flowchart TB
H[HRD<br/>System]
H --> PA[Performance<br/>Appraisal]
H --> PC[Potential<br/>Appraisal]
H --> CN[Counselling &<br/>Mentoring]
H --> CP[Career<br/>Planning]
H --> TD[Training &<br/>Development]
H --> OD[Organisation<br/>Development]
H --> RW[Rewards &<br/>Recognition]
H --> EW[Employee<br/>Welfare &<br/>Quality of Work Life]
H --> IS[HRIS]
classDef default fill:#003366,color:#ffffff,stroke:#ffcc00,stroke-width:3px,rx:10px,ry:10px;
12 Human Resource Development: Concept, Goals, Mechanisms (Performance Appraisal, Counselling, Career Planning, Training, OD, Rewards), Pareek-Rao Framework and HRD as a Sub-System
12.1 Why HRD?
Human Resource Development (HRD) is the planned, continuous effort to enhance the capabilities, commitment and culture of an organisation’s people so they can perform present roles well and grow into future roles. While HRM concerns the full life-cycle of the employee (acquisition, utilisation, maintenance, separation), HRD is the developmental sub-system within HRM, concerned with learning, growth and culture-building. The Indian HRD movement, led by T.V. Rao and Udai Pareek at L&T and IIM Ahmedabad in 1974-75, defined the framework still used today.
12.2 1 · Concept and Definitions
TipThree Standard Definitions of HRD
| Author | Definition |
|---|---|
| Leonard Nadler (1969) | “HRD is a series of organised activities conducted within a specified time and designed to produce behavioural change” |
| Udai Pareek & T.V. Rao | “HRD is a continuous process to ensure the development of employee competencies, dynamism, motivation and effectiveness in a systematic and planned way” |
| American Society for Training and Development (ASTD) | “HRD is the integrated use of training and development, organisation development and career development to improve individual, group and organisational effectiveness” |
NotePYQ anchor — Nadler coined HRD
The term Human Resource Development was coined by Leonard Nadler in 1969 at a US conference. Pareek and Rao introduced HRD as an integrated system to Indian industry in 1975 at Larsen & Toubro.
12.2.1 Key Features
- Planned and systematic — not ad-hoc.
- Continuous — not a one-off event.
- Developmental — about growth, not control.
- Integrative — links training, appraisal, career and culture.
- Behavioural — change in observed performance.
- All levels — not only managers.
12.3 2 · HRD vs HRM vs Personnel Management
TipPersonnel Management vs HRM vs HRD
| Dimension | Personnel Mgmt | HRM | HRD |
|---|---|---|---|
| View of people | Cost | Resource | Asset to be developed |
| Focus | Compliance, administration | Acquisition + utilisation + maintenance | Learning + growth + culture |
| Time horizon | Short | Medium | Long |
| Initiative | Reactive | Proactive | Developmental |
| Relationship | Transactional | Strategic | Transformational |
| Typical title | Personnel Officer | HR Manager | HRD Manager / OD Specialist |
HRD sits inside HRM: HRM is the umbrella; HRD is the developmental sub-system.
12.4 3 · Goals of HRD
Pareek and Rao spell out HRD’s purpose at three levels.
TipGoals of HRD — Three Levels
| Level | Goal |
|---|---|
| Individual | Develop competencies, dynamism, motivation and a sense of work-related identity |
| Group / Team | Develop interpersonal trust, teamwork and collaboration |
| Organisation | Develop a culture of learning, openness, collaboration, commitment and effectiveness |
12.4.1 Pareek-Rao OCTAPACE Culture
The desired HRD culture is captured in the acronym OCTAPACE:
TipOCTAPACE — Eight Cultural Values
| Letter | Value |
|---|---|
| O | Openness |
| C | Confrontation (facing issues, not avoiding) |
| T | Trust |
| A | Authenticity |
| P | Proaction |
| A | Autonomy |
| C | Collaboration |
| E | Experimentation |
NoteMnemonic — OCTAPACE
O-C-T-A-P-A-C-E — eight values. Pareek and Rao identified these as the hallmarks of a developmental culture.
