Ppts ppts

Definition of HRD
• A set of systematic and planned activities
designed by an organization to provide its
members with the necessary skills to meet
current and future job demands.

Emergence of HRD
• Employee needs extend beyond the training
classroom
• Includes coaching, group work, and problem
solving
• Need for basic employee development
• Need for structured career development

Relationship Between HRM and HRD
• Human resource management (HRM)
encompasses many functions
• Human resource development (HRD) is just
one of the functions within HRM

Primary Functions of HRM
•
•
•
•
•
•
•

Human resource planning
Equal employment opportunity
Staffing (recruitment and selection)
Compensation and benefits
Employee and labor relations
Health, safety, and security
Human resource development

Secondary HRM Functions
• Organization and job design
• Performance management/ performance
appraisal systems
• Research and information systems

HRD Functions
• Training and development (T&D)
• Organizational development
• Career development

HR’s strategic role
•
•
•
•

Employees as organisation’s assets
Driving business strategy
Spanning organizational functions
HRD Deliverables:
–
–
–
–

Performance
Capacity Building
Problem solving/consulting
Org. change and development

Strategic HRD
• Integration of HRD with strategy formulation
and implementation
• Long-term view of HR policy
• Horizontal integration among HR functions
• Vertical integration with corporate strategy
• SHR as core competitive advantage

Firm Capitals
• Human Capital
– Knowledge, skills, abilities of individuals

• Social Capital
– Relationships in social networks
• Structural, cognitive, relational dimensions

• Intellectual capital
– Knowledge and knowing capability of social collectivities
• Procedural/declarative; tacit/explicit; individual/social

• Value and Uniqueness of capitals

Multiple Roles for HR (Ulrich, 1997)
Future/Strategic Focus
Mgmt of SHR
Processes

Mgmt of Firm
Infrastructure

Mgmt of TransFormation/Change
People
Mgmt of Employee
Contributions

Day-to-day/Operational
Focus

Definition of HR Roles
Role/Cell

Deliverable/
Outcome

Metaphor

Core Activity

Mgmt of SHR

Executing corp.
strategy

Strategic Partner

Aligning HR and bus.
Strategy

Mgmt of Firm
Infrastructure

Building an efficient
infrastructure

Administrative
Expert

Reengineering org.
Processes

Mgmt of Employee
Contributions

Increasing employee
commitment and
capability

Employee Champion

Providing resources
to employees

Mgmt of
Transformation/Cha
nge

Organizational
renewal

Change Agent

Managing
transformation and
change,

12

Importance of Human Resources
• Human resources are an important part of the
value chain
• They can be unique, and thus a source of core
competence in an organization
• If a core competence is related to HR, then HR
can contribute to competitive advantage

13

Strategic Analysis of HR: Purpose
• People related strategies may be important to
new strategy (for example, a change in the way
the organization does business)
• In today’s technologically complex business
world, analysis of existing human resources is
important in order to determine what options are
available
• The network of people within an organization and
their relationships with people can be an
important part of strategy

HR and Sustainable Competitive Advantage
• In some industries, people are the most important factor in
success
- advertising and creative development
- leisure and tourism
- management consulting
- hospitals and medical professions
• The adaptability of people to changing environments is an
important skill
• “The ability to learn faster than your competitors may be
the only sustainable advantage” – Arie De Geus, former
head of planning at Royal Dutch Shell

Challenges for HRD
•
•
•
•
•

Changing workforce demographics
Competing in global economy
Eliminating the skills gap
Need for lifelong learning
Need for organizational learning

Competing in the Global Economy
•
•
•
•
•
•

17

New technologies
Need for more skilled and educated workers
Cultural sensitivity required
Team involvement
Problem solving
Better communications skills

Need for Lifelong Learning
•
•
•
•
•

18

Organizations change
Technologies change
Products change
Processes change
PEOPLE must change!!

Training and Development (T&D)
• Training – improving the knowledge, skills and
attitudes of employees for the short-term,
particular to a specific job or task – e.g.,
– Employee orientation
– Skills & technical training
– Coaching
– Counseling

Training and Development (T&D)
• Development – preparing for future
responsibilities, while increasing the capacity
to perform at a current job
– Management training
– Supervisor development

Organizational Development
• The process of improving an organization’s
effectiveness and member’s well-being
through the application of behavioral science
concepts
• Focuses on both macro- and micro-levels
• HRD plays the role of a change agent

Career Development
• Ongoing process by which individuals progress
through series of changes until they achieve
their personal level of maximum achievement.
– Career planning

– Career management

Learning & Performance

By Permission: Naughton & Rothwell (2004)

Critical HRD Issues
• Strategic management and HRD
• The supervisor’s role in HRD
• Organizational structure of HRD

Strategic Management & HRD
• Strategic management aims to ensure
organizational effectiveness for the
foreseeable future – e.g., maximizing profits in
the next 3 to 5 years
• HRD aims to get managers and workers ready
for new products, procedures, and materials

Supervisor’s Role in HRD
•
•
•
•
•

Implements HRD programs and procedures
On-the-job training (OJT)
Coaching/mentoring/counseling
Career and employee development
A “front-line participant” in HRD

Organizational Structure of HRD
Departments
• Depends on company size, industry and
maturity
• No single structure used
• Depends in large part on how well the HRD
manager becomes an institutional part of the
company – i.e., a revenue contributor, not just
a revenue user

HRD Organization in a Large Company

Sample HRD Jobs/Roles
•
•
•
•
•
•

Executive/Manager
HR Strategic Advisor
HR Systems Designer/Developer
Organization Change Agent
Organization Design Consultant
Learning Program Specialist

Sample HRD Jobs/Roles – 2
•
•
•
•

Instructor/Facilitator
Individual Development and Career Counselor
Performance Consultant (Coach)
Researcher

