HRD practices & managerial effectiveness: role of organisation culture.

Singh, Anil Kumar

This paper presents a study in the light of liberalized Indian economy that has led to a competitive environment. In a changing scenario and a highly competitive market economy human resource practices and organizational culture will provide edge to organizations. The study attempts to understand the effect of HRD practices and organisation culture on managerial effectiveness. The sample consisted of 214 managers from public and private sector organizations. The results revealed that the HRD practices and organisational culture were strong predictors of managerial effectiveness both in private sector and public sector organizations.

Introduction

The changing economic scenario not only at the global level but also in the country demands changing workplace now to focus more on HR practices to expend the scope of their practices. HRD is an ongoing process whereby employees are constantly learning, unlearning, changing, adapting and reinventing themselves for organizational objectives. HRD deals with creating conditions that enable people to get the best out of themselves. They must build value-added HR practices and competencies that align with and help accomplish strategic goals (Ulrich & Brockbank 2005). Central to HRD as currently propounded is the notion of organisational independence and autonomy (Brewster & Bournois 1991). The integration and globalisation, not just of the economy, but also of technology, culture and governance bring different nations and people closer. India has a huge population in the working age group and potential working population. Efficient use of this resource base should facilitate a rise in the standard of living from the current low levels.

HRD functionaries will have to analyse the situation to determine realistic ways in which the management practices can be developed or modified to achieve the intended goals as stated above. A market place is one with an unprecedented degree of flexibility. There will be cultural differences within any global organisation. By stressing common goals and values, however, HR function can help the corporation to function as a unified and successful entity. Pareek (1997) felt that organisations do not possess values, but key players in organisations, as individual human being possesses values and at times the most powerful of these people can influence the goals and policies of their organisations and mend in the direction that are consistent with their own values (Roketech 1979). To achieve success they have to initiate, promote, device, and follow up HR practices in the organisation. HRD is now widely understood "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 and well-being (Rao 1988).

Bursk (1955) has used the term managerial effectiveness to include more than the achievement of a profitable record, though it is a primary obligation. It needs more than individual brilliance and personal ability to perceive and solve problems. The role of a manager is central to the organisation, linked with other roles and with effectiveness. Managerial effectiveness is in part the ability to strike continual balances among responsibilities to oneself, one's company, associates, industry and the community.

Reddin (1970) views that managerial effectiveness seldom is obtained by achieving a single objective, no matter how broadly it is written. Profit, for instance, may have been obtained at the risk of losing customers or by sacrificing human resources. Effectiveness is multi dimensional. Milton (1981) has suggested that concern for managerial effectiveness begins with recruitment and selection, i.e., to find the right person for the right job. Performance in organizational settings is a function of at least three variables. They are motivation level, role perceptions and persistence of behaviour.

Organization Culture

In the context of organization culture, it should be noted that the assumed direction of the relationship between culture and managerial effectiveness is not unquestioned. Schein (1985), for instance, has argued that certain values and norms develop from or are strengthened through successes of work groups within the firm. He points out, referring to the literature on group formation, that the effectiveness of actions taken by employees shapes their values and norms, which become elements of corporate culture. This implies that the performance of a firm influences its organisation culture, or, in fact that the relationship between organisation culture and managerial effectiveness is recursive instead of linear.

England (1967) found a general value pattern characteristics of American manages, quite stable over a period of six years. In a further research of company managers from the U.S., Japan, Australia, Korea and India, England and Lee (1974) found differences and similarities in the value system of managers in different countries. The differences were attributed primarily to societal differences whereas similarities suggest underlying cultural values common to managers. England (1975) interpreted similarities across countries due to similar level of industrialization, and also to the exploration of culture and technology. Tripathi (1988) found that the optimal linkage can be achieved by enhancing embeddedness and openness particularly in the case of Indian organizations. It is equally important that we examine this linkage from a competing value perspective. There is need to provide consistency between the structural characteristics of an organization and the features of socialcultural environment. According to guiding theory of Danison's (1990) empirical studies a highly adaptable, a high-involvement organization with a clear mission and widely shared organizational values (consistency) will be most effective. Siehl and Martin (1990) elaborate this view and also suggest that culture may serve as a filter for factors that influence the effectiveness of the organization.

