Everything you need to know about the importance of human resource development.

The need and importance for HRD is felt due to the following reasons:-

1. To Develop Competencies 2. System-Wide Changes 3. To Create Conducive Organizational Climate 4. Improvement in Industrial Relations 5. Organisational Commitment 6. Coping with the Environmental Changes

7. Changes in Political Philosophy 8. Increased Pressure on Employees 9. Improvement in Efficiency of Employees 10. Role Clarity 11. Organisational Commitment 12. Facilitates Changes and a Few Others.

Importance of Human Resource Development

Importance of Human Resource Development – To Stabilize Itself, Grow, Diversify the Products, Renew Itself to Become More Effective and a Few Others

Employees feel the need of knowledge, skills attitudes and values to perform the task efficiently. We call these competencies. Higher degree of competencies is required for higher degree and quality of job performance. Hence to achieve the goals in the changing situation, it is necessary to develop competencies continuously in an organisation.


In the present competitive situation to survive, grow and excel, the competent and motivated employees are essential. To maintain the growth level over a period of time, competencies of employees need to be sharpened or developed as organisation operates in the changing environment.

The organisations are interested to develop their business though products or services. They want to bring effectiveness in the organisation through cost reduction, delay reduction, better customer satisfaction, service promptness and better quality. Hence for these, the organisation needs to develop its human resource competencies to perform better.

For example, a university, bank, hospital, profit making company, etc., are interested to improve their services and want to give better satisfaction to customers, HRD activities may be needed to be undertaken to equip the employees with better competencies.


Thus the need for HRD is felt by every organisation that is interested in the following objectives to be achieved:

(a) To stabilize itself

(b) To grow

(c) To diversify the products or services


(d) To renew itself to become more effective

(e) To improve its systems, products and services

(f) To change and become more dynamic

(g) To play the role of a leader.

Importance of Human Resource Development – For Developing Competencies, To Improve Quality of Work Life, For Organisational Changes and for Improving Organisational Climate

The need for HRD is felt due to the following reasons:

Need # 1. HRD is Required for Developing Competencies:


No organisation can work better without competent manpower. The employees must be capable and competent in terms of knowledge, skills and attitudes. Talented and motivated manpower is an assets or the organisation whether it is profit or not profit making organisation.

Every organisation needs competent employees for performing different tasks effectively and to make it successful in its business operations. A profit organisation interested in growing, stabilizing, excelling and surviving by improving its performance in cost reduction, process time reduction, improved quality of products, services and behaviour of people.

All these are possible only through competent manpower. Similarly, non-profit organisations like bank, university or a hospital interested in improving its quality of service, promptness in operation work culture, attitude of employees and goodwill of the organisation in the market.

Need # 2. HRD is Needed to Improve Quality of Work Life:


In past, in factory system the workers were asked to work for long hours and were paid very less salary. It can be said that they were exploited to a good extent. The working conditions, attitude of employers, job security were very poor. Further, the rules, regulation and personnel policies were not favourable to employees. It can be said in brief the quality of work life was very poor.

To mitigate the effect of these under HRD, systematic adequate facilities and support are provided to employees to learn and develop their individual skills and develop organisation as a whole. HRD contributes in development of skills, knowledge, attitudes and provides career planning, self-respect and opportunity for self-growth.

Under career development planning they know their career path in future and it is assured also. Further with the help of other HRD mechanisms like counselling, guiding, monitoring, etc., the quality of work life is improved which is not possible under old factory system working.

Need # 3. HRD is for Organisational Changes:

It is a new approach adopted by management to tackle the drastic changes taking place in business environment. Traditional approaches no doubt are relevant but it is not possible to bring major changes and to tackle the current situation. To bring changes in procedures, systems, attitude and skills the need for HRD is felt.


Through this the working procedures, attitude of top level management, skill of employees and performance in different areas have been changed. It is only possible through HRD approach. It gradually enriches the whole organisation.

