All these qualities seem to resonate well with most of the awardees of NHRDN.
The future HR leaders have to focus on intellectual capital building. Talent management
in the form of competence building, commitment building and culture
building have to remain the focal points of HR.
Five Cascading Levels of HR
In his recent research on the role of HR in building sustainable organizations, the
author classified HR managers into five levels (Rao, 2013):
Level one at the bottom is “HR Administration” in which documentation, data
gathering and record keeping are the main focus. This work is largely clerical and
outsourceable. Anyone can do it with some instructions.
Level two is “Monitoring and Execution” in which the focus is collecting information,
reminding people, getting forms filled and statutory obligations fulfilled,
etc. This may sometimes include data analysis and feedback to the top management.
The measures are quantified in terms of appraisal forms filed in time, capacity
utilization of training centres, recruitment and retention rates of employees, recruitment
time reduced, projects completed on time, costs saved, etc.
Downloaded from hrm.sagepub.com by guest on September 23, 2015
South Asian Journal of Human Resources Management, 1, 1 (2014): 91–108
106 T.V. Rao
Level three is “Designing and Implementing” in which the focus is reviewing
the existing systems, redesigning and starting new practices in performance
appraisals, incentives and performance linked pay, learning and development,
employee engagement (or great place to work) surveys and practices. These also
can be outsourced.
The fourth level is “Strategising, Innovating, Integrating and Leading”. In this
level, HR has to be aligned with business and the concerns shift from having good
HR to having business driven strategic HR. The HR person at this level is constantly
looking for what C.K. Prahalad called as “Next Practice” and “Business driven HR
practice”. HR people at this level focus on building leadership across the organization,
use multiple tools, including 360 degree feedback, development centres, top
management team building and OD exercises. Here HR becomes talent focused and
the concern is on acquiring, retaining, nurturing and multiplying talent.
The fifth level HR is focused on making “HR as Business”. Managers at this
level realize that there can be no business without talented people at all levels and
particularly at the top. This is based on the philosophy that people make business
and therefore business-driven talent management is essential. The focus shifts
from tangibles to intangibles, from immediate and short-term performance goals
to building long-term capabilities, intellectual capital building, shareholder value
enhancement, stakeholder management, including customer service and identifying
and exploiting new opportunities, etc. Dave Ulrich calls this “Outside in HR”.
The author calls this “Business Focused HR”. The level 5 HR manager focuses on
HR itself as business and there is a need for HR to graduate to level 5.
HR as Business Imperative Should Focus on Intellectual Capital
The author’s studies on intellectual capital (IC) of Indian firms have indicated that
Indian corporations such as Infosys, Wipro, TCS, Dr. Reddy’s, India Hotels, ITC,
Titan, Tata Motors, BHEL, ELI, NTPC, Apollo Hospitals, Mahindra & Mahindra,
Gujarat Gas, HUL, etc., have a high intellectual capital value reflected in their
market capitalization. Some of these companies had as much as 97 per cent of
their market capital as intellectual capital similar to Microsoft at one time. They
have been maintaining the a high level of IC for the last decade or so, though some
of them between 2003 and 2013 have converted a part of their intellectual capital
into tangible assets and enhanced their sustainability (see Rao, 2011, Chapter 2).
The main purpose of HRF is to create intangible assets and not tangible assets
such as cost savings through cheap recruitment practices and use of cheaper consultants
selected through the tendering process. An HR manager who focuses on
tangible assets works at lower levels as indicated in the five levels of HR. The
focus of HR in future should therefore move to level 5 in creating long-term sustainability
of organizations and creating intangible assets. Some of the recent
developments in India kindle a hope that such transformation in HR will take
place in future.
Downloaded from hrm.sagepub.com by guest on September 23, 2015
South Asian Journal of Human Resources Management, 1, 1 (2014): 91–108
Evolution and Evaluation of Human Resources Function in India 107
Conclusion
HR has established itself well in this part of the world. Conceptual foundations for
good HR have been laid almost 40 years ago in India. Based on this foundation,
Indian organizations have experimented for over three decades with innovative
practices with varying degrees of success. Globalization and technological
advancements have revalidated HR principles and rejuvenated HRF in the last
two decades in a large number of corporations. Professional bodies and academic
institutions have contributed immensely in this direction. The seeds sown 40 years
ago have taken a long time to mature. Even today business compulsions seem to
make HRF operate at lower levels and undertake the urgent and short-term than
what is intangible but sustainable in the long-term. The HR transformational leaders
in India have shown the way for the future of HR. Some of the innovative
CEOs and HR leaders have provided the leadership needed to lift up the function
and demonstrated that “people focused” corporations can reach global standards
of excellence. Time is ripe now than ever before for HR to contribute to nation
building. An HR driven company is a future driven company and an HR driven
manager is a future driven manager. It is time to recognize that HR is business and
there is no business without HR.
