In the ever changing liberalized market scenario and a highly competitive market economy, human resource development (HRD) practices and organizational culture will provide an edge to organizations. This article attempts to understand the effect of HRD practices on organizational effectiveness.

The current economic situation today not only at the global level but also in the country demands changing workplace now to focus more on HRD practices to scale up their level of performance. HRD is an ongoing process whereby employees are constantly learning, unlearning, changing, adapting and reinventing themselves for organizational objectives and set out goals. HRD deals with creating the enabling environment that allows people to get the best out of themselves and perform optimally. People must build value-added HR practices and competencies that align with and help accomplish strategic organizational goals. HRD is believed to promote autonomy and organizational independence. The integration and globalization, not just of the economy, but also of technology, culture and governance brings different nations and people closer and the utilization of effective HRD will lead to high performance and productivity among them. The world has a huge population in the working age group and potential working population. Efficient use of HRD will facilitate a rise in the standard of living and organizational achievements.

HRD functionaries analyses the situation to determine realistic ways in which the management practices can be developed or modified to achieve the intended organizational goals. A market place has an unprecedented degree of flexibility. There will be cultural differences within any global organization. In order to reach common goals and values; HRD function can help the organization to function as a unified and successful entity. However, some people believe that organizations do not possess values, but key players in organizations does; that means individuals possesses values and at times the most powerful of them can influence the goals and policies of their organizations and mend in the direction that are consistent with their personal values. To achieve success they have to initiate, promote, device, and follow up HRD practices in the organization. HRD is now widely seen “as a system of frameworks, methods and processes aimed at systematically discovering, developing and using a person’s capabilities to the fullest extent both for individual and organizational growth.

Organizational effectiveness through HRD in the Changed Liberalized markets can be achieved through the following:

HR Competency Flexibility

HRD utilizes HR competency flexibility which refers to the possibility of varying the quality and quantity of employee attributes such as knowledge, skills and behaviors to changing environmental conditions. HR flexibility consists of three distinct dimensions, namely: flexibilities of skills, behaviors, and HR practices which indicates that internal flexibility HR practices are positively related to innovativeness.HRD has explored the construct of HR flexibility and its relationship with firm performance to improve organizational effectiveness. In a dynamic competitive environment, components of HR flexibility should be seen as strategic assets that provide long-term competitive advantage to organizations by developing the ability to flexibly achieve fit with constantly changing strategic needs for human resources. HRD also reveals that flexibilities of skills, behaviors and HR practices have both direct and indirect effects on firm-level HR outcomes as a structural mechanism in achieving superior organizational performance and achievements.

Continuous Performance Improvement

HRD brings about Continuous performance improvement (CI) which is a planned, organized and systematic process of ongoing, incremental and company-wide change of existing practices aimed at improving organizational performance. Studies have shown continuous improvement as a distinctive capability and a dynamic process which is a key element of competitiveness for organizational systems. Continuous Improvement (CI) helps to generate organization-wide process of focused and sustained incremental innovation such as improvement of products, processes, or services, reducing waste to improve workplace functionality, customer service and product performance. Therefore it is believed that there is a link between CI and continuous innovation.

Innovation Establishment

HRD helps to improve organizational effectiveness through Innovation establishment which is the establishment of new product, process, marketing method or organizational method which significantly improves business practices and workplace organization. This aspect utilizes multi-skill training which encourages the human flexibility bringing positive impact to the degree of openness and acquisition of new knowledge as well as new idea, which in turn, increases business performance.

Learning-oriented Culture

HRD effectiveness in an organization also brings about learning-oriented culture which is known as common beliefs, values and assumptions of organizational members on creating, acquiring, and transferring knowledge, and modifying its behavior to reflect new knowledge and insights. Studies showed that various skill training and development programs are known to be significantly associated with quality service and organizational growth. HRD reveals that training and development are perceived as necessary for organizational survival in a rapidly changing liberalized market which results into a strong positive impact on the performance of individuals, teams and the organizations as a whole. Organizational learning culture enhances the level of career/job, participative decision making and empowerment, leadership behaviors inspiring teamwork. Effective HRD has shown that learning-oriented culture has a positive direct impact on both aspects of non-financial performance but has an indirect effect on financial performance.So, due to globalization there is increase in competition as a result development of human resource has become essential in virtually every organization. However, organized HR practices are being adopted mostly by many small companies. In last the decade a lot of companies have not performed so well, this was because of lack of effective HRD department. But the scenario has changed as HRD departments have taken up their role to perform effectively and optimally. Various training programmes pertaining to training of workforce, company related topics have helped in enhancing the overall performance of these companies.

In order to get increased productivity from workforce it is essential to have a well framed HRD system in the organization. If the principles of HRD are adopted it could result in decrease in non-attendance by 20% and increase in productivity by 30%. So to cope up with the market competition HRD is very essential element for organizational growth.

Organizational effectiveness through HRD in the Changed Liberalized markets cannot be over emphasized because the HRD department is responsible for developing the feeling of motivation in the employees, this motivation in other words is the commitment of the employees towards the job and the organization. When the work of HRD is done effectively it would result into co-operation among team members, demolition of centralized system of decision making, creates homely environment, feeling of ownership and positive working atmosphere for the employer and employees.