Human Resource Development

HRD is basically concerned with the development of human resources in the organization for
improving the existing capabilities and acquiring new capabilities for achievement of the corporate
and individual goals.

HRD should help employees increasing their knowledge, skills, and capabilities and create positive
attitude towards work.

Nadler (1970) defined HRD as a series of organized activities conducted within a specified period of
time and designed to produce behavioral change. In a revised definition Nadler (1984) defined HRD
as organized learning experience in a definite time period to increase the possibility of job
performance and growth

In 1975 Larsen & Toubro a prominent Engineering Company in India had appointed two consultants
from the Indian Institute of Management, Ahmedabad to study the performance appraisal system
and make recommendations for improving it. The two consultants (Pareek and Rao, 1975) studied
the system through interviews etc, and suggested a new system. Pareek and Rao (1975)
recommended that “... Performance Appraisal, Potential Appraisal, Feedback and Counselling,
Career Development and Career Planning and Training and Development get distinct attention as
unique parts of an integrated system which we call the Human Resources Development System”.

According to T.V. Rao who is father of HRD in India,

Prepared by: Raman Luthra

Chartered Accountant
Human Resource Development in the organization context refers to the process whereby the
workers are continuously helped in a planned way to

1. Acquire or sharpen capabilities required to perform various tasks and functions associated
with their present or future expected roles.

2. Develop their general enabling capabilities as individuals so that they are able to discover
and exploit their own inner potential for their own and/ or Organizational development
purposes.

3. Develop an organizational culture where 'superior/ subordinate' relationships, 'team work'

and 'collaboration' among different sub units, are strong and contribute to the professional
well-being and motivation

Human Resource Management

“Human resource management” is concerned with the people dimension in management.

Since every organization is made up of people, acquiring their services, developing their
skills, motivating them to higher levels of performance and ensuring that they continue to
maintain their commitment to the organization are essential to achieving organizational
objectives. This is true, regardless of the type of organization government, business,
education, health, recreation, or social action

Difference between HRM and HRD

Basis of
HRM HRD
Differentiation

The full form of HRD is Human

The full form of HRM is Human
Resource Development. It refers to
Definition and Resource Management. It refers to how
continuous development functions
full form the principles of management can be
that are implemented for improving
applied to manage the employees
the performance of those working in
working in an organization effectively.
an organization.
Nature HRM is a management function. HRD is a sub-function of HRM.

Function The functions of HRM are reactive and The functions of HRD are proactive and
are usually applied to gaining holistic have to be applied consistently to
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Chartered Accountant
 Basis of
HRM HRD
Differentiation
organizational goals. enhance the productivity of
employees.

HRD goals are usually connected with

The objective of HRM is related to
Goal skill development, knowledge
improving the overall performance of
enhancement, and increasing the
employees.
competency of employees.

Most HRM processes are routine and HRD processes are ongoing and not
Process
have to be carried out as and when the occasional.
need arises.

HRM is an independent entity in itself.

It comprises of different sections HRD is a subsystem of HRM and draws
Dependency inclusive of recruitment and retention, many functions, attributes, and
HRD, compensation, performance, processes from HRM.
appraisal management, etc.

HRD is concerned with the

HRM deals with and has concerns for development of all aspects and people
Concerned with
people only. It handles recruitment, within an organization and manages its
rewards, etc. skill development processes.

HRM functions are generally formal and HRD functions may be informal as in
Levels of
are applied via classroom/laboratory mentorships, employees receive
formality
training, etc. coaching from superiors, usually
managers.

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Chartered Accountant
 Functions of HRD

[Function mai Human COAT phen k jaate hai]

Training and Development (T&D) Organisation Development Career Development

1. Training and Development (T&D) [T]

Training and development (T&D) focus on changing or improving the knowledge, skills and
attitudes of individuals. Training typically involves providing employees the knowledge and
skills needed to do a particular task or job, though attitude change may also be attempted.
Developmental activities, in contrast, have a longer-term focus on preparing for future work
responsibilities, by also increasing the capacities of employees to perform their current jobs.

