the current organizational culture with changing culture.
7. There should be a balance between differentiation and integration.
8. There should be a balance between specialization of the function with its diffusion into the others.
9. HRD system should ensure responsibility for the function.
10. It should build upon feedback and reinforcement mechanisms.
11. It should maintain a balance between quantification 4nd qualitative decisions.
12. There should be a balance between external and internal help.
13. It should plan the evolution of the function.
14. There should be a continuous review and renewal of the function.


Other Frameworks of HRD aging the flow of employees through the
organization.
As HRD came to prominence in the last decade,
other frameworks and models came into exist- The activities for managing employee con-
ence. Some of these are briefly reviewed here. tribution include listening, responding, and find-
ing ways to provide employees with resources
The Strategic HR Framework Approach: This
that meet their changing demands. The activitie s
framework formulated by Ulrich and Lake
for managing transformation and change include
(1990) aims to leverage and/or align HR prac-
identifying and framing problems, building
tices to build critical organizational capabilities
relationships of trust, solving problems, creat-
that enable an organization to achieve its goals.
ing, and fulfilling action plans.
This framework offers specific tools and paths
to identify how a firm can leverage its HR The Integrative Framework : The integrative
practices. Business strategy, organizational framework offered by Yeung and Berman (1997)
capabilities, and HR practices are the three identifies three paths through which HR practices
important elements in this framework. Ulrich can contribute to business performance: (1) by
(1997) presented a framework for HR profes- building organizational capabilities; (2) by
sionals in terms of four key roles: improving employee satisfaction; and (3) by
shaping customer and shareholder satisfaction.
• Management of strategic human resource.
Yeung and Berman (1997) argued for dynamic
• Management of firm infrastructure. changes in HR measures to refocus the priorities
• Management of employee contribution. and resources of the HR function. They argued
• Management of transformation and change. that HR measures should be business-driven
rather than HR-driven; impact-driven rather than
The activities for managing strategic human
activity-driven; forward looking and innovative
resources include the following:
rather than backward looking; and instead of
• Aligning HR and business strategy: "organi focusing on individual HR practices should focus
zational diagnosis." on the entire HR system, taking into account
• Reengineering organization processes: synergies existing among all HR practices.
"shared services."
• Listening and responding to employees: Human Capital Appraisal Approach : This
approach outlined by Friedman, James, and
"providing resources to employees."
David (1998) of Arthur Andersen consulting
• Managing transformation and change: "en company is based on the belief that there are
suring capacity for .change." five stages in the management of human capital:
The activities for management of firm in- clarification stage, assessment stage, design
frastructure include the following: stage, implementation stage, and monitoring
• Constant examination for improving the HR stage. There are five areas of human capital
processes. management: recruitment, retention, and retire-
ment; rewards and performance management;
• HR professionals to become administrative career development, succession planning, and
experts to ferret out unnecessary costs, training; organizational structure; and human
improve efficiency, and constantly find new capital enablers. A 5 X 5 matrix using these
ways to do things better; be effective as five stages and five areas could be used to
administrative experts and undertake activ evaluate and manage the human capital well.
ities leading to continual reengineering of the For example, in the clarification stage, the
work processes they administer. managers examine their human capital pro-
• HR professionals to design and deliver ef grammes to fit into their strategy and overall
ficient HR processes for staffing, training, culture. They may also examine each of the
appraising, rewarding, promoting, and man- areas to fit into the strategy.

