HRD and its strategic role, importance and relevance of HRD

Script for Chapter 2-HRD and its strategic role, importance and relevance of HRD

Objectives

Today’s session will help you understand

• The importance of Human Resource Development

• HRD and its strategic role in a business setup

• The relevance of HRD in an organisational setup

Introduction

You might be wondering what is strategic about HRD - or is it just fashionable to call each
function ‘strategic’. We are sure that your views will be clear by the end of this session.

In the previous session we had discussed how Human Resource Management – HRM - and
Human Resource Development – or HRD - are distinct but related functions. In many
organizations, HRD is outsourced to consultants and sometimes experts are simply asked to
provide training. In some organizations, HRD is one of the functions of HRM. In yet other
organizations, HRD is a separate function which operates in coordination with other functions
including HRM.

Dave Ulrich presented in 1997 a framework of roles of HR Managers, in which he identified one
‘strategic partner of senior management’ as one of the four roles of an HR Manager. As a
strategic partner, the HR manager contributes to the formulation of business strategy and
correspondingly determines the need for change. In his second role as a change agent, HR
Manager helps the organization bring about the needed change so that the strategic goals can be
accomplished.

As technology evolves, ICT – ie, information and communication technology becomes available
more and more widely and affordably across the world, as the business becomes more and more
globalized, the pace of change intensifies in the way an organization conducts business.

HRD : Systems & Strategies /MOOC-2021/B.K School of Professional and Management

Studies/Gujarat University
 HRD and its strategic role, importance and relevance of HRD

There is an opinion among thinkers of business strategy, that businesses require resources to
operate. But these resources are scarce and there is competition to get them. Therefore, the
organization which can gather and deploy resources it requires – especially those which are
valuable, rare, and inimitable – will have a competitive advantage over its competitors. One can
see the human resource as one of the inimitable resources. Further, trained, capable, and dynamic
human resource would be not only valuable, but rare also.

Another view, known as the Dynamic Capability view is that a firm’s competitiveness depends
directly upon its ability to integrate, build and reconfigure internal and external competences to
address rapidly changing environments. If you think about where this ‘competence’ resides, the
answer would be its people, or its human resources. How is the competence of the people going
to be shaped and reshaped in line with rapidly changing environment?

You guessed right – the key to the answer is with HRD department.
So, next as we discuss what is the relevance of HRD in an organizational set up,

HRD at workplace seems to offer the ultimate win-win outcomes for everyone. In an era which
is identified by its volatility of change to a learning society and the knowledge economy, it all
makes sense that effective HRD at workplace ensures to provide levers that can be manipulated
to control the future of workplace and organisation and see to it that individual career and
success and competitiveness for all those currently flourishing, and a route to prosperity for all
those who are currently ‘struggling to get by’ or going nowhere’.

Strategic Human Resource Development (HRD)

Human Resource Development has always served the needs of the organisation, especially on the
critical business issues, technological changes and gaps in skills of employees were always
catered by HRD function (R.A, 1995) but today’s dynamic environment requires more from
HRD i.e. to shape business strategy (R.A, 1995).

Strategic management involves a set of managerial decisions and actions that are intended to
provide a competitively superior fit with external environment and enhance the long-run
performance of the organisation.
HRD : Systems & Strategies /MOOC-2021/B.K School of Professional and Management
Studies/Gujarat University
 HRD and its strategic role, importance and relevance of HRD

Effective organizations have employees who are committed and make contributions to
organizational success. Hale (1991) pointed out that human resource development (HRD)
professionals must support organizational learning in order to establish performance
expectations, address higher-level problem-solving skills, and account for societal outcomes.
Thus, HRD professionals are primarily responsible for creating HRD strategies within a learning
culture that fosters continuous employee learning.

This indicates that HRD professionals need to adopt a new approach to maximizing
organizational effectiveness, one that addresses the real problems of an organization and enables
it to achieve learning results (Rothwell, 1996). So what does this new approach look like to
enable organizations to achieve learning results and adopt the new approach?

By organizing, integrating, and evaluating the comprehensive literature review, we have

identified the relationship between strategic HRD (SHRD) practices and organizational
learning. We argue, first, that SHRD has a responsibility to provide strategies, training, and
development opportunities to help organizations and their employees to achieve their business
goals. Then, we argue that the characteristics of SHRD are important in providing organizational
learning. We also believe that SHRD practices have the same responsibilities to influence
organizational learning as to provide organizations with the key capabilities to enhance their
organizational outcomes related to SHRD practices.