12.5 4 · HRD as a System — The Sub-systems
12.5.1 Pareek and Rao’s HRD Sub-systems
TipPareek-Rao HRD Sub-systems
| Sub-system | What it does |
|---|---|
| Performance appraisal | Assess past performance, provide development feedback |
| Potential appraisal | Identify what an individual could become |
| Counselling | Help the employee see strengths, weaknesses and the way forward |
| Mentoring | Long-term guidance by a senior |
| Career planning | Match individual aspiration with organisational paths |
| Training & development | Build skills, knowledge and attitudes |
| Organisation development (OD) | Plan culture and structure change |
| Rewards & recognition | Reinforce desired behaviour |
| Employee welfare & QWL | Build the conditions in which growth happens |
| HRIS | Information base supporting all the above |
12.6 5 · HRD Mechanisms in Detail
12.6.1 Performance Appraisal and Potential Appraisal
In HRD logic, the purpose of appraisal is developmental, not punitive. Performance appraisal looks backward at delivered results; potential appraisal looks forward at growth capacity.
TipPerformance vs Potential Appraisal
| Dimension | Performance Appraisal | Potential Appraisal |
|---|---|---|
| Time | Backward | Forward |
| Question | “How well did he do this role?” | “What other / higher role can he do?” |
| Use | Reward, training need | Promotion, succession |
| Tools | KRA / KPI, BARS, 360° | Assessment centre, psychological tests |
12.6.2 Counselling
A confidential, dyadic conversation through which the employee gains self-awareness and a development plan. Effective counselling has four phases — rapport, exploration, action planning, follow-up.
12.6.3 Mentoring
A long-term developmental relationship between a senior (mentor) and a junior (mentee or protégé). Kram (1985) identified two functions — career functions (sponsorship, exposure, coaching, protection, challenging assignments) and psychosocial functions (acceptance, counselling, friendship, role modelling).
12.6.4 Career Planning
Already covered in earlier chapters; in HRD it is the link between individual aspiration and organisational paths.
12.6.5 Training and Development
The single most visible HRD intervention. Covered in detail in the T&D chapter.
12.6.6 Organisation Development (OD)
A planned, system-wide effort to improve organisational effectiveness and health through behavioural-science interventions. The OD process classically follows Kurt Lewin’s three steps — unfreeze, change, refreeze.
TipCommon OD Interventions
| Intervention | What it does |
|---|---|
| Survey feedback | Diagnostic data fed back to teams |
| Team building | Improving team functioning |
| Process consultation | Helping a group understand its own processes |
| Sensitivity (T-group) training | Awareness of self in groups |
| Inter-group intervention | Reducing conflict between functions |
| Quality of work life (QWL) | Job and work-environment redesign |
| Confrontation meeting | Surfacing and resolving issues openly (Beckhard) |
| Grid OD | Blake-Mouton’s six-phase grid programme |
12.6.7 Rewards and Recognition
Beyond pay, the HRD reward system uses non-financial recognition — appreciation, public praise, badges, growth opportunities — to reinforce learning behaviour.
12.7 6 · Pareek-Rao HRD Score Card
Pareek and Rao’s HRD score card uses four dimensions:
TipHRD Score Card — Four Dimensions
| Dimension | What it measures |
|---|---|
| HRD systems maturity | Whether sub-systems exist and function |
| HRD competencies | Skills of the HRD function itself |
| HRD culture | OCTAPACE values lived in the organisation |
| Business linkages | How HRD contributes to business outcomes |
12.8 7 · Conditions for Effective HRD
- Top-management commitment.
- Supportive HR policies and aligned reward system.
- Competent HRD function staffed by professionals.
- Clear performance standards and feedback mechanisms.
- OCTAPACE-like culture — openness, trust, autonomy.
- Sufficient budget and infrastructure.
- Active line-manager involvement — HRD is not only HR’s job.
12.9 8 · Indian HRD Movement — A Brief History
TipMilestones of the Indian HRD Movement
| Year | Milestone |
|---|---|
| 1969 | Leonard Nadler coins the term “Human Resource Development” |
| 1974 | Larsen & Toubro invites Pareek and Rao to redesign its appraisal system |
| 1975 | First HRD department in India set up at L&T |
| 1980 | National HRD Network founded |
| 1985 | IIM Ahmedabad establishes the Centre for HRD; subsequently Academy of HRD founded at Ahmedabad |
12.10 Practice Questions
Q 01
Nadler
Easy
The term "Human Resource Development" was coined by:
View solution
Correct Option: C
Leonard Nadler, 1969.
Q 02
First Indian HRD
Medium
The first organised HRD department in India was set up at:
View solution
Correct Option: B
L&T, 1975 — Pareek and Rao's intervention.
Q 03
OCTAPACE
Hard
In Pareek and Rao's OCTAPACE, the "T" stands for:
View solution
Correct Option: B
O-Openness, C-Confrontation, T-Trust, A-Authenticity, P-Proaction, A-Autonomy, C-Collaboration, E-Experimentation.
