ROLE OF HRD CLIMATE IN ORGANIZATIONAL EFFECTIVENESS IN INDIAN ORGANIZATION

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1 Role of HRD Climate in Organizational Effectiveness in Indian Organization GJBM ISSN: Vol. 8 No. 2, December 2014 ROLE OF HRD CLIMATE IN ORGANIZATIONAL EFFECTIVENESS IN INDIAN ORGANIZATION Anshul Jaiswal* and A.P. Singh** ABSTRACT The present paper aims to explore the extent of HRD Climate and Team empowerment prevalent in organizations. Most researchers showed that HRD Climate is extremely important for the ultimate achievement of the business goals. HRD believes that individuals in an organization have unlimited potential for growth and development and that their potential can be developed and multiplied through appropriate and systematic efforts. The contribution of HRD Climate of any organization plays a great role for achievement of organizational goals. This paper is conducted on 200 Indian managers both from public and private sectors to assess the role of HRD climate and team empowerment in organizational effectiveness. Keywords: HRD Climate, Organizational effectiveness, General Climate, OCTAPACE Culture; HRD Mechanism. INTRODUCTION Organizational effectiveness is one of the most complex and least tackled problems in the study of social organizations. Many difficulties arise with attempts to define the concept of effectiveness adequately. Organizational effectiveness is the concept of how effective an organization is in achieving the outcomes the organization intends to produce. The idea of organizational effectiveness is especially important for non-profit organizations as most people who donate money to non-profit organizations and charities are interested in knowing whether the organization is effective in accomplishing its goals. The Organizational researches in the last fifty years have attempted to clarify the meaning involved in the concept of effectiveness. Organizational effectiveness has always measured how successfully organizations achieve their missions through their core strategies. Organizational effectiveness studies are concerned with the unique capabilities that organizations develop to assure that success. * Anshul Jaiswal, Assistant Professor, Department of Psychology, A.M.P.G. College, Banaras Hindu University. anshul.jaiswal.bhu@gmail.com ** A. P. Singh, Professor, Department of Psychology, Banaras Hindu University. apsbhu@gmail.com Global Journal of Business Management

2 126 Anshul Jaiswal and A.P. Singh Thorndike (1949) first noted a general trend among organizational researchers to measure effectiveness in terms of the attainment of some ultimate criterion ; such as productivity, net profit, mission accomplishment, or organizational growth and stability. Campbell s (1973) review of various effectiveness measures identified 19 different variables that have been used in the research literature. The most widely used of these univariate measures are: (1) overall performance, measured by employee or supervisory ratings; (2) productivity, measured typically with actual output data; (3) employee satisfaction, measured by self-report questionnaires; (4) profit, or rate of return, based on accounting data; Organizational Effectiveness and (5) withdrawal, based on archival turnover and absenteeism data. The earlier models of effectiveness were largely univariate, using only one measure of organizational success. The dynamic relationships between individual behaviour and organizational effectiveness have been largely ignored. This omission may help to explain the inability to achieve convergence across various measures of effectiveness (Katz and Kahn, 1966). The more sophisticated models are multivariate, attempting to measure effectiveness in terms of the sum of a set of relevant criteria. Georgopoulos and Tannenbaum (1957), in an early model, viewed effectiveness within a systems framework and concluded that the idea of effectiveness could best be understood jointly in terms of productivity, flexibility, and the absence of intra organizational strain. HUMAN RESOURCE DEVELOPMENT CLIMATE HRD believes that individuals in an organization have unlimited potential for growth and development and that their potential can be developed and multiplied through appropriate and systematic efforts. Human Resource Development may be defined as a continuous process to ensure the development of employee competencies, dynamism, motivation and effectiveness in a systematic and planned way. It has been defined as essentially consisting of three Cs: Competencies, Commitment and Culture. Without competencies organization may not be the cost effective or optimally efficient (Rao, 1986). Without commitment, these may not overcome at all or are done at such a slow pace that they lose their relevance. Without a culture an organization cannot run for long. Organizations need to be dynamic and growth oriented to sustain in the competitive environment. This is possible only through the competence of human resource. To cope with the fast changing environment, organizations need to review their HRD approaches continuously. HRD is neither a concept nor a tool, but is an approach using different personnel system, depending upon the needs and priorities of the organization. The basic postulation is the belief in human potential and its development by providing a suitable and congenial environment (Srimannarayana, 2007). HRD climate is characterized by the tendencies such as treating employees as the most important resources, perceiving that developing employees is the job of every manager, believing in the capability of employees, communicating openly, encouraging risk taking and experimentation, making efforts to help employees recognize their strengths and weaknesses, creating a general climate of trust, collaboration and autonomy, supportive personnel policies, and supportive HRD practices. An optimal level of development climate is essential for facilitating HRD activities (Rao & Abraham 1986). The elements of HRD Climate can be grouped into three broad categories: General Climate, OCTAPACE culture, and HRD mechanism. The general climate deals with perceptions that Vol. 8, No. 2, December 2014