HR Manager Role
• Integrates HRD with organizational goals and
strategies
• Promotes HRD as a profit enhancer
• Tailors HRD to corporate needs and budget
• Institutionalizes performance enhancement

HR Strategic Advisor Role
•
•
•
•

Consults with corporate strategic thinkers
Helps to articulate goals and strategies
Develops HR plans
Develops strategic planning education and
training programs

HR Systems Designer/Developer
• Assists HR manager in the design and
development of HR systems
• Designs HR programs
• Develops intervention strategies
• Plans HR implementation actions

Organization Change Agent
•
•
•
•

Develops more efficient work teams
Improves quality management
Implements intervention strategies
Develops change reports

Organization Design Consultant
• Designs work systems
• Develops effective alternative work designs
• Implements changed systems

Learning Program Specialist
•
•
•
•

Identifies needs of learners
Develops and designs learning programs
Prepares learning materials and learning aids
Develops program objectives, lesson
plans, and strategies

Instructor/Facilitator
• Presents learning materials
• Leads and facilitates structured learning
experiences
• Selects appropriate instructional methods and
techniques
• Delivers instruction

Individual Development and Career
Counselor
•
•
•
•

Assists individuals in career planning
Develops individual assessments
Facilitates career workshops
Provides career guidance

Performance Consultant (Coach)
• Advises line management on appropriate
interventions to improve individual and group
performance
• Provides intervention strategies
• Develops and provides coaching designs
• Implements coaching activities

Researcher
• Assesses HRD practices and programs
• Determines HRD program effectiveness
• Develops requirements for changing HRD
programs to address current and future
problems

Implementing HRD
Who should take responsibility?
How should needs be identified?

Whose interests should they serve?
What activities should be used?
Will they ‘add value’?
How does HRD relate to business goals?

Implementing HRD
A systematic training model

•

•


Essential prerequisites for any effort to implement a training model are a

consideration of budgets, attitudes, abilities and culture or climate.
•

A key requirement of training activity is that it is relevant and reflects the real
world.

•

Bramley (1989) advocated turning the four stages of the training model into a
cycle in which evaluation occurs throughout the process, with an emphasis
on managers taking responsibility for the transfer of learning.

•

In this way the model is made effective rather than mechanistically efficient.

An integrated approach

•An integrated approach highlights key interdependencies within
organizations, such as the link to strategy, the role of line managers
and the emergent features of learning.
•A policy of HRD has to be translated into the structures, systems
and processes that might be called a learning climate.
•At the heart of the learning climate lies the line manager-employee
relationship.
•A number of roles have been associated with managers to support
this, including coaching and mentoring.

Competing in the Global Economy
•
•
•
•
•
•

New technologies
Need for more skilled and educated workers
Cultural sensitivity required
Team involvement
Problem solving
Better communications skills

Eliminating the Skills Gap
• Example: In South Carolina, 47% of entering high
school freshmen don’t graduate.
– Best state is Vermont, with 81% graduating

• Employees need to be taught basic skills:
– Math
– Reading
– Applied subjects

• Need to improve U.S. schools!

Need for Lifelong Learning
•
•
•
•
•

Organizations change
Technologies change
Products change
Processes change
PEOPLE must change!!

Need for Organizational Learning
• Organizations must be able to learn, adapt,
and change
• Principles:
– Systems thinking
– Personal mastery
– Mental models
– Shared visions
– Team learning

A Framework for the HRD Process
HRD efforts should use the following four
phases (or stages):
• Needs assessment
• Design
• Implementation
• Evaluation
(“A DImE”)

Needs Assessment Phase
• Establishing HRD priorities
• Defining specific training and objectives
• Establishing evaluation criteria

Design Phase
• Selecting who delivers program
• Selecting and developing program content
• Scheduling the training program

Implementation Phase
• Implementing or delivering the program

Evaluation Phase
Determining program effectiveness – e.g.,
• Keep or change providers?
• Offer it again?
• What are the true costs?
• Can we do it another way?

Definition
• The HR audit is a type of functional audit. Thus, as a first approach, HR
auditing consists of diagnosing, analyzing, evaluating, and assessing
future lines of action within the framework of HRM.
• HR auditing is a basic tool for the management of a company. Its
objective is not only the control and quantifying of results, but also
the adoption of a wider perspective that will aid in defining future
lines of action in the HRM field.
• Thus, HR auditing must perform two basic functions [Cantera, 1995].
First, it must be a management information system whose feedback
provides information about the situation in order to facilitate the
development of managing processes or the development of HR. On
the other hand, it must be a way of controlling and evaluating the
policies that are being applied, as well as the established processes.

Cont’d
• The human resources audit is a periodic expertise performed within
the administration of the human resources, which includes
monitoring and collecting the information, its analysis and
assessment on this basis of the efficiency on which the organization
uses the human resources, with the purpose of improving
continuously the performances and the work satisfaction of the
employees.
• The purpose of this work is to have guidelines for the appraisal of the
HR function, which is in itself the basis for the auditing process.
• The objective is to set conceptual limits for its content and to present
the different approaches with which the HR audit can be presented.

Purpose of H.R. Audit
1. To examine and pinpoint strength and weaknesses related to H.R.
areas and Skills and Competencies to enable an organization to
achieve its long-term and short-term goals.
2. To increase the effectiveness of the design and implementation of
human resource policies, planning and programs.
3. To help human resource planners develop and update employment
and program plans.

Need for H.R. Audit
Top Management saw solutions to their
problems, issues and challenges in HRD to face
business competition and to achieve
organizational goals.

