CHAPTER-II

AN OVERVIEW OF HUMAN RESOURCE

DEVELOPMENT

2.1 Meaning and Definition of HRD

2.2 Characteristics of HRD
2.3 Objectives of HRD
2.4 Need for HRD
2.5 Importance of HRD
2.6 HRD at Micro and Macro Level
2.7 HRD Matrix
2.8 HRD Processes
2.9 HRD Outcomes
2.10 HRD Mechanisms:
2.11 Organisational Culture and Climate
 CHAPTER-II

AN OVERVIEW OF HUMAN RESOURCE DEVELOPMENT

INTRODUCTION
HRD is a process, not merely a set of mechanisms and techniques. The
mechanisms and techniques such as performance appraisal, counseling, training
and organisation development interventions are used to initiate, facilitate and
promote this process in a continuous way. Because the process has no limit,
the mechanisms may need to be examined periodically to see whether they are
promoting or hindering the process. Organisations can facilitate this process of
development by planning for it, by allocating organisational resources for the
purposes, and by exemplifying an HRD philosophy that values human beings
and promotes their development.

Human resource development is concerned with present and future of

employee performance by increasing employee’s ability to perform through
development of employee’s knowledge, attitude and skills. A well designed
HRD programme can increase the level of commitment of employees to the
organisation and also their perceptions that the work at the organisation is a
pleasure not pain. Increased involvement can thus result in achievement of
organisational goals.

HRD is an integrated strategy and planned development process for

effective utilisation of human resources for the achievement of organisational
objectives. It aims at the development of both human resource and

26
organisation. It is rather a total matching process between hard S’s (Structure,
System and Strategy) and Soft S’s (Soft, Skill, Style and Superodinate goals).1

“People” are the most important and valuable resource in every

organisation or institution has in the form of its employees. Dynamic people
can build dynamic organisations. Effective employees can contribute to the
effectiveness of the organisation. Competent and motivated people can make
things happen and enable an organisation / institution to achieve its goals.
Therefore, organisations should continuously ensure that the dynamism,
competency, motivation and effectiveness of the employees remain at high
levels. Human resource development is thus a continuous process to ensure the
development of employee’s competencies, dynamism, motivation and
effectiveness in a systematic and planned way.2

2.1 MEANING AND DEFINITION OF HUMAN RESOURCES

DEVELOPMENT:
According to Harbison and Myers (1964) “HRD is the process of
increasing the knowledge, the skills, and the capacities of all the people in a
society. In economic terms, it could be described as the accumulation of human
capital and its effective investment in the development of an economy. In
political terms, HRD prepares people for adult participation in the political
process, particularly as citizens in a democracy. From the social and cultural
points of view, the development of human resources helps people to lead fuller
and richer lives, less bound to tradition. In short, the processes of HRD unlock
the door to modernization”

According to Rao (1995) the scope of HRD is extended, at one side, to

developing competencies of human resource by enhancing knowledge, building
skill, changing attitude and teaching values, and at other side, creation of
1
K.K Choudari, “Personnel Management for executing - “Himalaya Publishing House, New Delhi,
1998, pp125.
2
T.V.Rao , “the HRD Missionary” OXFORD and IBH Publishing Co.Pvt.Ltd, New Delhi, 1990. Pp 8.

27
conditions through public policy, programs and other interventions to help
people to apply these competencies for their own and others’ benefits and
making things happen.

Human Resource Development (HRD) as “A set of systematic and

planned activities designed by an organisation to provide its members with the
opportunities to learn necessary skills to meet current and future job
demands”.3According to Gilley and Eggland (1989): “HRD is organised
learning activities arranged within an organisation to improve performance and
personal growth for the purpose of improving the job, the individual, and the
organisation”.“HRD is the process of determining the optimum methods of
developing and improving the human resources of an organisation and the
systematic improvement of the performance of employees through training,
education and development and leadership for the mutual attainment of
organisational and personal goals” 4

2.2 CHARACTERISTICS OF HUMAN RESOURCE DEVELOPMENT:

1. Human Resource Development is a System: It is a system having several
interdependent parts or sub-systems such as procurement, appraisal,
development, etc. Change in any one sub-system leads to changes in other
parts. For Example, if there is change in promotion policy where seniority is
replaced with merit, the chain reaction on affected individual, unions shall have
to be assessed-keeping the difficulties in framing acceptable guidelines
regarding ‘merit’ in mind.

2. Human Resource Development is a Planned Process: It is a planned and

systematic way of developing people.

3
Werner J. M. and DeSimone R. L. Human Resource Development 4e Published by Thomson South-
western, Indian Edition Akash Press Delhi India , 2006
4
Dr. Muhammad Tariq Khan1, Dr. Naseer Ahmed Khan2, Khalid Mahmood “An Organisational
Concept of Human Resource Development – How Human Resource Management Scholars View
‘HRD’ Universal Journal of Management and Social Sciences” Vol. 2, No.5; May 2012.

28
3. Human Resource Development is an Inter Disciplinary Concept: Human
Resources Development is a amalgamation of various ideas, concepts,
principles and practices drawn from a number of soft science such as
sociology, psychology, anthropology, economics, etc..

4. Human Resource Development is Continuous Learning Process:

It is a continuous learning process and not merely a set of mechanisms
of techniques. In the words of Parnnath, Human Resource Development is not
an engineering process having a set of mechanisms. The techniques such as
Organisational Development, Training and Development, Performance
Appraisal, and Career Advancement, etc, are used to initiate and facilitate and
promote this process in a continuous way. But these mechanisms have no
universal application. The mechanisms to be examined, reviewed, re-oriented
and recast to see whether they are promoting or hindering the process.

5. Human Resource Development is Cooperative Massive Effort in the

Organisation:
The Human Resource development play a major role in development of
employees but the cooperation of other parts of an organisation is necessary in
such an effort.

There are four basic agents or partners of development as under:

1. The employees
2. The Immediate Boss of the employees
3. The Human Resource Development Department
4. The organisation

6. Human Resource Development us an Administrative Function:

Human Resource Development Manager is a line manager and has an
important place in the organisation chart. Previously, it was treated as a staff
function. But the American Society for Training and Development suggested

29
that “Human Resource Development should be an entrepreneurial function to
increase the importance of the Human Resource Development”, observe that
HRD Manager should be a problem – solver, risk-taker, inter-dependent rather
than remedial teacher, caution-taker and dependent. He should create
opportunities for the employees in place of minimizing performance gaps.

7. The Components of Human Resource Development have a wide range:

Some persons have used HRD, Organisational Development as
synonyms. But HRD is the development of an individual through learning
process while organisational development is the development of proper
environment through organisational behaviour. But these are interlinked as
under:
.

Human Resource Development

Reaction

Learning

Job Behaviour Change

Organisation Behaviour Change

Organisation Performance of Organisational

Development

Figure-2.1: HRD Composition

30
8. Human Resource is concerned with the Development of People working
at all levels:
Human Resource Development with the development of people working
at all levels e.g., workers, technical staff, employees and executives in an
organisation, while Management Development is mainly concerned with the
development of executives and management in the organisation. It is also
different form human resource management. Human Resource Development is
inter-linked, pro-active, useful and applicable in all functional areas of
management and top management responsibilities is for twenty four hours
while Human Resource Management is independent reactive and personnel
functions having the responsibility up to office hours only.

9. Human Resource Development is a Science as well as an Art:

It is a science because of its mechanisms and principles and it is an art
due to its philosophy and skills. But the degree of art is greater than the degree
of science as it is related with the skills, values, attitudes and perception of
human beings.

10. There is a Positive relationship between HRD and Organisational

Development:
The constraints of Human Resource Development such as environment,
technology, competition, resources, past practices, history, nature of business,
management policies, etc, are being the same. An organisation that has better
HRD philosophy, climate, sub-system and better people is likely to be more
effective than an organisation that does not have more competent people, job
satisfaction, better development roles, more team work, high productivity and
profitability, better images, low cost, less labour turnover, less absenteeism,
minimum overtime and good industrial relations in an organisation.

31
11. Human Resource Development is a strategy to transform Human
Resource Inputs into Output:
The inputs are the people, the individuals, groups and the total human
organisation. The transformation processes are the managerial sub-system for
acquiring, developing, allocating, conserving, utilizing and evaluating people.
The outputs are the services provided by the individuals and groups to the
organisation in which they are employed in particular and to the society in
general.5

2.3 OBJECTIVES OF HUMAN RESOURCE DEVELOPMENT:

Objectives of HRD can be listed as follows:
1. To develop capabilities of all individuals working in an organisation in
connetion to the present role.
2. To develop capabilities of all such individuals in relation to their future
role.
3. To develop better interpersonal and employer – employee relationships
in an organisation.
4. To develop team spirit.
5. To develop co-ordination among different units of an organisation.
6. To develop organisational health by continuous renewal of individual
capabilities keeping pace with the technological changes.