Need # 4. HRD for Improving Organisational Climate:

Unfavourable organisational atmosphere includes the feelings of fear, misunderstanding, non-cooperation, threat and jealousy. There the top executives are more authoritative and do not give due importance to human being. They are not aware of problems faced by people at work. They are ignored. In this working climate the sense of belongingness, attachment and initiatives are generally found missing.

This is not suitable with the present rapidly changing working environment. To tackle the present situation the need for HRD approach is strongly felt to develop a new and better climate in the organisation. Here the importance of human being at work, human values, human problems and human relations is accepted. It replaces the old values by new ones. People become more open, independent, cooperative, friendly, and creative and believe in teamwork.

Importance of Motivation in Human Resource Development (HRD):

Motivation is one of the most important concepts in HRD. In most organizations, it is common to hear the refrain that a particular employee is not motivated and hence his or her performance has taken a backseat. Motivation can be understood as the desire or drive that an individual has to get the work done. For instance, when faced with a task, it is the motivation to accomplish it that determines whether a particular individual would complete the task according to the requirements or not.


Further, the absence of motivation leads to underperformance and loss of competitiveness resulting in loss of productive resources for the organization. It is for this reason that the HR managers stress on the employees having high levels of motivation to get the job done.

There are many theories of motivation and the ones being discussed here are the Herzberg’s hygiene theory, Maslow’s need hierarchy theory, and McGregor Theory X and Theory Y which dealt with needs satisfaction and motivation of employees.

1. Herzberg’s Hygiene theory states that for employees to be motivated, certain conditions need to exist and the absence of these conditions or the hygiene factors demotivate the employees. The point that is being made in this theory is that the presence of hygiene factors is a precondition for performance and is not a determinant of performance.

On the other hand, the absence of these factors actually demotivates the employee. The other factors were ‘Motivator’ which included recognition, challenging work, opportunity to perform, promotion etc., which provided motivation to employees.

2. Maslow’s need hierarchy theory postulates that individuals are motivated according to a hierarchy of needs which start from satiation of basic needs and then go on to need for recognition and finally, the need to actualize one’s vision and reach the highest stage of personality. The point that is being made in the theory is that individual’s progress from one stage to the other depending on how well the needs at each stage are met.

So, organizations have to ensure that employees’ needs are taken care of at each level so that by the time the employee reaches the top of the ladder, he or she is in a position to actualize them.


3. McGregor’s theory of motivation alludes to the carrot and stick approach that is favored by many managers. This theory states that employees can be motivated by a dual pronged strategy of rewarding them for good work and punishing them for bad work. The opposites of these reactions mean that employees have a strong incentive to do well as opposed to doing badly.

Motivation of employees is indeed important for the health of the companies. Only when employees are motivated sufficiently can they give their best. Typically, companies focus on compensation and perks and benefits as a strategy to motivate employees.

However, employees are motivated by factors other than pay and hence, the HRD function must take cognizance of this fact and proceed accordingly. This means that the need for job satisfaction and fulfillment have to be taken care of as well for the employees to reach their potential.

Importance of Human Resource Development – 4 Factors that Explain the Need for HRD in Every Organisation

Every organisation, business or otherwise, has to become dynamic and growth-oriented so that it can survive and continue successfully in its business and achieve its common goals. For this purpose, it requires HRD.

The following factors explain the need for HRD in every organisation:

1. HRD is needed to develop competencies of the people in the organisation in terms of knowledge, skills, capabilities and attitudes. Competent employees are a great necessity for every organisation, whether it be a profit-making organisation or non-profit-making organisation.


2. HRD is needed to bring about system-wide changes in the organisation. It is made up of several mutually dependent sub-systems or parts such as procurement, development, performance appraisal, man-power planning, job-environment etc. The sub-systems are linked with one another by feed-back loops.

