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Evolution of HRD in India

Q. How has HR changed since you started your career in it? A. Well, I didnt exactly start my career in it, as there was no HR back then! Psychology has always been a part of HR, and those of us who have introduced this concept to India (which also includes people like Dr. Udai Pareek and Dr. S.N. Chattopadhyay) have all studied the subject. We coined the term HR only to ensure that there is a department taking care of people problems. Personnel departments at the time were handling only administrative work. We, on the other hand, wanted the focus to shift to learning, development and making the workplace a happy one an integrated HRD systems approach. The most important development in the 1980s was when personnel managers started calling themselves HRD professionals. Personnel departments were always looked at as cost centres, but soon managers started asking how they could add economic value to the organisations. We saw slow changes, like State Bank of India instituting HR managers in all branches and Crompton setting up an HR department. Today, there is a lot more orientation towards learning. Companies have begun focusing on contemporary issues involving attrition and recruitment, although, in my opinion, recruitment has become a little commercialised. A lot of HR managers have become HR consultants. Some of the more proactive ones are linking their job roles with the field of PR, which is a good thing to do. However, they really are not using a comprehensive systems approach and that is what I am unhappy with. A lot of companies pay only lip service to the so-called people practices they employ. Earlier, employees were keen to pursue long-term careers, and did not switch jobs as easily as today. It is the line manager who suffers in the process, as most long-term projects fall victim to numerous leadership changes. I think the growth in 72 The Human factor November 2008

The Father of Indian HRD

An exclusive interview with Dr. T.V. Rao, widely credited as the Father of Indian HRD, reveals why he is unhappy with the current HR scenario

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November 2008 The Human factor

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HRD in India: How the Journey Began

Dr. T.V . Rao, along with Dr. Udai Pareek, are two former IIM-A professors who are largely credited with the design of the new HR Function and the first dedicated HRD department carved out of the personnel function. They designed the first HRD department in the world, about thirty years ago when the term HRD was not even known in India. They designed this out of their own thought and reflection as a part of the consultancy they provided to Larsen & Toubro (L&T) in 1974 and subsequently helped organisations like the State Bank of India (SBI) and BEML (Bharat Earth Movers Ltd.) to start the same. Later, Dr. Rao established a centre for HRD at XLRI as a part of the L&T Chair and then established the National HRD Network and the Academy of HRD in 1985 and 1990 respectively. Dr. Udai Pareek has been mentoring some of these bodies and institutions and they have done a marvellous job by changing the course of history of HRD in this part of the world. Some of these institutions have grown and have made significant contributions. Both Dr. Rao and Dr. Pareek chose to remain in the country and influence the course of the HRD

HR has been slower than what we had expected to see. Q. How do you suggest HR professionals deal with upcoming trends in HR, keeping the economic recession in mind? A. In the past few years, it seems to have become fashionable to indulge in employee engagement, and benchmarking of companies through bestplace-to-work surveys. I am worried that some companies do this only for image building. In the 1980s, companies were genuinely worried about the welfare of their employees and were sincere about any practices that were put into place. I knew someone who was writing a book on HR and hence was visiting a lot of companies to collect data. He came complaining to me that companies were not even allowing him access to their HR information. I told him how important it was to not just blindly trust everything one hears from HR leaders at conferences, as it may greatly differ from reality. Today, a lot of companies are propagating cultures with a high degree of secrecy and competition. Therefore, they may not be willing to share the complete truth about their HR practices. It is important for organisations like the National HRD Network and Indian Society for Training and Development to step up to the challenge and hold discussions on practical and relevant aspects of HR. I think the economic recession should be looked at as an opportunity for HR professionals. Firstly, they need to educate employees about the crisis, and help them interpret the possibilities that it brings. I do think that a lot of top people were getting artificially inflated salaries, and maybe somewhere companies went wrong with their hiring strategies. These high salaries are now creating unhealthy competition in the industry. For those employees who have lost a lot of money in the stock market, it may be useful for companies to provide