Objectives of HRD practices in an organisation should be to put efforts

to develop / and realise the full potential of the workforce including
management and to maintain an environment conducive to total participation,
quality leadership and personal and organisational growth. In an organisation
there are six units which are concerned with HRD, namely person, role, team,
inter-team and organisation. The effect of one contributes in turn to the
effectiveness of the others.
5
Santosh Gupta and Sachin Gupta, “Human Resources Development”, Deep and Deep Publications
Pvt Ltd. Rajuri Gorden New Delhi, 2005. Pp 4-5.

32
  Institute training on the job.
 Break down barriers between departments to build teamwork.
 Drive fear out of the workplace.
 Create conditions to enable employees to take pride in their
workmanship.
 Institute programme of education and self-improvement. .6

2.4 NEED FOR HRD

All business and industrial organisations are dynamic, liberalisation,
privatisation and globalisation made the business firms further dynamic. In
other words, they have been changing continuously in terms of technology,
type of business, products / services, organisational strength and the like. The
changes invariably demand for the development of human resources.

1) Changes in Economic Policies

Almost all the governments across the globe have changed their
economic policies from communistic / socialistic pattern to capitalistic pattern.
Liberalization, privatization and globalisation posed threat to the weak firms
and created opportunities to large firms.

2) Changing job Requirements

Organisational dynamism brings changes in organisational design and
job design. The changes in job design bring changes in job description and job
specifications. These changes demand for HRD.

3) Need for multi-skilled Human Resources

The changing trends in industrialisation, structuring jobs and
organisations demand the employee to take up multiple activities. The
customer centered approach lead to de-jobbing flexible organisations and

6
Deepak Kumar Bhattacharya, “Human Resources Management” Second Edition, Anurag Jain
Publications for Excel Books, New Delhi. 2005. Pp 25-39

33
flexible work. All these changes demand the employees with multiple skills.
HRD activities provide the opportunity to the employees to acquire and
develop multiple skills.

4) Organisational Viability and Transformation Process

Organisational viability is continuously influenced by the environmental
threats. If an organisation does not adopt itself to the changing environmental
factors, it will lose its market share. If the organisation desires to adopt these
changes first, it has to develop human resources.

5) Technological Advances
Organisations in order to survive and develop should adopt the latest
technology. Adaptation of the latest technology will not be complete until they
are manned by developed employees. Employee development is possible
through human resources development. These are the days of information
technology and high level production and service technology.

6) Human Relations
Most of the organisations today tend to adopt the human relations
approach. This in turn needs HRD.7

2.5 IMPORTANCE OF HUMAN RESOURCE DEVELOPMENT:

Human resource development (HRD) is an essential component for the
growth and economic development. It can occur at both the nationwide level
and the firm-wide level. The enhancement of HRD of a country is dependent
on the government and national policies, while at the firm or micro level HRD
can happen through training and efficient utilization of resources. Resources
are efficiently utilized to support HRD when the maximum benefit is created at
the lowest possible cost.8Human resource is needed to be developed as per the

7
Subbarao, P. “Personnel and Human Resources management” Himalaya Publishing House Mumbai,
2004, pp 119-120.
8
Jon wernor and Rendy Desimon “Human Resource Development” journal of employee training, 2006

34
change in external environment of the organisation, hence, HRD helps to adapt
such changes through the development of existing human resource in terms of
skill and knowledge.

The significance of HRD are as follows:

1. HRD Develops Competent Human Resource

HRD develops the skills and knowledge of individuals, hence, it helps to
provide competent and efficient HR as per the job requirement. To develop
employees’ skills and competencies, different training and development
programs are launched.

2. HRD Creates Opportunity for Career Development

HRD helps to grasp the career development opportunities through
development of human skills and knowledge. Career development consists of
personal development efforts through a proper match between training and
development opportunities with employee’s need.

3. Employee Commitment
Trained and efficient employees are committed towards their jobs which
is possible through HRD. If employees are provided with proper training and
development opportunities, they feel committed to the work and the
organisation.

4. Job Satisfaction
When people in the organisation are well oriented and developed, they
show higher degree of commitment in actual work place. This inspires them for
better performance, which ultimately leads to job satisfaction.

5. Change Management
HRD facilitates planning and management of change in an organisation.
It also manages conflicts through improved labour management relations. It

35
develops organisational health, culture and environment which lead to change
management.

6. Opportunities for Training and Development

Training and development programs are tools of HRD. They provide
opportunity for employees’ development by matching training needs with
organisational requirement. Moreover, HRD facilitates integrated growth of
employees through training and development activities.

7. Performance Improvement
HRD develops necessary skills and abilities required to perform
organisational activities. As a result of which, employees can contribute for
better performance in an organisation. This leads to greater organisational
effectiveness.9

2.6 HUMAN RESOURCE DEVELOPMENT AT MICRO AND MACRO

LEVEL:
Human Resource Development mainly concerns development of people
whether it may be political or managerial reasons. When we call it as a people
oriented concept the questions like should the people be developed in the larger
and national context or in the organisational context. Is it different at the macro
level and micro level? The answers would be that Human Resource
Development applies for both institutional (Micro) and National (Macro)
issues. But its main objective is to take up both present and future challenges to
the attainment of goals. However, it is useful both at macro and micro levels.

Macro Level:
At macro level Human Resources Development is concerned with the
people development for nations well being. It takes wealth, capabilities, skills,
attitudes of people which are more useful to the development among them and

9
www.Accountmanagement.blog.com.//importanceofhumanresourcedevelopment.com

36
the nation’s overall development as well. While calculating the national income
and economic growth prospective, Human Resource Development concept
examines the individual incomes, their attitudes, aspirations, etc., and
establishes concrete base for the economic planning and measures to control
inflation. This becomes possible only if the development of Human Resource
of whole nation is taken care of. However, Human Resource Development
contribution at macro level is not popularized. It is at Micro and more so it is
only at corporate level that Human Resource Development has become famous
over the years.

Micro Level:
Micro Human Resource is usually understood to be the actual execution
of duties as mandated at the macro level. These duties commonly include the
administration of policies regarding the selection, hiring, compensation,
placement, performance management, promotion, conflict resolution, discipline
and discharge of employees. Some of the terms commonly associated with
micro HR are operations planning, practices, procedures and administration.

Human Resources Development has great concern for grass root

development in the organisations. More so it is well received by companies’
management as they realised its importance and foresaw its future contribution
to the individual and organisational development. Generally HRD at micro
level talks of the organisations’ manpower, planning, selection, training,
performance appraisal, development, potential appraisal, compensation,
organisational development etc. HRD’s involvement in all these areas is mainly
with an objective to develop certain new capabilities in people concerned to
equip them to meet the present job challenges and to accept future job
requirements.10

10
VSP Rao “Human Resource Management” Second Edition, Anurag Jain Publication, New Delhi.
2005, pp 273-274.

37
2.7 HUMAN RESOURCE DEVELOPMENT MATRIX:
The HRD matrix shows the interrelationship between HRD instruments,
processes, outcomes and organisational effectiveness.
1. HRD Instruments: These include performance appraisal, counselling,
role analysis, potential development, training, communication policies,
job rotations, rewards, job enrichment programmes, etc. These
instruments may vary depending on the size of the organisation, the
internal environment, the support and commitment of the top
management, the competitive policies etc.
2. HRD Processes: The HRD instruments lead to the generation of HRD
processes like role clarity, performance planning, development of
climate, risk-taking, dynamism among employees. Such HRD processes
should result in more competent, satisfied and committed people that
would make the organisation grow by contributing their best to it.
3. HRD Outcomes: HRD instruments and processes make people more
committed and satisfied, where they tend to give their best to the
organisation enthusiastically.
4. Organisational Effectiveness: The HRD outcomes influence the
organisational effectiveness, which in turn, depends on a number of
variables like environment, technology, competitors, etc.11

2.8 HRD PROCESSES:

HRD is a process-oriented function. HRD functions in many
organisations fail because the processes involving the systems are not
adequately addressed. The concept of process essentially concerns the question
of “how” and to a great extent the question of “why”. It emphasizes the
behavioural and interactional dimensions. All the HRD processes are centered
around four constituents of an organisation viz., the employee
role, teams and the organisation itself. Each of the unit has its own behavioural

11
Rao T.V. “The Human Resource Development Missionary” Oxford IBH, New Delhi 1990

38
patterns and framework, which, if not addressed adequately may not bring in
the desired outcomes. It is through these processes that the HRD systems are
effectively implemented. Implementations of the HRD systems are, in turn
indented to bring in right processes in organisations. Hence, HRD systems and
HRD processes are closely linked.

