Benchmark HRD practices for organizational development

We are happy to bring to you the first issue of SCAN, TVRLS newsletter on HRD Audit. We are
promoting this newsletter as both informative and education tool. Wish you all the best towards
continuous learning & development.
Editors- Dr. T. V. Rao, Raju Rao & Shishir Misra
Content Of The Newsletter

Content Pae
From the chairmans desk
Reengineer your HR & make it more
strategic through HRD Audit
Dr. T. V. Rao
!"#
HRD Audit $n Health %ector & $nnovations
TVR!S Tea"
#"'
(ffectiveness of HRD Audit as an )D
$ntervention &
Dr. M. #. $o"on
'"*
HRD audit +ertificate program including
HRD score +ard
,
-.R/% resources on HRD Audit 0
+ompetency re1uired for an effective HRD
Auditor
0


%ro" The Chair"an&s Des'
REEN#(NEER )O*R +R ,ND M,-E (T MORE STR,TE#(C
throuh +RD ,udit
Dr. T. V. Rao, Chair"an TVR!S
$n her 2oreword to the book Human Resources in the #!
st
+entury3 Rosabeth Moss Kanter makes
the following observations4
HR is alive and well3 central to the success of companies.
HR management is on the agenda and evolving slowly and steadily.
HR departments are aging and ailing.
-hese are the three conclusions drawn by Rosabeth Moss Kantar
Kantar observed further (vidence has mounted that intangible assets play an increasingly
large role in defining the value of a company in the capital markets3 as several studies by
economists at the 5rookings $nstitution in Washington have reported6 intangibles such as brands3
worker skills3 organi7ational routines3 customer relationships3 and the like can account for nearly
two thirds of the market place value of manufacturing companies3 swamping the contribution
made by physical assets such as facilities3 e1uipment3 and product inventory.
How people are developed and led & the substance of HR8 or human resources management" is
definitely on the agenda.
9 HR issues and assets are gaining momentum6 the professionals who feel that those assets
and issues are their domain are losing ground. -he HR function3 HR department3 is aging and
ailing3 vulnerable or outsourcing consultants or replacement by technology. HR department is
seen by some as an endangered species despite the fact that there are some stellar e:amples of
flourishing and evolving companies such as %outhwest airlines with influential top ;eople
people. +reative new approaches are bubbling up3 but traditional administrative staff is
threatened. +learly we must separate innovation from organi7ation3 entrepreneurship from
empire.
(vidence persists that3 like many staff functions3 HR department can be conservative3 risk averse3
afraid to offend the powerful line managers whose support they need and whose favor they carry.
Why did HR lose the 1uality cause to engineers3 when -<8 wasn=t >ust statistical process
control? $t is about training in problem solving3 teamwork and empowerment?
Where are HR departments in the process of due diligence in mergers and ac1uisitions? $t is
common knowledge that most mergers fail not because of bad strategy or undisclosed financial
information3 but because of cultural. +ommunications and other people issues in the integration
process. %o where are HR departments? $f they are to be found at all they are rationali7ing
benefits programs3 not speaking out on issues or taking leadership role in integration. How about
corporate citi7enship@corporate social responsibility@communicate relations? 8uch of this involves
mobili7ing the work force. And now for the biggest issue of all in the #!
st
century3 corporate
governance and e:ecutive perks. Why aren=t HR departments taking up the responsibility? Why
are they not claiming this territory?
$ am not 1uestioning the high importance of HR activities. -here is no doubt that he
responsibilities now bundled in HR departments are e:tremely important one by one. 5ut some
can be automated. %ome can be outsourced. %ome can be unbundled and returned to line
business managers and to other staff functions Afinance for compensation3 $- for HR information
systems3 and employee data base etc.B. %ome can be located in fully owned subsidiaries that can
work as profit centers.
$ think all this change signals the end of HR (mpire3 not the end of HR activities. -he senior HR
e:ecutive is not endangered3 but the HR department is6 and the senior HR e:ecutive might not
even be a professionals or specialist in HR3 >ust savvy leader who knows how to connect people
and strategy.
+RD ,udit as a Tool for Reenineerin !in'in Peo.le and strate/
-he above e:cerpts from Rosabeth 8oss Canter are very true and thinking independently $ have
reflected the same view in the recent book on the 2uture of HRD A8acmillan $ndia3 #DD'B.
$t is high time that corporations e:amined the role HR departments are playing3 e:amine their
strategies and link their people strategies with the corporate strategies to do good business.
In one o the or!ani"ations where TVRLS did HRD audit the company is a good paymaster.