2. Organisation Development [O]

Organisation development (OD) is defined as the process of enhancing the effectiveness of
an organisational capabilities and the well-being of its members through planned
interventions that apply behavioral science concepts. OD emphasizes both macro and micro
level organisational changes; macro changes are intended to ultimately improve the
effectiveness of the organisation, whereas micro changes are directed at individuals, small
groups, and teams. For example, many organisations have sought to improve organisational
capabilities by introducing employee involvement programs that require fundamental
changes in work expectations, reward systems, and reporting procedures.

3. Career Development [C]

Career development is “an ongoing process by which individual’s progress through a series
of stages, each of which is characterized by a relatively unique set of issues, themes, and
tasks”
Career developments involve two distinct processes
a) Career planning : Career planning involves activities performed by an
individual, often with the assistance of counselors and others, to assess his or her
skills and abilities in order to establish a realistic career plan.

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Chartered Accountant
 b) Career management : Career management involves taking the necessary steps to
achieve that plan, and generally focuses more on what the organisation can do for
foster employee career development.

Training Delivery Methods

On-the-Job Training (OJT) Off the Job Methods Self-Paced/Computer-Based

Methods Classroom Training Approaches Training Media and Methods

1. On-the-Job Training (OJT) Methods

i) Job Instruction Training (JIT): JIT is defined as a sequence of instructional procedures used
by the trainer to train employees while they work in their assigned job.

ii) Job Rotation: Job rotation is the approach where the trainee is generally expected to
learn more by observing and doing than by receiving instruction. Rotation, as the term
implies, involves a series of assignments to different positions or departments for a
specified period. During this assignment, the trainee is supervised by a department
employee, usually a supervisor, who is responsible for orienting, training, and evaluating
the trainee.

iii) Coaching: Coaching refers to teaching and supervising someone. In the coaching method,
senior managers are made responsible for coaching and developing the trainees who
work directly under them.

iv) Mentoring: Mentoring refers to the teaching by an intelligent and trusted guide and
advisor. In recent times, it has emerged as an important technique to develop future
managers. It is a one-to-one teaching–learning process.

2. Off the Job Methods Classroom Training Approaches

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 Five primary categories of classroom training methods are:

i) Lecture: The lecture method involves the oral presentation of information by a subject
matter expert to a group of listeners.

ii) Discussion: The discussion method involves the trainer in two-way communication with
trainees, and the trainees in communication with each other.

iii) Audiovisual media: Both the lecture and discussion methods are limited in their ability to
adequately portray dynamic and complex events. Audiovisual methods take advantage
of various media to illustrate or demonstrate the training material. Audiovisual media
can bring complex events to life by showing and describing details that are often difficult
to communicate in other ways.

iv) Experiential methods: Experiential learning advocates that effective learning requires
active engagement on the part of the learner. Experiential training methods that are
commonly used in organizations include case studies, games and simulations, role
playing, and behavior modeling.

3. Self-Paced/Computer-Based Training Media and Methods

As mentioned, computer-based training (CBT) can be conducted in either a classroom or an

individual, self-paced format. Indeed, with the increased availability of networked computer
labs, there can be an almost limitless interplay between instructor-led and individual-based
computer training. As such, we discuss computer-based training both as one of the five
approaches to classroom training, as well as a major example of current.

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 HR PROCUREMENT

1. Job Analysis and Design

2. Human Resource Planning

3. Recruitment

4. Selection

5. Orientation, Socialization
and Placement

1. Job Analysis and Design

Job Analysis is the process of describing and recording aspects of jobs and specifying the
skills and other requirements necessary to perform the job.

Purpose of conducting a job analysis process

• Recruitment and Selection: to use this particular information to create a right fit
between job and employee,
• Performance Analysis: to assess the performance of an employee,
• Compensation Management: to determine the worth of a particular task
• Training and Development: to analyze training and development needs of an
employee delivering that specific job
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 • Job designing - The main purpose of job analysis is to streamline the human efforts
and get the best possible output. It helps in designing, redesigning, enriching,
evaluating and also cutting back and adding the extra responsibilities in a particular
job. This is done to enhance the employee satisfaction while increasing the human
output.