1. Individual: Individual is the basic constituent of an organisation. All the

behavioural pattern and dynamisms emerge from individuals. Hence, individual
based HRD process explained below are vital for HRD function and for
implementation of the HRD systems.
i) Efficacy ii) Effectiveness iii) Styles iv) Leadership

2. Role: Role is a dynamic entity which involves the expectations of others and
self from the position of the role holder. A large number of behavioural
patterns and dynamism in organisations are centered on the roles. The role
occupier and all others who have some linkage or relationship to that role form
a constituent. Following are some of the role related, HRD processes in
organisations.
i).Competencies for job performance ii) Commitment iii) Motivation
iv) Frustration, and v)Stress and Burnout

3. Teams: Work in organisations is performed through teams or groups. When

individuals begin to work in team, behavioural patterns and dynamisms
emerge. Following HRD processes are to be addressed if team work should
bring in the desired results.
i). Communication ii). Feedback iii) Conflict resolution
iv) Collaboration

4. Organisation: A large number of HRD processes are organisation related.

Unless and until these processes are in place, HRD cannot take off. However,
in a number of organisations as a result of implementation of HRD systems,

39
these processes were set right. HRD systems can contribute towards the
development and maturity of these processes.
i) Organisational Climate ii) Communication iii) Learning Organisation
iv) Organisational Change v) Organisational Development 12

2.9 HUMAN RESOURCE OUTCOMES:

Human Resource Development processes should result in more
competent, satisfied and committed people that would make the organisation
grow by contributing their best to it. It is important to mention here that:
 HRD processes operating simultaneously affect the outcome.
 HRD processes are many, whereas outcomes are few.
 If HRD outcomes are not present in an organisation at a satisfactory
level, then one need to question the adequacy (qualitative and
quantitative) of the HRD process in that HRD out comes should be
evident with the following objectives.
1. More competent people
2. Commitment and more involvement.
3. Better utilisation of human resource
4. Job satisfaction and motivation
5. Respect for each other at workplace
6. Better organisational health
7. Better generation of internal recourses
8. Better problem solving competencies.
9. Collaboration among different units of organisation
10. Self-renewing capabilities which in turn increase the capability of
individuals, dyads, teams and entire organisation.
11. Team spirit and functioning in every organisational unit.

12
Biswajeet Pattanayak, “ Human Resource Management” Second Edition, Prentice Hall of India
Private Ltd., 2003, pp 104-112

40
HRD outcomes influence the organisational effectiveness:
Dimensions of Organisational Effectiveness can be measured under the
following heads:
 High productivity.
 Growth and Diversification of Units
 Cost Reduction
 More Profit
 Better Public Image of the organisation.
The linkage between HRD outcomes and organisational effectiveness
are not easily demonstrable due to the influence of several other variables in
determining productivity.13

2.10 HRD MECHANISMS:

Many HRD mechanisms are available to develop the competencies of
employees and improve the overall organisational climate. The major ones are
discussed below:
1. Performance Appraisal:
Performance Appraisal has become increasingly important tool for
organisations to use in managing and improving the performance of employees,
in making timely and accurate staffing decisions and improving the overall
quality of the firm’s products and services. The appraisal process is the formal
way of evaluating the employee’s performance. Its purpose is to provide an
accurate picture of post and future employee’s performance, to meet this
performance appraisal is set. The targets are based on job related criteria that
best determine successful job performance. The possible actual performance is
measured directly and objectively. Using a wide variety of techniques,
specialists select an appropriate method to measure an employee’s actual

13
Santosh Gupta and Sachin Gupta, “Human Resources Development”, Deepand Deep Publications Pvt
Ltd. Rajuri Gorden New Delhi, 2005. Pp 4-5.

41
performance against the previously set targets. The process is used to
strengthen the effort of performance linkage.

Appraisals help an organisation to communicate its expectations

regarding performance and connection between performance and reward to
employees. They increase employees’ confidence and employees’ feedback and
their efforts are being adequately rewarded. The feedback is offered through an
evaluation interview. Here, the rater tries to give both positive and negative
sides of the employee performance. To be useful, raters or supervisors use
HRD orientated appraisals as a mechanism to:
 Uncover difficulties faced by the subordinate while handling assigned
task and try to remove these hurdles.
 Understand the strengths and weaknesses of subordinates and help the
subordinates overcome the obstacles in the way.
 Encourage subordinates to meet problems head-on, accept
responsibilities and face challenges with confidence and courage.
 Plan for effective utilization of the talents of subordinates.

Instruments or devices used for collecting data on behavioral aspects to

help derive tentative generalizations like other instruments, HRD instruments
have deferent types of (what is to be measured, or diagnosed) units that have
some internal consistency and uses on index of some kind of express the result
of the analysis / diagnosis.

Objectives of Performance Appraisal

Performance appraisal has been expected to achieve various objectives
in an organisational setting. Appraisal serve to monitor the efforts of
individual, to integrate and co-ordinate individual efforts into a co-operative
endeavour to provide protection and feedback to the individual, to provide a
means of correcting or commending the efforts of individuals, and to provide
an equitable and consistent basis of distributing reward and penalties. It is

42
obvious, therefore, that there has been a very wide range conception of the
objectives to be achieved by an appraisal system. It has also been seen in a
narrower context by many who feel that its predominant use has been for
evaluation of past and current performance of employees. 14

A good performance appraisal system should have the following

objectives.
A) Administrative: Decision for promotion, salary increase, placement,
transfer, discharge etc., and organisation planning.
B) Motivation: Appraisal interviews, counselling, participation in goal setting
and work planning, self appraisal etc., are the part of motivation.
C) Development: Counselling, training and development and communication
of the employees.
d) Performance Development: Through MBO and other goal setting and
work planning processes.

Both behaviour and performance outcomes are appraised through

performance appraisal. “Behaviours emanate from the performed and
transformed performance from abstraction to action. Behaviours are the
product of mental and physical effort applied to tasks. Every appraisal system
is stressed on assessment of personality traits and constructive way to the job
itself. Now-a-days there has been a swing from appraising. Job related
behaviour and abilities to assessment of outcome or results achieved.

Need and Importance of Performance Appraisal

The performance appraisal has been considered as the most significant
and indispensable tool for an organisation for the information it provides is
highly useful in market decisions regarding various personal aspects such as
promotions. Performance also measures information gathering and decision –
14
Brij Mohan A “Performance Appraisal” Training Manual for Non-Academic Staff in Distance
Education 1993 pp224-225

43
making process which provides a basis for judging the effectiveness of
personnel, sub-divisions such as recruitment, selection, training and
compensation. An accurate information plays a vital role in the organisation. It
helps in pinpointing weak to see which of the employees need training or
counseling, because jobs are grouped by categories. These categories can be
broken into smaller and smaller groups, if necessary. If valid performance data
are timely available the management can maintain consistent promotion and
compensation policies throughout the total system.15

Functions of performance appraisal

Levinson has mentioned three functions of performance appraisals.
1) It seeks to provide an adequate feedback to each individual for his/her
performance.
2) It purports to serve as a basis for improving or changing behaviour
towards some more effective working habits.
3) It aims at providing data to managers / supervisors with which they may
judge future job assignments and compensation.16

Factors affecting performance

The following are the factors which affect the performance of an
individual and are, therefore, of relevance to performance appraisal.
 The quality of performance is greatly influenced by the quality of
superior. Subordinate relationship, particularly in non-mechanical
tasks.
 Superior – subordinate relationship which are supportive and
facilitative in nature are more productive and satisfying than control
based relationship.
 Tasks requiring innovation and growth require greater superior
support than those where only maintenance is needed.
15
Fred Luthans “Organisational Behaviour” McGraw Hill Publishing House New Yark 1981 pp-266-
270
16
H.Levinson “Appraisal of work performance” Harverd Business Review, july –August 1976 pp30

44
  Clarity of goals in terms of quality, cost and time limit exert a major
influence on performance.
 Performance is high where goals are dynamic. Growing task
requirement involving increased help in building sub-ordinates.
 Performance is better if the task-requirement (goals) is fixed in
collaboration with the subordinate concerned.
 Performance is low where feed-back is lower or where the
psychological consequences of failure are adverse, e.g. loss of status
or self-esteem.
 Performance is high where the employee has a high degree of
awareness of his capacity and of the potential of his task.
 Counseling for improvement in performance is more acceptable to a
subordinate where the advice is backed by objective factors and
he/she can perceive an intention on the part of the superior to help
him in the effort to improve.17

Performance appraisal concerns mainly three purposes – They are:

a. Administrative decision: Promotion, transfers and allocation of
financial rewards.
b. Employee development: Identification of training and
development needs and performance feedback.
c. Personnel research: Generation of manpower information.

Besides, salary and wage determination, performance appraisal is also

used for training and development, career planning, man-job matching,
promotion, helping supervisors to know their subordinates, helping the
employees to know their achievements and failures etc.18

17
Brij Mohan A “Performance Appraisal” Training Manual for Non-Academic Staff in Distance
Education 1993 pp224-225
18
Dr.M.L..anga “Management of Performance Appraisal” First Edition Himalaya Publishing House
Bombay 1983 pp1-2

45
Uses of Performance Appraisal
Some of the common uses of appraisals include
 Determining appropriate salary increases and bonuses for workers
based on performance measure.
 Determining promotions or transfers depending on the demonstration
of employee strengths and weakness.
 Determining training needs and evaluation techniques by identifying
areas of weaknesses.
 Promoting effective communication within organisations through the
interchange of dialogue between supervisors and subordinates.
 Motivating employees by showing them where they stand and
establishing a data on appraisal for rendering assistance in personnel
decisions.

