Human resource development, or HRD, is a widely used term that refers to activities aimed at developing people within an organization. The term has different connotations as it may refer to development of human capacities with the aim of raising profit in business but also, especially in developing countries, with the aim of achieving personal and societal advancement. HRD may be used both by private corporations and by public organizations (governments, NGOs and supranational organizations).
HRD is about the development of people within organizations. Other types of resources that organizations have at their disposal are physical resources (materials, facilities, equipment) and financial resources (cash, stock, bonds). The term human resources is normally used for the employees of an organization but it may also refer, for example, to the citizens of a country. The importance of HRD is often underlined in theory but overlooked in practice as it is difficult to measure the value of human resources using standard measures. One way to determine the importance of human resources is to calculate the cost to replace a valuable employee by recruiting, hiring, training and orienting a new employee.
Development of people is a process that enhances people's knowledge, skills and competencies, and helps improve their behavior within the organization for both personal and professional use. This viewpoint is focused on the individual (individual development). At the same time, the aim of developing people within an organization is ultimately to benefit the organization, by fostering better organizational efficiency, improved competitiveness and increased profitability. This viewpoint is focused on the organization (organizational development).
Both individual and organizational development is achieved via people's participation in activities especially organized in order to introduce new knowledge and skills, and to improve behaviors. HRD learning activities can be divided in three types – on the job (mostly individual instruction), off the job (such as college and university courses) and through the job (including new job assignments).
Development through daily work experience, without especially organized activities, is also possible but it takes more time while it cannot guarantee results. Another disadvantage of this "hit-or-miss" approach is that it could even result in development of knowledge, skills and attitudes that are considered inappropriate or inadequate, according to Jerry W. Gilley and co-authors in Principles of Human Resource Development (2002). Gilley has therefore made the following simple definition: "HRD refers to learning and to the activities that bring about desired change."
The definition does not reflect the organizational point of view, namely that the development of the people within an organization must ultimately lead to performance improvement and thereby boost the organization's efficiency and competitiveness. Therefore the full definition of HRD provided in Principles of Human Resource Development is "organized learning activities arranged within an organization in order to improve performance and/or personal growth for the purpose of improving the job, the individual and/or the organization."
Some scholars talk about strategic HRD to emphasize the vital role that people have in achieving the organization's goals. The term strategic here stands for essential, critical, important, but it also implies a long-term, organized effort to achieve a goal, according to Gilley and co-author Ann Maycunich in Organizational Learning, Performance and Change: An Introduction to Strategic Human Resource Development (2000). The main idea is that in order to be successful, HRD practice has to be well-organized and planned, covering the whole organization. In addition, the activities must be firmly linked to the organization's business strategy and focused on its long-term goals.
In Human Resource Development: For Enterprise and Human Development (2006) D. J. Kelly differentiates between two different approaches to HRD – broad development-oriented and enterprise-oriented. One early and broader definition of HRD, given by Harbison and Myers as quoted by Kelly, is "the process of increasing the knowledge, the skills and the capacities of all the people in a society." According to this older ideal, which reflects the full range of individual needs and rights, HRD is part of a wider class of processes relating to human development in general. Enterprise-oriented HRD is, in contrast, benefit-driven and focused on increasing the knowledge and skills of employees so that they fit the needs of business.
Although both models can be used by public organizations or by private corporations, the most common combinations are broad development-oriented HRD promoted by public organizations and enterprise-oriented HRD promoted by businesses.