Output of Job Analysis

Job description Job specification Job Evaluation

Job description

• A job description (JD) is a written statement of what the job holder does, how it is
done, under what conditions it is done and why it is done.
• It describes what the job is all about, throwing light on job content, environment
and conditions of employment.
• It is descriptive in nature and defines the purpose and scope of a job.
• The main purpose of writing a job description is to differentiate the job from other
jobs and state its outer limits.

A job description usually covers the following information:

• Job title: Talk about the job title, code number and the department where it is
done.
• Job summary: A brief write up about what the job is all about.
• Job activities: A description of the tasks done, facilities used, extent of supervisory
help, etc.
• Working conditions: The physical environment of job in terms of heat, light, noise
and other hazards.
• Social environment: Size of work group and interpersonal interactions required to
do the job.

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Chartered Accountant
 Job specification

• Job specification summarizes the human characteristics needed for satisfactory job
completion.
• It tries to describe the key qualifications someone needs to perform the job
successfully.
• It spells out the important attributes of a person in terms of education, experience,
skills, knowledge and abilities (SKAs) to perform a particular job.
• The job specification is a logical outgrowth of a job description.
• For each job description, it is desirable to have a job specification.
• This helps the organization to find what kinds of persons are needed to take up
specific jobs.

Contents: A job specification usually covers the following information:

• Education
• Experience
• Skill, Knowledge, Abilities
• Work Orientation Factors
• Age

Job Evaluation

The Job Evaluation is the process of assessing the relative worth of the jobs in an
organization. The jobs are evaluated on the basis of its content and the complexity involved
in its operations and thus, positioned according to its importance.

Methods of Job Evaluation

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 Analytical Methods

1. Point raking: It is one of the quantitative methods in job evaluation. In this method, the
worth of a job is determined on the basis of the extent of the presence of some defined
factors in that job. These factors are usually called compensable factors. They may include
any key factor like skills, knowledge or efforts that are compensable in monetary terms. The
jobs with a high concentration of these compensable factors get higher points.

2. Factor comparison is another quantitative method extensively used in job evaluation. This
method is widely seen as an improvement over the ranking method. In this method, a set
of factors common to all jobs are identified and assigned points.
The five universal job factors are
• mental requirements
• physical requirements
• skills
• working conditions
• responsibilities.
Then, each job is compared with others for each one of these factors. Understandably, each
job undergoes multiple comparisons with other jobs. For instance, a job may be compared
with another for a specific factor like job responsibility and get ranked for that.

Non-Analytical Methods

1. Ranking: In this method, each job is ranked after its comparison with all other jobs in the
organization. Based on their worth to the organization, jobs are placed in a vertical order. An
important prerequisite for the job ranking method is job analysis and the resultant job
description statement for each job under consideration.

2. Paired Comparison: In this method, each job is individually compared with every other in the
organization. If, during the comparison, a job is found to have more value than another, it is
assigned some reward points. If it is considered less important, it gets no points.

3. Job Grading: In this method, jobs are grouped on the basis of the similarities found in their
characteristics and values. In other words, jobs with characteristics in common are
assembled into groups. This kind of grouping of similar jobs is usually called job classification.
Generally, jobs within each job group or class are eligible for the same pay scale or grade.

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4. Market Pricing: Job evaluation ensures internal equity in the fixation of pay scales for
different jobs. However, internal equity alone is not sufficient in compensation management.
It is also essential for an organization to establish external equity in the pay scales for a job.
External equity refers to bringing the pay scales for jobs in the organization on par with the
pay scales of similar jobs in other organizations.

Job Design: The Job Design means outlining the task, duties, responsibilities, qualifications,
methods and relationships required to perform the given set of a job. In other words, job
design encompasses the components of the task and the interaction pattern among the
employees, with the intent to satisfy both the organizational needs and the social needs of
the jobholder.
The objective of a job design is to arrange the work in such a manner so as to reduce the
boredom and dissatisfaction among the employees, arising due to the repetitive nature of
the task.