Organisations use performance appraisals for three purposes – i)

Administrative, ii) Employee development, and iii) Programme assessment.
Programme appraisals commonly serve for administrative purpose by
providing employers with a rationale for making personnel decisions, such as
decisions relating to pay increases, promotions, demotions, terminations and
transfers.19

2. Potential Appraisal:
The term ‘potential’ refers to the abilities possessed by an employee but
not put to use currently or the abilities to assume challenging responsibilities in
future assignments. The term ‘performance’ refers to one’s skills, abilities in
meeting the requirements of the job which one is holding currently. Potential
appraisal is different from performance appraisal which shows the employee’s
current performance in his existing role. If the employee is required to play a

19
A.M.Sharma “Personnel and HRM” Himalaya publishing House New Delhi 2003, pp117-118

46
completely different set of roles at the higher levels, potential appraisal needs
to be carried out at regular intervals.

The potential appraisal refers to the appraisal i.e., identification of the

hidden talents and skills of a person. The person might or might not be aware
of them. Potential appraisal is a future – oriented appraisal whose main
objective is to identify and evaluate the potential of the employees to assume
higher positions and responsibilities in the organisational hierarchy. Many
organisations consider and use potential appraisal as part of the performance
appraisal processes.

“The objective of potential appraisal is to identify the potential of a

given employee to occupy higher positions in the organisational hierarchy and
undertake higher technologies.” The appraisal is carried out on the basis of (i)
supervisor’s observations; (ii) performance data relating to various previous
roles played by an employee; (iii) performance on roles in simulating to a new
position. A good potential appraisal system helps management to pick up a
suitable candidate for a given job and offer additional training facilities, if
necessary.

The purposes of a potential review are:

1. To inform employees of their future prospects;
2. To enable the organisation to draft a management succession
programme;
3. To update training and recruitment activities;
4. To advise employees about the work to be done to enhance .their career
opportunities.

47
Techniques of potential appraisal:
1) Self – Appraisals. 2.) Peer appraisals. 3) Superior appraisals. 4). MBO’
5). Psychological and psychometric tests. 6) Management games like role
playing
7) Leadership exercises etc.

Potential appraisal helps to identify what can happen in future so that it

can be guided and directed towards the achievement of individual and
organisational growth and goals. Therefore, potential should be included as a
part of the Performance appraisal in organisations.

The Potential for Improving Performance, or PIP, measures the

performance of the average worker versus the best person performing a
particular task. Large differences suggest that performance can be improved by
bringing average performance closer to the best performance. Small differences
suggest little potential for improvement.

The following are some of the requirements and steps to be followed when
introducing a potential appraisal system:
Role Description: A good potential appraisal system would be based on clarity
of roles and functions associated with the different roles in an organisation.
This requires extensive job descriptions to be made available for each job.
These job descriptions should spell out the various functions involved in
performing the job.

Qualities Required: Besides job descriptions, it is necessary to have a detailed

list of qualities required to perform each of these functions. These qualities
may be broadly divided into four categories – (1) Technical knowledge and
skills, (2) Managerial capabilities and qualities, (3) Behavioral capabilities, and
(4) Conceptual capabilities.

48
Indicators of Qualities: A good potential appraisal system besides listing
down the functions and qualities would also have various mechanisms for
judging these qualities in a given individual. Some of the mechanisms for
judging these qualities are – (a) Rating by others, (b) Psychological tests, (c)
Simulation games and exercises, (d) Performance appraisal records.

Organising the System: Once the qualities required to perform these functions
are indicated the qualities and mechanisms for generating these indicators are
clear, the organisation is in a sound position to establish and operate the
potential appraisal system. Such establishment requires clarity in organisational
policies and systematisation of its efforts.

Feedback: If the organisation believes in the development of human resources

it should attempt to generate a climate of openness. Such a climate is required
for helping the employees to understand their strengths and weaknesses and to
create opportunities for development. A good potential appraisal system should
provide an opportunity for every employee to know the results of assessment.
Employee should be helped to understand the qualities actually required for
performing the role for which he thinks he has the potential, the mechanisms
used by the organisation to appraise his potential, and the results of such an
appraisal.

A good potential appraisal system provides opportunities continuously

for the employee to know his strengths and weaknesses. These are done
through periodic counseling and guidance sessions by either the personnel
department or the managers concerned. This should enable the employee to
develop realistic self-perceptions and plan his own career and development.20

20
Neelankavil, Nora and Ivek Sthalkar “Mid-Career Coursing: A Participative HRD Option” IJTD
May-Jun 1991, pp 33-34

49
Career Planning and Career Development:
Individual career planning assumed greater significance with the growth
and speed of knowledge, phenomenal increase in educational and training
facilities and widespread increase in job opportunities. Similarly, organisational
career planning also gaining importance with the change in technology, human
needs, value and aspirations, increase in organisational size, complexity and
various systems are operating at different levels.21 At this juncture, HRD
system is creating this facilitative culture through its subsystems that would
ensure individual growth and a long term commitment to the organisation.
Career planning is one of the important subsystems which contribute towards
better HRD.22

“A career is a sequence of positions occupied by a person during the

course of a life time “Career development means the development of the
general and technical and managerial career in the organisation, career paths of
the employee is the foreseeable future in the organisation with the help of the
reporting manpower planning and potential appraisal. Career planning gets
closely linked with these components of the human resource system.23Career
Planning is a participative process. Organisation does not have unilateral
control over employee’s career. Both organisation and individual are
responsible for career planning.24

Career planning is a process of integrating the employees’ needs and

aspirations with organisational needs. Career programmes and HR programmes
are linked to the degree that they help each individual meet individual and
oragnisation requirements.

21
C.B.Mamoria, S.V.Gankar “Human Resources Management”, Himalaya Publising House, Seventh
Edition 2008, pp159-169.
22
Philip.J, “HRD:Concept and Practices”, In Modern Management Associations Led, 1987 pp 57-67
23
Donal E, Super and Doughlas, T Hall “Career Development, Exploration and Planning” in a Annual
Review of psychology, Mark R Rosenzweing and Lyman W Porter (Plo Alto: Annual Review Inc
1978) XXIX 334.
24
Bhatia S.K. Career Management:A Two-Way Process”, Indian Management, Nove 1985 pp25-27.

50
 In the HRD system, the long term growth plans of a company are not
kept secret. They are made known to the employees. The subordinates should
be assisted in planning their careers within the company. It is, however, not
necessary that each one of them would scale new heights every year but at least
they are aware of the opportunities and get ready for greater challenges ahead.
Career planning doesn’t guarantee success. But without it, employees are rarely
prepared to encash the opportunities that come on their way.

Important Elements of Career:

Career has following important elements:
 It is properly sequenced job related activity. Such job related activity
vis-à-vis experience include role experiences at different hierarchical
levels of an individual, which lead to an increasing level of
responsibilities, power, achievement and rewards.
 It may be individual-centered or organisational centered. Individual-
centered (internal) career is an individually perceived sequenced of
career progession within an occupation.25
The process of career management can be classified into two parts
1. Career planning
2. Career development
1. Career planning:
A career is the job that is held during ones working life. Edwin B Flippo
defined a career as a sequence of separate but related work, objectives that
provide continuity, order and meaning in a person’s life. Douglas T. Hall
defined a career as “an individually perceived sequence of attitudes and
behaviours associated with work related experience and activities over time
span of persons life”.

25
D.K.Bhattachary, “Human Resoource Development”, Himalaya Publishing House , Mumbai, First
Edition 2009, pp98-99.

51
 A career path is sequential pattern of jobs that form a career. Career
goals are the future positions one strive as part of a career. Career planning is
the process by which one selects career development. They are personal
improvement which one undertakes to achieve a personal career plan. Career
management is the process of designing and implementing goals and strategies
enable the organisation to satisfy employee needs while allowing individuals to
achieve their career goals.26

In the HRD system the long term growth planning of a company are
kept secret. They are made known to the employees; major changes are
discussed at all levels to promote understanding and commitment among
employees. The immediate concern of employees would be to find out where
they stand in such a road map. Since managers have information about the
growth plans of the company they should be assisted in planning their careers
within the company. It is however, not necessary that each of them would scale
new heights every year but at least they are aware of the opportunities and get
ready for greater challenging ahead. But without it, employees are rarely
prepared to encash the opportunities that come on their way.27

2. Career Development :
Career development programmes are not of recent index. There are four
steps in establishing a career development system they are;
 Needs : define the present system
 Vision: determining new directions and possibilities
 Action plan: deciding on practical first step and so on
 Results: maintaining the change.28

26
P.Subbarao “Essentials of Human Resource management and Industrial Relations” ”, Himalaya
Publishing House Mumbai, 2004 pp 225-226
27
Santosh Gupta and sachin Gupta “Human Resource Development” Deep & Deep Publications Pvt.
Ltd 2005 pp 67-68
28
Ibid 72-73

52
3. Training and Employee Development:
Training has gained importance in present day environment where jobs
change rapidly. Training is a learning experience designed to achieve a
relatively permanent change in an individual that will improve the ability to
perform on the job. Employee development on the other hand is a future
oriented training process, focusing on the personal growth of the employee.
Both training and development focus on learning.29 Training programmes
should not be designed as quick fixes for organisational problems, nor should
they depend on faddish techniques just because they are popular now and are
followed by our next door neighbor. Instead, training should be planned to
meet the specific needs of the organisation and its employees. To survive and
grow in a competitive environment, organisations have to motivate their
employees to get ready for all kinds of future challenges.

