Research Article

focuses on the analysis and resolution of managerial issues based on analytical and 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 function. Since then, most organizations have started new HR departments or redesignated their personnel and other departments as HRD departments. Today, there are high expectations from HRD. Good HRD requires well-structured function, appropriately identified HRD systems, and competent staff to implement and facilitate the change process. This paper attempts to: Examine the way the HRD function is structured in the Indian corporate sector. Highlight the current HRD practices in India in relation to various HRD systems. Examine the extent to which HRD implemen tation meets the criteria of the Integrated HRD Systems Approach of Pareek and Rao (1975, 1977), and using this analysis, comment on the prerequisites for the success of other recent HRD frameworks for Asian countries.

A number of human resources development frameworks has come into existence in the last ten years from various parts of the world. Indian organizations have begun to use these for improving their HRD systems and their impact. An Integrated HRD Systems Approach was evolved for Indian organizations at the Indian Institute of Management, Ahmedabad by Udai Pareek and T V Rao for L&T. This paper examines the current status of structuring of the HRD function and HRD subsystems in India against this "Integrated HRD Systems" framework. The paper also comments on the recent approaches to HRD. Data from HRD audits of 12 Indian organizations indicated that HRD function is not well structured, is inadequately differentiated, poorly staffed, and fails to meet the requirements of this framework. In the light of these experiences of Indian organizations in implementing this framework, the paper points out the prerequisites for success of other HRD frameworks in India.
T VRao is Chairman, Raju Rao is Consultant, and Taru Yadav is Research Associate at the T VRao Learning Systems Private Limited, Ahmedabad.
An earlier version of this paper with data from eight Indian organizations has been submitted for presentation at the Academy of HRD Research Conference, USA, Oklahoma, February-March 4, 2001.

Theoretical Frameworks of HRD

Pareek and Rao's Framework
In 1975, L&T a prominent engineering company in India had appointed two consultants (Udai Pareek and TV Rao) from the Indian Instifute of Management, Ahmedabad to study the performance appraisal system and make recommendations for improving it. They (Pareek and Rao, 1975) studied the system through interviews and suggested a new system. They recommended that "... Performance Appraisal, Potential Appraisal, Feedback and Counselling, Career Development and Career Planning, and Training
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and Development get distinct attention as unique parts of an integrated system which we call the Human Resources Development System" (see Pareek and Rao, 1998, p 24). This system was proposed as a separate system with strong linkages with the personnel (human resources) system. In their second report on the human resources system in L&T, Pareek and Rao (1977) recommended that the personnel fun- ction be viewed as Human Resources Function (HRF) and suggested a trifurcated function: Personnel Administration, HRD, and Worker Affairs. Adding Organization Development (OD) also to the HRD function, they recommended that "... Since OD is being added now, it is necessary to strengthen that part of HRD. We, therefore, recommend that the company may appoint a Manager (OD) with two officers to do a lot of research work which will soon start" (p 139). The consultants differentiated HRD from other components of HRF and also integrated structurally and system-wise. Structurally, HRD is to be a subsystem of HRF and integration of this with the other two subsystems (Personnel Administration and Worker Affairs) is to be done by a person at the Director level (for example, Vice-President Personnel & HRD), through task forces and subsystem linkages. Inter-system
1.

linkages were outlined between various HRD subsystems to have an integrated system. Pareek and Rao also outlined a philosophy for the new HR system, which included 14 principles to be kept in mind while designing the HRD system. These principles deal with both the purpose of HRD system and the process of its implementation (see Box). In essence, the Integrated HRD Systems Approach of Pareek and Rao (1975) has the following elements: A separate and differentiated HRD depart ment with full time HRD staff.

Six HRD subsystems including OD.

Interlinkages between the various subsys tems. Designed with 14 principles in mind. Linked to other subsystems of HRF. After L&T accepted these recommendations in full and started implementing them, the State Bank of India (the single largest Indian Bank) and its Associates decided to use the Integrated HRD Systems Approach and created a new HRD Department. By mid-80s, a large number of organizations in India had established HRD departments.

Box: Principles of HRD System

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. 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. It should help maximize individual autonomy through increased responsibility. It should facilitate decentralization through delegation and shared responsibility. It should facilitate participative decision-making. It should attempt to balance the current organizational culture with changing culture. There should be a balance between differentiation and integration. There should be a balance between specialization of the function with its diffusion into the others. HRD system should ensure responsibility for the function. It should build upon feedback and reinforcement mechanisms. It should maintain a balance between quantification 4nd qualitative decisions. There should be a balance between external and internal help. It should plan the evolution of the function. There should be a continuous review and renewal of the function.
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2. 3. 4. 5. 6. 7. 8. 9.