Various studies (Beer & Eisenstat, 1996; Brinkerhoff & Gill, 1994; Dixon, 1994; Gardiner &
Sadler-Smith, 2001; Gómez, Lorente, & Cabrera, 2004; Klimencki & Lassleben, 1998; Sadler-
Smith, Spicer, & Chaston, 2001; Williams, 2001) were used to examine how organizational
learning helps employees attain performance results that enable them to accomplish their
personal goals and objectives. For example, Sadler-Smith, Spicer, & Chaston (2001) stated that
organizational learning is the development or acquisition of new knowledge or skills in response
to internal or external stimuli that leads to a more or less permanent change in collective
behavior, enhancing organizational outcomes.

While the organisations have division of labor on the basis of roles and abilities, therefore when
organisation fails to attain its objectives through existing competencies; skill competency gap
arises which can only be filled through HRD. Further, HRD becomes strategic when its supports
HRD : Systems & Strategies /MOOC-2021/B.K School of Professional and Management
Studies/Gujarat University
 HRD and its strategic role, importance and relevance of HRD

organisation to achieve its objectives while paving the way towards its destination through its
rational, conscious and continuous process of assessing the needs till evaluation of outcomes in
the form of learning and improvement. However, its strategic in nature as organisation’s strategy
will be on stake till it is being taken care of. (Luoma, 2000). Strategic alignment concerns the
development of HRD goals and objectives and HRD interventions, which are aligned with
company strategy, problems, and developments” (Lam, 2000).

Donnell and Garavan (1997) also emphasised that skills and knowledge of the workers are the
critical factors that determine the growth of the economy while becoming strategic in nature.
Therefore, training should be organisations mainstream purpose. Moreover, HRD should also be
an implicit part of strategic planning of the organisation (Garavan, 1997).

Therefore, HRD professionals need to develop an approach that helps the organization focus on
their strategic business goals. Such an approach must focus on organizational learning and the
key factors that it influences. In an organizational learning context, strategy emphasizes the
importance and critical nature of employees and organizations in achieving their business goals
and organizational effectiveness. To fulfill this objective, SHRD needs to be well organized and
planned, as well as integrated into every aspect of the organization.

Definitions

Let us now consider how Strategic HRD, SHRD Practices and Organisational Learning could
possibly be defined.

Strategic HRD

As described by Harrison(2000), strategic HRD is ‘development that arises from a clear vision
about people’s abilities and potential and operates within the overall strategic framework of the
business’. Strategic HRD holds long term and broad view about how HRD policies and practices
will be able to support the achievement of business strategies.

It is business-led and the learning and development strategies that are established as part of the
overall strategic HRD approach which advances towards business goals and strategies, and has a
positive role in helping to ensure that the business attain its targets, mission and vision.
HRD : Systems & Strategies /MOOC-2021/B.K School of Professional and Management
Studies/Gujarat University
 HRD and its strategic role, importance and relevance of HRD

Strategic HRD aims at enhancing resource capability in line with the belief that human
capital/resource of an organisation is a major source of competitive advantage. There is no doubt
that people are a centre of an organisation and for this reason human resource development plays
a very crucial role within an organisation. Hence, an organisation has to ensure that the right
quality of people are available to meet current and future demands.

SHRD Practices

Garavan et al. (1995) contended that HRD is used in many contexts and widely differing
activities. Gilley and Eggland (1989) concluded that HRD is an organized learning activity
within the organization used to improve performance and personal growth for the purpose of
improving the job, the individual, and the organization. The key definition of SHRD used in this
article is Garavan (1991): SHRD is the strategic management of training, development, and
management or professional education interventions, so as to achieve the objectives of the
organization while at the same time ensuring the full utilization of the knowledge in detail and
skills of individual employees.

Furthermore, SHRD is extensively concerned with practice. Huselid, Becker, and Beatty (2005)
used the term Workforce Scorecard to highlight the focus on the strategic performance of
employees rather than the contribution of the HR function to business success.

SHRD, with its focus on proactive change management, can help organizations survive in an
increasingly global, unstable, and competitive environment (Grieves, 2003). Several key
elements, including critical thinking (Patterson, Crooks, & Lunyk-Child, 2002), evaluation
(Torres & Preskill, 2001), strategic hiring and training (Pérez López, Peón, & Ordás, 2006),
participation (Wang & Wang, 2004), and credibility (Ulrich, 1997), serve as a road map for
SHRD practice and provide SHRD professionals with a clear path to establish value and
performance in their organizations.