References
Cappelli, P., Singh, H., Singh, J., & Useem, M. (2010). The India way. Boston, MA:
Harvard Business Press.
Curtis, B., William, E.H., & Sally, M. (1995). Overview of the people capability maturity
model. Software Engineering Institute, Carnegie Mellon University.
Friedman, B., James, H., & David, M.W. (1998). Delivering on the promise: How to
attract, manage and retain human capital. Arthur Anderson, New York: Free Press.
Kaplan, R.S., & Norton, D.P. (1992). The balanced scorecard—Measures that drive
performance. Harvard Business Review, January–February, 71–79.
Khandelwal, A. (2013). Dare to lead: Transformation of Bank of Baroda. New Delhi: Sage
Response Books.
Khandelwal Committee Report. (2011). Report of the HR committee on public sector
banks. Mumbai: Indian Banks Association.
Mungale, Sonali, & Bhatiani, Ritu Singh. (2003). An evaluative study of the HRD function
through HRD audit. Paper presented at the 4th Conference of Young Professionals of
the National HRD Network, November, Delhi.
Nair, N., Vohra, N., Rao, T.V., & Srivastava, A. (2009). HR best practices. New Delhi:
Steel Authority of India
Nayar, V. (2011). Employees first: Customer second: Turning conventional management
upside down. Boston, MA: Harvard Business Review Publications.
Padki, R., Agarwal, N.M., Balaji, C., & Mahapatra, G. (Eds). (2005). Emerging Asia: An
HRD agenda. New Delhi: Tata McGraw-Hill.
Pareek, U., & Rao, T.V. (1975). HRD system in Larsen & Toubro. Unpublished
Consultancy Report, Indian Institute of Management, Ahmedabad (Published as
Pareek and Rao, 1998).
Downloaded from hrm.sagepub.com by guest on September 23, 2015
South Asian Journal of Human Resources Management, 1, 1 (2014): 91–108
108 T.V. Rao
Pareek, U., & Rao, T.V. (1977). HR function in Larsen & Toubro. Ahmedabad: Indian
Institute of Management (Published as Pareek and Rao, 1998).
———. (1998). Pioneering human resources development: The L&T system. Ahmedabad:
Academy of Human Resources Development (Publication of the original consultancy
reports, 1975 and 1977).
———. (2008). From a sapling to the forest: The saga of the development of HRD in India.
Human Resource Development International, 11(5), November, 555–564.
Pareek, U., Rao, T.V., Ramnarayan, S., & Usman Gani, A. (2003). HRD in Asia: First Asian
Research Conference on HRD. Academy of HRD, New Delhi: Oxford and IBH.
Ramnarayan, S., & Rao, T.V. (2011). Organization development: Accelerating learning
and transformation. New Delhi: SAGE Response Books.
Rao, T.V. (1999). HRD audit. New Delhi: SAGE Response Books.
———. (2003). The future of HRD. New Delhi: Macmillan India.
———. (2011). Hurconomics. New Delhi: Oxford & IBH (Republished by Pearson
Education, New Delhi).
———. (2013). Creating sustainable organizations: The need for intellectual capital focus
of HR managers. NHRDN Journal, 6(4), October, 65–71.
———. (2014). HRD audit (2nd ed.). New Delhi: SAGE Response Books.
Rao, T.V., & Chawla, N. (2005). 360 degree feedback and assessment & development
centers. New Delhi: Excel Publications.
Rao, T.V., Mahapatra, G., Rao, R., & Chawla, N. (2002). 360 degree feedback and
performance management systems (Vol. 2). New Delhi: Excel Publications.
Rao, T.V., & Pereira, D. (1985). Recent experiences in human resources development. New
Delhi: Oxford & IBH. (1985 Seminar when the NHRDN was born).
Rao, T.V., Ramnarayana, S., & Chawla, N. (2010). Life after 360 degree feedback and
assessment and development centers (Vol. 4). New Delhi: Excel Books.
Rao, T.V., & Rao, R. (2000). 360 degree feedback and performance management systems
(Vol. 1). Excel Publications: New Delhi.
Rao, T.V., & Sharma, C. (2012). 100 managers in action. New Delhi: Tata McGraw-hill.
