Review Article, ISSN 2304-2613 (Print); ISSN 2305-8730 (Online)

The Impact of Human Resource Development (HRD)

Practices on Organizational Effectiveness: A Review
Md. Bashir Uddin1, Kamrun Naher2, Afroza Bulbul3*, Neser Ahmad4, Mohammad Mizanur Rahman5
1AssistantProfessor, Department of Business Administration, Sylhet International University, Sylhet, BANGLADESH
2,4SeniorLecturer, Department of Business Administration, Sylhet International University, Sylhet, BANGLADESH
3Associate Professor, Department of Business Administration, International Islamic University Chittagong, Chittagong, BANGLADESH
5Ph.D Student, Department of Management and Marketing, Univesiti Putra Malaysia (UPM), MALAYSIA

*E-mail for correspondence: afrozabulbul132@gmail.com

Received: Sept 24, 2016 Published: Oct 21, 2016

DOI: https://doi.org/10.18034/abr.v6i3.38

ABSTRACT
This paper attempted to review theoretically the HRD and its matrix and revealed to show the
positive relationship between HRD and organizational effectiveness. In HRD shows the different
variables (outcomes) such as HRD instruments, HRD processes & climate variables and
organizational dimensions. HRD affects the organizational goals which may result from higher
productivity, cost reduction, more profits, better image and more satisfied customers and stake
holders considered as organization dimensions HRD activities, as such, do not reduce costs, improve
quality or quantity, or benefit the enterprise in any way. It is the on-the- job applications of learning
that ultimately can reduce costs, improve quality, and so forth. In the organizational context,
therefore, HRD means a process which helps employees of an organization to improve their
functional capabilities for their present and future roles, to develop their general capabilities, to
harness their inner potentialities both for their self and organizational development and, to develop
organizational culture to sustain harmonious superior-subordinate relationships, teamwork,
motivation, quality and a sense of belongingness. The study also analyses the Kliman Model of HRM
to show the path of mechanisms which could lead to competitive advantage. Today’s fast changing
environment modern organizations are more careful to sustain in the competitive advantage relating
to HRD our study has been developed to help the management students, academicians, and
professionals to understand the subject properly and enhance their knowledge about HRD network
within the organization for its effectiveness.

Keywords: HRD, Training & Development, HRD Instruments, Organizational Effectiveness

INTRODUCTION This study explains the HRD mechanisms, HRD culture,

HRD climate, role of HRD units, HRD Matrix, HRM
HRD is concerned with an organized series of learning
philosophy, etc. to go for organizational effectiveness.
activities, within a specified time limit, designed to
produce behavioral change in the learner. In the opinion Statement of the Problem
of Nadler the term "HRD" was first applied in 1968 in
There may be certain inadequacies in the study which
George Washington University. It was used in Miami at
create roadblocks and prohibit the organizations from being
the conference of American Society for Training and
effective. Here the meaningful role of HR professionals
Development (ASTD) in 1969. According to Nadler
comes in. We expect to remove these inadequacies while
(1980), the term was gaining more acceptances during
formulating the strategies and designing HR interventions
the mid-1970, but many used it as a more alternative
as times moves on. It is the practice of enhancing the
term than "Training & Development."In the opinion of
enabling capacity of individuals, collectives, and
some management professionals, Japan is the first
organizations through the development and application of
country to begin with HRD practices. "Better People," not
learning based interventions for the purpose of optimizing
merely better technology, is the surest way to a "Better
employees and organizational growth.
Society," is the most popular belief in Japan (Basu, 1987).