Vol. 26, No.1, January-March 2001 51 Vikalpa

HRD Score Card Approach: A recent approach provement path from an ad hoc, inconsistently
formulated by Rao (1999) envisages that, in performed practices to a continuously mature,
order to make the right business impact, HR disciplined, and continuously improving devel-
interventions should be mature in terms of the opment of the knowledge, skills, and motivation
HRD systems, competencies, culture (including of the workforce.
styles), and business linkages. Through a well- The P-CMM model is intended to help the
formulated HRD audit, the following are as- software organizations to:
sessed:
• Characterize the maturity of their workforce
• The maturity level and the appropriateness
practices.
of each of the subsystems of HR, the appro
priateness of the HR structures, and the level • Guide a programme of continuous workforce
of competencies of HR staff, line managers, development.
top management, etc. • Set priorities for immediate actions.
• The HRD culture (defined in terms of open Integrate workforce development with pro-
ness, collaboration, trust, autonomy, proac- cess improvement.
tion, authenticity, confrontation, and exper
imentation) and the congruence of the top • Establish a culture of software engineering
management and HR staff styles with HRD excellence.
culture, and the extent to which all the It is designed to guide software organiza-
systems and practices result in employee tions in selecting immediate improvement ac-
satisfaction and customer satisfaction, etc. tions based on the current maturity of their
P-CMM Approach: Curtis and his team (1995) workforce practices. The P-CMM model in-
developed this approach for software organiza- cludes practices such as work environment,
tions. The People Capability Maturity Model (P- communication, staffing, managing perform-
CMM) aims at providing guidance on how to ance, training, compensation, competency de-
improve the ability of software organizations to velopment, career development, team building,
attract, develop, motivate, organize, and retain and culture development. It is based on the
the talent needed to steadily improve their assumption that organizations establish and
software development capability. The strategic improve their people management practices
objectives of P- CMM are: through the following five stages of maturity:
• Improving the capability of software organ initial, repeatable, defined, managed, and
izations by increasing the capability of the optimizing. Each of the maturity levels com-
prises of several Key Process Areas (KPAs) that
workforce.
identify clusters of related workforce practices.
• Ensuring that the software development When performed collectively, the practices of
capability is an attribute of an organization a key process area achieve a set of goals
rather than that of a few individuals. considered important for enhancing workforce
• Aligning the motivation of individuals with capability. To quote Curtis, William, and Sally
that of the organization. (1995):
• Retaining human assets (i.e., people with In maturing from the initial to the repeat-
critical knowledge and skills within the or able level, the organization instills the
ganization). discipline of performing basic practices for
A fundamental premise of the maturity managing its workforce. In maturing to
framework is that a practice cannot be improved the defined level, these practices are tai-
if it cannot be repeated. In an organization's lored to enhance the particular knowledge,
least mature state, systematic and repeated skills, and work methods that best support
performance of practices is sporadic. The P- the organization's business. The core com-
CMM model describes an evolutionary im- petencies of the organization are identified;

the workforce activities are aligned to the even more difficult to adopt and get results. It
development of these competencies. In is with this view that an attempt is made to assess
maturing to the managed level, the organi- the current status of HRD structures and prac-
zation uses data to evaluate how effective tices in the Indian industry.
its workforce practices are and to reduce
variation in their execution. The organi- Methodology and Limitations
zation quantitatively manages organiza-
tional growth in workforce capabilities, In order to examine the structure of HRD
and when appropriate, establishes compe- function and implementation of various HRD
tency-based teams. In maturing to the subsystems, 12 of the 50 organizations which
optimizing level, the organization looks participated in the HRD audit conducted by the
continuously for innovative ways to im- authors were chosen. These were chosen to
prove its overall talent. The organization represent a variety of Indian corporates. The
is actively involved in applying and con- 12 organizations cover financial services, con-
tinuously improving methods for develop- sumer products, electronics, cement, tyres, and
ing individual and organizational compe- automobiles.
tence. The HRD audit methodology involves an
All these approaches share a lot in common evaluation of the HRD structure, systems,
with the following characteristics with relatively processes, competencies, and culture by a team
varying degree of emphasis on them: of experts. The methodology used for HRD
includes:
• They are systems driven and emphasize
HRD systems or subsystems or tools. • Questionnaire study of HRD systems and
• They attempt to link HR practices with processes.
business goals. • Individual and group interviews with HRD
• They recognize the importance of HR pro staff, top management, line managers, and
fessionals and HRD. other stakeholders to ascertain their percep
tions of the HR systems and processes and
The Integrated Systems Approach of Pareek outline the gaps.
and Rao envisaged a separate HRD department
for effective designing and implementation of • Study of various documents relating to HRD
HRD systems. It envisaged strategy as a starting systems.
point (as in Ulrich and Lake, 1990), and, • Observation of the work culture, training in
therefore, focused on all the systems to achieve operation, etc.
business goals and employee satisfaction. It • Analysis of secondary data.
aimed at synergy (like in the Integrated Ap-
proach of Yeung and Herman), proposed the The detailed methodology used in HRD
phased evolution of HRD function (like the P- audit is described in detail by Rao (1999). The
CMM approach) and included most of the observations reported in this study are drawn
elements of the Human Capital Approach. While from the experiences of the authors during their
each of the latter models has brought to focus visits to these organizations for HRD audit and
one or the other most neglected dimensions that discussions with HR managers, line managers,
could be good pointers for not getting the best and other employees. The HRD audit provides
out of HR, the essence is very similar to Pareek a lot of data which are not included here. The
and Rao's approach. If the locally developed 12 organizations are described subsequently.
frameworks are not implemented well for rea- The common part of these organizations is that
sons not associated with the framework but with they all sought an audit of their HRD by external
lack of understanding and seriousness, it may consultants. This itself is a progressive step. To
be presumed that advanced frameworks are the extent this sample constitutes such organ-