Training is the acquisition of knowledge, skills, and competencies as a

result of the teaching of vocational or practical skills and knowledge that relate
to specific useful competencies. Training has specific goals of improving one's,
capacity, and performance. It forms the core of apprenticeships and provides
the backbone of content. In addition to the basic training required for a trade,
occupation or profession, observers of the labor-market] recognized the need to
continue training beyond initial qualifications: to maintain, upgrade and update
skills throughout working life. People within many professions and occupations
may refer to this sort of training as professional development.30Training and
development is a subsystem of an organisation. It ensures that randomness is
reduced and learning or behavioral change takes place in structured format.

29
R.K. Sahu, “ Training for Development all You need to Know” , Anurag Jain for Excel Books, New
Delhi, 2005,
30
M.T.Uva, “Human Resource Management” McGraw Hill Publishing House, August 31-2013, pp 31-
35

53
Traditional and Modern Approach of Training and Development
Traditional Approach – Most of the organisations before never used to
believe in. They were holding the traditional view that managers are born and
not made. There were also some views that training is a very costly affair and
not worth. Organisations used to believe more in executive pinching. But now
the scenario seems to be changing.

The modern approach: The Indian Organisations have realized the

importance of corporate training. Training is now considered as more of
retention tool than a cost. The training system in Indian Industry has been
changed to create a smarter workforce and yield the best results.31

Training and Development Objectives:

The principal objective of training and development division is to make
sure the availability of a skilled and willing workforce. In addition to that, there
are four other objectives: Individual, Organisational, Functional, and Societal.

Individual Objectives – help employees in achieving their personal goals,

which in turn, enhances the individual contribution to an organisation.

Organisational Objectives – assist the organisation with its primary objective

by bringing individual effectiveness.

Functional Objectives – maintain the department’s contribution at a level

suitable to the organisation’s needs.

Societal Objectives – ensure that an organisation is ethically and socially

responsible to the needs and challenges of the society.32

31
MG Jomon “ Human Resource Development in Real Time” 2003, pp 91-95
32
Ibid 95-96

54
Identifying Training Needs
There is a great scope for improvement of working personnel in their job
satisfaction. The problem faced by individuals, groups, departments, divisions,
and organisations as a whole may be identified through structured discussion
and opinion surveys.

Defining Training Objectives

Generally, the training programmes are organised to import knowledge,
skills, attitudes and competencies of people to perform the assigned job
effectively. The objectives must be measured. The trained personnel should be
able to utilize their knowledge and competencies to solve identified problem in
the organisation. In order to achieve this objective the programmes should
have an application orientation.

Structure of Training Programme

The content of the programme should be derived by analysis and
activities should be performed by the trained manpower and their present
competencies. The programme should be flexible, modular, credit based, and
application oriented. The programme should optimize learning by utilizing on
the job learning experience and class-room teaching.33

Objectives of Training
Objectives of training methods can be determined generally as below.
a) Increase job satisfaction and morals among employees
b) Increase employee motivation
c) Increase efficiency in processes, resulting in financial gain
d) Increase capacity to adopt new technologies and methods
e) Increase innovation in strategies and products
f) Reduce employee turnover
g) Enhance company image, e.g., conducting ethics training
33
B.S.Rathod, L.N.Mittal and D.D.Sharma, “Current Tends in HRD”, Deep and Deep Publications
New Delhi, 1995, pp 364-365.

55
 h) Risk management, e.g., training about sexual harassment, diversity
training etc.

Objectives of orientations are different from other methods, because

they are given for the new employees of the organisation in the beginning of
their career at organisation. Orientation should emphasize the following topics:

(i) The company's history and mission.

(ii) The key members in the organisation.
(iii) The key members in the department, and how the department helps to
fulfill the mission of the company.
(iv) Personnel rules and regulations.

Objectives of the telling methods give an idea about the training area.
Sometimes written parts also can be seen in this method, but generally this
method gives an understanding about the learning area.

Showing methods create a picture among trainees mind and it helps to

bring the trainee to real situations and that helps to practice decision making
and general understanding in wide area, than telling method. This method also
helps to increase the creativity of the trainee.

Role playing generate leaders and decision makers. Such kind of things
help the trainee to get a deep understanding about the learning and working
area. Such training can be used for junior management levels and finally can
make a competence, skillful employees. Job rotation reduces the individuals
stress. By this training method, employer or management can assign the trained
employee to fill an internal vacancy, without giving training again. This will
help the smooth flow of work at the organisation. Such trainings help to reduce
absenteeism of an employee.

56
 Technical training is unique for a job. Most of technicians are
specialized in their field. So these technical trainings reduce wastage and
accidents while maximizing the profit of a firm or the line. These kind of
trainings create efficiency in the organisational production.

Discussion technique involves the participation of the trainees in actual

work. Trainee is allowed to ask any related questions. Sometimes cases are also
used for actual situations. These methods generate discussions between the
trainee and the trainer. This can be used in several of organisations relating to
their works.

Some methods cannot be determined as a part of above mentioned

training types, because they have some specific characters or a combination of
above types. Those various specific training methods are discussed below.

a) Orientations - Orientations are conduct for new employees. The beginning

days on the job are crucial for the success of new employees. This point is
illustrated by the fact that 60 percent of all employees who quit do so in the
first ten days.

Some companies use verbal presentations while others have written

presentations. Many small businesses convey these topics one-by-one in
orientations. No matter what method is used, it is important that the newcomer
understand his or her new place of employment.

b) Internship and assistantship – These are usually a combination of

classroom and on - the -job training. They are often used to train prospective
managers or marketing personnel.

c) Programmed learning - Programmed learning, computer-aided instruction

and interactive video all have one thing in common: they allow the trainee to
learn at his or her own pace. Also, they allow material already learned to be

57
bypassed in favor of material with which a trainee has a difficulty. After the
introductory period, the instructor need not be present, and the trainee can learn
at his or her own time. These methods sound good, but may be beyond the
resources of some small businesses.

d) Laboratory training – This is conducted for groups by skilled trainers. It is

usually is conducted at a neutral site and is used by upper- and middle
management trainees to develop a spirit of teamwork and an increased ability
to deal with management and peers. It can be costly and usually is offered by
larger and small businesses. Most of the research and development institutes
are used this method and this will be the most effective training type to such
kind of institutes.

e) Technical training – There are numerous fields in which technical training

are offered which cover the jobs such as that of draughtsman, mechanics,
toolmaker, designers, mechanics, electrician, technical officers and technical
assistants etc. For training in crafts, trades and in technical areas,
apprenticeship training is the oldest and the most commonly used method.
Apprenticeship develop employees who can do many different tasks. They
usually involve in several groups of skills that allow the apprentice to practice a
particular trade, and they take place over a long period of time in which the
apprentice works for, and with, the senior skilled worker. Apprenticeship
training is especially appropriate for jobs requiring production skills.

Role playing training:

Role playing and simulation are training techniques that attempt to bring
realistic decision making situations to the trainees. Likely problems and
alternative solutions are presented for discussion. There is no better trainer than
experience is exemplified with this type of training. Experienced employees
can describe real world experiences, and can help in and learn from developing
the solutions to these simulations. This method is cost effective and is used in

58
marketing and management training. Sometimes role playing activities can be
categorized under the discussion methods too.

Job rotation also can be mentioned as a role playing method. Job

rotation involves moving an employee through a series of jobs so he or she can
get a good exposure to the tasks that are associated with different jobs. It is
usually used in training for supervisory positions. The employee learns a little
about everything. This is a good strategy for small businesses because of this
an employee may be asked to do, many jobs and this strategy is used to manage
individual stress at organisations.

Training Methods:
 On-the-job training:
Training in an organisation can be divided into two broad types. They
are on-the-job training and off-the-job training. On-the-job training is given to
the employees while they are conducting their regular works at the same place.
In this way they do not lose time while they are getting training. After a plan is
developed for what should be taught, employees should be informed about the
details. A time table should be established with periodic evaluations to inform
employees about their progress. On-the-job training techniques include
orientation, job instruction training, apprenticeship, internship, assistantship,
job rotation and coaching.

 Off-the-job training
Off-the-job techniques include lectures, special study, audio visual
conferences or discussions, case studies, role playing, simulation, programmed
instructions, and laboratory training. Most of these techniques are too costly.

59
Methods of training can be basically divided into four types, namely,
A) The telling method. B) The showing method
C) The role playing method. D) The discussion technique.34

Training objective should be specific for the particular segment of the

event of an organisation. As mentioned above, the training objectives may be
different from one organisation to another; but the objective to be specific for
that organisation or to specific to a part of that organisation. The above
objective is specific and the employees should be trained for achieving that
objective. Even the above objective can be different from a testing services
division. R and D is trial and error method or product development basis and
testing services is based on evaluation methods or quality assurance of
developed product basis. It definitely may be definitely different from
marketing and sales division of an organisation.