10. 11. 12. 13. 14.

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Other Frameworks of HRD

As HRD came to prominence in the last decade, other frameworks and models came into existence. Some of these are briefly reviewed here. The Strategic HR Framework Approach: This framework formulated by Ulrich and Lake (1990) aims to leverage and/or align HR practices to build critical organizational capabilities that enable an organization to achieve its goals. This framework offers specific tools and paths to identify how a firm can leverage its HR practices. Business strategy, organizational capabilities, and HR practices are the three important elements in this framework. Ulrich (1997) presented a framework for HR professionals in terms of four key roles: Management of strategic human resource. Management of firm infrastructure. Management of employee contribution. Management of transformation and change. The activities for managing strategic human resources include the following: Aligning HR and business strategy: "organi zational diagnosis." Reengineering organization processes: "shared services." Listening and responding to employees: "providing resources to employees." Managing transformation and change: "en suring capacity for .change." The activities for management of firm infrastructure include the following: Constant examination for improving the HR processes. HR professionals to become administrative experts to ferret out unnecessary costs, improve efficiency, and constantly find new ways to do things better; be effective as administrative experts and undertake activ ities leading to continual reengineering of the work processes they administer. HR professionals to design and deliver ef ficient HR processes for staffing, training, appraising, rewarding, promoting, and manVol. 26, No.1, January-March 2001 51

aging the flow of employees through the organization. The activities for managing employee contribution include listening, responding, and finding ways to provide employees with resources that meet their changing demands. The activitie s for managing transformation and change include identifying and framing problems, building relationships of trust, solving problems, creating, and fulfilling action plans. The Integrative Framework : The integrative framework offered by Yeung and Berman (1997) identifies three paths through which HR practices can contribute to business performance: (1) by building organizational capabilities; (2) by improving employee satisfaction; and (3) by shaping customer and shareholder satisfaction. Yeung and Berman (1997) argued for dynamic changes in HR measures to refocus the priorities and resources of the HR function. They argued that HR measures should be business-driven rather than HR-driven; impact-driven rather than activity-driven; forward looking and innovative rather than backward looking; and instead of focusing on individual HR practices should focus on the entire HR system, taking into account synergies existing among all HR practices. Human Capital Appraisal Approach : This approach outlined by Friedman, James, and David (1998) of Arthur Andersen consulting company is based on the belief that there are five stages in the management of human capital: clarification stage, assessment stage, design stage, implementation stage, and monitoring stage. There are five areas of human capital management: recruitment, retention, and retirement; rewards and performance management; career development, succession planning, and training; organizational structure; and human capital enablers. A 5 X 5 matrix using these five stages and five areas could be used to evaluate and manage the human capital well. For example, in the clarification stage, the managers examine their human capital programmes to fit into their strategy and overall culture. They may also examine each of the areas to fit into the strategy.
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HRD Score Card Approach: A recent approach formulated by Rao (1999) envisages that, in order to make the right business impact, HR interventions should be mature in terms of the HRD systems, competencies, culture (including styles), and business linkages. Through a wellformulated HRD audit, the following are assessed: The maturity level and the appropriateness of each of the subsystems of HR, the appro priateness of the HR structures, and the level of competencies of HR staff, line managers, top management, etc. The HRD culture (defined in terms of open ness, collaboration, trust, autonomy, proaction, authenticity, confrontation, and exper imentation) and the congruence of the top management and HR staff styles with HRD culture, and the extent to which all the systems and practices result in employee satisfaction and customer satisfaction, etc. P-CMM Approach: Curtis and his team (1995) developed this approach for software organizations. The People Capability Maturity Model (PCMM) aims at providing guidance on how to improve the ability of software organizations to attract, develop, motivate, organize, and retain the talent needed to steadily improve their software development capability. The strategic objectives of P- CMM are: Improving the capability of software organ izations by increasing the capability of the workforce. Ensuring that the software development capability is an attribute of an organization rather than that of a few individuals. Aligning the motivation of individuals with that of the organization. Retaining human assets (i.e., people with critical knowledge and skills within the or ganization). A fundamental premise of the maturity framework is that a practice cannot be improved if it cannot be repeated. In an organization's least mature state, systematic and repeated performance of practices is sporadic. The PCMM model describes an evolutionary imVol. 26, No. 1, January-March 2001 52