It seems to have become fashionable to indulge in employee engagement for the purpose of image building, says Dr. Rao

them some generic counselling so that they do not go into depression. In my new book HRD Scorecard 2500, I have evaluated HR in organisations and marked it on 2500 points: 1000 for the system, 500 for competence, 500 for HR, 500 for capital and 500 for HRD impact. Each parameter has been translated financially. It is time for HR managers to review the way they use employees competencies and how they can partner with the business effectively, while remaining employee champions, rather than spending time retrenching good talent. Q. Tell us how you came up with the idea for 360 Degree Appraisal and the reaction you received for it. A. I came up with the idea for it in the 1970s. Many students I was teaching at the IIM-Ahmedabad still remember the kind of curriculum we had. Dr. Pareek and I came from a behavioural sciences background and we believed that psychometric tests were a good way for capturing and communicating the personality of an individual. It helps people understand and differentiate between factors like introversion and extroversion. So we administered such tests to the students and provided them with analytical feedback - they greatly appreciated the concept. In addition to this, students wanted to learn about how the outside world perceived them. I developed a tool on leadership styles and even leaders wanted to know how juniors perceived them. I, in turn, was not fond of teaching the same thing in every section so I was always on the lookout for something fresh to cover. After developing a rough module, we allowed 15-20 students to enrol for it. We then held sessions wherein these students received feedback from their peers, seniors and juniors. This is how it started. Today, we do not follow the same module strictly - changes are

movement rather than going to settle abroad. They have provided enormous consulting support to other countries in the region like Malaysia, Indonesia and UNESCO Bangkok. Dr. Rao proposes that professional bodies like National HRD Network should focus on establishing standards and enforcing them.

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dr . t . v . rao

is not because HR has failed. It is just that as long as HR personnel manage it, line managers tend to distance themselves from the process. I think performance appraisal has to be owned by line managers and they should feel integrated with the system. If you use a good PMS, that takes care of the entire HR system and one does not need any other systems to supplement it. KPAs (Key Performance Areas) should be put in place for all employees, including the Chairman. This makes the system very transparent. People will enjoy their work more when they have clear targets to achieve within a time period.

made as per situations. It was a practice in IIM to involve your colleagues in your research and I did the same. The programme was a great success. The initial reaction was very positive and we conducted it for almost 3-4 years. I was only worried that the IIMs were not very innovative, and sometimes tend to follow a narrow approach. Q. What is your recommendation to Indian companies with respect to performance appraisal systems? A. There are 3-4 important recommendations. Take PMS (Performance Management System) out of HR. This

Q. What characteristics do you encourage in leaders today? A. There is no substitute for values. Q. How far is psychometric testSecond on my list is the concern for ing used in Indian organisaa larger cause. Sometimes one needs tions? Please give suggestions to sacrifice in the short-term to gain for its administration. in the long-term. Indian companies A. Many companies use psychometric should focus on utilising the diver- testing to predict attrition. The most sity of employees and integrating important thing that psychometric them under one culture. Leadership testing does is to enhance awareness should be unanimous and should en- about oneself and increase individual courage a high degree of nationalism. choices. You know what you are good Most importantly, employees should at and, therefore, you choose an apspend a part of their income on the less propriate career. This peace of mind fortunate in the country. Many com- brings happiness in ones life. panies are encouraging this. I think youngsters who want to Q. What were your open their own schools key observations there is no and try other unconvenwhen you used the tional things are the ones substitute first known Assessfor values, ment Centre in India to watch. and it is in 1974? How has this Q. Tell us about the important for mechanism changed concept of Hurconom- young leaders over the years? ics and how it benefits to show concern A. I must say that not for larger the HR fraternity. much has changed since A. The concept is very causes to help 1974! There has not been any major innovation. simple and it has arisen long-term gain because of the growing fiThe first time I used Asnancial consciousness in the minds of sessment Centre was to select projpeople today. Everything seems to be ect leaders for the entrepreneurship valued in money terms. I detest people development programmes conducted asking me my companys annual turn- by Gujarat Investment System (GIS). over in money terms. I strongly believe The job of those project leaders was that we have over-valued money but to identify the unemployed youth and unfortunately there is no alternative employ those who possesed entrepreNovember 2008 The Human factor

to it. Abhimanyu (Arjuns son in the Mahabharata) knew how to enter the chakravyuh but did not how to come out. Similarly, if you pay your secretary Rs.10,000 a month, it will cost the company Re. 1 per minute. So, for an employee whom you pay Rs.1 lakh a month, it will cost Rs.10 per minute. If that employee speaks on the phone for even 5 minutes, he will have to justify Rs.50 of the companys money. The moment you become conscious of time, every minute feels valuable and you learn to respect the other person. Therefore, the concept of HR Economics focuses on respect and helps us value the talent of others. Using Hurconomics, talent can even be measured in monetary terms.