HRD & Managerial Effectiveness

HRD in practice involves an organization's acquisition, development and utilisation of employees, as well as relationship to an organization and its performance (Ferris et. el. 1995). In the USA, the opposing models of HR, hard and soft models of HR are the Michigan Model (Fombrun et. al. 1984) emphasising its utilitarian/instrumental functions in achievement of managerial objectives and the Harvard Model (Beer et. al. 1985), which stresses the developmental aspects of HR. Related research arguments made are that a firm's current and potential human resources are important considerations in the development and execution of its strategic business plan. This literature, although largely conceptual, concludes that human resource development practices can help to create a source of sustained competitive advantage, especially when they are aligned with a firm's competitive strategy (Begin 1991, Butler et. al. 1991). Ichniowski (1990) concluded that the use of progressive HR practices were associated with both high productivity and high financial performance. Albert (1990) found the role of HR practices in influencing the company profits. The results indicate a strong possibility of HR practices leading to a higher financial performance, though a direct relationship between the two could not be established. In contrast to Ichniowski (1990) study, Huslied (1995) had a much larger sample of firms and found a positive statistically significant relationship between HR sophistication and performance of the firm. Hitt et al. (2001) examined the direct and moderating effects of human capital on professional service firm performance.

Objectives of the Study

This study examines the impact of HRD practices represented by planning, recruitment, selection, performance evaluation, training and development, career management and rewards and organisation culture represented by self realisation, status enhancement, sulphitic values and socio economic support on managerial effectiveness in public sector and private sector organisations in India. This study was undertaken with a view to identify the intervening process that connects HRD practices in the organization with managerial effectiveness. This study is an attempt to conceptualise an integrated HRD--ME Model with intervening variable of organisation culture.

Organizations under Study

Organization A was set up primarily to meet the needs of the power sector in the country. It was incorporated in 1975 and is India's largest and the world's sixth largest power generating company.

Organization B has global recognition as the Indian 'Navratna'. It is the largest power generation company in India. This organization is amongst Forbes Global 500 Companies in the world. This organisation is one of the largest public enterprises in India and has well established HRM practices right from its inception.

Organization C is India's largest private sector enterprise in the area of electrical engineering. The company has strong highly skilled dedicated technicians, engineers and managers. In its endeavour to achieve excellence in the quality of its products and services, the focus has been on the customers to remain unwavering. The organization believes that employees are its valuable resource.

Organization D has transferred from ordinary textile mill into a multi-product, multi-location conglomerate. The way of life in the organization has created an organisational culture, which has led to effective utilisation of human resources.

Sample & Data Collection

The sample consisted of 214 participants working in the above four organizations--two belonging to the public sector and two belonging to the private sector. There were 119 respondents from the public sector organizations (68 from A and 51 from B) and 95 from the private sector organizations (41 from C and 54 from D).

The sample consisted of executives from entry to top positions (Vice-President). The data collected personally by the researcher and also by mail using, nonprobability incidental sampling with an assurance that information obtained would be kept confidential. The sample size was obtained on all the management levels, but most respondents were from middle level management, on the assumption that they possess accurate and comprehensive perception of HRD practices employed. The sample includes all departments.

The questionnaire consists of 121 items, which were over: (1) HRD practices questionnaire consisting of 69 items developed by Judith R Gorden (1986), standardised and split half reliability calculated to be 0.81, (2) Organization Culture developed by Super and Neivell (1986) and used by J. B. P. Sinha (1987) consisting of 21 items, and (3) Managerial effectiveness scale developed by Phil R. Harris (1988) consisting of 13 items.

