Principles in Designing HR Function: Udai Pareek

PRINCIPLES UNDERLYING DESIGNING OF HUMAN RESOURCES SYSTEM
Conceptualised by Udai Pareek while establishing the first HRD department and HR Function in L&T, 1974-75 (reproduced from the Book Pioneering Human Resource Development: The L&T System” by Udai Pareek and T. V. Rao; Academy of HRD, Ahmedabad, pages 74-79. For copies write to: director@academyofhrd.org ). This is a part of the report of L&T. The conceptualization is done largely by Udai Pareek and accepted in full by L&T after a presentation to its top Management including Mr. N. M. Desai Mr. Holk Larsen) .
Very little systematic attention has been given to the designing of human resources system (HRS). In the absence of systematic attention to various aspects, HRS may not be able to serve effectively the various purposes for which it is set up. So far, the urgent but not necessarily the most important problems have been attended to in HRS viz. statutory requirements of industrial relations and appointments, promotions and salary administration etc. of the various personnel in the company. The designing of HRS would require attention to various aspects. We purpose 15 principles which should be followed while designing HRS in any company.
FOCUS ON ENABLING CAPABILITY: The main focus of HRS should be to help the company increase what may be called its “enabling” capabilities. These capabilities would include development of Human Resources in the company, development of total organizational health, improvement of the problem solving capability, developing diagnostic ability so that the problems in the organization can be quickly, timely, and effectively located and solutions attempted without dependence, and developing a healthy open system so that maximum commitment of the employees can be obtained. HRS, in this sense, becomes an important system underpinning various other functions and strengthening them through its programme.
INTEGRATING THE DEVELOPMENT OF PEOPLE WITH ORGANISATION DEVELOPMENT: Any HRS should aim at the development and multiplication of Human Resources. Every human being has certain capacities and potential to do certain things. Human beings are not very often aware of their own strengths. It requires another human being to point out ones own strengths. HRS should provide enough opportunity for each individual to become aware of his potential and thus make maximum possible contribution in his various organizational roles. It is certainly not possible for any organization to provide scope for complete exploration of individuals’ talents and potential. However, HRS should offer maximum opportunity through appraisals, feedback, counselling and experimentation in various roles. An organization like L&T offers enormous such opportunities.
MAXIMISING INDIVIDUAL AUTONOMY AND GROWTH THROUGH INCREASED RESPONSIBILITY: Learning experiences get maximized when individuals have opportunities to experiment and also hold the responsibility for outcomes. Such learning experiences on the job have a great value for the individual and the organization. Employees start enjoying their jobs more and develop themselves better if their jobs offer them some flexibility and autonomy to innovate. HRS should attempt to help employees assume more responsibility through autonomy in decision making and experimentation.

DECENTRALISATION THROUGH DELEGATION AND SHARED RESPONSIBILITY: People who work together or close to each other know each other better than those who do not have such opportunities to be together. HRS should be based in such a context. Identification and development of human resources becomes an integral part of every manager’s job. The system can only maximize opportunities for managers to take this responsibility. In fact, the central office can only perform monitoring and service functions, and identification and development functions should be shared by every employee/ officer in the organization. The units/ regions should increasingly take the initiative in these matters, with the central office providing necessary monitoring, policy making, and system development facilities.
PARTICIPATIVE DECISION-MAKING: Dealing with human beings is a sensitive area for any organization to handle. No matter what innovations are made and what opportunities are provided there are likely to be frustration. People tend to feel frustrated when they are not consulted in matters in which they have enough knowledge and information. Design matters in which they have enough knowledge and information. Design of HRS or any of its sub-systems must give adequate weightage to the ideas and existing resources of people. It should attempt maximum participation or representation of people who are likely to be involved in its implementation or are affected by it.
BALANCING ADAPTATION TO AND CHANGING ORGANIZATIONAL CULTURE: HRS does not have any standard form and has to be evolved for each organization according to its nature, recruitment and its culture. While designing HRS, it is necessary to take into consideration the nature and culture of organization for which it is being designed and at the same time it should be designed to suit the prevalent culture of the organization and the intended direction of change. The role of HRS is not only to perpetuate such culture but to modify it for increased effectiveness. There has always been a controversy between those who believe that HRD or any parts of HRS like appraisal system should be designed to suit the culture and those who believe that such systems should be able to change the culture. Both extreme positions seem to be less functional. HRS should not make the company stay where it is; it should take it forward. However, this can done only if its design does not severely conflict with the prevalent culture, but at the same time has elements of change and evolution towards the future.