As a result, a change in one sub­system produces a reverberating effect on all other sub-systems. While the traditional human resource development methods such as training, job rotation etc. are inadequate to bring about over-all development of human resources, the HRD programmes do this by bringing about a system-wide change and thereby enrich the entire socio-technical system.

3. HRD is needed to mitigate some of the evil effects of the modern factory system such as long hours of work, production of standardised products, loss of skill, neglect of human factor, ill-treatment of workers or treating workers as machines etc. But HRD treats workers as human beings, enriches their roles, satisfies their needs of advancement, growth, self-respect, recognition, creativity and autonomy.

HRD assures workers about their future through career development plans. HRD thus enables every individual in the organisation to discover, develop and use his/her capabilities to a fuller extent so as to achieve individual and organisational goals.

4. HRD is needed to provide a favourable climate in the organisation. It develops a new climate in the organisation by replacing the old values by the new ones and by making the individuals in the organisation more open, independent, authentic, creative and co­operative in their behaviour.

Importance of Human Resource Development – With the Functions of HRD

In the context of present-day competitive business, the quality of human capital of an organization determines the degree of success which it can achieve. Since there is keen competition for human resources and not only the competition for customers, the human capital can be created within the organization and not acquired from outside. From this point of view, HRD has created its own needs in every organization.


In particular, HRD is needed for the following purposes:

1. To Develop Competencies:

The basic need for HRD is to develop competencies in people at all levels in the organization. HRD has two purpose- to provide employees greater opportunity to grow and succeed within a company and to strengthen management and professional team’s at all organizational levels. Competencies can be developed by increasing ability through increased knowledge, skills, and change in attitudes.

Knowledge refers to the possession of information and ideas in a particular field which may be helpful in developing relationships among different variables related to that field. Skill refers to expertness, practical ability, or facility in an action or doing something.

Attitude refers to the orientation of an individual in terms of settled mode of thinking or behaviour. Development of competencies among individuals and teams consisting them is required in all types of organizations, business or non-business. However, in business organizations, their role is more focused because of increased competition.

2. System-Wide Changes:


Mere development of competencies among people in the organization is not enough for their effectiveness but there must be change in those factors which affect the use of these competencies. Therefore, changes are required in other aspects of organizational functioning.

According to McKinsey model, the interrelated aspects in an organization are strategy, structure, system, staff (people), skills, styles, and shared values. Change in any one element necessitates changes in other elements to absorb the change initiated in one element. HRD makes efforts to bring this system-wide change and make all elements coherent.

3. To Create Conducive Organizational Climate:

HRD attempts to create organizational climate congenial to individual growth as well as organizational growth by replacing the old and traditional assumptions about human beings with contemporary and more realistic assumptions about human beings.

Such assumptions as management commands and workers respond; people can be motivated by carefully defined direction, authority and control as well as appropriate rewards and penalties; for being effective in human relationships, one needs to be rational and logical in his behaviour rather than emotional, creating more hierarchical levels so that promotional avenues exist; and so on will be only dysfunctional.

Instead, the contemporary practices are based on flexibility and tailor-based system. HRD attempts to build this kind of climate.


Thus, HRD contributes to betterment of an organization in the following ways:

i. People in the organization become more competent because of the skills that are developed in them and the clarity of roles that they perform.

ii. Involvement in and commitment to jobs increase because of linkage between job performance and rewards, both intrinsic and extrinsic.

iii. People develop better understanding to each other based on mutual trust and confidence which generates better cooperation.

iv. Top management becomes sensitive to human resources in terms of their utilization and solution of problems.

Functions of HRD:

The field of HRD spans several functions across the organization starting with –

1. Employee recruitment and training – Training helps in development of employees.

2. Appraisals and payroll – HRD indulges in regular appraisals of employees and fixing the pay.

3. Recreational and motivational aspects of employee development – To develop employees in a wholesome manner, they need to be motivated and deterred by providing recreational programs.