Job Design

Job Job Job Job

Enrichment Enlargement Simplification Rotation

1. Job Enrichment: Job enrichment refers to the development of work practices that challenge
and motivate the employees to perform better. The main aim of job enrichment is to provide
an enhanced autonomy for the employees and increased operational efficiency for the
organization.
2. Job enlargement transforms the jobs to include more and/or different tasks. Its basic aim is
to make the job more attractive by increasing the operations performed by a person in the
job.
3. Job simplification is the process of removing tasks from existing roles to make them more
focused. Job simplification is about stripping skill variety to create a more focused task. This
can be used in case of job creep when a job has been enlarged over time and has become
unmanageable.
4. Job rotation refers to moving employees from one job to another in a predetermined way.
This enables an employee to perform diverse roles and gain exposure to the techniques and
challenges of doing several jobs.
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 2. Human Resource Planning

• Human resource planning is basically a process of identifying the right person for the right
job at the right time and at the right cost.
• This process involves the estimate of the future manpower needs of an organization and
meeting them through the labour force available with it.
• Human resource planning is the first step in the process of recruitment and selection of
employees after a job analysis has been completed.

HR Forecasting—Need Assessment

The success of HR plans depends on the accuracy of the HR forecasts that are needed to
implement the organizational strategies. These forecasts involve estimating the future
requirements of the organization in terms of the nature and the number of people.

Nominal
Group
technique

1. Trend analysis is a simple technique used for forecasting the HR requirements on the basis
of past events. It involves the comparison of any factor that influences HR requirements (for
example, the average number of resignations in a year) over a considerable period of time
(for example, ten years) through a simple statistical analysis.

2. Ratio Analysis is the analysis of the relationship between any two numerical variables. As a
forecasting technique, it presumes a certain relationship between two given variables and,
using that relationship, predicts the future HR requirements. For instance, an organization
can predict the number of people additionally needed for a likely increase in demand for a
product

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3. The Delphi technique is basically a group-based systematic forecasting method.
• In the first phase of the Delphi technique, a group of independent experts forecast
the HR requirement of the organization on the basis of the input provided by the
organization.
• In the second phase, a summary of the experts’ forecasts is prepared and sent back
to them for their opinions and suggestions. This act is repeated several times till a
consensus is reached by the experts on the final HR requirements for the
organization.

This method aims at maximizing the benefits and minimizing the dysfunctional
aspects of group decision making as it eliminates group dynamics and individual
dominance from the process.

4. Nominal Group Technique This is also a group forecasting method. It is an interactive mode
of decision making with a difference. Each expert in the group independently develops HR
requirements and presents it before other experts in the group. The group evaluates each
member’s presentation and eliminates duplication, if any. Then, each member’s proposal is
relatively graded and the top-ranked proposal is selected as the final HR forecast.

5. Managerial Judgement In this method, forecasts are made about the HR requirements,
usually by the senior managers of the organization. The forecasting here is based on the
managers’ subjective views on the possible human resource requirements in the future. The
decisions are mostly based on the experience and expertise of the managers and there is
little emphasis on data collection and interpretation.

6. Bottom-up approach — In this approach, HR forecasting is done in a decentralized decision-

making style. The process of HR forecasting begins with the lowest level of the managerial
hierarchy. The managers in charge of each division or department forecast the HR
requirements on the basis of the organizational and unit-wise goals. This forecasting process
is then moved up gradually to the higher levels of the management. Finally, the aggregate
forecast of the HR requirements is developed.

7. Top-down approach — The purpose of this approach is to have the minimum involvement
of the line managers in HR forecasting. In this method, experts working at the highest levels
of the management forecast the HR needs of the organization on the basis of the information
available and the field expertise

8. The work study technique aims at examining the business operations to achieve the
optimum utilization of the human and physical resources available. The major purpose of
this technique is to improve the employees’ productivity and the organizational efficiency.

9. Zero-base Forecasting This method is a new entrant in the existing series of techniques to
forecast the HR requirements of an organization. It requires lines managers to justify the
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 need to continue with the positions or jobs that fall vacant in their department. It does not
consider any position as eligible for routine continuance. Line managers should state logically
why the vacancy should not be abolished and why it is necessary to continue with it.