BALANCING DIFFERENTIATION AND INTEGRATION: With increase in expertise in RHS, the three distinct functions need clearer identity. These functions are: personnel administration, organization development and training, and industrial relations. Putting these three functions under one person may not do justice to them since there is a distinct identity of these three functions. Time has come that this differentiation is not only recognized but is built into the design of HRS. However, integration of these three functions is also necessary because they have inter-linkages and may require mutual support. This can be done, as we state in another principle, at a fairly high level. Such integration along with necessary differentiation would be necessary to make the function effective.
BALANCING SPECIALIZATION AND DIFFUSION OF THE FUNCTION: While HRS is a specialized function and should be treated as such in the organization, its special identity should not result in lack of involvement of line people in various aspects of HRS. Since action is the sole responsibility of line people, HRS should strengthen their role. This can be done by diffusing part of HRS amongst the line people. For example, simple personnel administration like sanctioning of leave, disciplinary action, dealing with conflict problems, etc. should be handled by the line people themselves. If necessary, they may have help from a personnel man. Without such diffusion, the personnel function may only be used for escaping the responsibility of administering personnel effectively. Certainly, specification of systematic practices would be necessary but this has to be supplemented by the participation of line people in some of the HRS activities.
ENSURING RESPONSIBILITY FOR THE FUNCTION: Unfortunately, in most companies, HRS does not have much credibility for several reasons. One main reason is that this function is at a very low level in the organization. Unless the HRS is introduced at a high level in the organization, its respectability will continue to be a very low. Moreover, unless a very senior person is in-charge of HRS, the insightful and creative leadership, which is required to make the function effective, may not be provided. For this reason, it is necessary that HRS be instituted at a very high level in the organization to increase both its visibility as well as its usefulness.
BALANCING LINKAGES WITHIN AND WITH OTHER FUNCTIONS: HRS should be designed to strengthen various functions which are important in the company. For example, it should have linkages with the budgetary and other information control systems. It should have linkages with long-range corporate planning, with marketing finance and production and other functions of the company. Such linkages are extremely important. On the other hand, linkages amongst the various sub-systems of HRD are also necessary.
BUILDING FEEDBACK AND REINFORCING MECHANISMS: The various sub-systems in HRS should provide feedback to strengthen one another. Systematic feedback loops should be designed for this purpose. For example, performance and potential appraisal should provide necessary leads for training in OD and OD programmes may provide necessary leads for work redesigning etc. A systematic plan of flow of one subsystem to the other should be properly prepared. Appendix 3.1 provides such a plan indicating how the process of feedback and linkage become a circular loop type.
BALANCING QUANTIFICATION AND QUALITATIVE DECISIONS: While quantification of various aspects in HRS is necessary, everything cannot be completely quantified. This applies as much to selection and recruitment as to performance and potential appraisal. Attempts should be made to continuously improve and quantify several variables and even to design computer storage of various kinds of data. But the qualitative and insightful decisions will always be necessary and desirable. For example, while promoting people, various quantitative data available and computerization of data may be useful. These may be used as necessary inputs, but some other factors which cannot be quantified will have to be taken into account while taking the decisions. Such a balancing is necessary.
BALANCING INTERNAL AND EXTERNAL HELP: HRS would require development of internal expertise and resources. However, the company should see the optimum pay-off in terms of employing their internal or external resources. Some highly rare expertise which may be available from external resources has to be used only occasionally in the organization. Thus may not be developed internally in the system. Such a balance is necessary. Similarly, the use of external resources in terms of training should be used minimally, but cannot be completely ruled out. A judicious planning for the use of both is necessary. A company which is completely closed to external resources and is doing everything internally may not be able to benefit from some of the latest developments in the field. On the other hand, a company which is merely relying on external help either in training or other aspects of HRS cannot develop itself effectively without necessary internal resources.
PLANNING EVOLUTION OF THE FUNCTION: HRS cannot be established overnight in a company. Some aspects can be introduced depending on the state and sophistication of the company. Some other aspects would require longer preparation before these are effectively introduced. Rushing the introduction of all the aspects of HRS may only result in ritualism rather than effective introduction of the system. Introduction of HRS, therefore, should be properly phased, and there should be enough thinking about how these phases will be completed and build one over the other.
CONTINUOUS REVIEW AND SELF RENEWAL: The environment and the organizational culture keep changing with time. However innovative a system may be, there is always a danger of it becoming ritualistic and dysfunctional after sometime. Therefore it is necessary to plan any system in such a way that it has mechanisms of self renewal. HRS should provide in it mechanisms for continuous review and change.