Importance of Human Resource Development in India – In Indian Context

The rapid export growth, direct investment in foreign countries, joint ventures, mergers and acquisitions show the movement towards globalisation. Foreign companies from USA, Europe, Japan and South Korea are presently focusing foreign markets through different modes of entry. It becomes necessary to manage activities relating to production, marketing, human resource, finance, research, etc.

Along with other branches of management the importance of human resource management has also increased due to globalisation, enactment of new or amendment of existing labour legislations, development of knowledge of employees and research activities relating to human resource, changing role of trade unions in present time, increasing expectation of employees from organisation and competitive demands of employees.

In the present global competitive situation it has become very difficult to manage business of foreign subsidiaries. As it happened across the world, Indian economy was also liberalized. Due to this liberalisation of licensing policy many changes have taken place in corporate sector in India. Now many public sector units are privatized or level of competition increased due to entry of MNCs.

Government has stopped new recruitment and permits retrenchment and imposition of voluntary retirement schemes. This has increased the workload of employees. Further tenth five year plan recommended reduction in number of government jobs. This has badly affected the working women. In this critical situation now there is pressure on Indian industry to improve quality of products and services with cost reduction.

To stay in competitive race is possible only through upgraded working methods, technical and managerial skills and motivation of employees working at different levels. Therefore, the need for HRD has also felt like other developed countries in India.

Importance of Human Resource Development – 9 Reasons why HRD is Considered Important

As the time has been changing dramatically, one needs to be future-oriented and vigilant to monitor the human resource management practices. Besides planned efforts should be made to develop human relations skill in managers at all levels and they should be encouraged to practice these skills capitalizing on human dignity, capability and potential through healthy inter­personal relations formal and informal positive rewards – extrinsic and intrinsic and greater people’s involvement in terms of exercise of discretion, decision making and use of ingenuity.

HRD is considered important due to the following reasons:

1. Improvement in Industrial Relations:

The gap between the managers and the workers have been created due to the reasons like widespread unrest, strained worker management relations, rising expectations of workers etc. HRM is required for creating proper understanding among the workers and the management. Through HRM workers are convinced that various managerial actions will not only accomplish the organisational objectives but also help them in fulfilling their motives.

2. Organisational Commitment:

HRM helps in creating a sense of pride for the organisation among the work force. This improvement in the organisational commitment of workers leads to the improvement in efficiency and quality of work in the organisation.

3. Coping with the Environmental Changes:

There are rapid changes in the business environment. The technological changes continuously affect the business organisations. The automated production processes and office operations require that the human resources of the organisation should be continuously updated with these changes. This updating of human resources can only be done through the human resource management.

4. Changes in Political Philosophy:

All over the world the political philosophy has undergone various changes. A separate ministry has been formed by the central government namely “Ministry of Human Resource Development” which is put under the senior ministers. This shows the importance given to the human resource in India. Therefore the increasing the efficiency of the personnel in the organisation, there is a need for human resource management.

5. Increased Pressure on Employees:

The technological changes have made it important to use the sophisticated machines. This needs skilled personnel for the installation, monitoring, maintenance and controlling of operations. Therefore, for coping with the emerging situation, there is a need for training and development of the employees in the organisation. This can be facilitated with the help of human resource management.

6. Improvement in Efficiency of Employees:

Human resource management helps in making people aware of the skills required for the job performance. There is a greater clarity of work norms and standards. This results in a more competent work force.

7. Role Clarity:

Human resource management encourages communication between work teams. People not only understand their roles better but also become aware of the expectations of the other members of the team. Therefore, human resource management by defining the authority and responsibility of the employees makes them clear about their roles in the organisation.

8. Organisational Commitment:

By encouraging communication, human resource management helps in developing greater trust and respect for each other. Employees become more open and authentic and new values can be generated easily. People become more committed to their jobs because rewards are administered more objectively through human resource management.

9. Facilitates Changes:

Human resource management makes people better equipped with problem solving capabilities. This not only makes them proactive but also brings readiness on their part to accept change.