provement path from an ad hoc, inconsistently performed practices to a continuously mature, disciplined, and continuously improving development of the knowledge, skills, and motivation of the workforce. The P-CMM model is intended to help the software organizations to: Characterize the maturity of their workforce practices. Guide a programme of continuous workforce development. Set priorities for immediate actions. Integrate workforce development with process improvement. Establish a culture of software engineering excellence. It is designed to guide software organizations in selecting immediate improvement actions based on the current maturity of their workforce practices. The P-CMM model includes practices such as work environment, communication, staffing, managing performance, training, compensation, competency development, career development, team building, and culture development. It is based on the assumption that organizations establish and improve their people management practices through the following five stages of maturity: initial, repeatable, defined, managed, and optimizing. Each of the maturity levels comprises of several Key Process Areas (KPAs) that identify clusters of related workforce practices. When performed collectively, the practices of a key process area achieve a set of goals considered important for enhancing workforce capability. To quote Curtis, William, and Sally (1995): In maturing from the initial to the repeatable level, the organization instills the discipline of performing basic practices for managing its workforce. In maturing to the defined level, these practices are tailored to enhance the particular knowledge, skills, and work methods that best support the organization's business. The core competencies of the organization are identified;
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the workforce activities are aligned to the development of these competencies. In maturing to the managed level, the organization uses data to evaluate how effective its workforce practices are and to reduce variation in their execution. The organization quantitatively manages organizational growth in workforce capabilities, and when appropriate, establishes competency-based teams. In maturing to the optimizing level, the organization looks continuously for innovative ways to improve its overall talent. The organization is actively involved in applying and continuously improving methods for developing individual and organizational competence. All these approaches share a lot in common with the following characteristics with relatively varying degree of emphasis on them: They are systems driven and emphasize HRD systems or subsystems or tools. They attempt to link HR practices with business goals. They recognize the importance of HR pro fessionals and HRD. The Integrated Systems Approach of Pareek and Rao envisaged a separate HRD department for effective designing and implementation of HRD systems. It envisaged strategy as a starting point (as in Ulrich and Lake, 1990), and, therefore, focused on all the systems to achieve business goals and employee satisfaction. It aimed at synergy (like in the Integrated Approach of Yeung and Herman), proposed the phased evolution of HRD function (like the PCMM approach) and included most of the elements of the Human Capital Approach. While each of the latter models has brought to focus one or the other most neglected dimensions that could be good pointers for not getting the best out of HR, the essence is very similar to Pareek and Rao's approach. If the locally developed frameworks are not implemented well for reasons not associated with the framework but with lack of understanding and seriousness, it may be presumed that advanced frameworks are
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even more difficult to adopt and get results. It is with this view that an attempt is made to assess the current status of HRD structures and practices in the Indian industry.

Methodology and Limitations

In order to examine the structure of HRD function and implementation of various HRD subsystems, 12 of the 50 organizations which participated in the HRD audit conducted by the authors were chosen. These were chosen to represent a variety of Indian corporates. The 12 organizations cover financial services, consumer products, electronics, cement, tyres, and automobiles. The HRD audit methodology involves an evaluation of the HRD structure, systems, processes, competencies, and culture by a team of experts. The methodology used for HRD includes: Questionnaire study of HRD systems and processes. Individual and group interviews with HRD staff, top management, line managers, and other stakeholders to ascertain their percep tions of the HR systems and processes and outline the gaps. Study of various documents relating to HRD systems. Observation of the work culture, training in operation, etc. Analysis of secondary data. The detailed methodology used in HRD audit is described in detail by Rao (1999). The observations reported in this study are drawn from the experiences of the authors during their visits to these organizations for HRD audit and discussions with HR managers, line managers, and other employees. The HRD audit provides a lot of data which are not included here. The 12 organizations are described subsequently. The common part of these organizations is that they all sought an audit of their HRD by external consultants. This itself is a progressive step. To the extent this sample constitutes such organ53 Vikalpa

izations, the sample is a biased sample. The authors, however, feel that these organizations are representative of the Indian corporate sector.