10. Simulation model is a mathematics-oriented, software-enabled technique with growing

applications in HR forecasting. It is a team-based approach towards HR forecasting. The
working of the simulation model involves asking several what-if questions to develop
alternatives in the forecasting process. For example, what would be the impact if the
organization laid off two per cent of its workforce? What would be the impact on HR
requirements if the organization increases its production by 5,000 units?

11. Human Resource Allocation Approach It is an HR forecasting method based on object-

oriented simulation model. This method has four components:
I. employees, including their education, experience and competencies
II. functions, including job structure and the changes in them
III. a matching model, and
IV. a formal rule structure comprising the policy of the organization towards job
allocation.

This method allows comprehensive modeling of the interaction among these components.
The matching model deals with allocation of different jobs to employees.

3. Recruitment

Recruitment provides the first contact for an organization with its potential employees.
Recruitment may be defined as a search for promising job applicants to fill the vacancies that
may arise in the organization.

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 Internal Sources

Internal recruitment usually refers to filling open jobs with the current employees of the
organization. It is a process designed to create sufficient interest among the current
employees to cause them to formally indicate an interest in a given position.

1. Existing Employees- The most common source of internal recruitment is through existing
employees. Organizations normally maintain inventories of qualifications to choose
employees for suitable vacancies. Such inventories contain data such as the current
employee’s performance, educational background and suitability.

2. Former Employees are also considered as an internal source of recruitment for they are
acquainted with the policies and practices of the organization. Besides, they enjoy
familiarity with the present employees in most cases. It is now increasingly common to take
back employees who left the firm for various reasons.

3. Employee Referrals This method refers to the practice of the present employees providing
information about the candidates who are willing to be considered for the present
vacancies. The applicants may be the friends or relatives of the referring employees. Referral
is also a cost-effective source of recruitment. Its effectiveness lies in the assumption that
the present employees will recommend only suitable candidates for the vacant jobs lest
their own credibility be affected.

External Sources

1. Employment Exchanges: Employment exchanges have been established by the government

to act as a liaison between job providers and job seekers. In fact, these exchanges were set
up all over the country in compliance with the Employment Exchanges (Compulsory
Notification of Vacancies) Act of 1959. The twin tasks of employment exchanges are to help
employers locate suitable candidates for the vacancies arising in their organization and the
job seekers get information about such job opportunities.

2. Outsourced to Recruitment Agencies: Transferring the whole or a few parts of the

recruitment process to an external HR consultant rendering recruitment services is called
outsourcing recruitment.

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3. Advertisements: Printed advertisements are a preferred mode of external recruitment for
several reasons. As printed advertisements reach many people in a short period of time, the
vacancies can be communicated to the potential candidates quickly. They enjoy a wider
coverage and better reach. They are cost-effective when the vacancies are large in numbers.

4. Campus Recruiting: When company representatives are sent to college campuses to recruit
applicants to create an applicants’ pool from graduating classes, it is called campus
recruiting.

5. Walk-ins and Write-ins: When applicants directly write to the organization or just walk in to
the office to state their interest for employment, we call it write-ins and walk-ins. The walk-
ins may be self-initiated or in response to the advertisement placed by the organization in
newspapers. Walk-ins and write-ins are helpful in strengthening the applicants’ pool
maintained by the organization and are a suitable method for immediate selection and
placement.

6. Internet Recruiting: Internet recruiting refers to placing an advertisement on the Internet

for inviting applications from the potential applicants to fill the vacancies specified. In recent
times, there has been a steep rise in the number of Indian companies opting for the Internet
as a tool for recruitment.

7. Raiding or Poaching: Raiding or poaching refers to cajoling or attracting the employees of

the rival organizations with attractive offers. Organizations may directly or indirectly contact
the talented employees of their rivals and gradually persuade these employees to join them.

4. Selection

Selection is the process by which candidates for employment are divided into two classes
those who will be offered employment and those who will not.