Another important thing of the establishing training objectives is that it

should be measurable. From a specific method or a process or generally, the
objective can be measured. If the objectives cannot be measured, the evaluation
of the training is difficult. Therefore, a good training objective should be
measurable. The training objective should be made achievable by trainees. If
the training objectives cannot be achievable by trainees, it is also an error of
setting training objectives. The training programmes should motive employees
of an organisation; and not frustrate them. For motivating people and training
them in a correct way, there should be achievable objectives. So Implementing
ISO 9000:2001 quality system among R and D Division should be achievable.
If the R and D Divisions cannot implement the quality system anyhow, that
objective is not achievable for R and D institutes rather than production
oriented organisation. While setting non achievable training objectives, trainees
may feel that training will not affect them; and it may be only time consuming

34
Sahu. R.K. “ Training for Development all You need to Know” , Anurag Jain for Excel Books, New
Delhi, 2005,

60
process. In an organisational level, time consuming for non profitable activity
is not good. It may become a reason for profit losses and destroy skillful
employees’ and skills too. Competent employees may not like to spend their
valuable time for non achievable activity and it may create stress in their minds
too. The absenteeism, accidents, and less concentration in work may then
increase in the organisation. So there must be set achievable training objectives
when the training programmes are designed for employees.

The training programme should be relevant to an organisation or to the

employee. Sometimes employees may receive some e-training programmes
which are not directly relevant to their current fields; but it may have a good
opportunity to adapt to new potential to the employee. Some kind of general
training also have to be involved making employees as “Generalists” not
specify to a particular field, which is suitable for most firms. The generalist
concept is most suitable to most organisations because the employer can rotate
employees among the organisation in to several types of job responsibilities to
them. The job rotation is a suitable process to reduce individual stress in
organisation. Employees must have general knowledge and abilities to do
assigned tasks well. Training and development programmes can bring the
employees up to that standard. In the case of specialised jobs there have to be a
direct relationship between training and the job responsibilities.

In both on-the-job and off-the-job training methods, training objectives

should be time bound, because the trainee takes time to develop skills in him.
When considering off-the-job type trainings, during the training period, the
organisation may not have a maximum contribution for the production
function. Even in on-the-job type training, there is low contribution from the
employee’s to organisation during the training periods. Therefore, to minimize
this additional time consumption, the training should be time bound. Training
programmes and training objectives should be co-ordinated effectively. For that

61
purpose, there should be a specific time period to end up the training and
develop the trainee.

Organisation Development and Rewards:

OD may be defined as a change effort that is planned, focused on an
entire organisation or a large subsystem, managed from the top, aimed at
enhancing organisational health and effectiveness and based on planned
interventions made with the help of change agent or third party who is well
versed in the behavioral science.

Organisation development is an ongoing, systematic process of

implementing effective organisational change. OD is known as both a field of
science focused on understanding and managing organisational change and as a
field of scientific study and inquiry. It is interdisciplinary in nature and draws
on sociology, psychology, and theories of motivation, learning, and personality.
Although, behavioral science has provided the basic foundation for the study
and practice of OD, new and emerging fields of study have made their presence
felt. Experts in systems thinking and organisational learning, structure of
intuition in decision making and coaching whose perspective is not steeped in
just the behavioral sciences but much more multi-disciplinary and inter-
disciplinary approach, have emerged as OD catalysts or tools. Organisation
development is a growing field and is responsive to many new approaches.

Kurt Lewin (1898–1947) a widely recognised as the founding father of

OD, and the concept became popular in the mid-1950s.35 From Lewin, came
the ideas of group dynamics and action research which underpin the basic OD
process as well as providing its collaborative consultant/client ethos.

35
Argyris C and Schon D, Organisational Learning; A theory of action prospective, 1978Reading MA;
Addison Weslys, ISBN 0-201-001748

62
 These procedures became important parts of OD as developments in this
field continued at the National Training Laboratories and in growing numbers
of universities and private consulting firms across the country.36

The failure of off-site laboratory training is to be live up to its early

promise was one of the important forces stimulating the development of OD.
Laboratory training is learning from a person's "here and now" experience as a
member of an ongoing training group. Such groups usually meet without a
specific agenda. Their purpose is for the members to learn about themselves
from their spontaneous "here and now" responses to an ambiguous hypothetical
situation. Problems of structure, status, communication, and self-serving
behavior typically arise in such a group. The members have an opportunity to
learn something about them and to practice such skills as listening, observing
others, and functioning as effective group members.37

As formerly practiced (and occasionally still practiced for special

purposes), laboratory training was conducted in "stranger groups," or groups
composed of individuals from different organisations, situations, and
backgrounds. A major difficulty developed, however, in transferring
knowledge gained from these "stranger labs" to the actual situation "back
home". This required a transfer between two different cultures, the relatively
safe and protected environment of the T-group (or training group) and the give-
and-take of the organisational environment with its traditional values. This led
the early pioneers in this type of learning to begin to apply it to "family groups"
— that is, groups located within the organisation. From this shift in the locale
of the training site and the realization that culture was an important factor in

36
Carter, Louis L, “Best practices in Leadership in Development and organisation Change, jossey Bass.
ISBN 0-7879-7635-3. 2004.
37
Sullivan Ronald, “Practicing Organisational development; A Guide for Leaders Change”, Jossey
Boss, ISBN 0-470-40544-9.2010.

63
influencing group members (along with some other developments in the
behavioral sciences) emerged the concept of organisation development.38

Hence, it is a highly erroneous impression to think that the OD function

is the extension of a personnel management function. On the other hand,
professional social work, defined as the function of enabling human beings,
especially the vulnerable and the weak human beings, is nearest to the HRD
functions if not an inseparable part of it.

2. Rewards:
People do what they can do to satisfy their needs. They choose to
behave in way which will maximize their rewards. The most obvious reward is
pay but there are many others. Intrinsic rewards come from their job itself such
as feelings of achievement, pride in doing a job etc. Extrinsic rewards come
from a source outside the job including pay, promotion and benefits offered by
management. Reward could be linked to performance as well to motivate high
achievers to do well. If rewards are allocated completely on non-performance
factors such as seniority, job titles etc. then employees are likely to reduce their
efforts.39 Now a day’s organisations also use team based rewards to motivate
empowered work teams to exceed established targets.

3. Employee Welfare and Quality of Work Life (QWL):

The term employee welfare means “the efforts to make life worth living
for workmen”. It includes various services, facilities and benefits offered to
employees by the employers, unions and govt. The purpose is to improve the
living standards of workers and thereby improve the quality of work life.
Employees voluntarily extend a number of benefits to employees in the hope
that these indirect compensation plans motivate employees to perform better.
Over the years, the types of benefits offered have been expanding in line with

38
Western.S, “What do mean by Organisational development” Krakow; Krakow Adviso Press, 2010.
39
P.P.Arya B.B. Tandon, “Human Resource Development” Third Edition, Deep and Deep Publication,
New Delhi, 1997- pp, 40-46

64
competitive pressures, changing job market trends, employee expectations,
union demands and legislative requirements.

Quality of Work Life (QWL)

The term Quality of Work Life means different things to different
persons for example- to floar level employee who is on an assembly line it may
just mean a fair days pay, safe working conditions and a supervisor who treats
him with dignity. To an young recruit, it may mean opportunities for
advancement, creative tasks and a successful career.

The factors contributing to Quality of Work Life are:

1. Adequate and fair compensation.
2. A safe and healthy environment.
3. Jobs aimed at developing and using employee’s skills and abilities.
4. Jobs which can allow employees to grow in the organisation, jobs aimed
at expanding employee’s capabilities, rather than leading to their
obsolescency.
5. An environment in which employees develop self esteem and sense of
identity.
6. Protection and respect for employees rights to privacy, dissent equity
etc.
7. A sensible integration of job career and family life and leaser time.

Quality of Work Life covers all aspects of workers life with reference to
his/her interaction with his/her work and the environment. The conditions that
contribute to motivation (equitable salaries, financial incentives and effective
employee selection) will also contribute to the Quality of Work Life. Some of
these activities like job enrichment contribute indirectly to the Quality of Work
Life by tapping the workers higher order needs and motivating them with other

65
activities may contribute directly to the Quality of Work Life providing for a
safer work place, less discrimination on the job, and so forth40.

Systematic efforts are made by organisations to give workers a greater

opportunity to affect the way they do their jobs and the contributions they make
to the organisation’s overall effectiveness. It is a way of empowering
employees by giving them a greater ‘say’ in the decision making process. QWL
means having good working conditions, good wages and benefits, good
leadership, interesting and challenging jobs. QWL efforts include the
following:
 Employee involvement: Here employees are given the opportunity to
participate in the decisions that affect them and their relationship in the
company.
 Quality circles: These are small group of employees who meet
regularly to find, analyse and solve quality and other work-related
problems of a particular department/section/area.
 Socio-technical systems: These are interventions in the work situation
that redesign the work, the workgroups and the relationship between
workers and the technologies they use to perform their jobs.
 Co-determination: In this method, representatives of workers meet
management in a formal way to discuss and vote important decisions
that affect the lives of workers.
 Self-managed work teams: These are employee groups (also called
autonomous workgroups) with a high degree of decision-making,
responsibility and behavioural control for completing their work. The
team is usually given the responsibility for producing an entire product
or service.
 Suggestion programmes: It is a formal method for generating,
evaluating and implementing employee ideas.