The Model

The model implies that moderation or interaction could be said to exist if returns from one practice (e.g. HRDP) varied across the other practice (e.g. Organisation culture) at all levels. This means that Managerial effectiveness is jointly determined by the interaction of the predictor (e.g. HRDP) and moderator (e.g. Organisation culture) variables. The presence of interaction is established if the cross product coefficient differs significantly from zero.

Specifying the above function in a linear form, we have

ME = [alpha] + [beta] HRDP + [gamma]OC + [[member of].sub.t]. (1)

Where [alpha] is the intercept coefficient and [beta] and [gamma] are slope coefficients and [[member of].sub.t] [[member of].sub.t] is the error term.

The variable HRDP has been defined and measured in terms of: planning (PL), selection (SL), recruitment (RC), performance evaluation (PE), training and development (TD), career management (CM), rewards (RW) i.e.

ME= f (PL, RC, SL, PE, TD, CM, RW). (2)

The variable Organization culture (OC) depends on others such as self-realisation (SR), status enhancement (SE), sulphitic values (SV), socio economic support (SES) i.e.

OC = f (SR, SE, SV, SES). (3)

Equation 1 explains the normative additive model when two factors were entered together into the equation. In these equations, a regression coefficient estimates the effects of the independent variable (factor) on the dependent variable, across the levels of the other independent variable(s). It means that b reflects the trends of change in ME (Managerial effectiveness) with changes in HRDP at each level of OC (Organisation culture), and g reflected the trends of change in ME with changes in OC at each level of HRDP. The above single equation models have been estimated both in case of private and public sector organizations.

Results & Discussion

The independent variables (HRD practices and Organisation culture) account for more than 65% of variance both in private and public sector organizations, where managerial effectiveness is a dependent variable. In largely theoretical literature and conventional wisdom among human resource professionals there is growing consensus that HRD policies and practices provide a significant contribution to managerial effectiveness. This study provides broad evidence in support of these assertions. The present study was conceived around the framework that HRD practices shape the pattern of interactions between and among the managers and employees. Further, organizations generally organise human resource practices that are consistent with their organisation culture, together they affect managerial effectiveness (Osteman 1987, Block et. al. 1987).

Career management and self-realisation were found to be most significant predictors of managerial effectiveness, both in public and private sector organizations. Career management was found to be the most significant predictor of managerial effectiveness in private sector. It has a direct bearing on Managerial effectiveness. The organizations are working for Career management so as to reduce the attrition rate in the organisations. Organizations were finding themselves in worldwide competition and most individuals are striving for achievement, recognition, growth, and good quality of life. Unless careers are managed effectively by both individuals and organizations, neither can achieve their goals.

Career management also takes into consideration individual development, transfer and promotion. Career paths based on job analysis of employee behaviours provide a documented, and strong reference point for individual career planning and development activities (Ledvinka 1975).

Managers across organizations (private and public) strongly endorsed self-realisation (one of the variables of culture), as one of the most significant predictors of managerial effectiveness. While organizations find themselves in worldwide competition, most of the individuals are striving for achievement, ability utilisation, advancement, aesthetics, personal development, and peace of mind. Realisation or anticipation of realisation of the values has resulted in better performance. Sinha (1988) felt that these values held highest expectations by the managers of different organizations in India. Self-realisation encouraged people to satisfy their achievement needs in the work situation.

Self-realisation can be used to manage the motivation of employees. Managerial effectiveness can be increased by increased self-realisation that satisfies individual needs while channeling their behaviour toward organisational goals both in private and public sectors. Such a finding provides support that market economies have the inevitable consequences of rendering organisations competitive.

Training and development was found to be a significant predictor of managerial effectiveness in public sector organizations. The core competence of any organization is the collective learning of all its people. In view of the importance of training and development, the public sector organizations are spending lot of money to encourage training. The executive training program, in which organizations systematically attempt to develop the skills of their top managers, either by bringing in outside experts to train them in-house, or by sending to specialized programs, conducted by various institutions (0"Reilly 1993). Such programs make effective managers in rapidly changing business environment and organizational change.