The Scope of Human Resource Audits
Whenever the H.R. Audit it taken up, the scope is decided.
Audit need not be exhaustive, but should be focused on
particular function of H.R.M. such as Training and Development,
Performance Appraisal, Compensation, etc.. However, the
objective and approach of H.R. Audit, more or less, remains the
same,
regardless
of
scope.
– Audit of Corporate Strategy
Corporate Strategy concerns how the organization is going to gain competitive
advantage.

– Audit of the Human Resource Function
Audit touches on Human Resource Information System, Staffing and Development, and
Organization Control and Evaluation.

– Audit of Managerial Compliance
Reviews how well managers comply with human resource policies and procedures.

– Audit of Employee Satisfaction
To learn how well employee needs are met.

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Approaches to HR Auditing
•

Walker [1998] differentiates between two approaches relative to HR auditing: those
centered in the function’s internal aspect, and those centered on the external aspect.

•

From an internal perspective, as in any strategic function, there is a trend of valuing its
actions as a result of the activities undertaken and its costs. In this way, the
department’s capability would be judged on its ability to supply certain services to the
organization at the lowest possible cost. Under this approach, the operational
measurements traditionally used are those which refer to quantity, quality and
reliability, or cost and speed, therefore placing the focus on activities, costs, or
productivity ratios.

•

From an external perspective, if it is understood that the ultimate appraisal of the
effectiveness of HR is based on their impact on the company’s results, then the
measurements should include results obtained outside the function.

•

Another well-known classification of HR audit approaches, which is used to structure
the present work, is the difference between three focuses, which are the legal audit of
performance or conformity, the operative or efficacy-based audit, and the strategical
audit.

Cont’d
The audit should verify if the firm’s policies, practices, and documents
regarding employee hiring, retention, discipline, termination, and postemployment are both fair and legal [Higgins, 1997].
According to Nevado [1998, p. 49], the basic functions of the audit of
conformity or of performance as an element of HR auditing are threefold.
The first function is examining to see if the firm is fulfilling all its
administrative social obligations, as well as those relative to the collective
rights of its personnel.

The second is to study the relationship between the employees and the firm
based on the legal statutes.
The final function is verifying if the firm fulfills its financial obligations (for
example, social security payments), as well as its informative ones.

Approaches
•

The legal approach centers on finding out if the company is complying with
the current labor laws. Presently, it focuses mainly on the evaluation of the
company’s efforts in the prevention of work-related risks.

•

The function approach analyzes the application of different HR policies.
Several measurement systems have been presented with the same basic
ideas, which include the study of planned measures, the method of
implementation, and the results obtained. Yet, these two approaches are
limited to the operational and tactical fields, and do not evaluate if HRM
supports or aids in the achievement of the company’s strategy.

•

This is why the strategic approach has been developed as a means of
determining if the HR function is a source of competitive advantage for the
company.

Approaches to conduct HR Audit
1. Self – directed surveys.
2. Task Forces within the organisation.
3. Out side Consultants.

Benefits of A Human Resource Audit
• Identifies the contribution of the personnel
departments to the organization
• Improves professional image of the personnel
department
• Encourages greater responsibility and
professionalism among members of the personnel
department
• Clarifies the personnel department’s duties and
responsibilities
• Finds critical personnel problems
69

HR Audit Implementation Pattern
a.
b.
c.
d.
e.

HR Strategies
HR Styles and cultures
HR Structures
HR Systems
HR Competencies

Human Resource Strategy
The process of determining and articulating the organizations : vision,
mission, values, goals and objectives, and its internal and external
environments and then formulating plans to attain outcomes
consistent with the above; then implementing those plans.
It is the pattern of planned human resource deployments and
activities intended to enable the organization to achieve its goals.
Focus: To provide competitive advantage

Human Resource Strategies

1.
2.
3.
4.
5.
6.
7.

Communication strategies
Commitment, ownership, accountability
Quality
Customer satisfaction
Cost reduction
Developing entrepreneurial spirit
Culture building exercises

Human Resource Systems
Human Resource functions are carried out
through its systems and sub systems.
1. Career Systems: Manpower planning,
recruitment, career planning, succession
planning, retention
2. Work Systems: Role analysis, role
effieciency, performance plan, performance
feedback and guidance, performance
appraisal, promotion, job rotation, reward

Human Resource Systems
3. Development System: Induction, training, job
enrichment, self learning mechanisms, potential
appraisal, succession development, counseling,
mentor system.
4. Self Renewal System: Survey, action research,
organizational
development
interventions,
organizational retreats.
5. Culture Systems: Vision, mission, values,
communication, social environment, task forces,
small groups.

Human Resource Structure
A structure provides a convenient way of
organizing several related variables as a single
unit.
HRM dept in line organization

HRM dept in functional organization
HRM dept in line and staff organization
HRM dept in divisionalized organization structure
HRM dept in a matrix organizational structure

Components of Human Resource Structure
• Span of control
• Authority and power structure
• Accountability

HR Competencies

1.
2.
3.
4.
5.
6.

Competency is a combination of skills, job attitudes and
knowledge which is reflected in job behavior that can be
observed.
Communication competency
Global awareness competency
Self management competency
Change management competency
Human resource competency
Leadership and team management competency

HR Audit Methodology & Issues
1.
2.
3.
4.
5.
6.

Individual interview method
Group interview method
Workshop method
Questionnaire method
Observation
Use of secondary information

Individual Interview Method:
Top level management and senior managers are interviewed, individually. It
helps in following:
A. Knowing their thinking about future plans and opportunities available for
the company.
B. Knowing about their expectations from the H.R.Audit.
C. Getting sensitive information pertaining to working styles and culture.
Union leaders, departmental heads, some strategic clients and informal
leaders are also interviewed, individually.
In case of small companies, manned by professionals, interviews can be
extended with selected employees from different levels and functions.