3 Role of HRD Climate in Organizational Effectiveness in Indian Organization 127 organizations members share the fundamental elements of their organizations. The OCTAPACE deals with the extent of Openness, Confrontation, Trust, Authenticity, Proactivity, Autonomy, Collaboration and Experimentation (Tabasum, 2007), while the HRD mechanism deals with performance appraisal, potential development, training, reward management, counselling, career planning (Purang, 2008). In brief, HRD is the process of improving, moulding and changing the skills, knowledge, creative ability, aptitude, attitude, values and commitment etc. based on present and future job and organizational requirements. A healthy HRD Climate certainly bolsters the overall internal environment of the organization, fosters employee commitment, involvement and satisfaction with the job. HRD Climate is a measure of the perceptions of the knowledge workers about the prevailing nature of HRD. RESEARCH METHODOLOGY Objective 1. To explore the relationship between HRD Climate and Organizational Effectiveness. Hypothesis 1. HRD Climate would be positively and significantly related to perceived organizational effectiveness Methodology The present study was carried on 200 first level managerial personnel from different private and public sector organizations in India. Measures The following tools were used in this study. (a) HRD Climate Survey: The scale is developed by the centre at XAVIER Labour Relation Institute (XLRI, India) in The questionnaire consists of 38 items for General climate, OCTAPACE culture and HRD mechanism. The reliability of this scale is.85 (b) Organizational Effectiveness: This scale is developed by Singh & Jaiswal (2010). This scale consists of 19 items. The cronbach s alpha of the scale is.91 RESULT The following result shows the bivariate correlation examining the direction and strength of various dimensions of Organizational Effectiveness (Innovation, Interpersonal relationship, Job satisfaction and commitment) and the dimensions of HRD Climate (General Climate, OCTAPACE Culture and HRD Mechanism). The results of correlation coefficient reported in Table 1 show that all the dimensions of organizational Effectiveness (Innovation, Interpersonal relationship, Job satisfaction and commitment) and overall Organizational Effectiveness were positively and significantly correlated with all the dimensions of HRD Climate (General Climate, OCTAPACE Culture and HRD Mechanism) and with overall HRD Climate (p<0.01). This indicates very high correlation between these two variables. Global Journal of Business Management

4 128 Anshul Jaiswal and A.P. Singh Table 1: Summary of the correlation analysis between predictors and OE (N=200) Innovation Interpersonal Job Commitment OE Total Relationship Satisfaction General Climate.569**.570**.570**.322**.655** OCTAPACE Culture.588**.628**.596**.197**.675** HRD Mechanism.583**.568**.474**.249**.623** HRD Total.611**.623**.583**.267**.688** *P<.05 (two tailed) **P<.01 (two tailed) Summary of the Multiple Regression Analysis (Step-wise) for HRD Climate as predictors and Organizational Effectiveness as criterion variable Table 2: HRD Climate as predictors and Organizational Effectiveness as criterion variable Model Predictor R R 2 Adj. R F p variables significance square 1 OCTAPACE GC a. Predictors: (Constant), OCTAPACE b. Predictors: (Constant), OCTAPACE, GC The result of stepwise multiple regression analysis show that OCTAPACE culture is contributing 45.5% variance in explaining Organizational Effectiveness and General Climate is contributing 2.4% variance in explaining Organizational Effectiveness. Category wise analysis leads to the conclusion that OCTAPACE culture has been more prevalent than HRD mechanisms and general climate in explaining the variance in Organizational Effectiveness DISCUSSION The objectives of the present study were to explore the relationship between Organizational Effectiveness and HRD Climate. The hypothesis made earlier to this study was that there would be a positive relationship between Organizational Effectiveness and Human Resource Development Climate and the results shown above indicate that the hypothesis is accepted here. Results of correlational analysis specify that all the dimensions of Organizational Effectiveness are significantly positively correlated with all dimensions of Human Resource Development Climate (Table 1.) The relationship of HRD Climate with organizational level outcomes has gained importance as a research issue. A study showed a significant and positive relationship between HRD Climate, organizational effectiveness and productivity Agarawala (2006). Research shows that HRD climate affects the performance of an organization. Priyadarshini and Venkatapathy (2002) in their study found that the HRD practices in banks have a strong influence on their performance and that top performing banks have a higher degree of innovative HRD practices in their organizations. HRD climate affects the performance of individuals and organizations following higher satisfaction level achieved by its members on job related issues Ahuja (2002). Mufeed (2006) found positive relationship between HRD climate and job satisfaction and attitude towards work and role efficacy, which again shows that HRD climate, has a definite impact on these Vol. 8, No. 2, December 2014