Results and Findings

Structure of HRD Function The structure of HRD function in organizations is briefly described below: the 12

appraisals and training devote their full attention to these functions. OD, career planning, and potential appraisal are not focused at present. TQM and feedback and counselling are well integrated into the other systems. Multinational Electronics Manufacturing Company (MEMO): MEMC is the world's leading supplier of electrical and electronic connectors and inter-connection systems. Headquartered in the US, MEMC has about 46,000 employees all over the world. It is a world-class technology leader and is frequently named as one of the top 50 patent-holding corporations in the world. The total number of employees in this company at the time of this study was about 600. The HR department had six employees, one Manager, one Assistant Manager, one Senior Executive, one Officer, one Junior Officer, and one receptionist. The head of HR integrates HRD function with the other HR systems. While there are no separate departments, there are individuals in charge of different HR systems. Tyre Manufacturing Company (TMC): The market share of this TMC is considered to be one of the best in the tyre industry in India and the total number of employees in one of its plants studied is about 1400. The HR department has 21 employees who look after personnel, safety, time, office, welfare, etc. There is no separate HRD department. It is not a differentiated function. After the HRD audit, the company decided to establish a separate HRD unit and integrate it with the personnel function at the plant level. At the top level in the corporate office, there is a high concern for competence building to meet changing needs of the industry. Indian Multinational Company (IMC): This company is owned by an Indian business house and is located in another country. It is a manufacturing unit and employs a few Indians. It is the best-rated company in the country where it is located. It is the first to get ISO-14001 and QS-9000 accreditation. Eighty-five per cent of its products are exported to about 30 countries (like UK, France, Spain, Italy, Israel, etc.) and most of its customers across the world consider it to be highly quality conscious and customer54
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Venture Finance Company (VFC): VFC is a

professionally managed venture finance company which enjoys both national and international patronage. It has provided managerial and financial support to over 45 companies. The total manpower currently is 34 out of which 26 are in the managerial cadre while the remaining are clerical support staff. This is the smallest of the organizations studied. VFC does not have a separate department for HRD. Currently, there is one executive who looks after HRD and one deputy manager in charge of personnel and administrative matters. Consumer Products Company (CPC ): In this company, talent, recruitment, retention, and excitement are the focus in HR and it aims at fully establishing itself as an FMCG company. Ecommerce, E-initiatives, and diversification are some future possible areas of work. The total number of employees is about 800. The corporate personnel division is headed by a President-HR (who also looks after an SBU besides all HR activities). There are three Deputy General Managers (personnel administration, TQM, and health services), one Manager-estates, recruitment, and other HR issues, one Civil Manager, two Assistant Managers (payroll and training and performance management), one Executive (recruitment, 360 degree feedback, and other matters), one Senior Officer (Secretary to President and Compensation Manager) and one Officer (administrative support in training, resignations, exit interviews, transfer, etc). The Human Resources Function in this company is highly differentiated. The President-HR integrates it at the top level. There is no strong departmentation but specialization at individual level and a high degree of flexibility. The managers in charge of
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driven. It plans to double its production in the next five years. It intends to do so with an addition of less than 20 per cent to its manpower. It has about 300 local employees and about 40 Indian managers. The HR department has a total of 31 staff of which there is one Deputy General Manager heading the functions and three Officers each looking after training, personnel matters, and safety. Of the remaining employees, nine are Drivers, two are Receptionists, four are Safety Technicians, two are Agricultural Engineers, one is a Nurse, and the rest are miscellaneous staff.
Automobile Manufacturing Company (AMC):