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Uddin etal: The Impact of Human Resource Development (HRD) Practices on Organizational Effectiveness: A Review (131-140)

Importance of the Study needed to make an organization function well. He

explained that without competencies organizations cannot
Research, experimentation, and experience in the field of
ensure efficiency. Without commitment organization faces
HRD have grown enormously in the last decade. Our
slow pace growth. Culture supports the organization to
study has been done to show remarkable work in
live long-time as oxygen. It has been rightly observed by
attempting to find out new ways of developing employee
Billimoria & Singh (1985) that “each human being is born
competencies. Thus, HRD is needed by every organization
as something new, something that never existed before.
that is interested in stability and growth with the dynamic
Each is born with the capacity to win in life, each has his
activity that may result from effectiveness and corporate
own unique potentials, capabilities and limitations”. Here,
leadership in competitive advantage.
they added that organization should come forward to
Sources of Data nurturing human resources. HRD is an approach founded
on the belief that people are capable of growth - given an
The study has been done by secondary sources like
environment that facilitates individual growth (Dayal,
different journals, published articles, books and websites,
1993). Growth is, therefore, important for organization.
etc. This is a theoretical analysis of nature.
According to Dayal, HRD is to make a person, a total
person in terms of skill, maturity, competence, self-
LITERATURE REVIEW
awareness, adjustment to the environment, and
Human resource management is a chastisement, an expert confidence. In the view of Dayal, HRD can be seen as a
specialization that has created in late years as an expansive philosophy rather than as a programed. HRD is concerned
range, enveloping different field consolidated and union with two sets of extreme factors - which prevents growth
with certain component of work force administration and which leads to growth. In this context Khan (1987)
hierarchical conduct modern and work relationship and also remarks: "HRD is the process of increasing
so forth As indicated by Susan (2005), Human resource knowledge, skills, capabilities and positive work attitude
management is the capacity inside an association that and value of all people working at all levels in a business
spotlights on enlistment of, administration of and giving undertaking". Sharif (1999) mentioned in his article that
course to the individuals who work in the association. empirically verifies the contributions of the ‘HRD` efforts
Human Resource administration can likewise be in the growth process of an economy. From this paper, the
performed by line administrator. Human resource role of HDR has been noticed very strong as well as
administration is the authoritative capacity that necessary stimulating the growth voyage of an economy
arrangements with issues identified with individuals, for like Singapore continually. He considered people as
example, remuneration, employing, performance ‘Human Capital` and ‘knowledge’. The need for
management, association advancement, wellbeing, health, investment in the human resource development is
benefits, worker inspiration communication, positively correlated with the rate of technological
administration and training (Susan, 2012). Human progress (Chowdhury, 2003). He explained that higher
resource management is additionally key and extensive rates of growth can be achieved by adopting sophisticated
way to deal with overseeing individuals and the work techniques due to increase in the scale of production and
place, culture and environment. Viable Human resource operational complexity, the demand for highly qualified
management empowers representatives to contribute specialists and administrators also increase in the
viably and beneficially the generally speaking corporate world. Chowdhury (2003) reviewed that the
organization heading and the achievement of the workers come in various forms from skilled to unskilled,
association's objective and targets (Susan, 2012). professional to illiterate and old to young. Placing a
Mangers dealing with people at work have generally an worker in a job is only the first step in HRD. Today’s fast
inferior position in company hierarchy. Although the basic changing world of corporate practices also requires the
function of personnel department is to attract, develop, and human worker, say in an organization, to be coached
retain the right kind of people for the right kind of job, so as irrespective of his level of skill. He also said that human
to achieve effective development and utilization of resource development has been described as a journey
manpower, personnel department in Bangladesh is indeed towards higher level of performance. An important
fighting to deal with adversarial relations with employees. element of this journey is training which shyness to invest
This is why; many scholars and practitioners have given in the future is. Ahmed, et al. (1993) attempted to highlight
their attention on how to develop HR through human the strategies for human resource development adopted so
resource department (HRD) which may result far in Bangladesh, achievement in this respect and in view
organizational effectiveness. Some of the following of gradual industrial restructuring and potential areas of
writings/ studies have been considered as reviewed earlier. labor absorption, suggest some measures for obviating the
imbalance which exists between demand for and supply
Rao, a pioneer of HRD, (1999) defines human resource of labor force in the job market of the country. Rao, et al.
development (HRD) as essentially consisting of three (1988) mentioned in his book that people in the
Cs:competencies, commitment, and culture. All three are organization are helped to acquire new competence so as