izations, the sample is a biased sample. The appraisals and training devote their full attention
authors, however, feel that these organizations to these functions. OD, career planning, and
are representative of the Indian corporate sector. potential appraisal are not focused at present.
TQM and feedback and counselling are well
Results and Findings integrated into the other systems.
Multinational Electronics Manufacturing Com-
Structure of HRD Function pany (MEMO): MEMC is the world's leading
The structure of HRD function in the 12 supplier of electrical and electronic connectors
organizations is briefly described below: and inter-connection systems. Headquartered in
the US, MEMC has about 46,000 employees
Venture Finance Company (VFC): VFC is a all over the world. It is a world-class technology
professionally managed venture finance compa- leader and is frequently named as one of the
ny which enjoys both national and international top 50 patent-holding corporations in the world.
patronage. It has provided managerial and The total number of employees in this company
financial support to over 45 companies. The at the time of this study was about 600. The
total manpower currently is 34 out of which 26 HR department had six employees, one Man-
are in the managerial cadre while the remaining ager, one Assistant Manager, one Senior Ex-
are clerical support staff. This is the smallest ecutive, one Officer, one Junior Officer, and one
of the organizations studied. VFC does not have receptionist. The head of HR integrates HRD
a separate department for HRD. Currently, function with the other HR systems. While there
there is one executive who looks after HRD are no separate departments, there are individ-
and one deputy manager in charge of personnel uals in charge of different HR systems.
and administrative matters.
Tyre Manufacturing Company (TMC): The market
Consumer Products Company (CPC ): In this share of this TMC is considered to be one of
company, talent, recruitment, retention, and the best in the tyre industry in India and the
excitement are the focus in HR and it aims at fully total number of employees in one of its plants
establishing itself as an FMCG company. E- studied is about 1400. The HR department has
commerce, E-initiatives, and diversification are 21 employees who look after personnel, safety,
some future possible areas of work. The total time, office, welfare, etc. There is no separate
number of employees is about 800. The corporate HRD department. It is not a differentiated
personnel division is headed by a President-HR function. After the HRD audit, the company
(who also looks after an SBU besides all HR decided to establish a separate HRD unit and
activities). There are three Deputy General integrate it with the personnel function at the
Managers (personnel administration, TQM, and plant level. At the top level in the corporate
health services), one Manager-estates, recruit- office, there is a high concern for competence
ment, and other HR issues, one Civil Manager, building to meet changing needs of the industry.
two Assistant Managers (payroll and training and
performance management), one Executive (re- Indian Multinational Company (IMC): This
cruitment, 360 degree feedback, and other mat- company is owned by an Indian business house
ters), one Senior Officer (Secretary to President and is located in another country. It is a
and Compensation Manager) and one Officer manufacturing unit and employs a few Indians.
(administrative support in training, resignations, It is the best-rated company in the country where
exit interviews, transfer, etc). The Human Re- it is located. It is the first to get ISO-14001 and
sources Function in this company is highly QS-9000 accreditation. Eighty-five per cent of
differentiated. The President-HR integrates it at its products are exported to about 30 countries
the top level. There is no strong departmentation (like UK, France, Spain, Italy, Israel, etc.) and
but specialization at individual level and a high most of its customers across the world consider
degree of flexibility. The managers in charge of it to be highly quality conscious and customer-