and HRD. The HRD function is bifurcated at the next level into industrial relations (headed by a Deputy General Manager - P&IR) and HRD headed by a General Manager - HRD, and HD manager with training as an independent function directly reporting to the VicePresident - HRD. The HRD and IR staff include 43 officers. Of the 43 personnel, four are in the training division and only one is in HRD along with management trainees. The rest are in Personnel and IR. Power Manufacturing Company (PMC): Profit wise, this company is among the top ten leading companies in India (high profit and high share value), it has ISO 9000 certification and is the best generating plant. The total manpower at PMC is 2,500, where 40 per cent are management and supervisory staff, 48 per cent are workers, and 7 per cent are subordinate staff. The HRD function operates under two departments: P&IR and Training. The P&IR department is headed by a Deputy General Manager (P&IR) and is assisted by a Manager (P&IR), a Deputy Manager (IR), and two Deputy IROs. There are a total of seven Assistant Personnel Officers, one Welfare Officer, and two trainees. There are 14 assistants (including general assistants, steno-typists, etc.) to assist the staff. The training centre is headed by a Chief Engineer (Training) who reports to the Vice-President in charge of the power plant. Gas Distribution Company (GDC): This company has over 530 employees and the annual turnover is about Rs 100 crore. The HRD department consisted of a Senior Manager and Assistant Manager, Senior Officers besides an Assistant Manager, a Senior Officer, an Engineer, and a staff in the training centre. Soap Manufacturing Company (SMC):The annual turnover of this company is around Rs 200 crore. The total manpower strength in this organization is 450 out of which 350 are workers. The Personnel and Administrative department consists of three workmen and eight officers/managers including one Executive (HRD and Administration) and a Manager (Personnel and Administration).
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This company envisions itself to be a world class organization in the next few years. Competition is increasing with the entry of multinationals and joint ventures. The total number of staff at managerial levels is over 1,700 both technical and non- technical. The HRD staff consists of 16 members with six of them having an engineering background which gives them a technical advantage in the business of the company. While two of them look after training and development, the rest look after other HR functions including recruitment, induction, etc. Cement Manufacturing Units (CMUs): CMU1 had a total of 154 staff and officers and 130 workmen. Of the 154 staff, 27 are in senior managerial cadre, 69 are supervisors and officers, and 58 are assistants. Seventy-seven of the 130 workers are skilled. A Deputy General Manager-Personnel & HRD who integrates both the functions manages the HR function. A Manager and an Officer assist him. CMU-2 is a market leader and is expected to be the largest single location manufacturing plant when its plans are achieved. The plant has an employee strength of 450 workmen and 782 officers. There are ten members in the Personnel and HR department and 17 in the Welfare department. Metal Manufacturing Company (MMC): The total employee strength of this company is 8,000 with a turnover of nearly Rs 1,000 crore. HRD and IR is combined in this MMC. The VicePresident looks after both industrial relations
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Structuring of HRD
The above description of the HR function indicates that the HR departments in Indian organizations (including one multinational located in India and one Indian company located in another country) do not have well differentiated structures appropriate for HRD. They have well differentiated roles in personnel but not in HRD. When it comes to HRD, it seems that they structure the role in such a way that it is mixed up with other personnel functions. As the structures are mixed and convenience-based, the HRD activities also get mixed attention and are often convenience-based. As a result, various sub- systems of HRD do not get the attention they deserve. Our audits have indicated that even those designated as HRD managers are unable to devote full time to HRD as they are involved with other personnel functions and administrative activities. In a recent encounter one of the authors of this paper had with a senior HR Manager of a IT company, he was told that there were over a hundred HR professionals working in that company and 25 of them were in the Visa section. This indicates the ease with which Indian corporations including the IT companies use the HRD term to cover all those involved in various forms of unrelated HRD activities. Indian organizations have not yet reached the maturity level to differentiate the human capital multiplication function from conventional welfare and administration functions. If one has to follow the original structuring suggestions by Pareek and Rao, there should be separate functionaries available for handling performance appraisal, feedback and counselling, potential appraisal and development, OD, training, and career planning and development. The HRD function is also inadequately represented. On an average, while there is one person to look after the personnel management needs of every 100 employees, there is less than one full time person to look after the HRD needs of every 1,000 employees. This can be considered as inadequate. The existing HRD personnel are also not well qualified in terms
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of learning methodology, human development, and such other technical skills required to handle the competency building, commitment building, and culture building functions of HRD. It may be concluded that the HRD function in India is not appropriately structured though the world's first dedicated HRD department was started here. The structures do not follow the principles envisaged by Pareek and Rao and are not differentiated as outlined by them. Indian organizations seem to have played only lip sympathy to HRD. More than 50 per cent of the organizations do not even have a full-time, dedicated HRD facilitator. Even if there is one, he is loaded with recruitment, salary administration, and such other tasks, which are not development roles. Highlights of the HRD Practices of 12 Companies The HRD practices of 12 companies are presented in Exhibit 1. From Exhibit 1, the following trends may be observed in terms of the HRD practices: Most organizations seem to have well-deve loped performance management systems or are in the process of having the same. The performance management systems of all these organizations seem to be development-orient ed. This is more so in organizations where there is a separate HRD department or there is high emphasis on HRD. Feedback and counselling is the second system which only a few of them seem to follow. However, this is integrated into performance appraisal and hence diluted. The feedback and review discussions are conducted more as a formality than with a high development ori entation. There is no potential appraisal as a separate system in any of these companies. It is a part of performance appraisal in a few of these companies. Only one of the organizations is planning to use assessment centres. Three hundred and sixty degree feedback is being tried out in seven out of the 12 organVikalpa