Group Interview Method
Group interviews and discussions with the employees and/or executives of
large companies for H.R. Audit, facilitate collection of information about
effectiveness of existing systems.
COMPOSITION OF GROUP:
1. Ideally, the group should be of 4 to 8 persons.
2. Group should consists of same or similar level of employees from cross
functional areas.

3. In case of large organisation, group interviews for each functional area can
be conducted, separately.

RELAVANT QUESTIONS THAT ARE ASKED IN INDIVIDUAL AND
GROUP INTERVIEWS

1.

What do you see as the future growth opportunities and business directions of
the company?

2.

What skills and competencies does the company have which you are proud of?

3.

What skills and competencies do you need to run your business, or to perform
your role, more effectively at present?

4.

What are the strengths of your HRD function?

5.

What are the areas where your HRD function can do better?

Cont’d
6. What is good about your HRD subsystems, such as:

• performance appraisal,
• career planning,
• job rotation, training,
• quality circles,
• induction training,
• recruitment policies,
• performance counseling,
• worker development programmes, and
• HRD departments?
7. What is weak about them? What can be improved?
8. What changes do you suggest to strengthen HRD in your company?
9. What do you think are the ways in which line managers
10. can perform more developmental roles?

Workshop Method
1.

In some cases of H.R. Audit, instead of Individual and Group Interviews, Workshop Methods i.e.
Large Scale Interactive Process (LSIP) is conducted, as under:
1. 30 to 300 participants can be asked to gather in a room.
2. They are divided in small groups.
3. They are asked to work either around Systems, Subsystems or
around different dimensions of HRD and do SWOT Analysis.
4. All the groups thereafter give presentations.
5. The H.R. Auditor compiles the views of all groups, makes
own observation, conclusions and prepares a report.
6. The H.R. Auditor announces the audit Results before submitting
the report to top Management.
LSIP WORKSHOP FOR HRD AUDIT ON PERFORMANCE APPRAISAL SYSTEM

Relevant Questions Asked In a Workshop
1. What are the three good things in your performance appraisal
system?
2. What is the one thing you would like to change in your
performance appraisal system?
3. How would you critically evaluate the job rotation in your
company?
4. What are the strengths and weaknesses of your training
policies and practices?
5. What three objectives would you use to describe the promotion
policies as they exist in your company?

Questionnaire Method
Feed back about various dimensions of HRD, including the competency base of HRD staff, the
styles of line managers, the implementation of various HRD systems, etc are obtained
through a detailed questionnaire from individuals or groups for H.R. Audit. This method helps
in benchmarking.
The process is as follows:
1. Detailed questionnaire is prepared by H.R. Auditor.
2. Individuals or groups are asked to assemble in a room or hall are explained objective and
process of HR Audit. They are then given questionnaires.
3. They submit the questionnaire, duly filled in, to the HR Auditor.

4. The HR Auditor compiles the feedbacks, makes observations, conclusions and
recommendations.
5. Audit Results are informed to the Participants before the report is submitted to the top
management.

Observation
In addition to following the said methods, the HR Audit,
needs to undertake following to assess the extent to
which a congenial and supportive human welfare-oriented
climate exists in the company:

1. Visit workplace, plant, machinery room, canteen,
toilets, training rooms, hostels, hospital, school, living
colony, etc., as applicable.
2. Observations can be made through a checklist.

Use of Secondary Information
ANALYSIS OF SECONDARY DATA:

This can provide an insight into the HRD assets and liabilities of the company.
For example in the are of training, it may reveal as to whether employees are
given training systematically or otherwise, the cost involved for training, the
age group of employees attended training programmes, the purpose of
training
the
employees
etc..
ANALYSIS OF REPORTS, RECORDS, MANUALS AND OTHER PUBLISHED
LITERATURE:
Study and analysis of said documents help in assessing the strengths and
weakness of HRD.

Balanced Score Card Approach
4 perspectives on the balanced scorecard
The four perspectives are:
• Financial perspective - how does the firm look to
shareholders?
• Customer perspective - how do customers see the firm?
• Internal perspective - how well does it manage its
operational processes?
• Innovation and learning perspective – can the firm
continue to improve and create value? This perspective
also examines how an organisation learns and grows.

Score Card Approach
For each of four perspectives it is necessary to identify indicators to

.

measure the performance of the organisations

Financial Perspectives
•
•
•
•
•
•
•
•
•
•

Return on investment
Economic value added
Operating cost management
Operating ratios and loss ratios
Corporate goals
Survival
Growth
Process cost savings
Increased return on assets
Cost reduction

Score Card Approach
Customer Perspectives
•
•
•
•
•

Number of complaints
Average time to process orders
Response time
Reliability
New skills acquisitions

Score Card Approach
Internal Perspectives
•
•
•
•
•
•
•

Efficiency improvements in individuals & groups
Reduction in unit costs per person
Improvements in morale
Increase in individual capacity utilisation
Increased productivity
% defective output per dept
Amount of reworking

Score Card Approach
Innovation & Learning Perspectives
•
•
•
•
•
•
•

Number of new products
Amount of training
Number of strategic skills learned.
Number of employee suggestions.
Extent of employee empowerment
Employee coaching
Performance enhancers in learning

Writing H R Audit Report

OBJECTIVE:
1. TO HIGHLIGHT AREAS THAT NEEDS IMPROVEMENT.
2. TO BE ACTED UPON.
PURPOSE:
TO HELP THE TOP MANAGEMENT AND THE HRD STAFF TO RECOGNISE AND RETAIN THE COMPANY’S
STRENGTHS.
POINTS TO REMEMBER FOR WRITING REPORT:
A. SIMPLE LANGUARE SHOULD BE USED.
B. IT SHOULD BE SHORT AND PRECISE.
C. BULLET FORM HIGHLIGHTING THE STRENGTHS A WEAKNESSES,SHOULD BE USED.