Vol. 26, No. T.January-March 2007 54 Vikalpa

driven. It plans to double its production in the and HRD. The HRD function is bifurcated at
next five years. It intends to do so with an the next level into industrial relations (headed
addition of less than 20 per cent to its manpower. by a Deputy General Manager - P&IR) and
It has about 300 local employees and about 40 HRD headed by a General Manager - HRD,
Indian managers. The HR department has a and HD manager with training as an independ-
total of 31 staff of which there is one Deputy ent function directly reporting to the Vice-
General Manager heading the functions and President - HRD. The HRD and IR staff include
three Officers each looking after training, 43 officers. Of the 43 personnel, four are in
personnel matters, and safety. Of the remaining the training division and only one is in HRD
employees, nine are Drivers, two are Recep- along with management trainees. The rest are
tionists, four are Safety Technicians, two are in Personnel and IR.
Agricultural Engineers, one is a Nurse, and the
Power Manufacturing Company (PMC): Profit
rest are miscellaneous staff.
wise, this company is among the top ten leading
Automobile Manufacturing Company (AMC): companies in India (high profit and high share
This company envisions itself to be a world class value), it has ISO 9000 certification and is the
organization in the next few years. Competition best generating plant. The total manpower at
is increasing with the entry of multinationals and PMC is 2,500, where 40 per cent are manage-
joint ventures. The total number of staff at ment and supervisory staff, 48 per cent are
managerial levels is over 1,700 —both technical workers, and 7 per cent are subordinate staff.
and non- technical. The HRD staff consists of The HRD function operates under two depart-
16 members with six of them having an engi- ments: P&IR and Training. The P&IR depart-
neering background which gives them a tech- ment is headed by a Deputy General Manager
nical advantage in the business of the company. (P&IR) and is assisted by a Manager (P&IR),
While two of them look after training and a Deputy Manager (IR), and two Deputy IROs.
development, the rest look after other HR There are a total of seven Assistant Personnel
functions including recruitment, induction, etc. Officers, one Welfare Officer, and two trainees.
Cement Manufacturing Units (CMUs): CMU- There are 14 assistants (including general as-
1 had a total of 154 staff and officers and 130 sistants, steno-typists, etc.) to assist the staff. The
workmen. Of the 154 staff, 27 are in senior training centre is headed by a Chief Engineer
managerial cadre, 69 are supervisors and of- (Training) who reports to the Vice-President in
ficers, and 58 are assistants. Seventy-seven of charge of the power plant.
the 130 workers are skilled. A Deputy General Gas Distribution Company (GDC): This com-
Manager-Personnel & HRD who integrates both pany has over 530 employees and the annual
the functions manages the HR function. A turnover is about Rs 100 crore. The HRD
Manager and an Officer assist him. department consisted of a Senior Manager and
CMU-2 is a market leader and is expected Assistant Manager, Senior Officers besides an
to be the largest single location manufacturing Assistant Manager, a Senior Officer, an Engi-
plant when its plans are achieved. The plant has neer, and a staff in the training centre.
an employee strength of 450 workmen and 782 Soap Manufacturing Company (SMC):The annual
officers. There are ten members in the Personnel turnover of this company is around Rs 200
and HR department and 17 in the Welfare depart- crore. The total manpower strength in this
ment. organization is 450 out of which 350 are
Metal Manufacturing Company (MMC): The workers. The Personnel and Administrative
total employee strength of this company is 8,000 department consists of three workmen and eight
with a turnover of nearly Rs 1,000 crore. HRD officers/managers including one Executive
and IR is combined in this MMC. The Vice- (HRD and Administration) and a Manager
President looks after both industrial relations (Personnel and Administration).