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to make confident them with sensitivity. They emphasized as well as for development purposes keeping in
HRs to cope with the changes. Sharmaand and Purang mind futuristic requirement of the organization.
(2000) surveyed of 27 middle level managers in the  Counseling: HRD supports to give critical feedback
engineering sector, manufacturing primarily power sector and discusses them how they can improve themselves.
equipment with a view to understanding relationship  Career Planning: Career planning involves identifying
between value institutionalization and HRD climate. The the right potential well in time, for development to take
study highlights that there exists positive relationship over higher responsibilities. HRD tries to establish a
between value institutionalization and HRD climate. promotional policy for people.
From the above citations of the literature regarding the  Succession Planning: HRD makes succession planning
application of HRD along with HRD Matrix in job of the for those who are fit/ right for the next position so that
business organizations our study tries to show how it organization cannot trap in operations.
ultimately can reduce costs, improve quality,  Training: Training comprises an integral part of
productivity and higher profits which may result HRD process. To increase employees’ efficiency and
organizational effectiveness (outcome). effectiveness on the job, HRD tries to improve the
capabilities of HRs through arranging the different
OBJECTIVES OF THE STUDY types of training programs.
 Job Evaluation: How much should be paid for a job
The main objective of the study is to organize long-term which ensures by HRD through job analysis
organizational effectiveness (outcome) through HRD. In regarding the responsibilities of the job.
the study, keeping in view aforesaid discussion above,
 Transfer, Promotion & Demotion: A transfer may
the following objectives have been laid down:
result in changes in duties and responsibilities,
 To develop capabilities of all individuals working in an supervisory and working conditions, but not
organization about their present and future roles; necessarily salary. On the other hand, promotion is
 To develop HRD mechanisms lead to the desired the advance position of an employee from one job to
outcomes; a higher level one, with increase salary. Whereas,
 To ensure efficiency through HRD instruments; demotion is the opposite of promotion that creates
 To link HRD with organizational strategy; the downward position. HRD manager ensures
 To find out the inadequacies in the HRD practices and those who are the right person for the right position
provide broad guidelines to keeping pace with the in an organization.
technological changes and suggestions for enhancing  Role Analysis: For the requirement of effective role
organizational effectiveness. HRD elaborates the processes, standards, and critical
attributes namely knowledge, attitude, skills habits
DISCUSSION (KASH) which in turn in the context of its works
Functions/ Activities of HRD system.
 Communication Policies: HR Department stresses a
HRD covers all HRM functions. To attain the
lot of communication aspects to be developed that
aforementioned objectives HRD unit performs the
do pave the way for effectiveness and efficiency.
following functions by applying the HRD instruments or
 Rewards: Rewards are the positive reinforcements
interventions:
given by the organization which act as effective
 Human Resource Planning (HRP): By jobs demand motivators and help people to increase productivity
HRD unit tries to establish HRP by which HRD the and efficiency such as promotion, reviewed salary,
manager needs to be able to forecast what the fringe benefits, etc.
organization’s future HR requirements will be and  Organizational Development (OD) Exercises: OD
from where the HR will be obtained. If HR is surplus, exercises help organization in the development and
the manager gives an attention retrenchment strategies growth with their activities of an organizational
or stopping recruitment so that organizations minimize diagnosis, team building, task force, other structural
their costs. If shortage, manager starts recruiting and and process interventions like role development, job
accelerating training and development. enrichment, job re-designing, etc.
 Recruitment and selection: HRD attracts HR from
HRM functions are the best tools to achieve the same
internal and external sources and selects the qualified
which result organizational outcomes may act as creation
candidates from a huge number of applicants.
of image, more profits, higher productivity, more
 Performance and Potential Appraisal: Performance
competent people, more team work and finally ensures
appraisal means an evaluation of individual doing.
better utilization of human resources (see fig- 4).
They are well known to what should be done by
themselves if needed. HRD manager helps At this stage, for better appreciation, we would mention
employees in self-appraisal or peers or 360-degree the HRD objectives of two leading companies:
feedback. Potential appraisal is done for placement

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Uddin etal: The Impact of Human Resource Development (HRD) Practices on Organizational Effectiveness: A Review (131-140)