Q 04
Potential appraisal
Medium
Potential appraisal differs from performance appraisal mainly in being:
View solution
Correct Option: B
Performance = past delivery; potential = future capacity.
Q 05
Kram mentoring
Hard
Kram (1985) classified mentoring functions into two categories:
View solution
Correct Option: B
Career and psychosocial functions.
Q 06
OD steps
Medium
Kurt Lewin's three-step model of planned change is:
View solution
Correct Option: B
Unfreeze → Change → Refreeze.
Q 07
Pareek Rao
Medium
The Indian HRD movement is most closely associated with which two scholars?
View solution
Correct Option: A
Udai Pareek and T.V. Rao.
Q 08
Sub-system
Easy
Which is not typically a sub-system of HRD?
View solution
Correct Option: C
Payroll is a transactional HRM activity, not an HRD sub-system.
Q 09
Grid OD
Hard
Grid OD as an OD programme is associated with:
View solution
Correct Option: B
Robert Blake and Jane Mouton — six-phase Grid OD programme.
Q 10
HRD vs HRM
Easy
The relationship between HRD and HRM is best described as:
View solution
Correct Option: B
HRM is the umbrella; HRD focuses on learning, growth and culture.
Q 11
ASTD definition
Hard
According to ASTD, HRD integrates which three components?
View solution
Correct Option: A
T&D + OD + career development.
Q 12
Confrontation in OCTAPACE
Hard
In OCTAPACE, "confrontation" means:
View solution
Correct Option: B
Confrontation = facing issues squarely, problem-solving stance.
Q 13
Match
Hard
Match the contribution with the author:
| (i) | Coined "HRD" | (a) | Kurt Lewin |
| (ii) | OCTAPACE culture | (b) | Leonard Nadler |
| (iii) | Unfreeze-Change-Refreeze | (c) | Kram |
| (iv) | Career & psychosocial mentoring functions | (d) | Pareek & Rao |
View solution
Correct Option: A
Nadler-HRD; Pareek & Rao-OCTAPACE; Lewin-3-step model; Kram-mentoring functions.
Q 14
HRD score card
Hard
Pareek and Rao's HRD Score Card uses how many dimensions?
View solution
Correct Option: C
Systems, competencies, culture, business linkages.
Q 15
View of people
Medium
Personnel management has historically viewed people as a:
View solution
Correct Option: A
Personnel = cost; HRM = resource; HRD = asset to be developed.
Q 16
Confrontation meeting
Hard
The OD technique called "confrontation meeting" was developed by:
View solution
Correct Option: B
Richard Beckhard, 1967.
Q 17
Process consultation
Medium
Process consultation is associated with:
View solution
Correct Option: A
Edgar Schein — helping a group understand its own processes.
Q 18
Counselling phase
Medium
Which is not a typical phase of effective employee counselling?
View solution
Correct Option: C
Counselling is developmental, not punitive.
Q 19
Octapace items
Hard
Which of these is not part of Pareek-Rao OCTAPACE?
View solution
Correct Option: C
OCTAPACE = Openness, Confrontation, Trust, Authenticity, Proaction, Autonomy, Collaboration, Experimentation.
Q 20
HRD purpose
Easy
In the HRD philosophy, the primary purpose of performance appraisal is:
View solution
Correct Option: B
HRD treats appraisal as a developmental tool.
12.11 Quick Recall
ImportantQuick recall
- HRD coined by Nadler, 1969. Pareek & Rao established HRD in India at L&T, 1975.
- HRD = developmental sub-system within HRM; views people as assets to be developed.
- OCTAPACE culture (Pareek-Rao): Openness, Confrontation, Trust, Authenticity, Proaction, Autonomy, Collaboration, Experimentation.
- HRD sub-systems: performance & potential appraisal, counselling, mentoring, career planning, T&D, OD, rewards, welfare/QWL, HRIS.
- Performance vs potential appraisal: backward vs forward; reward vs promotion/succession.
- Kram (1985) mentoring functions: career (sponsorship, exposure, coaching, protection, challenge) + psychosocial (acceptance, counselling, friendship, role modelling).
- Lewin’s three-step OD model: Unfreeze → Change → Refreeze.
- OD interventions: survey feedback, team building, process consultation (Schein), T-group, inter-group, QWL, confrontation meeting (Beckhard), Grid OD (Blake & Mouton).
- HRD Score Card — four dimensions: systems, competencies, culture, business linkage.
- ASTD definition: HRD = T&D + OD + career development.