Vol. 26, No. J, January-March 2001 55 Vikalpa

Structuring of HRD of learning methodology, human development,
and such other technical skills required to handle
The above description of the HR function the competency building, commitment building,
indicates that the HR departments in Indian and culture building functions of HRD.
organizations (including one multinational loca- It may be concluded that the HRD function
ted in India and one Indian company located in India is not appropriately structured though
in another country) do not have well differ- the world's first dedicated HRD department was
entiated structures appropriate for HRD. started here. The structures do not follow the
They have well differentiated roles in personnel principles envisaged by Pareek and Rao and are
but not in HRD. When it comes to HRD, it not differentiated as outlined by them. Indian
seems that they structure the role in such a way organizations seem to have played only lip
that it is mixed up with other personnel func- sympathy to HRD. More than 50 per cent
tions. As the structures are mixed and conven- of the organizations do not even have a
ience-based, the HRD activities also get mixed full-time, dedicated HRD facilitator. Even
attention and are often convenience-based. As if there is one, he is loaded with recruitment,
a result, various subsystems of HRD do not salary administration, and such other tasks,
get the attention they deserve. Our audits have which are not development roles.
indicated that even those designated as HRD
managers are unable to devote full time to HRD Highlights of the HRD Practices of 12
as they are involved with other personnel Companies
functions and administrative activities. The HRD practices of 12 companies are pre-
In a recent encounter one of the authors sented in Exhibit 1.
of this paper had with a senior HR Manager From Exhibit 1, the following trends may
of a IT company, he was told that there were be observed in terms of the HRD practices:
over a hundred HR professionals working in
that company and 25 of them were in the Visa • Most organizations seem to have well-deve
section. This indicates the ease with which loped performance management systems or
Indian corporations including the IT companies are in the process of having the same. The
use the HRD term to cover all those involved performance management systems of all these
in various forms of unrelated HRD activities. organizations seem to be development-orient
Indian organizations have not yet reached the ed. This is more so in organizations where
maturity level to differentiate the human capital there is a separate HRD department or there
multiplication function from conventional wel- is high emphasis on HRD.
fare and administration functions. • Feedback and counselling is the second system
If one has to follow the original structuring which only a few of them seem to follow.
suggestions by Pareek and Rao, there should However, this is integrated into performance
be separate functionaries available for handling appraisal and hence diluted. The feedback and
performance appraisal, feedback and counsel- review discussions are conducted more as a
ling, potential appraisal and development, OD, formality than with a high development ori
training, and career planning and development. entation.
The HRD function is also inadequately repre- • There is no potential appraisal as a separate
sented. On an average, while there is one person system in any of these companies. It is a part
to look after the personnel management needs of performance appraisal in a few of these
of every 100 employees, there is less than one companies. Only one of the organizations is
full time person to look after the HRD planning to use assessment centres.
needs of every 1,000 employees. This can
be considered as inadequate. The existing HRD • Three hundred and sixty degree feedback is
personnel are also not well qualified in terms being tried out in seven out of the 12 organ-
Vol. 26, No. I.January-March 2001 56 Vikalpa

izations either as part of corporate initiative In sum, Indian corporations still have a long
or on their own initiative. way to go in using all the principles and getting
the best benefit out of HRD.
• Employee satisfaction surveys, TQM inter
ventions, total productivity management, team Extent to which the Integrated Systems
building workshops, visioning exercises, train Approach is being Followed in Implement-
the trainer programmes, etc. are some of the ing HRD
OD interventions being used by these organ
izations. However, there is very little of in- Table 2 presents a summary evaluation of the
extent to which Pareek and Rao's Integrated
house competencies in OD. OD interventions
Systems Approach is followed in the 12 organ-
are largely outsourced. HRD departments
are not yet being developed as internal izations. The observations are derived from
change agents or OD facilitators. various audits.
Table 2 clearly indicates that the Integrated
• Training and development is well developed
Systems Approach has not been implemented
and well managed in these organizations.
properly even though the approach was evolved
Internal faculty has been developed in most
25 years back. The approach is very simple and
of these organizations. Those organizations locally evolved with the help of Indian man-
covered under ISO certification programmes
agers. The reasons for poor implementation
have given systematic and high emphasis to
may be due to:
training and development activities. They are
still to graduate from training and develop • Lack of understanding and appreciation of the
ment orientation to creation of a learning significance of HRD and its linkages to
environment. business by the top management.
Extent of Application of the Principles of • Lack of competent HRD staff.
the Approach in Implementing HRD
• Lack of professional preparation of HRD
The Integrated Systems Approach by Pareek staff.
and Rao envisaged that there is linkage between
the subsystems. The study also indicated that, • Inadequate understanding of HRD concep
in most of the organizations, training needs are tualizations and frameworks.
being identified on the basis of performance The recent HRD frameworks are concep-
appraisals. Potential appraisal is the most ne- tually more heavy, culturally not very sensitive
glected factor followed by career planning and to Asian cultures, and are more sophisticated
development and feedback and counselling. Due in terms of larger number of variables they
to limited number of persons handling the HRD cover and the linkages needed. For example,
function, there is some degree of integration the strategic HR approach of Ulrich requires
between the subsystems. Integration with per- HR professionals to perform multiple roles and
sonnel also seems to be reasonably good. achieve multiple objectives starting from align-
The principles envisaged by Pareek and Rao ing HR with business to initiating and managing
in designing and implementing HR systems are organizational transformation. This is a laudable
meant to uplift the HR function to a higher level objective and requires different quality of people
and make it an enabling and empowering to manage HR. They should in fact be CEOs
function. If HR systems in any organization are or have the calibre of CEOs. It is doubtful
designed and implemented using these princi- whether they will have the organizational sup-
ples, the organization is likely to have a com- port and competencies to perform the multiple
petitive advantage. An evaluation of the extent roles envisaged by Ulrich when they find it
to which seven of these principles is being difficult to manage the six subsystems of HRD
followed is presented in Table 1. in an integrated manner.