izations either as part of corporate initiative or on their own initiative. Employee satisfaction surveys, TQM inter ventions, total productivity management, team building workshops, visioning exercises, train the trainer programmes, etc. are some of the OD interventions being used by these organ izations. However, there is very little of inhouse competencies in OD. OD interventions are largely outsourced. HRD departments are not yet being developed as internal change agents or OD facilitators. Training and development is well developed and well managed in these organizations. Internal faculty has been developed in most of these organizations. Those organizations covered under ISO certification programmes have given systematic and high emphasis to training and development activities. They are still to graduate from training and develop ment orientation to creation of a learning environment.

In sum, Indian corporations still have a long way to go in using all the principles and getting the best benefit out of HRD.

Extent to which the Integrated Systems Approach is being Followed in Implementing HRD
Table 2 presents a summary evaluation of the extent to which Pareek and Rao's Integrated Systems Approach is followed in the 12 organizations. The observations are derived from various audits. Table 2 clearly indicates that the Integrated Systems Approach has not been implemented properly even though the approach was evolved 25 years back. The approach is very simple and locally evolved with the help of Indian managers. The reasons for poor implementation may be due to: Lack of understanding and appreciation of the significance of HRD and its linkages to business by the top management.

Extent of Application of the Principles of the Approach in Implementing HRD

The Integrated Systems Approach by Pareek and Rao envisaged that there is linkage between the subsystems. The study also indicated that, in most of the organizations, training needs are being identified on the basis of performance appraisals. Potential appraisal is the most neglected factor followed by career planning and development and feedback and counselling. Due to limited number of persons handling the HRD function, there is some degree of integration between the subsystems. Integration with personnel also seems to be reasonably good. The principles envisaged by Pareek and Rao in designing and implementing HR systems are meant to uplift the HR function to a higher level and make it an enabling and empowering function. If HR systems in any organization are designed and implemented using these principles, the organization is likely to have a competitive advantage. An evaluation of the extent to which seven of these principles is being followed is presented in Table 1.
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Lack of competent HRD staff.

Lack of professional preparation of HRD staff. Inadequate understanding of HRD concep tualizations and frameworks. The recent HRD frameworks are conceptually more heavy, culturally not very sensitive to Asian cultures, and are more sophisticated in terms of larger number of variables they cover and the linkages needed. For example, the strategic HR approach of Ulrich requires HR professionals to perform multiple roles and achieve multiple objectives starting from aligning HR with business to initiating and managing organizational transformation. This is a laudable objective and requires different quality of people to manage HR. They should in fact be CEOs or have the calibre of CEOs. It is doubtful whether they will have the organizational support and competencies to perform the multiple roles envisaged by Ulrich when they find it difficult to manage the six subsystems of HRD in an integrated manner.
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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 enabling capabilities. The capabilities outlined in their report 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.

This is aimed at by all the organizations. However, there is no well-articulated philosophy. The concern exists in the minds of top management but is not being translated into action by the HRD departments. The existing structures and competencies are insufficient for this.

HRD should help individuals to recognize their

In the absence of good potential assessment

potential and help them to contribute their best to various organizational roles they are expected to perform.
Maximize

systems and career development initiatives, this is being highly neglected.

HRD

individual increased responsibility.

autonomy

through

departments have not undertaken 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. atically.

Decentralization through delegation and

shared responsibility. Participative decision-making.

HRD function has not focused on this system 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 culture.

Continuous review of the function and

the adaptation of HR systems to the existing 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.
HRD audit and such other mechanisms are

renewal.

being used occasionally. Continuous review mechanisms are absent in these organizations.

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

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

Interlinkages between subsystems.

Designed with 14 principles in focus.

Linked to other systems of HRF.

competent and strategic partners in business.

Conclusions and Recommendations This survey indicates that the HRD function is not well structured as envisaged in mid-70s. The function seems to be convenience-driven rather than systems-driven. It does not have all the systems ideally it should have as envisaged in the 70s. The systems are not well integrated. The integration mechanisms are stronger but the specialization does not get the attention it deserves. The structures and competencies are not fully in tune with the Integrated HRD Systems Approach offered by Pareek and Rao. The HRD subsystems, however, have evolved and matured to a substantial degree, specially the performance management system, and training and development system. OD and feedback and counselling are in the next level of maturity. Potential appraisal and career planning and development are the least developed and used subsystems. The HRD departments need to have professionally trained and competent staff. If they have to make an impact, they should enhance the maturity levels of all the above subsystems. These subsystems have a lot of potential for giving competitive advantage through the development of employees and their competencies.