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Dr. T.V. Rao: Up Close & Personal

1. Your personal goals 5 years down the line? Consultancy happened to me by accident and now I want to come out of the web I have created all around me! I would like to go back to my hometown village and settle down there; maybe look at teaching, health and education. I want to go back to my roots. 2. People you admire or whose philosophies you respect? The person I admire most was Ravi Matthai (first full-time director of IIM Ahmedabad). I have worked closely with him and Dr. Pareek, and our thinking has always matched. I admire Ravi and I follow his philosophies. A person I do not speak about too much is my mother. She did not know how to read or write and has had a tough life. Her husband deserted her as soon as I was born, but she did not lose her entrepreneurial thinking and continued helping people in the village. This teaches me that even if you are not very well-educated, you can achieve a lot if you take the right initiatives. 3. Which field would you be in if not HR? I would have been an investigator in the field of crime. I would have loved to join the police force, if I was not in HR. 4. Your favourite books? When I was young I certainly used to read the Ramayana and the Mahabharata. Recently, I have read books by Arun Sharma and Shiv Khera. 5. How do you like spending your free time? I like spending my free time watching movies or on the Internet. I also enjoy writing articles whenever possible. 6. Your advice to management graduates? The most important thing is to take initiative. One should not wait for directions. Have concern for your neighbourhood and nature. Forget about your final placements for once. 7. What principles do you live by? Some of my principles have got me in trouble! Essentially I speak what is in my heart and sometimes this hurts people. I cannot be diplomatic. My outspokenness lands me in trouble. I do not believe in a lavish, luxurious life.

minds over the others. However, sometimes I may not want to hurt someones sensitivities and therefore, I may not be completely honest. This brings in problems of transparency. The gap between what we tell and what we feel is increasing, and this is because everything is presented in a beautiful (although artificial) package. Hence, predictability becomes difficult, unlike in the US. If an HR manager does not even understand the employees, how will she formulate the right policies? I would strongly advise companies to change this kind of culture. One should definitely have strong values of integrity and security. Increase your tolerance and be honest like Gandhi. He was a great visionary and he always spoke the truth to add value. Q. In your opinion what roles should be played by the academic institutions like the management schools and professional bodies like the NHRDN to shape the future of HRD? A. Management schools should innovate to train and recruit competent faculty. who should focus on building the theory of HRD that will take the country and the profession forward. Professional bodies like the NHRDN should focus on establishing standards and enforcing them. Every professional must commit a week to ten days every year for the profession, and at the same time donate without compensation. We owe to our profession. Q. There has been talk recently about the huge pay packages that failed CEOs are getting. What is your take on this issue? A. Salaries of many top people are over-valued. I think many of them do not deserve such packages. I believe that there are two types of CEOs: one who succeeds or fails by virtue of his competencies and the other who succeeds or fails by virtue of factors beyond his control. Talented people should certainly be paid well but not necessarily be made billionaires! thf

neurial or technical skills. They were to be trained in project management. We created a set of tests and exercises to select the project leaders. The unfortunate thing was that not many people used it until the mid 1990s. Post 1995, people recognised the importance of talent. The basic mechanisms have not changed though. The validity of the assessment centre is as questionable today as it was during those days. The reason is that gauging success today has become more complex than before due to the high level of competition. Very few strategies have come up in terms of reliability of assessment centres. Also. people have not been able to position the concept correctly. Con76 The Human factor November 2008

sultants should help develop low-cost assessment centres, rather than selling large packages to MNCs. I think this is wrong, as assessment centre cannot be used on such a mass scale. Q. You have advised a diverse range of companies over the years. What have been your observations in managing people, especially in developing economies like India and China? A. As far as our country is concerned, Indians are rich in terms of their emotions and determination in getting things done. They are very hardworking and sensitive. I think these are the qualities which distinguish Indian