Table 1: An Assessment of the Principles Followed in Designing and Implementing the
HR Systems in Indian Organizations

H R S P r i n c i p l e E n v i s a g e d b y P a reek and Rao (1977) Assessment of the Extent to which the Principle in Being
Followed

• HRD should help the company to increase • This is aimed at by all the organizations.
enabling capabilities. The capabilities However, there is no well-articulated
outlined in their report include: development philosophy. The concern exists in the minds
of human resources in all aspects, of top management but is not being translated
organizational health, improvements in problem into action by the HRD departments. The
solving capabilities, diagnostic skills, existing structures and competencies are
capabilities to support all the other systems insufficient for this.
in the company, etc.

• HRD should help individuals to recognize their • In the absence of good potential assessment
potential and help them to contribute their systems and career development initiatives,
best to various organizational roles they are this is being highly neglected.
expected to perform.
• Maximize individual autonomy through • HRD departments have not undertaken
increased responsibility. structural interventions. They are also weak
in this part of OD interventions. However, to
the extent performance management systems
are focusing on this aspect, it gets done.
• Decentralization through delegation and • HRD function has not focused on this system-
shared responsibility. atically.
• Participative decision-making. • Participative performance appraisal systems
have facilitated this to a great extent.
Organizational diagnosis exercises also have
facilitated this. The participative culture has
largely increased and the HRD function does
have a role in these organizations.
• Balancing adaptation of the HRD system to the • HRD departments have largely contributed to
current organizational culture and changing the adaptation of HR systems to the existing
the culture. culture rather than attempting to change them.
It is only in the recent past with the use of
Balanced Score Card Approach in the
performance system that there is some
attempt to change the culture.
• Continuous review of the function and
renewal. • HRD audit and such other mechanisms are
being used occasionally. Continuous review
mechanisms are absent in these
organizations.

The usefulness of these frameworks and performance appraisal, feedback and counsel-
models to Asian organizations is doubtful unless ling, etc. If HR professionals have to use any of
implementation problems like the ones men- these models, the following are the important
tioned above are taken care of. Most of these prerequisites:
approaches give a strategic role to HR and treat • CEOs should be willing to treat their em
the HR professionals as partners in business. ployees as a strategic resource and give HR
Pareek and Rao's model gave this role to HRD
the status it deserves.
in 1975 by assigning a transformational role to
HR professionals though HRD systems like OD, • They should recognize HR professionals as


Table 2: Extent to which Elements of Pareek and Rao's (1975) Integrated Systems
Approach is Followed

Element Extent to which Followed

• A differentiated structure with separate HRD • None of the organizations has differentiated HRD
department and full-time staff. structures. Less than 50% have full-time HRD
staff.
• Six subsystems of HRD. • Only two of the subsystems are implemented
reasonably well. Training and performance apprais
al, potential appraisal, career planning, and OD
are weak.
• Interlinkages between subsystems. • Only performance appraisal is linked to training
and full potential of performance appraisal is not
used.
• Designed with 14 principles in focus. • The principles are not used though occasionally
some components figure in terms of company
values.
• Linked to other systems of HRF. • This is done by default as HRD does not have
a separate identity.

competent and strategic partners in business. Conclusions and Recommendations
• HR professionals should learn as much about
business as they do about HR systems, This survey indicates that the HRD function is
change management, and transformational not well structured as envisaged in mid-70s. The
technologies. function seems to be convenience-driven rather
than systems-driven. It does not have all the
• They should continuously enhance their HR systems ideally it should have as envisaged in the
competencies to keep pace with the changing 70s. The systems are not well integrated. The
environment. integration mechanisms are stronger but the
specialization does not get the attention it de-
• Their agenda and roles should be redefined serves. The structures and competencies are not
to include involvement in business plans, fully in tune with the Integrated HRD Systems
organizational structures, and implementa- Approach offered by Pareek and Rao. The HRD
tion activities. For example, success of ERP subsystems, however, have evolved and matured
or SAP implementation will depend greatly to a substantial degree, specially the performance
on how well the change is orchestrated in management system, and training and develop-
terms of employee involvement and how well ment system. OD and feedback and counselling
it is integrated into various HR processes and are in the next level of maturity. Potential apprais-
planning of HRD for ERP and SAP. al and career planning and development are the
• There should be competent HR professionals least developed and used subsystems. The HRD
available in the country. (The number of HR departments need to have professionally trained
professionals who have become CEOs in the and competent staff. If they have to make an
last 25 years is less than a dozen in the entire impact, they should enhance the maturity levels
country.) of all the above subsystems. These subsystems
have a lot of potential for giving competitive
• Administrative functions should be differen- advantage through the development of employ-
tiated from HRD. ees and their competencies.