HR professionals should learn as much about business as they do about HR systems, change management, and transformational technologies. They should continuously enhance their HR competencies to keep pace with the changing environment. Their agenda and roles should be redefined to include involvement in business plans, organizational structures, and implementation activities. For example, success of ERP or SAP implementation will depend greatly on how well the change is orchestrated in terms of employee involvement and how well it is integrated into various HR processes and planning of HRD for ERP and SAP. There should be competent HR professionals available in the country. (The number of HR professionals who have become CEOs in the last 25 years is less than a dozen in the entire country.) Administrative functions should be differentiated from HRD.
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59

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55

Exhibit 1:

Summary of Highlights of the HR Structure and Systems Used in 12 Companies in the Period Between 1995-2000 VFC
Single person

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HRD Dimension Structure

CPC
President-Corporate Personnel heads the function. Separate managers allocated to HRD.

TMC
No separate HRD function. HRD activities are part of personnel and industrial relations. HRD audit recommended separate identity. Employee development review having goal setting and behavioural attributes. Assessment done annually.

MEMO
Top -level person in charge of HR and HRD. Integrates HRand HRD function. No separate HRD managers. Chief spends time on HRD and pays special attention. Performance for business results. Open system linked to business goals.

IMC
No separate HRD. Personnel function looks after personnel administration. Training looked after by a separate functionary. After HRD audit, special attention being given to HRD. Open system with self-appraisal promoting open discussion with superior, based on traits only. Key performance areas and key responsibility areas absent.

CMU-1
No separate HRD. HRD integrated into HR function which handles HR administration matters.

department covering
HRD as part of personnel and administration. Reports to CEO.

Performance Appraisal

Trait-based appraisal. Open. Changed to KPAbased with quarterly performance review discussion after HRD audit.

Balance Score Card framework. Key responsibility areas identified. 360 degree feedback used for top management.

Annually done. Comprehensive and developmentoriented. Appraisal system inclusive of selfappraisal, goals and accomplishments, personal attributes, team appraisal, and appraisal of effort put in for subordinate's development. Mention in performance appraisal through recommendations for potential development. Limited to appraisal feed-back only. Performance counselling nonexistent. Exists in form of "Reserve Pools," but limited to highest

Potential Appraisal

No potential appraisal system.

No potential appraisal system.

No potential appraisal system.

No potential appraisal system.

No potential appraisal system.

Feedback and Counselling

Performance counselling and feedback done twice in the year and includes the appraisal exercise.

No system providing feedback or counselling exists.

Performance review development at the start of appraisal only. Counselling absent.

Weak system of feedback giving. No counselling.

Weak system of feedback giving at the start of appraisal. Counselling absent.

Career Planning and Development

No career planning.

No career planning in organization. Career development encouraged through

Policy of career and succession planning documented.

two positions in
departments only. Exhibit 1 Contd.

training only.

Training and
Development

T&D area of high focus and importance. Post-training presentations and reports mandatory. Library of such reports maintained.

Continuous throughout the year. Also as part of TQM, training needs identified, calendar prepared, internal faculty identified and developed, posttraining feedback monitored. Employee satisfaction surveys. Climate diagnosis, manpower studies, benchmarking, marketsurveys, action research, kaizens, small group activities, etc.

Systematic T&D needs identification done annually for functional, behavioural and managerial skills.

Employee Training and Development. Management Committee identifies T&D needs quarterly and continuously facilitates them. Training calendar prepared.

Continuous through Total Productivity Management for technical skills, posttraining presentations and reports. No scientific identification of training needs.

T&D needs identified through various sources and means. Training calendar prepared for the year and communicated to all. Systematically done and continuous in the organization. Sporadic and not given adequate focus in the organization.

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Organizational Development

Weak.

Culture building: annual day, sports.

HRD Dimension

CMU-2

AMC
There is a separate HRD department. Personnel function separate and focuses on worker welfare and administration.

MMC
HRD&IR is a combined department. HRD was initiated in 1992 as an important activity. The Management HRD function bifurcated at the next level into IR&HRD. All personnel functions handled b y t h e D e p u t y General Manager-P&IR. Appraisals linked to increments training, job rotation, identification of high-fliers, counselling, promotion, etc.