EXHIBIT-1 are concerned with HRD. These are: - (i) person; (ii) role;
(iii) dyad; (iv) team; (v) inter-team & (vi) organization.
HRD Objectives of Siemens Limited
The effectiveness of one unit (foci) will contribute to the
Main objectives of Siemens are: effectiveness of others. The holders of a variety of
 Development of employees is the primary task of the positions in the sub-departments report to top person
company; (head of HR Department). Those reporting to the head of
 It is the policy of Siemens to recruit, train, develop and the HR Department typically include:
advance employees within the company;
 Manager of employment (responsible for HR
To achieve these objectives Siemens have laid down their planning, recruitment, selection and performance
policies as under: appraisal).
 Recruitment of quality manpower and their retention;  Manager of compensation (responsible for
 Plan and monitor career development staff to perform compensation, incentives and benefits
effectively in their present jobs; groom potential administration)
managers for higher responsibilities;  Manager of training and development Responsible
 To introduce and sustain an objective system of for Orientation, Training, Development and career
evaluation of performance based on result;
planning).
 Performance as the sole criterion for increments and
 Manager of health and safety (responsible for
promotion;
occupational health and safety administration).
 Use of training as the strategic factor for competitive
advantage;
 To nurture a spirit of entrepreneurship among
STRUCTURE OF HRD SYSTEM
employees; Different organizations have different types of
 Work in close collaboration for fostering the spirit of organizational plan which really depends on the size,
openness; nature, functions and vision of an organization. Rao,
 To ensure transparency in decision making: Raju, and Yadav (2001) surveyed HRD practices in 12
-Self-motivated employee Indian organizations covering financial services,
-Employee commitment consumer products, electronics, cement, tyres and
-Commitment of results. automobiles which shows that employees perceived as
EXHIBIT-2 favorable the value of autonomy. Here precise HRD
structure has been shown hypothetically of different
HRD Objectives of W.S. Industries India Limited types of organization as follows.
 To plan and induct appropriate manpower regarding of Fig. 1: Organization Chart No. 1- For a Large Company
knowledge, skills, and attitude (KSA);
Manager
 To provide opportunities for growth to employees Education
regarding of remuneration, career and skill and Development
endowment.
 To practice equity and fairness in all its dealing with Manager
Executive
employees;
Education
 To continuously enhance knowledge, skill of employees Vice President/
for the performance of their present and future tasks Training

through education and training; Manager OD

 To create an organizational climate which encourages a
highly motivated workforce; Manager
 To prepare employees for easy and faster adaptation to Management
change. Development
President-HRD
From the above, it is clear to us that the two companies’ Manager Sales
HRD objectives and HRM practices are almost same and and Mktg.
their retention/ maintenance factors are in practice so
that the existent employees cannot switch other
Manager
organizations and they are committed to contributing
Vice President/ Engg. Trg.
organizational development.
Education and
Development Manager
RESPONSIBILITY OF HRD
Mfg. Trg.
HRD is thus the responsibility of both: line managers and
HRD /Personnel specialists. It is a co-operative and
Manager Staff
massive effort in the organization. Rao and Pareek (1981)
Support Trainig
observed that there are six units in an organization which

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Fig. 2: Organization Chart No. 2- Integrated HRD HRD CLIMATE

