Academic journal article Indian Journal of Industrial Relations

HRD System in India: Conceptual Framework, Measure Development & Model Fit

Academic journal article Indian Journal of Industrial Relations

HRD System in India: Conceptual Framework, Measure Development & Model Fit

Article excerpt

Introduction

With reference to Indian organizations, two HRD conceptualizations have been highlighted-one by Rao (1986) and the other by Kandula (2001). Rao (1986) presented illustrative lists of HRD mechanisms, process variables, process outcomes and organizational effectiveness dimensions in a schematic presentation. Kandula (2001) developed a conceptualization of strategic HRD system which consists of two broad components, i.e., strategic HRD practices and strategic HRD facilitators. We combined both the frameworks and further enlarged the same by adding the influence of management styles on HRD practices. Further, we tested the validity and reliability of the four scales adapted for the purpose and finally we tested the model fit by applying Structural Equation Modeling.

Earlier research indicates that HRD system, processes and practices intended to incremental development of employees' competencies/commitment and change in organizational climate are positively related to various parameters of organizational performance such as employee turnover (Singh, 2000; Batt, 2002), increased productivity (Guzzo, Jettie & Katzell, 1985; Ichniowski, 1990; MacDuffie, 1995), payoff in terms of bottom-line financial performance (Radford & Kove, 1991; Flynn, 1994; Huselid, 1995), greater commitment (Agrawal, 2003; Gong, Law, Chang & Xin, 2009), higher safety performance (Zacharatos, Barling & Iverson, 2005), better service performance (Chuang & Liao, 2010) etc. Thus, in extant research, HRD system has been found positively associated with different outcomes that range from very proximal (i.e. productivity enhancement) to more distal (i.e. profitability). However, the mechanisms linking HRD and HR outcomes appear fragmented in earlier research. For such a linkage, various perspectives that have been frequently adopted by previous researchers mainly include behavioral perspective, human capital and resource based perspective, and holistic perspective. For example, Yeung & Berman (1997) have identified three paths through which HRD practices contribute to business performance: by building organizational capabilities, by improving employee satisfaction, and by shaping customer and shareholder satisfaction. Kandula (2001) made a survey of fifty-nine Indian organizations representing twenty different industries to study HRD practices and found moderate status with almost equal status to all the study variables (HRD mechanisms) in the studied organizations. In his study, all the study variables (HRD mechanisms) were found to have significant and positive correlation with each other. Jiang, Hu & Baer (2012) found that three dimensions of HR systems (i.e., skill-enhancing, motivation enhancing, and opportunity-enhancing HR practices) were positively related to human capital and employee motivation in different patterns in such a way that, compared with the other two HR dimensions, skill-enhancing HR practices were more positively related to human capital and less positively related to employee motivation. In addition, human capital and employee motivation mediated the relationships between three HR dimensions and voluntary turnover and operational outcomes, which in turn related to financial outcomes. In extant research, mainly additive approach has been adopted in order to measure the impact of HR mechanisms on HR outcomes; however, in recent studies (e.g., Gong, Law, Chang & Xin, 2009; Subramony, 2009; Batt & Colvin, 2011), it is argued that different sets of HR practices or different components of HR system may have differential effects on the HR outcomes.

Conceptual Framework

We developed a conceptual framework of HRD system which is visualized in Fig. 1. A brief description of the key elements of such a framework is being presented here: (1) Functioning of HRD department, employee training, performance appraisal, job enrichment, career planning, employee communication, and employees empowerment are the key sub-systems / HRD mechanisms. …

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