Human Resource Development

&
Planning

Tedwin Thomas
MBA HR
 Topics
HRD Challenge's in 21st Centaury.
HR outsourcing.
HR Audit.
HR Response Development.
HR Accounting.
Future of HRD Organization.
 HRD Challenges
Globalization:

The H.R department will need to create models and processes

for achieving global activeness, effectiveness and
competitiveness.
Managing the Value Chain for Business
Competitiveness
Innovation
Faster Decision Making
Price or Value Advantage
Effective linking with Suppliers
 HRD Challenges
Growth of the organization By increasing customer,
acquisition and mergers.

Building organizational capabilities

Reviewing existing capabilities
New capabilities
Aligning new capabilities with business strategies.
 HRD Challenges
Managing Change
Adopting some new H.R. Practices
Learning some New Skills and Attitudes
Unlearning some existing skills and Attitudes.
Attracting and Retaining Intellectual Capital
Attracting Talented People.
Retaining them.
Utilizing them suitably.
 HRD Challenges
Making Technology viable

Finding out ways and means to make technology successful.

Transforming the Organization

Creating fundamental and lasting changes.

 HR Outsourcing
Human resource outsourcing (HRO) occurs when a business
instructs an external supplier to take responsibility (and risk) for
HR functions and perform these tasks for the business. Payroll
outsourcing is commonly outsourced for two reasons: its a
time-consuming administrative task for employers, and there
are many specialist companies with the technology and
knowledge to run it efficiently and compliantly.
Some businesses will outsource their entire HR department
while others will just outsource time-consuming administrative
tasks, which allow their internal resource to focus on the
strategic level.
Some of the services provided by HR outsourcing firms are:

Recruiting, training, and development

Overseeing organizational structure and staffing requirements
Tracking department objectives, goals, and strategies
Employee orientation programs

Some of the well-known HR outsourcing companies are Viteb, PeopleStrong, Trinet etc.

HR outsourcing has become a popular solution for organizations to remain competitive

and cut costs. It also provides skilled professionals who are focused specifically on HR.
Advantages:A properly conducted audit helps in the following
To recognize strengths
To reveal problem areas
Confirms compliance with latest regulations
Ensures effective HR policies
Builds confidence in HR function
 Approaches to HR Audit
The following approaches are adopted for purpose of
evaluation:

Comparative approach
Outside authority approach
Statistical approach
Compliance approach
Management by objectives (MBO) approach
 Comparative Approach
In this, the auditors identify Competitor Company as the model. The
results of their organization are compared with that Company/ industry.

Outside Authority Approach

In this, the auditors use standards set by an outside consultant as
benchmark for comparison of own results.

Statistical Approach
In this, Statistical measures are performance is developed considering
the companys existing information
 Compliance Approach
In this, auditors review past actions to calculate whether those
activities comply with legal requirements and industry policies
and procedures.

Management By Objectives Approach

This approach creates specific goals, against which performance
can be measured, to arrive at final decision about organizations
actual performance with the set objectives.
 Human Response Development
or
Human Resource Development
Human Resource Development includes such opportunities as
employee training,employee career
development,performance managementand
development, coaching, mentoring, succession planning,
key employee identification, tuition assistance, and
organization development.
 HR Accounting
Human resource accountingis the process of identifying
and reportinginvestmentsmade in thehuman resourcesof an
organization that are presently unaccounted for in the
conventionalaccountingpractices. It is an extension of
standard accounting principles.
Human Resource Accounting means accounting for
people as the organisational resources. It is the measurement
of the cost and value of people to organisations. It involves
measuring costs incurred by private firms and public sectors
to recruit, select, hire, train and develop employees and judge
their economic value to the organisation.
 Definition :

Human resource accounting is the measurement of the

cost and value of the people for the organisation.

- Eric Flamholtz of university of California, Los

Angeles
 HR Accounting - India
As far as the statutory requirements go, the Companies Act, 1956 does
not demand furnishing of HRA related information in the financial
statements of the companies. The Institute of Chartered Accountants of
India too, has not been able to bring any definitive standard or
measurement in the reporting of human resources costs.
In India, some of these companies are : Infosys, Bharat Heavy Electricals
Ltd (BHEL); the Steel Authority of India Ltd. (SAIL), the Minerals and
Metals Trading Corporation of India Ltd. (MMTC), the Southern
Petrochemicals Industries Corporation of India (SPIC), the Associated
Cement Companies Ltd, Madras Refineries Ltd. , the Hindustan Zinc
Ltd. , Engineers India Ltd, the Oil and Natural Gas Commission, Oil India
Ltd., the Cement Corporation of India Ltd. etc.
 Objectives of HRA
Provide cost value information about acquiring, developing ,
allocating and maintaining HR.
Enable management to effectively monitor the use of HR.
Find whether human asset is appreciating or depreciating over a
period of time.
Assist in the development of effective management practices.
practices.
To motivate individual persons in the organization to increase their
worth by training .
HR by giving valuable information. Objectives Of HRA
 Uses of HRA
As a political tool, used to demonstrate mismanagement of
human resource.
As a pedagogical instrument for analysing and structuring .
As a decision making aid to ensure that decision on HR are
more rational from the management point of view.
 Methods of HR Valuation
1. Historical Cost Method:
Under this method, all actual costs incurred on recruitment,
training, familiarisation, etc., are capitalized.
(It suggests capitalizing the expenditure of the firm incurred on
recruitment and selection, training and development of the
employees and treats them as the assets of the organization for
the purpose of HR accounting.)
2. Replacement cost method :
replacement cost refers to the cost of replacing an existing
employee. In other words, replacing cost is the cost that would cost
to replace the existing human resources with human resources
capable of rendering equivalent services.
3. Opportunity Cost Method:
This method is used to value employees possessing certain skills and,
thus, is rare in availability. Managers willing to acquire such scarce
employees offer bid prices. One who finally acquires the scarce
employees puts the bid price as his investment in such employees.
4. Economic value method:
Under this method, human asset is valued on the basis of the
contribution they are likely to make to the organisation till their
retirement from the jobs. The payments made to them in the
form of pay, allowances, benefits, etc., are estimated and then
discounted appropriately to arrive at the present economic
value of the individuals.
 Future of HRD Organization
Introduction
2 decades this term became popular in india.
Mr. Pareek and Mr. Rao in 1975 outlined the new HRD
system.
HRD was initiated in India at Larsen & Toubro Limited
After L&T implemented it SBI implemented it and got the
results.