PMC
HRD's functions operate under two functions -P&IR and Technical Training and competencies Development Centre. HRD activities largely undertaken by the HRD section of the P&IR department.

GDC
HRD department was established in 1991-92. A new complementary department has relating to TQM, job evaluation, and manpower audit and can work closely with HRD.

SMC
Members of HR department are associated with quality forums and share the new things they learn.

Structure

No separate HRD department. Welfareoriented. H R D mainly in terms of appraisal and training.

Performance Appraisal

Development review process initiated in 1994 focusing on job goals, personal traits, and personality. Includes joint appraisal on some

Annual performance review system, not perceived to be very transparent and open.

Performance appraisal is one-sided requiring appraiser to assess the appraisee on a number of qualities.

Good performance given due consideration for promotion.

Annual appraisal takes place, where appraisee is given performance rating after discussing the entire year's performance. Exhibit 1 Contd.

Potential Appraisal

Mention in appraisal system, not focused on or given required attention to. Performance feedback given during review sessions. Counselling weak.

Not currently being introduced, succession planning present in some divisions. Quarterly feedback being introduced after the audit.

High potential candidates are identified during potential appraisal. The HRD department regularly conducts exit interviews, analyses the data, and gives feedback to the top management.

High potential candidates are identified during potential appraisal. Feedback from mentors and mentees collected regularly and action initiated whenever possible. Training programmes evaluated on the basis of the feedback from faculty as well as participants. A well laid-out career planning and promotion policy exists. Career paths identified in a general way. Succession planning done only for the VP level position. Technical, managerial, and behavioural programmes conducted regularly for all officers and staff. Training needs identified by the Technical Training and Management Development Centre (TTMDC). Induction training, mentoring, jobrotation, TTMDC, quality circles, shop floor committees.

Potential appraisal does not exist.

360 degree feedback for unit head only.

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Feedback and Counselling

No system providing feedback or counselling.

Feedback given after 360 degree feedback.

Career Planning and Development

No system exists.

Succession planning initiated by identifying possible successor for each key person.

Career planning and succession planning are not present.

No formal laid-out corporate policy on succession planning.

Training and Development

Continuous activity, individual department for T&D, training calendar made every year, training needs identified through brainstorming and interdisciplinary meetings.

Technical training highly emphasized, continuous activity, main focus on competency building, high support from top management, posttraining data collection weak.

Structural training activities being undertaken since 1989. Technical training and behavioural and management development are the in-house programmes undertaken.

Short-term training programmes for professional knowledge and onthe-job skills. A training centre at one location.

In-house and external training programmes. Functional and developmental training needs discussed in performance review discussion.

Organizational Development

Managerial grid and effectiveness programmes conducted along with periodic diagnostic surveys.

A number of cultural change initiatives introduced.

Excellent worker development programmes, training needs identification through appraisals^ mentoring, and role model.

Climate survey, strategic planning, learning culture, total quality, low resistance to change.

Quality circle, sports, cultural activities, kaizens, small group activities.

References
Curtis, B; William, E H and Sally, M (1995). Overview of the People Capability Maturity Model, Carnegie Mellon University: Software Engineering Institute. Friedman, B; James, H and David, M W (1998). Delivering on the Promise: How to Attract, Manage and Retain Human Capital, Arthur Andersen, New York: Free Press. Pareek, U and Rao, T V (1975). HRD System in Larsen& Toubro, Ahmedabad: Indian Institute of Management, Unpublished Consultancy Report. Pareek, U and Rao, T V (1977). HR Function in Larsen & Toubro, Ahmedabad: Indian Institute of Management. Pareek, U and Rao, T V (1982). Designing and Managing Human Resource Systems, New Delhi: Oxford & IBH.

Pareek, U and Rao, T V (1998). Pioneering Human Resources Development: The L&TSystem, Ahmedabad: Academy of Human Resources Development, (Publication of the Original Consultancy Reports, 1975 and 1977). Rao, T V (1999). HRD Audit, New Delhi: Response Books (A Division of Sage Publications). Ulrich, D and Lake, D (1990). Organizational Capability: Competing from the Inside/Out, New York: Wiley. Ulrich, D (1997). The Human Resource Champions: The New Agenda for Adding Value and Delivering Results, Boston, MA: Harvard Business School. Yeung, A K and Berman, B (1997). "Adding Value through Human Resources: Reorienting Human Resource Measurement to Drive Business Performance," Human Resource Management, Vol 36, No 3, pp 321-335.

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