HR Audit Report
EXECUTIVE SUMMARY
CHAPTER-1 INTRODUCTION
CHAPTER-2 CURRENT STATUS OF THE HRD FUNCTION; SOME FACTS.
CHAPTER-3 GENERAL OBSERVATIONS
CHAPTER-4 CAREER SYSTEMS
CHAPTER-5 WORK PLANNING
CHAPTER-6 DEVELOPMENT SYSTEM
CHAPTER-7 SELF-RENEWAL SYSTEM
CHAPTER-8 HRD CULTURE
CHAPTER-9 HRD FUNCTION

TABLE AND APPENDICES

1. Introduction

BRIEF DESCRIPTION ABOUT:
• COMPANY LOCATIONS, PRODUCTS AND SERVICES, MANPOWER, TURN OVER, AND
MAIN CONCERNS AND TOP MANAGEMENT.
• DATE AND REASON FOR UNDERTAKING THE AUDIT.
• METHODOLOGY ADOPTED FOR THE STUDY:
DETAILS OF SAMPLES, AND AUDIT METHODS USED:
* Questionnaires administered,
* Number of individual interviews,
* level-wise records and reports examined,
* Group Interviews, etc..
• HRD SYSTEMS (various sub-systems of HR audit; etc.)

2. Current Status of The HRD Function
DETAILS ABOUT HRD FUNCTIONS:
• STRUCTURE AND STAFFING OF HRD FUNCTION,
• HRD DEPARTMENT’s THRUST AREAS AND OBJECTIVES,
• HIGHLIGHTS OF EXISTING HRD SYSTEMS AND SUB-SYSTEMS:
- Performance Appraisal,
- Potential Appraisal,
- Career Planning,
- Mentoring,
- Training,
- Job rotation,
- Quality circles, etc.
• STRENGTHS AND WEAKNESSES OF THE HRD FUNCTION.
• HRD NEEDS: AN OVERVIEW
– Broad highlights of the areas that need attention.

3. General Observations
•

SALIENT FESTURES OF THE COMPANY OBSERVED BY THE AUDITORS VIS-À-VIS PRESENT COMPETENCIES AND
FUTURE POTENTIAL, ENCOMPASSING FOLLOWING DIMENTIONS OF HRD:
* Competence Building,
* Culture Building,
* Commitment Building.
• PRESENT AND FUTURE BUSINESS CONCERNS - HIGHLIGHTS,
• CONPETENCIES AND COMPETENCY REQUIREMENTS FOR FUTURE,
• GENERAL OBSERVATIONS ABOUT COMPETENCIES FOUND.
• GENERAL OBSERVATIONS ABOUT THE COMPETENCY PROMOTING MECHANISMS,
• COMMITMENT AND MOTIVATIONAL PATTERNS,
• COMMITMENT-AND MOTIVATION-PROMOTING MECHANISMS,
• WORK CULTURE AND ORGANISATIONAL CULRURE,
• CULTURE-BUILDING MECHANISMS

- A BRIEF ABOUT IMPORTANCE OF THE ABOVE 3 COMPONENTS FOLLOWED BY GENERAL STRENGTHS AND
WEAKNESSES OF THE COMPANY RELATING TO HR AREAS, COVERING THE FOLLOWING, CAN BE GIVEN:
* Impact of existing situation in the industry on HRD Culture of the organisation; Technological Innovations,
Customers
expectations, Leadership change or change of Management or any thing affecting HR function.
* Any excellent or weak parts of the HRD function.
* The general Strengths and Weaknesses of the Company.

4. Career Systems
FINDINGS OF THE AUDIT ON THE FOLLOWING SHOULD BE INCLUDED:
• IMPORTANCE OF THE FOLLOWING,
• MANPOWER PLANNINGF AND UTILISATION
- Strengths, Weaknesses and Recommendations.
• RECRUITMENT –
• POTENTIAL APPRAISAL AND FAST TRACK
• CAREER PLANNING AND DEVELOPMENT
• SUCCESSIONAL PLANNING

5. Work Planning
• INTRODUCTION (Concept of work planning and
the component of systems)
• CONTEXTUAL ANALYSIS
-Strengths, Weaknesses and Recommendations.
• ROLE CLARITY

• PERFORMANCE APPRAISAL SYSTEM

6. Development System
• INTRODUCTION AND COMPONENTS
• INDUCTION TRAINING
• TRAININGAND LEARNING SYSTEMS
• PERFORMANCE GUIDANCE AND DEVELOPMENT
• WORKER DEVELOPMENT
• OTHER MECHANISMS OF DEVELOPMENT

7. Self-Renewal System
• INTRODUCTION
• ROLE EFFICACY
-Strengths, Weaknesses an Recommendations.
• ORGANISATION DEVELOPMENT

• ACTION ORIENTED RESEARCH

8. HRD Culture
• INTRODUCTION
• HRD CULTURE
• VALUES
• QUALITY ORIENTATION

• REWARDS AND RECOGNITION
• INFORMATION
• COMMUNICATION
• EMPOWERMENT THROUGH PARTICIPATION, DECENTRALISATION, SHOPFLOOR COMMITTEES, ETC.

9. HRD Function
• GENERAL OBSERVATIONS
• INDUSTRIAL RELATIONS AND HR
• PERSONNEL POLICIES AND HRD
• HRD FUCTION – STRUCTURE
• HRD DEPARTMENT - COMPETENCIES
• HRD STRATEGIES

• HRD ACTIVITIES AND PRIORITIES
-Strengths, Weaknesses and Recommendations

AUDITING PROCESS: STEPS IN H.R. AUDIT
Auditing process varies from organizations to organizations.
Generally involves following STEPS:
STEP ONE: Briefing and Orientation:
Key Staff Members meet:
i. To discuss particular issues considered to be important.
ii. To chart out audit procedures, and
iii. To develop plans and program of audit.
STEP TWO: Scanning material information:

Scrutiny of all available information pertaining to personnel,
personnel handbooks and manuals, guides, appraisal forms, computer
capabilities and any other related information.