;eople had a very young age profile. -hey were happy with various HR practices3 the informal
work atmosphere3 the communication system and various HR issues. However they had no idea
of their future in the company. (very one wanted to know how long the company will last and
what is the future it holds for them. -hey wanted to know the vision3 strategy and future plans of
the company. We did not have any HR strategies to be linked to business strategies and
conse1uently careers of individuals. When this was pointed out to the company at the end of the
HRD audit. -he +() took it seriously and impressed their head office in another country with his
corporate plan. Eow in a period of three years this company has grown three times in turn over
and has become a three hundred crore company from a hundred crore company. A small HRD
audit has led to get the top management to think in terms of the strategy and involved a lot of
their employees and has resulted in business development.
In another com#an$ 1uality issues3 cost issues3 empowerment issues and leadership issues etc.
all found place in the HR agenda. -hey redefined the role of HRD and got a lot of line manager
involved in various HR interventions. HR began to be owned by the line managers.
In another case of an $- company which got its ;+88 level certified had the most unreliable HR
managers who do not keep up their promises and did not have any commitment to the company.
;+88 is systems sensitive but is not role sensitive and does not e:amine the kind of issues
raised by Rosabeth 8oss Canter.
$ strongly believe that it is high time that corporations e:amine the R)$ on their HR departments
and interventions. $ have always argued if a corporation is spending four to five million rupees on
their HR departments and interventions3 it is appropriate to allocate at least one to five percent of
their HR budget and get their HR audited to get a good return on their HR e:penditures.
+RD ,*D(T (N +E,!T+ SECTORS 0(NNOV,T(ONS
Recently -.R/% conducted an HRD Audit e:ercise for %HHI AWockhardt Hospital & heart
$nstituteB3 5angalore. -his was our first e:perience with a health sector com#an$.
-he &usiness conte't or the Audit was to assess the feasibility of successful replication of the
service & business model of WHH$ keeping the future ob>ective in mind.
We followed the standard methodolo!$ or HRD Audit3 which included interviews3 observation3
analysis of available records3 focused group discussions across the organi7ation covering ,D
percent of employee=s population covering top management3 regular staff3 resident doctors3
consultants doctors & contract employees.
-he methodolo!$ inno(ation by -.R/% was to design a special em#lo$ee satisaction
sur(e$ )uestionnaire for the audit & get the feedback from employees. -he in*#atient + out
#atient eed&ack were analy7ed & were included in the audit report.
ESS indi1ated the followin areas as (n & out .atient feed2a1' indi1ated the
strenth followin stron areas
-eamwork
+leanliness of the hospital
+ooperation between departments
/eadership of the F8
(:cellent nursing care
(:cellent3 approachable & knowledgeable
doctors who have saved lives
.ery clean & hygienic
Hi!hli!hts o the HRD Audit,
-eam oriented culture
;roviding cross"functional e:posure through Gob rotation
+areer planning system needs to be strengthened
Hniform implementation of policy & communication for the same
Reward performance3 competence3 potential & commitment
$nduction process needs to be focused & streamlined
2acilitative leadership style of people at top
Developing leadership at second level
Effe1ti3eness of +RD ,udit as an OD inter3ention
Dr- ./ 0omon
1
-his article is based on my last seven years of research in the area of HRD Audit. During this
longitudinal study the author has assumed researcher3 implementation consultant & managerial
role.
2our organi7ations were studied in depth Atwo manufacturing organi7ations3 one"service
organi7ation and a multinational organi7ationB as part of my doctoral thesis e:ploring the
23ecti(eness o HRD Audit as an 4D inter(ention5. -he study was carried out over a period
of three years A!II0"!IIJB.
The research indin!s or one com#an$ are !i(en here-
T/.e of
Orani4at
ion
+RD ,udit in.uts Nature of
inter3ention
Visi2le 1hanes
Fas
distribution
company
with 0#K
employees
Role clarity to be achieved
Clarit/ with regard to
personnel ;olicy
Tea" work to be improved
Potential appraisal and
development not
ade1uately addressed.
Trainin follow"up and
effectiveness measurement
to be insisted
Resear1h competencies to
be inculcated
,udit Report was
kept confidential
and was made
available to top
management and
HR
To.
8anagement
made an action
plan based on
the report
The action plan
also was not
shared but HR
department
implemented it as
part of routine HR
activities.
+R department
kept audit results
as an account of
their performance
-P,&s were
identified for each
role.
Personnel policies
were framed and
made available
Tea" based
activities and
pro>ects initiated
Perfor"an1e
8anagement system
revamped with
assessment of
potential as well
Trainin system
carefully
implemented
,1tion oriented
Research conducted
periodically
M,$OR %(ND(N#S O% T+E ST*D)
1
Dr. MG Jomon has worked with Apollo Tyres LTD, Perambra as HRD Manaer. Presently he is !a"#lty
member in $a%ier &nstit#te o! Manaement '$&M()*h#baneswar. He "an be a""essed at +oe,-imb.a".in
!. All the four organi7ations studied benefited out of the HRD Audit intervention and used
HRD Audit as a tool for )rgani7ational Development.