40
Ashwathappa K “Organisational Behaviour” Himalaya Publishing House – 9th Edition, pp 313-14.

66
  Open door policies: Where open door policies exist, employees are free
to walk into any manager’s office with their problems and seek solutions
to such problems.HRD system focuses on employee welfare and QWL
by continually examining employee needs and meeting them to the best
possible extent.

Human Resource Information System:

Human resource information system (HRIS) is a method by which an
organisation collects, maintains and reports information on people and jobs, the
information is generally stored in a central human resource data bank,
preferably in a computer containing the following details:
 Personal data: Identification, education, reserved category, place of
origin, etc.;
 Recruitment data: Entry date, grade in aptitude tests, grade in
leadership tests;
 Experience data: Placement history, promotions, tasks performed grade
wise;
 Appraisal data: Appraisal on each job, ratings of behaviours in a group,
commitment to overall goals, etc.;
 Training data: Nature of training received at each level, current training
assignment, etc.;
 Miscellaneous: Health status, personal problems, security needs, record
of incentives received, absence & sickness data, etc.;

This information is put to use whenever there is a need to identify

employees for certain special assignments. Each of the subsystems described
contribute to the achievement of overall HRD goals. Performance and potential
appraisal helps an employee develop his role capabilities and prepare himself
for future changes. Training improves his learning abilities. Feedback and
performance coaching helps him correct mistakes and improve interpersonal
relationships. OD promotes the collaborative spirit and self-renewing skills.

67
Rewards and welfare amenities enrich the life of employees and help them to
carry out the assigned tasks with zeal and enthusiasm. It should be remembered
that the subsystems discussed above should not be viewed in isolation. They
are all inter connected and independent parts. When viewed in isolation, they
do not offer the synergistic advantages of a well developed HRD system.41

2.11 ORGANISATIONAL CULTURE AND CLIMATE:

Organisational culture is the behavior of human beings who are a part
of an organisation and the meanings the people attach to their actions. Culture
includes the organisational values, visions, norms, working language, systems,
symbols, beliefs and habits. It is also the pattern of such collective behaviors
and assumptions that are taught to new organisational members as a way of
perceiving, and even thinking and feeling. Organisational culture affects the
way people and groups interact with each other, with clients, and with
stakeholders.42

According to Ravasi and Schultz “organisational culture is a set of

shared mental assumptions that guide interpretation and action in organisations
by defining appropriate behavior for various situations”. At the same time
although a company may have their "own unique culture", in larger
organisations, there is a diverse and sometimes conflicting cultures that co-
exist due to different characteristics of the management teams. The
organisational culture may also have negative and positive aspects.43

Organisational culture refers to a system of shared meaning held by

members that distinguishes the oragnisation from the other organisation. This
system of shared meaning is, on closer examination, a set of key characteristics
that the organisation values. There are seven primary characteristics that, in

41
Rao V.S.P “Human Resource Management” Second Edition, Excel Book Publications, pp 278-79
42
Johnson, Gerry (1988) "Rethinking Incrementalism", Strategic Management Journal Vol 9 pp. 75–
91
43
Ravasi, D., Schultz, M. (2006), "Responding to organisational identity threats: exploring the role of
organizational culture", Academy of Management Journal, Vol.49, No.3, pp. 433–458.

68
aggregate, capture the essence of an organisations culture.44 Organisational
culture is concerned with how employees perceive the characteristics of an
organisations culture, not with whether or not they like them.45

Concept of Organisational Culture:

Culture consists of beliefs and behavior. It is cultivated behavior in the
sense that it is learnt from the other members of the society. Organisational
culture is the totality of beliefs, customs, traditions and values shared by the
members of the organisation. Organisational culture stress on sharing of norms
and values that guide the organisational members' behavior. These norms and
values are clear guidelines as to how employees are to behave within the
organisation and their expected code of conduct outside the organisation.

Nature of Organisational Culture:

The main features of organisational culture are as follows:-
1. Like an individual, every organisation has its own personality.
2. The personality of the organisation defines the internal environment of
an organisation.
3. It differentiates an organisation from the others.
4. It is relatively enduring or stable over time.
5. It exercises a significant influence on the attitudes, behavior and
performance of organisational members.

Organisational culture is a set of beliefs, assumptions, values, shared

feelings and perceptions which influence the actions and decisions taken by the
organisational members. For e.g., if the culture encourages innovativeness, any
problem will make people take initiative and risks, and try out new ways of

44
J Chatman and D.F. Caldwell “People and organisational culture: a profile comparison approach to
assessing person – organisation” Academy of Management Journal, September 1991, pp 487-576.
45
Stephen P Robbins “Organisational Behaviour” 10th edition, Prentice Hall of India Products. Pp525-
526

69
doing things. On the other hand, if the organisational culture is security
oriented, the same problem situation would cause people to start looking for
rules, procedures as a mode of response.

"Organisational Climate" is different from "Organisational Culture".

"Organisational culture is a relatively uniform perception held by the
organisation, it has common characteristics, it is descriptive, it can distinguish
one organisation from another and it integrates individual, group and
organisation system variables". Each and every organisation has a culture that
influences the behavior of the employees toward colleagues, supervisors,
subordinates, clients, competitors, etc. Internal environment of an organisation
is often referred to organisational climate. This makes one organisation unique;
such differences are found in various kinds of employees in terms of personal
characteristics of members such as their values, needs, attitudes, expectations,
and stay in organisation. When considered collectively, the actions of the
individuals become more meaningful for viewing the total impact upon the
climate and determining the stability of the work environment. It should be
noted that the climate is to be viewed from a total system perspective. While
there may be differences in climates within departments these will be
integrated to a certain extent to denote overall organisational climate46.

Elements of Organisational Culture:

Following are the elements of organisational culture:-
1. Individual Autonomy: - In this the individuals have responsibility,
freedom and opportunities of exercising initiative that an individual
has in the organisation.
2. Structure: - In this the organisation creates objectives, performance
expectations and authority relationships.

46
Ibid, pp 261-66

70
 3. Management Support: - In this the managers provide clear
communication, assistance, warmth and support to their
subordinates.
4. Identity:- In this the members identify with the organisation as a
whole rather than with their particular work group or field of
professional expertise.
5. Performance Reward System: - Reward system of an organisation
includes increase in salary, promotions etc., is based on employee
performance rather than on seniority and favoritism.
6. Risk Tolerance: - In this employees are encouraged to be
innovative, aggressive and risk taking.47

Role and Significance of Organisational Culture:

Each organisation is recognized by its culture. Whenever people name
an organisation, the culture attached to the organisation is immediately
recalled. One organisation is different from other organisations because of
cultural values, beliefs and norms. Following are the functions performed by
organisational culture:-
1. Organisational culture creates the boundary beyond which no employee
is allowed to go. They automatically observe the organisational
standards and norms of behavior.
2. An organisation is well recognized by its culture. The culture of an
organisation provides its stability. People like to continue with the
organisation. Employees, customers, financers and other related persons
like to remain with the organisation.
3. The social recognition of the organisational culture makes the
organisation grow and develop in all ways.

47
Udai Preek, “Training Instruments for Human Resources Development” Second Reprint. Tata
McGraw Hill Publishing Co. Ltd. 1999, pp432-445

71
 4. Organisational culture acts as a motivator that guides and controls the
employees. Satisfied employees get more spirit and enthusiasm for
performing their jobs.
5. The attitude and behavior of the employees are directed towards the
achievement of goals through a sound culture. Disciplined employees
make other employees disciplined and well-behaved.
6. Culture gives rise to a positive attitude and behavior which are again an
addition to culture. Culture leads to good behavior and good behavior
makes good culture which is useful for better behavior. Both employees
and the organisation enjoy culture.

A strong culture ensures better performance. Culture enhances

organisational commitment and increases the consistency of employee
behavior.

Types of Organisational Cultures:

Following are the types of organisational cultures:-
1. Authoritarian and Participative Culture: In the authoritarian
culture there is centralization of power with the leader, obedience to
orders and discipline are stressed. Any disobedience is punished
severely to set an example to others. The basic assumption is that the
leader knows what is good for the organisation and he always acts in
its interests.
2. Mechanistic and Organic Cultures: The mechanistic organisational
culture has the values of bureaucracy and so is also called
"Bureaucratic Culture". Organisational jobs are created around
narrow specializations and people think of their careers mainly
within these specialization. There is a great deal of departmental
loyalty. This sort of culture resists change and innovation. In organic
culture formal hierarchy of authority, departmental boundaries,

72
 formal rules and regulations and prescribed channels of
communications are found. Emphasis is on task accomplishment,
team work, and free flow of communication – formal and informal.
There is a understanding within the staff at the time of problems,
threats and opportunities the organisation is facing and willingness to
take part in solving the problems. The culture stresses flexibility,
consultation, change and innovation.
3. Sub-Culture and Dominant Culture: Each department of an
organisation may have its own culture representing a sub-culture of
the system. An organisational culture takes place when there is an
integration of all the departments. Within any given unit the
tendency for integration and consistency will be assumed to be
present, but it is perfectly possible for coexisting units of a larger
system to have cultures that are independent and even in conflict
with each other.