Cont’d
STEP THREE: Surveying employees:
a. Interview with key managers, functional executives, Top functionaries in
the organisation and employees Representatives, if necessary.
b. The purpose is to pinpoint issues of concern, Present strengths,
anticipated needs and managerial views on human resources.

STEP FOUR: Conducting interviews:
I. What questions to be asked, are developed during
scanning of information.
II. It is better for H.R. Audit, if clarity about the key
factors of H.R.M. selected for audit and the related
questions that need to be examined.

Cont’d
STEP FIVE: Synthesising:
The data gathered is synthesized to present the
a. Current Situation.
b. Priorities.
c. Staff pattern, and
d. Issues identified.
STEP SIX; Reporting:
1. The results of the audit are discussed with Managers and Staff Specialists, in
several rounds.
2. Important issues are identified for inclusion in the formal Report.

Challenges for HR Department in Carrying
Out HR Audit

Globalization Involves
• New Markets
• New Products
• New Mindsets
• New Competencies
• New Ways Of Thinking

Cont’d
H. R. DEPATMENTS WILL NEED TO CREATE MODELS AND
PROCESSES FOR ACHIEVING:
• GLOBAL ACTIVENESS

• COMPETITIVENESS
• EFFECTIVENESS

Cont’d
VALUE CHAIN FOR GLOBAL COMPETITIVENESS
AND HR SERVICES
BUILDING CUSTOMER-RESPONSIVENESS ORGANISATION
THROUGH:
Innovation
Faster Decision Making
Price or Value Advantage
Effective linking with Suppliers

GROWTH OF ORGNIZATION

• By increasing customers
• By mergers

• By acquisition
• By joint ventures

Cont’d
An HR audit can be used by an organization
for multiple purposes. Some of the more
common reasons are:
– To identify and address HR-related problems.
– To seek out HR-related opportunities.
– To conduct due diligence for mergers and
acquisitions.
– To support initial public offerings.

Cont’d
This audit serves as an examination on a sample basis of practices and
systems for identifying problems and ensuring that sound accounting
principles are followed. Similarly, an HR audit serves as a means
through which an organization can measure the health of its human
resource function.

Organizations undertake HR audits for many reasons:
• To ensure effective utilization of human resources.
• To review compliance with laws and regulations.
• To instill a sense of confidence in the human resource department
that it is well-managed and prepared to meet potential challenges
and opportunities.
• To maintain or enhance the organization's reputation in a community.

THE AUDIT PROCESS
The HR audit process is conducted in different phases. Each phase is
designed to build upon the preceding phase so that the organization
will have a very strong overview of the health of the HR function, at
the conclusion of the audit. These phases include:
• Pre-Audit Information: This phase involves the acquiring and review
of relevant HR manuals, handbooks, forms, reports and other
information. A pre-audit information request is forwarded to the
client who compiles the necessary information for review by auditors.
• Pre-Audit Self-Assessment: In order to maximize the time spent
during subsequent portions of the audit, a pre-audit self-assessment
form, if sent to the client can be of use. The self-administered yes/no
questionnaire asks a number of questions about current HR policies
and practices.

PREPARATION FOR AN AUDIT
•

•
•

Auditor engagement: If external firm carrying out the audit, it is
preferable to set terms in writing defining and agreeing on scope .If using
internal resource it is better to appoint them formally with clarity on
scope and select persons who are non political or those who are not high
on hierarchy. Also, if internal persons are auditing there must be training
in auditing.
Documents, manuals, handbooks, forms and reports auditor must have
access to relevant information contained in employee files and other
confidential documents of the organization. Auditors must be given
unrestricted access to records, once they sign agreement for
confidentiality.
Data gathering: Completion of a self-assessment questionnaire
significantly expedites the audit process and allows for better audit
planning.
On-site access: The on-site portion of the audit is the most critical.

KEY AREAS
•

On-site Review: This phase involves an on-site visit at the client's facility
interviewing staff regarding HR policies and practices. A very in-depth HR
audit checklist is completed.

•

Records Review: During the on-site visit, a separate review is conducted
of HR records and postings. Employee personnel files are randomly
examined as well as compensation, employee claims, disciplinary actions,
grievances and other relevant HR related information are checked.

•

Audit Report: The information gathered is used to develop an HR audit
report. The audit report categorizes action needs into three separate
areas. The areas that are urgent and important (UI), not urgent needs but
important (NUI), not urgent but not important needs (NNI)), and
important opportunities needs (IO). As a result of this scheme of
classification, managements can prioritize their steps.

Cont’d
The critical areas
• The comprehensive HR audit covers all areas of HR
management like recruitment practices, training and
development, compensation and benefits, employee and
union relations, health, safety and security, miscellaneous
HR policies and practices-welfare, strategic HR issues,
manpower planning/budgeting.
• Besides classifying needs in each of the above areas, the
HR audit also cites relevant laws, cases and research to
support the recommendations.

How does an organization use HR audit results?
Since the HR audit results are classified, an important
aspect is already taken care of. Critical needs should be
the first ones to be addressed. Organizations generally
have three options for dealing with audit results.
• Use the HR audit as a blueprint or action plan for
addressing HR needs.
• Address as many needs as possible using the
organization's internal expertise and resources.
• Contract out those need areas where internal expertise
and resources are not available or do not fit in the core
competencies of the organization.