#. )rgani7ations initiated HRD Audit intervention with reasons specific to them. -o mention
a few professionali7ation of the organi7ation3 to assess the organi7ational health3 to
benchmark against international organi7ation3 to see the unit in relation to its sister
concerns3 for a formal take off of HRD3 to see the linkage between business performance
and human related issues3 to get a comprehensive feedback of what the top
management was doing3 and about the business3 to make the organi7ation system driven
and performance based3 to decide on what direction to take with the emerging pro>ects3
to get a balance of HRD activities etc.
'. Audit Reports in all the four organi7ations studied served as a mirror and pointed out the
strengths and areas of improvement. %ince this also included top management as well3
none of the reports were opened up to all the employees. )ut of the four organi7ations
studied3 in three organi7ations3 these are confidential reports made available to top
management and HR chief.
*. $mplementation of the HRD Audit inputs were done selectively and mostly by the HRD
department without much involvement of line managers. However3 in one organi7ation3
line managers implemented the audit inputs.
,. .isible changes of HRD Audits were observed in all spheres of activities with specific
changes seen in HRD systems3 people competency development and culture
development activities.
0. -he most important factors influencing HRD Audit intervention and utili7ation of HRD
Audit inputs are4
+()@-op management commitment to HRD
HRD chief=s commitment to HRD
8anagement style of the )rgani7ation
)rgani7ational characteristics
HRD department profile
+ompetency levels of the HRD personnel
+RD ,udit Certifi1ate .rora" 0 (n1ludin +RD S1ore 1ard
A very innovative program & first of its kind in the country3 this program was launched by -.R/%
in December #DD# with an intention to enhance the competency level of HR professionals & build
their competencies for organi7ational application of HRD Audit as a )D intervention tool.
-he course aims at providing learning3 application & facilitation skills in HRD3 HRD Audit
+oncepts3 +omponents of HRD Audit3 HRD strategies3 HRD systems3 HRD structure3 HRD
+ulture3 HRD competencies3 HRD Audit 8ethodology3 HRD Audit $nstruments3 HR %core +ard3
5alance %core +ard3 HRD Audit /inkages with ;+88 & <uality %ystems3 HR Audit & business
/inkages3 HRD Audit reports and using HRD Audit for 5usiness $mprovements
-he first 2at1h of 56 .arti1i.ants was a clear sign that the program was very well received. -he
participants3 with e7.erien1e ranin fro" 8 to 68 /ears 1o".rise +hiefs of HR3 .;s3 F8s3
8anagers3 %enior (:ecutives3 (:ecutives3 +onsultants & (ducationists. -he .arti1i.ants in total
1arr/ 59: "an-/ears of e7.erien1e.
The first ;at1h in1luded .arti1i.ants fro" (D;(, Essar, (C(C(, Phili.s, M1Dowell, Reuters
(ndia, #odrej & ;o/1e, ;low Plast, Dr. Red//&s, E<(M 2an', Tata (nfoTe1h, Mitsu2ishi, ;lue
star, (TC, Sat/a" Co".uters, Cairn Ener/, +one/well (ndia, Son/ (ndia, MR%, ;ritannia,
Sie"ens & Sa"tel et1.
-he se1ond 2at1h of the program has already started with 6= .arti1i.ants.
2or any detail related to the program please visit htt.>??www.hrdaudit.1o" or write to us at
t3raoad8@san1harnet.in
Co".eten1/ reAuired for an effe1ti3e +RD ,uditor
)ur several years of e:periences working with various organi7ations have indicated the following
competency re1uirement to be an effective HRD Auditor. HR professional in many organi7ations
where HRD audit is used or planned to be used as a system intervention & )D tool needs to build
& strengthen these competencies to conduct such e:ercises internally & benefit from it.
;lanning skill
$nformation seeking skill
Ability to diagnose
Ability to probe
Ability to paraphrase
)rgani7ing skill
$nterviewing skill
2acilitation skill
)bservation skill
Data recording skill
Documentation & report writing skill
+ommunication skill
;resentation skill
;roactive
;atience
$nitiative -aking
-ime 8anagement

TVR!S Resour1es on +RD ,udit
Having propounded the concept of HRD Audit3 so far -.R/% has e:tended the HRD Audit
service to many companies across the country and outside. $n the process we have developed
many resources3 1uestionnaires3 activity checklists3 competency 1uestionnaires & knowledge
tests3 HRD Audit manual. -he following resources are available with -.R/% on HRD Audit.
HRD Audit 5ook by Dr. -. .. Rao3 %age ;ublication
HRD Audit 8anual
HRD performance +hecklist 1uestionnaires
HRD +ompetency +hecklist
HRD Audit knowledge test
HRD & !DDD $tem knowledge test