Maintaining a Culture: - Following are the practices that help to

maintain the culture:
1. Selection Process: - The main purpose of selection process is to select
right type of person for the right job. When for a given job two or more
candidates with identical skills and abilities are available then the final
selection is influenced by how well the candidate fits into the
organisation. It is by selecting the candidates who can match the
organisational culture, the management can think of maintaining
organisational culture.
2. Actions of Top Management: - Besides managerial vision the actions
of the top executives also have a major impact on the organisational
culture. Through what they say and how they behave, senior executives
establish norms that help the organisation to take risks, how much

73
 freedom managers should allow their subordinates, what actions will
pay off during promotions and other rewards.

Concept of Organisational Climate:-

Just as every individual has a personality that makes him/her unique,
each organisation has an organisational climate that distinguishes its
personality from other organisations. The concept of organisational climate was
introduced by human relations in the late 1940s. Now it has become very useful
for thinking and describing the social system.

Organisational climate is the summary of perception which people have

about an organisation. It is a global expression of what the organisation is.
Organisation climate helps to tell about the attitude of the organisational
members towards the organisation itself.48

Features of Organisational Climate: - Following are the features of

organisational climate:-
1. Organisational climate is an abstract and intangible concept. But it
causes an impact on the behavior and performance of organisational
members.
2. It gives distinct identity to organisation and differentiates it from other
organisations.
3. It is a total expression of what the organisation is. It is the summary
which people have about the organisation.
4. It is a multi-dimensional concept. It consists of all organisational factors,
e.g., authority pattern, leadership pattern, communication pattern,
control, etc.

48
Sujata Mangaraj “Globalisation and Human Resource Management” First Edition, Excel Books,
New Delhi,2008.pp.182

74
Elements of Organisational Climate:-
Following are the elements of organisational climate:-
1. Individual Autonomy: - It allows the employees to feel free to
manage themselves, have decision making power and are not
continuously accountable to the higher management. It means that
individual have the freedom to exercise responsibility.
2. Position Structure: - In this the objectives of the job and methods
for accomplishing it are established and communicated to the
employees.
3. Reward Orientation: - It means an organisation rewards individuals
for hard work or achievement. Reward orientation is high when
organisations ask people to perform better and reward them for doing
so.
4. Task Orientation: - If the management is task oriented, the
leadership style will be autocratic. The employees will have to speed
up the pace of work to please their bosses.
5. Relation Orientation or Consideration: - The organisational
climate will be considerate and supportive if the managers are
relation oriented while dealing with the workers. The needs of the
workers will be given due importance. This will produce team spirit
in the organisation.
6. Job Satisfaction: - The satisfaction the workers get on their jobs is
also an important part of organisational climate. The workers feel
happy if the jobs are designed to allow the workers to use their
innovative skills.

Organisational Climate and Effectiveness:-

Every organisation requires organisational climate to realize its
objectives. An organisation can be more effective if there are two way
communication and employees are co-operative and have better knowledge of

75
the organisation. Such employees have higher job satisfaction and feel
committed to the organisation.49 Their productivity will also be higher. Thus,
good organisational climate helps in employee satisfaction, better human
relations and higher productivity.

Organisational climate influences satisfaction and performance through

change in behavior in different ways:-
1. It influences behavior through evaluation of the self and others such
evaluation is based on different physiological variables.
2. It causes problems upon individual freedom of choice and decision
making. The behavior is influenced by attaching different rewards and
punishments.
3. It influences the behavior of the employee towards the whole
organisation and of his own ability. Ability is influenced by the nature
and clarity of the job, degree of freedom, extent of authority, scope of
responsibility, supervisory support, training, safety, physical working
conditions and previous experience.50

Organisaitional Culture factors includes:

 Innovation and risk taking
 Attention to detailed
 Outcomes Orientation
 People Orientation
 Aggressiveness
 Stability
 Rapid Changes
 Customer Orientation

49
Ishwar Dayal “ Designing Human Resource Development System” Concept Publishing Co. new-
Delhi, 1993.pp151-152
50
Ibid 162-63

76
These are different cultural concepts viz.,
 Dominant Culture
 Sub- Culture
 Core Value
 Strong Culture
 Weak Culture
 Mechanistic and Organic Cultures
 Authoritarian and Participative Cultures

Figure- 2.2
Process of Culture Creation

Environmental Analysis

Business goal

Formulation of strategy

Create new cultural values

Implementation New Culture Values

Achieve New Strategic Values and Strategies
Source: Subbarao P. “HRM & Development” pp 211. 2005

Human Resource Development Climate:

HRD climate helps the employees to acquire required competencies that
would enable them to execute their present or future expected roles and aids in
developing their capabilities for better Organisational Performance. Though the

77
measures of Organisational Performance are many ranging from financial to
behavioural one’s.51

The HRD climate of an organisation plays a very important role in

ensuring the competency, motivation and development of its employees. The
HRD climate can be created using appropriate HRD systems and leadership
styles of top management. The HRD climate is both a means to an end as well
as an end in itself. Perception about an organisation’s goals and about decisions
that a manager should take to achieve these goals comes not only from formal
control systems but also through informal organisation. Both the formal and
informal structure combines to create what is called organisational climate. The
term ‘climate’ is used to, designate the quality of the internal environment
which conditions in turn the quality of cooperation, the development of the
individual, the extent of member’s dedication or commitment to organisational
purpose, and the efficiency with which the purpose becomes translated into
results. Climate is the atmosphere in which individuals help, judge, reward,
constrain and find out about each other. It influences morale and the’ attitudes
of the individual toward his work and his environment.52

The most important aspect of organisational culture are the values it

practices. Eight values may be examined to develop the profile of an
organisational culture that is called OCTAPACE; it indicates Openness,
Confrontation, Trust, Authenticity, Proactive, Autonomy, Collaboration, and
Experimenting.
a) Openness - the openness in the system should influence the design of HRS.
Organisations can be classified in continuum from completely open to
completely close. No organisation may be on the two extremes of the
continuum. However, they will tend to be towards one or the other end. The

51
Ajay Solkhe and Dr. Nirmala Chaudhary “HRD Climate and Job Satisfaction” International Journal
of Computing and Business Research” Volume 2 Issue 2 May 2011.
52
Rao T.V. and E. Abraham, ‘HRD Climate in Indian Organisations “Rao and Pereira (ed.), Recent
Experiences in Human Resource Development, New Delhi: Oxford and IBH, 1986.

78
 degree of openness of the organisation will be an important factor in
determining the nature of the various dimensions of HRD being designed,
as well as the way in which these dimensions should be introduced.
Organisations which are fairly open may start with several confronting
designs of HRS.
b) Confrontation - this term is used in relation to putting the problem in front
rather than the back to escape the problems. A better term would be
confrontation exploration that implies facing a problem and working jointly
with other concerned to find its solution. If an organisation encourages
people to recognize a problem, bring it to people concerned, explore with
them to understand it and search possible ways of dealing with it.
c) Trust - Trust is another factor which should be considered along with
openness. If the level of trust is low, the various dimensions of HRS are
likely to be seen with suspicion; therefore, the credibility of the system may
go down. In such a case the system if introduced may become a vital and
cease to perform the main functions for which it is meant.
d) Authenticity: is the value underlying trust. It is the willingness of a person
to acknowledge the feelings he /she has, and accept him / her as well as
other who relate to him/her as persons. Authenticity is reflected in the
narrowest gap between the stated vales and the actual behavior. This value
is important for the development of a culture of mutuality.
e) Proactive - can be contrasted with the term react. It is the later action in
response to an act from some source, while in the former the action is taken
independently. Pro-action means anticipating issues in advance and
responding to the needs of the future.
f) Autonomy - nothing but willingness to use power without fear and helping
other to do same. It multiplies power in system and the basis is
collaboration.
g) Collaboration - involves working together for a common cause.
Individuals instead of solving their problems by themselves share their

79
 concerns with one another and prepare strategies and work out plan of
action and implement them together.
h) Experimenting - as a value emphasizes the importance given to innovating
and trying out new ways of dealing with problems in the organisation.

Factors influencing Human Resource Development Climate

The following factors work as an enabling force for the enhancement of
human resource development climate:
 Top Management Style and Philosophy.
 Personnel policies.
 Human Resource Development Instruments and Systems.
 Self-renewal Mechanisms.
 Attitudes of Personnel and Supportive Attitude on the part of Human
Resource Development and Personnel policies.
 Commitment of Line Managers.

80