5 Role of HRD Climate in Organizational Effectiveness in Indian Organization 129 factors. Mishra & Dhar (1999) conducted a study and found that HRD climate contributes to overall organizational development, increased employee commitment, added satisfaction level with their job. Rohmetra (1998) found that there exists a positive relationship between HRD Climate and the level of satisfaction of the employees. HRD Climate had a positive association with job satisfaction Kumar & Patnaik (2002). Job satisfaction is found as a resultant of HRD Climate Krishnaveni, (2006). Jain, Singhal, and Singh (1997) also conducted a similar study on two PSEs to assess whether their developmental climate was conducive to employee development. Both the PSEs were found to have satisfactory levels of HRD climate. Pillai (2008) found that the dimensions of HRD Climate were positively related to organizational commitment. There are many studies which show that HRD has got direct linkages to productivity and organizational effectiveness. HRD Climate is a significant predictor of Organizational commitment (Saxena, 2006). Ultimately, it is suggested that the organizations may introduce fair employee welfare programmes and reward systems to improve employee satisfaction levels and subsequently to gain advantage from the satisfied workers to increase productivity. Thus, it can be said that HRD Climate of an Organization is a key element in organizational effectiveness. REFERENCES Agarwala, T. (2006). Innovative human resource practices and HRD climate: A comparison of automobile and IT industries. Human Resource Development in Asia, Pareek, Osman-Gani, Ramnarayan & Rao. T.V. (Eds), New Delhi: Oxford & IBH; Ahuja S. (2002). Creating corporate advantage through HRD. Vision: the Journal of Business Perspective, 6(1), Campbell, J.P., Bownas, E. A., Peterson, N.G. and Dunnette, M. D. (1974). The Measurement of Organizational Effectiveness: A Review of Relevant Research and Opinion, Personal Decisions, Minneapolis. Georgepolous, P. S. and Tannenbaum, A. S. (1975) The study of Organizational Effectiveness, American Sociological Review, 22, Jain, V.K., Singhal, K.C and Singh, U.C. (1997) HRD Climate in Indian Industry, Productivity, 37, Krishnaveni, R., (2009). Human Resource Development A Researcher s Perspective, Excel Books. Kumar, S. and Patnaik, S.P. (2002). Human resource development climate and attributes of teachers in JNvs, Indian Society for Training and Development. 32(2), Mishra, P. and Bhardwaj, G. (2002). Human resource development climate: An empirical study among private sector managers Indian Journal of Industrial Relations, 38, Mishra, P, D. and Dhar, U. (1999). Job Satisfaction as a Correlate of HRD Climate: An Empirical Study, International Journal of Training & Development, 29 (2). Mufeed, S.A. and Gurkool, F.A. (2006). Enhancing educational institutions effectiveness through HRD climate: An Empirical Assessment. Management & Change, 10, Narayan, S. and Rangnekar, S.(2008). An empirical study of organizational climate, HRD climate and job involvement as predictors of managerial effectiveness. Indian Journals, 36, Pillai P.R. (2008). Influence of HRD climate on the learning orientation of bank employees. Indian Journal of Industrial Relations, 43(3), Prakash, R.P. (2008). Influence of HRD climate on the learning orientation of bank employees. Indian Journal of Industrial Relations, 43, Purang, P. (2008). Dimensions of HRD climate enhancing organizational commitment in Indian organizations. Indian Journal of Industrial Relations, 43, Global Journal of Business Management

6 130 Anshul Jaiswal and A.P. Singh Rani Geetha Priyadarshini R and VenkatapathyR.( 2002). Extent of HRD Practices in the Banking Industry. Journal of Social and Management Sciences, 31(1), Rao, T.V. and Abraham, E., (1986). Human resource development climate in Indian organizations. In, T.V.Rao & D.F.Pereira (eds.), Recent experiences in human resource development, Oxford & IBM, N.Delhi. Rao, T.V. (1987). Planning for human resources development. Vikalpa, 12, Rao, T.V., (1986). Integrated human resource development system. Recent Experiences in Human Resource Development. (Ed.) Oxford and IBH Publishing Co., New Delhi, 3-19 & Rao, T.V., (1999). HRD Audit: Evaluating the human resource function for business improvement. Response Books: A Division of Sage Publications, New Delhi, 17-19; 34-35; Rohmetra, Neelu (1998). Towards Creating a Learning Organization: HRD Climate Focus. PARADIGM, 2(1): Saxena, S. (2006). Human resource development climate in Indian IT companies. The Icfaian Journal of Management Research, 5, Srimannarayana, M. (2007).Human resource development climate in Dubai organizations. Indian Journal of Industrial Relations, 43, Srimannarayana,M. (2008). Human resources development climate in India. Indian Journal of Industrial Relations, 44, Tabasum, F. (2007). Profiling the OCTAPACE culture: An empirical study of banking and IT sectors of India. The Icfaian Journal of Management Research. 6, Thorndike, R. L. (1949) personnel selection, Test and Measurement Techniques, , John Wiley, New York. Tilaye, K. (2005). Level of organizational commitment: Its correlates and predictors. Indian Journal of Industrial Relations, 41, Tripathi, P.C. (2005). Personnel Management and Industrial Relations. (Ed. 12th) sultan chand & Sons, New Delhi, pp Venkateswaran, K.P.S., (1997). A Note on HRD climate. Vikalpa, 22 (1), Vol. 8, No. 2, December 2014