To understand the HRD climate, organizations often
Manager Finance institute some structured questionnaires for finding out
and Accounts the gap and take remedial measures. Some of the
questionnaires, could be as – (i) Does the organization
Manager Sup/ Customer consider employees as the most important resource? (ii)
Customer Service Service Trg. Does the organization believe in developing
competencies of all cross-sections of employees and
Manager Human Sup/ Mgt. and initiate action in that direction? (iii) To what extend the
Resource Clerical Trg. organization is transparent in communication? (iv) Are
General Manager the employees encouraged to take risks? (v) Is there a
Manager
Sup/ Tech Trg. climate of collaboration, team spirit, mutual trust and
Manufacturing confidence? (vii) To what extend are HRD activities
development oriented? Over these questionnaires,
Manager Sales Sup/ Sales Trg. organization could be able to find out the deviation
between goals and obtained results and take remedial
actions.
Manager
Marketing HRD INTERVENTIONS/ SUBSYSTEMS/ MECHANISMS
According to Rao, major interventions of HRD are (i)
Performance and potential appraisal; (ii) Career
Fig. 3: Organization Chart No. 3 – HRD as a Separate Planning; (iii) Training; (iv) Organization development;
Department & (v) Reinforcement. HRD interventions may vary from
Director/ Personnel
one organization to another depending upon their needs,
based on diagnostic studies.
Admn.
HRD STRATEGY
HRD integrates T & D, organizational development,
Director/
(OD), career development etc. due to improving
HRD individual, group and organizational effectiveness. Many
professionals feel that if only HRD could be effectively
linked to the organizations’ long-term strategy, then it
Director
Vice President - HRD would command top management’s attention, galvanize,
IR
management support, and attract additional resources.
HRD strategies believe that in order to involve employee
Director/ to be successful that team effectiveness training should
Labour be delivered internally. It provides training client
Welfare personnel to learn the skills required to facilitate the
team effectiveness training systems. For instance, The
Manager BIG (The Big Lottery Fund) competency framework,
Sales
develop in partnership with SHL, has been fully
integrated into recruitment, appraisal and employee
development. This ensures that HR is aligning its
It appears that the structure of HRD department varies processes to business needs and developing a framework
from organization to organization in terms of size, nature to develop employee capability and management
of activity, philosophy and attitude. And this shows it as effectiveness.
a separate functional identity in an organization.
HRD MATRIX
HRD CULTURE HRD Matrix is the interrelationship between HRD
In a changing environment, organizations are required to practices and organizational effectiveness
go for frequent restructuring and re-designing of (Bhattacharyya, 2006). HRD practices generate HRD
activities. HRD culture enable the organization to adopt processes, which result in HRD outcomes that contribute
with the rapid changes which is characterized by to organizational effectiveness. Rao (1990) developed
openness, confrontation, trust, autonomy, pro-activeness, such a matrix which is presented below:
authenticity, collaboration practices.

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Uddin etal: The Impact of Human Resource Development (HRD) Practices on Organizational Effectiveness: A Review (131-140)

Fig. 4: A Schematic Presentation of Linkage between HRD Instruments, Processes, Outcomes and Organizational
Effectiveness

Here, the main issue is that HR mechanism should be path where the mechanisms lead to outcomes (employee-
developed since it leads to the desired outcomes. Only a centered and organizational centered), which in turn, can
HR mechanism can fulfill the basic philosophy of HRM. lead to competitive advantage. The path taken is as
This could be understandable in Lawrence Kleiman follows:
Model. He states that the influence process follows a

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Fig- 5: L Kleiman Model of HRM Practices

Source: Beer, et. al., Human Resource Management: A General Manager’s Perspective, The Free Press, New York, 1985, p. 17.
Here the employee centered outcomes refer to the communicate a good image of the company. This level
competence level of each employee, employee’s willingness, outcome will give competitive advantage to the company
and employee’s attitudes such as job satisfaction level, through the generation of its good will in the market.
commitment, and citizenship behavior which result from
the right kind and right combinations of the instruments. On KEY FACTORS INFLUENCING HRM POLICIES
the other hand, the organizational outcomes are
There are certain key factors that have a strong influence on
productivity level (in terms of quantity and quality of the
HRM policies and are in turn influenced by them (Ali, 2009).
product and the USP of the product), image of the company,
These factors must be taken into account while designing
legal compliances etc which are result of the employee level
HRM policies. These factors are put into two major
outcomes. Naturally, for example if the employees of a firm
considerations: situational factors and stakeholders interests
are highly satisfied and committed then they will
as depicted in the following figure:

Fig. 6: Map of the HRM Territory

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Uddin etal: The Impact of Human Resource Development (HRD) Practices on Organizational Effectiveness: A Review (131-140)