55 Exhibit 1: Summary of Highlights of the HR Structure and Systems Used in 12 Companies in the Period Between 1995-2000
Vol. 26, No. 1, January-March 2001

HRD Dimension VFC CPC TMC MEMO IMC CMU-1
Structure Single person President-Corporate No separate HRD Top -level person in No separate HRD. No separate HRD.
department covering Personnel heads function. charge of HR and Personnel function HRD integrated
HRD as part of the function. HRD activities are HRD. looks after personnel into HR function
personnel and Separate managers part of personnel Integrates HRand administration. which handles HR
administration. allocated to HRD. and industrial HRD function. Training looked administration
Reports to CEO. relations. No separate HRD after by a separate matters.
HRD audit managers. functionary.
recommended Chief spends time After HRD audit,
separate identity. on HRD and pays special attention
special attention. being given to HRD.
Performance Trait-based appraisal. Balance Score Employee Performance for Open system with Annually done.
Appraisal Open. Card framework. development review business results. self-appraisal Comprehensive and
Changed to KPA- Key responsibility having goal setting Open system promoting open development-
based with quarterly areas identified. and behavioural linked to business discussion with oriented.
performance review 360 degree feedback attributes. goals. superior, based on Appraisal system
discussion after used for top Assessment done traits only. inclusive of self-
HRD audit. management. annually. Key performance appraisal, goals
areas and key and accomplish-
responsibility areas ments, personal
60

absent. attributes, team
appraisal, and ap-
praisal of effort put
in for subordi-
nate's development.
Potential No potential No potential No potential No potential No potential Mention in
Appraisal appraisal system. appraisal system. appraisal system. appraisal system. appraisal system. performance
appraisal through
recommendations
for potential
development.
Feedback Performance No system providing Performance Weak system Weak system of Limited to appraisal
and Counselling counselling and feedback or review develop- of feedback feedback giving at feed-back only.
feedback done twice counselling exists. ment at the giving. No the start of appraisal. Performance
in the year and start of appraisal counselling. Counselling absent. counselling non-
includes the only. existent.
appraisal exercise. Counselling absent.
Career Planning No career planning. No career planning Policy of career and Exists in form of
and Development in organization. succession planning "Reserve Pools," but
Career development documented. limited to highest
Vikalpa

encouraged through two positions in
training only. departments only.

Exhibit 1 Contd.

Vol. 26, No. 1, January-March 2001 Training and T&D area of high Continuous Systematic T&D Employee Training Continuous through T&D needs
Development focus and throughout the year. needs identification and Development. Total Productivity identified through
importance. Also as part of done annually for Management Management for various sources
Post-training TQM, training needs functional, Committee identifies technical skills, post- and means.
presentations and identified, calendar behavioural and T&D needs quarterly training presentations Training calendar
reports mandatory. prepared, internal managerial skills. and continuously and reports. prepared for the
Library of such faculty identified and facilitates them. No scientific year and communi-
reports maintained. developed, post- Training calendar identification of cated to all.
training feedback prepared. training needs. Systematically done
monitored. and continuous in
the organization.
Organizational Weak. Employee satisfaction Culture building: Sporadic and not
Development surveys. annual day, sports. given adequate
Climate diagnosis, focus in the
manpower studies, organization.
benchmarking, market-
surveys, action research,
kaizens, small group
activities, etc.

HRD Dimension CMU-2 AMC MMC PMC GDC SMC

Structure No separate HRD There is a separate HRD&IR is a com- HRD's functions HRD department Members of HR
61

department. Welfare- HRD department. bined department. operate under two was established in department are
oriented. H R D Personnel function HRD was initiated functions -P&IR and 1991-92. associated with
mainly in terms of separate and focuses in 1992 as an Technical Training A new complemen- quality forums and
appraisal and on worker welfare important activity. and competencies tary department has share the new
training. and administration. The Management Development Centre. relating to TQM, things they learn.
HRD function HRD activities job evaluation, and
bifurcated at the largely undertaken manpower audit and
next level into by the HRD section can work closely
IR&HRD. All of the P&IR with HRD.
personnel functions department.
handled b y t h e
D e p u t y General
Manager-P&IR.