Steps involved in standard selection process

1. Screening and Preliminary interview

2. Application Blank
3. Selection tests
4. Selection Interview
5. Reference checks
6. Physical Examination
7. Final Selection

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 1. Preliminary interview

The purpose of screening and preliminary interview is to eliminate unsuitable or unqualified

candidates from the selection process. In screening unqualified candidates are eliminated on
the basis of information given in the application forms, whereas preliminary interview rejects
misfits for reasons, which did not appear in the application forms.

2. Application Blanks

Application blank is the commonest device for getting information from a prospective
candidate. Almost all organizations require job seekers to ill up an application. This serves as
a personal record of the candidate bearing personal history profile, detailed personal
activities, skills and accomplishments.

3. Selection Tests

Since there are differences in the abilities, aptitudes, interest and personality traits of
individuals, it is essential to measure these differences effectively and accurately to
determine their suitability for the jobs. This may be done with the help of selection tests,
also called psychological tests.

1. Ability test — Ability refers to the capacity of a person to do a particular job. The ability of a
person commonly denotes the combination of mental ability (like memory and inductive
reasoning), physical ability (like stamina, body coordination and physical strength) and motor
ability (like finger dexterity and reaction time).
i) Intelligence (IQ) test — The aim of an intelligence test is to measure the general
intellectual abilities of a person. This test assesses the memory, vocabulary, verbal
comprehension, thought fluency, inductive reasoning, and numerical skills of a
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 candidate.
ii) Aptitude test — An aptitude test measures the latent talents of a person that may be
crucial to performing the job successfully. This test is normally given to those applicants
who have no previous experience in that field. Hence, aptitude tests are appropriate for
predicting the future ability and/or performance of the candidate.
iii) Achievement test — The aim of an achievement test is to measure the knowledge gained
by a person in his/her job. It evaluates the claims made by the job holders regarding their
performance and skills acquired in the job. It is also called proficiency test, performance
test or trade test.

2. Personality test — Personality refers to the sum of the characteristics of a person which
reflect on his/her response to a particular situation. The characteristics may include, among
other things, introversion, inter-personal skills, motivation, stability, self-belief, courage,
attitude and temperament. A personality test proposes to assess and predict these basic
characteristics of a person.

3. Interest test — A person’s mental and physical abilities are not sufficient to achieve a
desirable job performance. Apart from these, the person must have a strong and inherent
interest for that job. The aim of the interest test is to know the interest, attitude and
preference of a person towards the job offered.

4. Honesty or integrity test — Organizations may feel a need to ascertain the honesty of the
candidates to ensure that they have not furnished any false information in the application
form and also to safeguard themselves from frauds and misappropriation. In an honesty or
integrity test, the questions are asked in such a way that the attitude and actual behavior of
the candidates can be found out.

4. Selection Interview

Interview is an oral examination of candidates for employment. No selection process is

complete without one or more interviews. Interview is the most common and core method
of both obtaining information from job-seekers, and decision-making on their suitability or
otherwise.

5. Reference checks

The reference check as yet another step in the selection process used for the purpose of
verifying information and also obtaining additional feedback on an application. The
candidate is asked to supply two-three names of persons i.e., referees who know him/her
personally, Previous employers, University Professors, neighbours and friends can act as
references.

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Chartered Accountant
 6. Physical Examination

The last tool used in the selection process is physical examination. The main purpose of
conducting physical or medical examination is to have proper matching of job requirement
with the physical ability of the candidate

7. Final Selection

The last step in the selection process is the final selection of the candidate for a job. The
candidates who have cleared all the above hurdles are finally selected and a letter of job
offer is issued to them. The job offer i.e., appointment letter contains the details like pay-
scale, allowances and other terms and conditions of the job.

5. Orientation, Socialization and

Placement

Employee orientation or induction is a crucial stage in the hiring process of an organization.

The newly joining employees get the first impression of the organization through the
orientation programmes. It is thus necessary for any organization to have a meticulously
planned and well executed orientation programme to educate the employees about the
various aspects of the organization. Orientation programmes are useful in making the new
employees feel assured, happy and at ease with the new environment. They can also ensure
a smooth transition and integration for the employees without any initial shock and
unpleasant surprises.

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Chartered Accountant