The figure shows that HRM policies are not only collaboration, autonomy, respect, management of
influenced by the factors stated above, but affect certain mistake, management of conflicts, etc.
immediate organizational outcomes and have certain  Focus on learning contextual factors from different
long-term consequences. professional bodies like NIPA, BPATC, NAEM, IBA,
BIBM, BIM, ISTD, HRD Network etc. These
ORGANIZATIONAL EFFECTIVENESS professional bodies, through their publications,
Organizational Effectiveness is the concept of how seminars and workshops, share the experiences of
effective of an organization is in achieving the outcomes the corporate world.
of the organization intends to produce. In Organization  Focus on periodic reviewing of the HRD system
Effectiveness through HRD, human resource executives which may call for redesigning performance
can share their explored experiences in developing appraisal, job rotation, reward systems, career
people. There is a positive relationship between human planning, promotion, selection, induction, training
resource development and organization effectiveness. and development, etc.
Joseph and Singh (2000) attempted to describe in their  Focus on integrating HRD with other corporate
study that asserts competing, performing, stretching, functions like production, marketing, finance,
service organizations also need to review, reflect, material, corporate planning etc.
redirect, reorient, renew human resources in the  Focus on diffusion of HRD function involving line
organization through a continuous process of individual managers in various HRD aspects like training of
and collective development initiatives. TV Rao, HRD and subordinates, performance appraisal, promotion,
Organizational Effectiveness (1990) writes that other placement, selection, career planning, etc. line
things being the same; an organization that has people, by virtue of their rich experiences, may
competent, satisfied, committed and dynamic people is effectively contribute to these HRD areas.
likely to do better than an organization that scores low  Focus on working with unions by taking them into
on HRD outcome variables. In the same way, an confidence and collaborating with them. That unions
organization that has better HRD climate and processes can also play a positive role in furthering the
is likely to be more effective than an organization that organization is evident from a number of examples.
does not have them. It is stressed that HRD outcome
In Bangladesh, some large private sector organizations
variables are step closer to organization effectiveness.
have commenced establishing separate units known as
Organizational Effectiveness, within the Office of Human
human resource divisions/ department. But
Resources, serves as a gateway to training, development,
unfortunately, these divisions are mostly manned by
and consulting resources that build organizational
generalists. In the public sector and autonomous
capacity, increase individual capabilities, and promote a
organizations, the situation is more deplorable though
culture of excellence through strong leadership.
they are trying to rescue from the situation.
Organizational Effectiveness offers a variety of programs
and services designed to build job skills and enhance SUGGESTIONS
professional development providing workshops,
seminars, classes, and consulting services each year. The Therefore, to design HRD policies, all the likely
HRD tools if effectively used can create a conducive constraints due to inadequacies affecting the HR policies
HRD culture and HRD learning processes. HRD and the HR outcomes as well as organizational outcomes
processes are intermediate variables and affect the HRD and long-term consequences must be attentive seriously
outcomes. They are less easily observable and are softer in the areas of decreasing organizational outcomes that
dimension that indicates the effectiveness of HRD tools. should be:

FINDINGS  Employees should be informed of changes in the

environmental demands with their implications for
In consonance with prior discussion it is appeared that wages, work practices, and competency
the department of HRD of an organization is attentive on requirements. This is responsible for the
the following major areas: management.
 Employees with high competencies will have
 Increasing the ‘enabling’ capabilities by developing
versatility in skills and the perspective to take on
human resources, organizational health, team spirit,
new roles and jobs as needed. They will be more
and increasing employment motivation and
capable of responding to changes.
productivity.
 HR in terms, of wages, benefits, turnover,
 Focus on balanced organizational culture by
absenteeism, strikes, grievances and so on costs must
conducting periodic surveys, workshops,
be considered for organizations, employees and
discussions, stimulating openness, mutual trust,
society as a whole.
team spirit, creativity, initiative, mutuality,
 If HRD does not encompass the HR functions an
identity should be developed.

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 When HRD at a higher level in the organizational properly and enhance their knowledge about HRD
hierarchy does not entrust the responsibility network within the organization for its effectiveness.
establish credibility for the HRD functions.
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