Knowledge Management
• Process to help organization identify, select,
organize, disseminate, transfer information
• Structuring enables problem-solving, dynamic
learning, strategic planning, decision-making
• Leverage value of intellectual capital through
reuse

Knowledge
• Data = collection of facts, measurements, statistics
• Information = organized data
• Knowledge = contextual, relevant, actionable
information
–
–
–
–
–
–
–

Strong experiential and reflective elements
Good leverage and increasing returns
Dynamic
Branches and fragments with growth
Difficult to estimate impact of investment
Uncertain value in sharing
Evolves over time with experience

Knowledge
• Explicit knowledge
–
–
–
–

Objective, rational, technical
Policies, goals, strategies, papers, reports
Codified
Leaky knowledge

• Tacit knowledge
–
–
–
–

Subjective, cognitive, experiential learning
Highly personalized
Difficult to formalize
Sticky knowledge

Knowledge Management
• Systematic and active management of ideas,
information, and knowledge residing within
organization’s employees
• Knowledge management systems
– Use of technologies to manage knowledge
– Used with turnover, change, downsizing
– Provide consistent levels of service

Organizational Learning
• Learning organization
– Ability to learn from past
– To improve, organization must learn
– Issues
• Meaning, management, measurement

– Activities
• Problem-solving, experimentation, learning from past, learning from acknowledged
best practices, transfer of knowledge within organization

– Must have organizational memory, way to save and share it

• Organizational learning
– Develop new knowledge
– Corporate memory critical

• Organizational culture
– Pattern of shared basic assumptions

Knowledge Management Initiatives
• Aims
– Make knowledge visible
– Develop knowledge intensive culture
– Build knowledge infrastructure

• Surrounding processes
– Creation of knowledge
– Sharing of knowledge
– Seeking out knowledge
– Using knowledge

Knowledge Management Initiatives
• Knowledge creation
– Generating new ideas, routines, insights
– Modes
• Socialization, externalization, internalization, combination

• Knowledge sharing
– Willing explanation to another directly or through an
intermediary

• Knowledge seeking
– Knowledge sourcing

Approaches to Knowledge
Management
• Process Approach
– Codifies knowledge
• Formalized controls, approaches, technologies
• Fails to capture most tacit knowledge

• Practice Approach
– Assumes that most knowledge is tacit
• Informal systems
– Social events, communities of practice, person-to-person contacts

• Challenge to make tacit knowledge explicit, capture it, add to it,
transfer it

Approaches to Knowledge
Management
• Hybrid Approach
– Practice approach initially used to store explicit knowledge
– Tacit knowledge primarily stored as contact information
– Best practices captured and managed

• Best practices
– Methods that effective organizations use to operate and manage
functions

• Knowledge repository
– Place for capture and storage of knowledge
– Different storage mechanisms depending upon data captured

Knowledge Management System Cycle
• Creates knowledge through
new ways of doing things
• Identifies and captures new
knowledge
• Places knowledge into
context so it is usable
• Stores knowledge in
repository
• Reviews for accuracy and
relevance
• Makes knowledge available at
all times to anyone

Disseminate

Components of Knowledge Management
Systems
• Technologies
– Communication
• Access knowledge
• Communicates with others

– Collaboration
• Perform groupwork
• Synchronous or asynchronous
• Same place/different place

– Storage and retrieval
• Capture, storing, retrieval, and management of both explicit and
tacit knowledge through collaborative systems

Components of Knowledge
Management Systems
• Supporting technologies
– Artificial intelligence
• Expert systems, neural networks, fuzzy logic, intelligent agents

– Intelligent agents
• Systems that learn how users work and provide assistance

– Knowledge discovery in databases
• Process used to search for and extract information
– Internal = data and document mining
– External = model marts and model warehouses

– XML
• Extensible Markup Language
• Enables standardized representations of data
• Better collaboration and communication through portals

Knowledge Management System
Implementation
• Challenge to identify and integrate components
– Early systems developed with networks, groupware, databases

• Knowware
– Technology tools that support knowledge management
• Collaborative computing tools
– Groupware

• Knowledge servers
• Enterprise knowledge portals
• Document management systems
– Content management systems

• Knowledge harvesting tools
• Search engines
• Knowledge management suites
– Complete out-of-the-box solutions

Knowledge Management System
Implementation
• Implementation
– Software packages available
• Include one or more tools

– Consulting firms
– Outsourcing
• Application Service Providers

Knowledge Management System Integration
• Integration with enterprise and information
systems
• DSS/BI
– Integrates models and activates them for specific problem

• Artificial Intelligence
–
–
–
–

Expert system = if-then-else rules
Natural language processing = understanding searches
Artificial neural networks = understanding text
Artificial intelligence based tools = identify and classify
expertise

Knowledge Management System Integration
• Database
– Knowledge discovery in databases

• CRM
– Provide tacit knowledge to users

• Supply chain management systems
– Can access combined tacit and explicit knowledge

• Corporate intranets and extranets
– Knowledge flows more freely in both directions
– Capture knowledge directly with little user involvement
– Deliver knowledge when system thinks it is needed

© 2005 Prentice Hall, Decision
Support Systems and
Intelligent Systems, 7th Edition,

9-134

Knowledge Management Valuation
• Asset-based approaches
– Identifies intellectual assets
– Focuses on increasing value

• Knowledge linked to applications and business
benefits approaches
–
–
–
–
–

Balanced scorecard
Economic value added
Inclusive valuation methodology
Return on management ratio
Knowledge capital measure

• Estimated sale price approach

Metrics
• Financial
– ROI
– Perceptual, rather than absolute
– Intellectual capital not considered an asset

• Non-financial
– Value of intangibles
•
•
•
•
•

External relationship linkages capital
Structural capital
Human capital
Social capital
Environmental capital

Factors Leading to Success and Failure of
Systems
• Success
–
–
–
–
–
–

Companies must assess need
System needs technical and organizational infrastructure to build on
System must have economic value to organization
Senior management support
Organization needs multiple channels for knowledge transfer
Appropriate organizational culture

• Failure
–
–
–
–

System does not meet organization’s needs
Lack of commitment
No incentive to use system
Lack of integration

Definition of Interventions
• An intervention is a set of sequenced and
planned actions or events intended to help
the organization increase its effectiveness.