Thite, M., Kavanagh, M.J., & Johnson, R.D. (2012). Evolution of human resource management
& human resource information systems: The role of information technology. In
M.J. Kavanagh, M. Thite, & R.D. Johnson (Eds), Human resource information systems:
Basics, applications & directions (pp
All these qualities seem to resonate well with most of the awardees of NHRDN.The future HR leaders have to focus on intellectual capital building. Talent managementin the form of competence building, commitment building and culturebuilding have to remain the focal points of HR.Five Cascading Levels of HRIn his recent research on the role of HR in building sustainable organizations, theauthor classified HR managers into five levels (Rao, 2013):Level one at the bottom is “HR Administration” in which documentation, datagathering and record keeping are the main focus. This work is largely clerical andoutsourceable. Anyone can do it with some instructions.Level two is “Monitoring and Execution” in which the focus is collecting information,reminding people, getting forms filled and statutory obligations fulfilled,etc. This may sometimes include data analysis and feedback to the top management.The measures are quantified in terms of appraisal forms filed in time, capacityutilization of training centres, recruitment and retention rates of employees, recruitmenttime reduced, projects completed on time, costs saved, etc.Downloaded from hrm.sagepub.com by guest on September 23, 2015South Asian Journal of Human Resources Management, 1, 1 (2014): 91–108106 T.V. RaoLevel three is “Designing and Implementing” in which the focus is reviewingthe existing systems, redesigning and starting new practices in performanceappraisals, incentives and performance linked pay, learning and development,employee engagement (or great place to work) surveys and practices. These alsocan be outsourced.The fourth level is “Strategising, Innovating, Integrating and Leading”. In thislevel, HR has to be aligned with business and the concerns shift from having goodHR to having business driven strategic HR. The HR person at this level is constantlylooking for what C.K. Prahalad called as “Next Practice” and “Business driven HRpractice”. HR people at this level focus on building leadership across the organization,use multiple tools, including 360 degree feedback, development centres, topmanagement team building and OD exercises. Here HR becomes talent focused andthe concern is on acquiring, retaining, nurturing and multiplying talent.The fifth level HR is focused on making “HR as Business”. Managers at thislevel realize that there can be no business without talented people at all levels andparticularly at the top. This is based on the philosophy that people make businessand therefore business-driven talent management is essential. The focus shiftsfrom tangibles to intangibles, from immediate and short-term performance goalsto building long-term capabilities, intellectual capital building, shareholder valueenhancement, stakeholder management, including customer service and identifyingand exploiting new opportunities, etc. Dave Ulrich calls this “Outside in HR”.The author calls this “Business Focused HR”. The level 5 HR manager focuses onHR itself as business and there is a need for HR to graduate to level 5.HR as Business Imperative Should Focus on Intellectual CapitalThe author’s studies on intellectual capital (IC) of Indian firms have indicated thatIndian corporations such as Infosys, Wipro, TCS, Dr. Reddy’s, India Hotels, ITC,Titan, Tata Motors, BHEL, ELI, NTPC, Apollo Hospitals, Mahindra & Mahindra,Gujarat Gas, HUL, etc., have a high intellectual capital value reflected in theirmarket capitalization. Some of these companies had as much as 97 per cent oftheir market capital as intellectual capital similar to Microsoft at one time. Theyhave been maintaining the a high level of IC for the last decade or so, though someof them between 2003 and 2013 have converted a part of their intellectual capitalinto tangible assets and enhanced their sustainability (see Rao, 2011, Chapter 2).The main purpose of HRF is to create intangible assets and not tangible assetssuch as cost savings through cheap recruitment practices and use of cheaper consultantsselected through the tendering process. An HR manager who focuses ontangible assets works at lower levels as indicated in the five levels of HR. Thefocus of HR in future should therefore move to level 5 in creating long-term sustainabilityof organizations and creating intangible assets. Some of the recentdevelopments in India kindle a hope that such transformation in HR will takeplace in future.Downloaded from hrm.sagepub.com by guest on September 23, 2015South Asian Journal of Human Resources Management, 1, 1 (2014): 91–108Evolution and Evaluation of Human Resources Function in India 107ConclusionHR has established itself well in this part of the world. Conceptual foundations forgood HR have been laid almost 40 years ago in India. Based on this foundation,Indian organizations have experimented for over three decades with