Appraisals linked to
Performance Development review Annual performance increments training, Performance appraisal Good performance Annual appraisal
Appraisal process initiated in review system, not job rotation, identi- is one-sided given due takes place, where
1994 focusing on perceived to be fication of high-fliers, requiring appraiser consideration for appraisee is given
job goals, personal very transparent counselling, to assess the promotion. performance rating
Vikalpa

traits, and personality. and open. promotion, etc. appraisee on a after discussing the
Includes joint number of qualities. entire year's
appraisal on some performance.

Exhibit 1 Contd.

Potential Mention in appraisal Not currently being High potential High potential Potential appraisal 360 degree feedback
Vol. 26, No. 1, January-March 2001 Appraisal system, not focused on introduced, succession candidates are candidates are does not exist. for unit head only.
or given required planning present in identified during identified during
attention to. some divisions. potential appraisal. potential appraisal.
Feedback and Performance feed- Quarterly feedback The HRD department Feedback from No system providing Feedback given after
Counselling back given during being introduced regularly conducts mentors and mentees feedback or 360 degree feedback.
review sessions. after the audit. exit interviews, collected regularly counselling.
Counselling weak. analyses the data, and action initiated
and gives feedback whenever possible.
to the top Training programmes
management. evaluated on the
basis of the feed-
back from faculty as
well as participants.
No formal laid-out
Career Planning No system exists. Succession planning A well laid-out Career planning and corporate policy on
and Development initiated by identi- career planning and succession planning succession planning.
fying possible promotion policy are not present.
successor for each exists.
key person. Career paths identi-
fied in a general
way.
Succession planning
done only for the
62

VP level position.
Short-term training In-house and
Training and Continuous activity, Technical training Structural training Technical, programmes for external training
Development individual department highly emphasized, activities being under- managerial, and professional programmes.
for T&D, training continuous activity, taken since 1989. behavioural program- knowledge and on- Functional and
calendar made every main focus on Technical training mes conducted the-job skills. A developmental
year, training needs competency building, and behavioural and regularly for all training centre at training needs
identified through high support from top management officers and staff. one location. discussed in
brainstorming and management, post- development are the Training needs performance review
interdisciplinary training data in-house programmes identified by the discussion.
meetings. collection weak. undertaken. Technical Training
and Management
Development Centre
(TTMDC).
Climate survey, Quality circle,
Organizational Managerial grid and A number of cultural Excellent worker Induction training, strategic planning, sports, cultural
Development effectiveness program- change initiatives development mentoring, job- learning culture, activities, kaizens,
mes conducted along introduced. programmes, training rotation, TTMDC, total quality, low small group
with periodic needs identification quality circles, shop resistance to change. activities.
diagnostic surveys. through appraisals^ floor committees.
Vikalpa

mentoring, and role
model.

References Pareek, U and Rao, T V (1998). Pioneering Human
Resources Development: The L&TSystem, Ahmedabad:
Curtis, B; William, E H and Sally, M (1995). Overview Academy of Human Resources Development,
of the People Capability Maturity Model, Carnegie (Publication of the Original Consultancy Reports,
Mellon University: Software Engineering Institute. 1975 and 1977).
Friedman, B; James, H and David, M W (1998). Rao, T V (1999). HRD Audit, New Delhi: Response
Delivering on the Promise: How to Attract, Manage Books (A Division of Sage Publications).
and Retain Human Capital, Arthur Andersen, New Ulrich, D and Lake, D (1990). Organizational Capa-
York: Free Press. bility: Competing from the Inside/Out, New York:
Wiley.
Pareek, U and Rao, T V (1975). HRD System in Larsen&
Toubro, Ahmedabad: Indian Institute of Manage- Ulrich, D (1997). The Human Resource Champions: The
ment, Unpublished Consultancy Report. New Agenda for Adding Value and Delivering Results,
Boston, MA: Harvard Business School.
Pareek, U and Rao, T V (1977). HR Function in Larsen Yeung, A K and Berman, B (1997). "Adding Value
& Toubro, Ahmedabad: Indian Institute of Man-
through Human Resources: Reorienting Human
agement.
Resource Measurement to Drive Business Perform-
Pareek, U and Rao, T V (1982). Designing and Managing ance," Human Resource Management, Vol 36, No 3,
Human Resource Systems, New Delhi: Oxford & IBH. pp 321-335.


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