Garavan (1991) accented the point that the need for integration into business planning is critical
for SHRD, as is a contribution to corporate goals and an awareness of mission. Then, he
suggested that the support and active participation of top management, as key stakeholders, is
vital for the development of SHRD. In addition, he argued that continuous knowledge of the

HRD : Systems & Strategies /MOOC-2021/B.K School of Professional and Management

Studies/Gujarat University
 HRD and its strategic role, importance and relevance of HRD

external environment, in terms of opportunities and threats for business and for HRD,
specifically, is vital for SHRD to flourish.

Organizational Learning

Pérez López et al. (2006) assumed that “organizational learning is a process to improve the
development of the organization by means of new initiatives (technological, productive or
commercial)” (p. 217). This requires a move from simply putting more knowledge into databases
to leverage the many ways that knowledge can migrate into an organization and impact business
performance (Cross & Baird, 2000). Tippins and Sohi (2003) considered that organizational
learning consists of four dimensions: information acquisition, information dissemination, shared
interpretation, and development of organizational memory.

Gilley and Maycunich (2000) conceived the learning process as consisting of five phases: First is
preparation for learning; in order to ensure that learning is effective, organizations must
adequately prepare for the acquisition of new knowledge. Second is information exchange,
allowing employees to obtain content necessary to improve their knowledge, skills, or behaviors.
The learning environment must support the free exchange of ideas and feelings and allow
learners to feel secure and to participate in open two-way communications (Hiemstra, 1991).
Third is knowledge acquisition and practice; learning occurs when certain activities cause an
individual to transpose information into new awareness that ultimately alters behavior. The new
awareness is equal to knowledge acquisition and practice. Fourth is transfer and integration; if
the organization fails to assist employees in integrating learning and transferring skills or
knowledge on the job, the organization will experience difficulty, and opportunities for change
will be lost. The last is accountability and recognition; individuals must be held accountable for
their learning and be recognized for their efforts and improvement.

Integrating the above definitions, it seems that ideally, all HRD is strategic in nature. Efforts to
develop human resource without alignment to strategy would likely be misdirected. So, we
conclude that organizational learning is a process of learning in order to acquire knowledge and
improve business performance, and it consists of four dimensions: knowledge acquisition,
knowledge distribution, interpretation, and organizational memory

HRD : Systems & Strategies /MOOC-2021/B.K School of Professional and Management

Studies/Gujarat University
 HRD and its strategic role, importance and relevance of HRD

Now, let’s recognise the importance of HRD in an organisational framework:

IMPORTANCE OF HUMAN RESOURCE DEVELOPMENT

Human Resource is needed to be developed as per the external as well as internal changes around
and within the organisation, hence, HRD helps to adopt such changes through the development
of existing human resource in terms of skill, knowledge and abilities.

The purpose of HR Development is basically to provide the ‘coaching’ needed to strengthen and
grow the KSAs that an employee brings into the organisation. The aim of development and
training is to make employees even better at what they do.

HRD is a system which introduces changes in the work culture and work environment without
disconnecting the functioning of the organisation. There are few points which highlight its
importance:

1. Competent employees: HRD plays a very important role in making people aware of the skills
required to perform job duties and tasks. This creates greater clarity of work norms and
standards. Thus, it results in a more competent workforce in an organisation.
2. Role clarity: Communication is encouraged between work-teams and individuals by HRD.
Together with understanding their roles better, people also become aware of the
expectations of the other members in the team.
3. Greater trust and respect: By encouraging communication, HRD helps in making employees
more authentic, and open which also generates new values.
4. Breaks resistance to change: HRD makes its employees better equipped with problem-solving
capabilities. This not only makes them proactive but also brings willingness on their part
to accept and adapt to changes taking place in the organisation.

There are various other benefits which includes synergy effect, facilitates Human Resource
Planning, higher productivity, cost effectiveness, growth expansion, diversification, career
development, increased profits and so on. Thus, appropriate HRD provides unlimited benefits.

HRD : Systems & Strategies /MOOC-2021/B.K School of Professional and Management

Studies/Gujarat University
 HRD and its strategic role, importance and relevance of HRD

Summary

In a nutshell, HRD is directly associated with improving and enhancing the performance of the
employees, which is regarded by many organisations as the only competitive advantage that can
be sustained.
This competitive edge is achieved by organisations that discover the knowledge, skills and
abilities( KSA) of their work force and build them to achieve unique differentiation. Empirical
studies on business effectiveness and sustainability from all over the world suggests that, people
are the key to the success of the business.

HRD : Systems & Strategies /MOOC-2021/B.K School of Professional and Management

Studies/Gujarat University