innovativepractices with varying degrees of success. Globalization and technologicaladvancements have revalidated HR principles and rejuvenated HRF in the lasttwo decades in a large number of corporations. Professional bodies and academicinstitutions have contributed immensely in this direction. The seeds sown 40 yearsago have taken a long time to mature. Even today business compulsions seem tomake HRF operate at lower levels and undertake the urgent and short-term thanwhat is intangible but sustainable in the long-term. The HR transformational leadersin India have shown the way for the future of HR. Some of the innovativeCEOs and HR leaders have provided the leadership needed to lift up the functionand demonstrated that “people focused” corporations can reach global standardsof excellence. Time is ripe now than ever before for HR to contribute to nationbuilding. An HR driven company is a future driven company and an HR drivenmanager is a future driven manager. It is time to recognize that HR is business andthere is no business without HR.ReferencesCappelli, P., Singh, H., Singh, J., & Useem, M. (2010). The India way. Boston, MA:Harvard Business Press.Curtis, B., William, E.H., & Sally, M. (1995). Overview of the people capability maturitymodel. Software Engineering Institute, Carnegie Mellon University.Friedman, B., James, H., & David, M.W. (1998). Delivering on the promise: How to attract, manage and retain human capital. Arthur Anderson, New York: Free Press.Kaplan, R.S., & Norton, D.P. (1992). The balanced scorecard—Measures that driveperformance. Harvard Business Review, January–February, 71–79.Khandelwal, A. (2013). Dare to lead: Transformation of Bank of Baroda. New Delhi: SageResponse Books.Khandelwal Committee Report. (2011). Report of the HR committee on public sectorbanks. Mumbai: Indian Banks Association.Mungale, Sonali, & Bhatiani, Ritu Singh. (2003). An evaluative study of the HRD functionthrough HRD audit. Paper presented at the 4th Conference of Young Professionals ofthe National HRD Network, November, Delhi.Nair, N., Vohra, N., Rao, T.V., & Srivastava, A. (2009). HR best practices. New Delhi:Steel Authority of IndiaNayar, V. (2011). Employees first: Customer second: Turning conventional managementupside down. Boston, MA: Harvard Business Review Publications.
Padki, R., Agarwal, N.M., Balaji, C., & Mahapatra, G. (Eds). (2005). Emerging Asia: An
HRD agenda. New Delhi: Tata McGraw-Hill.
Pareek, U., & Rao, T.V. (1975). HRD system in Larsen & Toubro. Unpublished
Consultancy Report, Indian Institute of Management, Ahmedabad (Published as
Pareek and Rao, 1998).
Downloaded from hrm.sagepub.com by guest on September 23, 2015
South Asian Journal of Human Resources Management, 1, 1 (2014): 91–108
108 T.V. Rao
Pareek, U., & Rao, T.V. (1977). HR function in Larsen & Toubro. Ahmedabad: Indian
Institute of Management (Published as Pareek and Rao, 1998).
———. (1998). Pioneering human resources development: The L&T system. Ahmedabad:
Academy of Human Resources Development (Publication of the original consultancy
reports, 1975 and 1977).
———. (2008). From a sapling to the forest: The saga of the development of HRD in India.
Human Resource Development International, 11(5), November, 555–564.
Pareek, U., Rao, T.V., Ramnarayan, S., & Usman Gani, A. (2003). HRD in Asia: First Asian
Research Conference on HRD. Academy of HRD, New Delhi: Oxford and IBH.
Ramnarayan, S., & Rao, T.V. (2011). Organization development: Accelerating learning
and transformation. New Delhi: SAGE Response Books.
Rao, T.V. (1999). HRD audit. New Delhi: SAGE Response Books.
———. (2003). The future of HRD. New Delhi: Macmillan India.
———. (2011). Hurconomics. New Delhi: Oxford & IBH (Republished by Pearson
Education, New Delhi).
———. (2013). Creating sustainable organizations: The need for intellectual capital focus
of HR managers. NHRDN Journal, 6(4), October, 65–71.
———. (2014). HRD audit (2nd ed.). New Delhi: SAGE Response Books.
Rao, T.V., & Chawla, N. (2005). 360 degree feedback and assessment & development
centers. New Delhi: Excel Publications.
Rao, T.V., Mahapatra, G., Rao, R., & Chawla, N. (2002). 360 degree feedback and
performance management systems (Vol. 2). New Delhi: Excel Publications.
Rao, T.V., & Pereira, D. (1985). Recent experiences in human resources development. New
Delhi: Oxford & IBH. (1985 Seminar when the NHRDN was born).
Rao, T.V., Ramnarayana, S., & Chawla, N. (2010). Life after 360 degree feedback and
assessment and development centers (Vol. 4). New Delhi: Excel Books.
Rao, T.V., & Rao, R. (2000). 360 degree feedback and performance management systems
(Vol. 1). Excel Publications: New Delhi.
Rao, T.V., & Sharma, C. (2012). 100 managers in action. New Delhi: Tata McGraw-hill.
Thite, M., Kavanagh, M.J., & Johnson, R.D. (2012). Evolution of human resource management
& human resource information systems: The role of information technology. In
M.J. Kavanagh, M. Thite, & R.D. Johnson (Eds), Human resource information systems:
Basics, applications & directions (pp
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