• Interventions purposely disrupt the status
quo.

Characteristics of
Effective Interventions
• Is it relevant to the needs of the organization?
– Valid information
– Free and Informed Choice
– Internal Commitment

• Does it transfer competence to manage
change to organization members?

The Design of
Effective Interventions
• Contingencies of Change Situation
–
–
–
–

Readiness for Change
Capability to Change
Cultural Context
Capabilities of the Change Agent

• Contingencies Related to the Target of Change
–
–
–
–

Strategic Issues
Technology and structure issues
Human resources issues
Human process issues

Intervention Overview
• Human Process Interventions

• Techno structural Interventions
• Human Resources Management
Interventions
• Strategic Interventions

Human Process Interventions
•
•
•
•
•
•
•
•

Sensitivity training
Grid training
Process Consultation
Team Building
MBO
Coaching
Training and Development
Organizational Confrontation Meeting

Techno structural Interventions
• Structural Design

• Downsizing
• Reengineering

• Employee Involvement
• Work Design

Human Resources Management
Interventions
• Goal Setting

• Performance Appraisal
• Reward Systems

• Career Planning and Development
• Managing Work Force Diversity
• Employee Stress and Wellness

Strategic Interventions
• Integrated Strategic Change

• Mergers and Acquisitions
• Alliances and Networks

• Culture Change
• Self-designing Organizations
• Organization Learning and Knowledge
Management

Sensitivity Training – T groups
• Kurt Lewin & friends – 1946
• Development of “T group”
• Stranger lab – people from different
organization.
• Cousin lab- same, but various departments
• Family lab – “Back home” people in situations
and problem

T group training
Stranger lab:
• Intentional lack of
directive leadership,
formal agenda and
power / status.
• It creates behavioural
vaccum.
• It facilitates rich
projections from
behaviour.

Cousin lab:
• Trainer becomes open
non – defensive,
empathetic and
minimally evaluative
way.
• Feed back received
about impact of other
group members

Grid Organization Development
• Activities developed by Robert Blake and Jane Mouton, which
constitute a six-phase change model involving the total organization.
Internal resources are developed to conduct most of the programs,
which may take from three to five years to complete.
1. Managerial grid: The model starts with upgrading individual
managers' skills and leadership abilities,
2. Team work development: moves to team improvement activities,
3. Intergroup development: then to intergroup relations activities.
4. Developing ideal strategic corporate model: Later phases include
corporate planning for improvement,
5. Implementing ideal strategic corporate model: developing
implementation tactics, and
6. Systematic critique: finally, an evaluation phase assessing .change in
the organization culture and looking toward future directions.

Survey Feedback
• Activities that rely on questionnaire surveys to
generate information that is then used to
identify problems and opportunities. Groups
analyze the data regarding; their performance
and design action plans to correct problems.
1. Data collection
2. Feedback of information
3. Follow up action

Process Consultation
• Activities that "help the client to perceive, understand,
and act upon process events which occur in the client's
environment.'" .
• These activities perhaps more accurately describe an
approach, a consulting mode in which the client gains
insight into the human processes in organizations and
learn skills in diagnosing and managing them.
• Primary emphasis is on processes such as
communications, leader and member roles in groups,
problem solving and decision making, group norms and
group growth, leadership and authority, and intergroup
cooperation and competition. '

Process consultation -Contd…
1.
2.
3.
4.
5.
6.

Initiate contact
Define relationship
Select the setting & method
Gather data & make diagnosis
Intervene
Reduce involvement & terminate ( look for
future approach / development)

Team-Building Activities
• Activities designed to enhance the effective operation of
system teams.
• These activities focus on task issues such as the way
things are done, the skills and resources needed to
accomplish tasks, the quality of relationship among the
team members or between members and the leader, and
how well the team gets its job done.
• In addition, one must consider different kinds of teams,
such as formal work teams, temporary tasks force teams,
newly constituted teams, and cross-functional teams.

Life cycle of team
•
•
•
•
•

Forming
Storming
Norming
Performing
Adjourning

Stages of Group Development

E X H I B I T 8–2

Effective teams
•
•
•
•

Skills & Roll clarity
Supportive environment
Super – ordinate goals
Team rewards

Team building process
•
•
•
•

Problem sensing
Examining differences
Giving & receiving feedback
Developing interactive skills
– Constructive behaviour
– Negative behaviour

• Follow up action

MBO
• Peter Drucker coined in 1964.
• It is a comprehensive managerial system that
integrates many managerial activities in a
systematic manner, consciously towards
effective and efficient achivement of
organizational objectives”.

• After appraisal
• Recycling
Objective setting
Action planning

Performance review

Education and Training Activities.
• Activities designed to improve individuals' skills, abilities, and
knowledge. Several activities are available and several approaches
possible.
• For example, the individual can be educated in isolation from his or her
own work group (say, in a T-group consisting of strangers), or one can
be educated in relation to the work group (say, when a work team
learns how better to manage interpersonal conflict). The activities may
be directed toward technical skills required for performing tasks or
may be directed toward improving interpersonal competence.
• The activities may be directed toward leadership issues,
responsibilities and functions of group members, decision-making,
problem solving, goal setting and planning, and so forth.

Coaching and Counseling
• Activities that entail the consultant or other organization
members working with individuals to help
• (a) define learning goals,
• (b) learn how others see their behavior, and
• (c) learn new behaviors to help them better achieve their
goals. A central feature of this activity is non evaluative
feedback others give to an individual.
• A second feature is the second exploration of alternative
behaviors.

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