Managers' learning will need to know how to share information, through formal consultation or communication networks. In the knowledge economy the learning organization alone will survive. The ability of organisation to learn, create, codify and utilize knowledge faster than its rival increases managerial effectiveness. Managers are oriented towards learning and considered to be one of the key competences for managerial effectiveness. Training and development is a strong predictor of managerial effectiveness, global market not only will reward learning handsomely, it will severely punish the lack of learning (Scriven 1991, Wind & Main 1998).

Socio economic support was found to be a significant predictor of managerial effectiveness in public sector. Socio economic support consists of social relationships and interactions, comforts, dependency, good working conditions and economic gains. Managers were indifferent and did not care much for social interactions and relationships. These findings supported a truism towards the mindset ingrained in the employees of public sector. Whereas, Indian managers held the significant value expectations for economic gains, good working conditions and comforts (Sinha 1990), Japan's social norm requires its people to work hard. Japanese people have a sense of crisis over "how to survive" and it has prompted them to work hard to overcome the crises (Misumi 1983). 'Cooperation within and competition between' is the essence of the Japanese miracle. Socio economic support is important for respondents of public sector organizations to overcome the crisis of survival. The respondents in public sector organisations are working in an environment of socio economic support. It has its relevance due to the fact that Indian society in particular and developing societies in general are ridden with insecurities along with lack of resources, and people generally have a history of failures (Sinha 1990).

Status enhancement factor of perceived Organization culture is a strong predictor of managerial effectiveness in private sector organizations. The values loaded were authority, prestige, altruism and physical activities. The desire for authority, altruism, prestige and physical activities have a positive impact on performance of managers. Managers develop the attitude towards their work and contribute significantly to managerial effectiveness. The status enhancement and socio economic support are extrinsic values (variables of Organisation culture), and are having significant importance in the Indian environment.

Self-realisation and Status-enhancement were the most valued factors in India. The struggle for survival is where everyone is trying to get optimum results. When one moves higher in the hierarchical ladder in an organization the individualistic orientation becomes stronger. Status consciousness is one of the main Indian values, which make them to work and strive for Managerial effectiveness (Sinha 1982). The organizations encourage and recognize innovation, creativity and achievement. The managers working in middle and higher levels of the organizations need values of ability utilization, achievement and personal development (Padaki 1988, Sinha & Sinha 1994).

Similarly HR Planning was found to be a significant predictor of Managerial effectiveness in private sector organizations. An effective planning process is essential to optimising the organization's human resources. An effective HR Planning system is essential for an organization to be proactive, because such information allowed managers to make decisions that ensure optimum performance. Hambrick et al. (1989) discussed the recommendations from top executives around the world on how HR policy should change in order to meet the challenges of the 21st Century. Managers in Indian organisations can face a transition phase through HR Planning practices. The policy recommendations of these CEOs include HR Planning as an intrinsic part of corporate strategy, making the HR executive a member of top management team and ensuring the utility of the corporation by choosing leaders and managers who internalise corporate culture, values and goals. The corporations will find themselves in a global market place of hyper competition and increased change. Private sector can compete with organizations only through planning and managing the people in the organization more effectively. Lansbury (1988) claimed that "as organizations become more technically complex and capital intensive, the greater was their dependence upon right kinds of human resources". Private sector organizations are witnessing vast changes in the business environment and in the nature of work itself. To be effective, careful attention needs to be paid to a thorough understanding of the behavioural requirements of jobs and to the determination of human resource needs. HR Planning information is important so that firms can institute action plans to cope with projected HR needs in the future. Private sector organizations are far more concerned with efficient human resource utilisation and effective managerial performance (Formham 1993). The reasons are quite obvious as they tend to make maximum utilisation of all the resources to acquire competitive edge.

Training and development, self-realisation, career management and socio economic support were strong predictors of Managerial effectiveness in the public sector where as career management, self-realisation, planning and status enhancement were predictors of Managerial effectiveness in private sector. Career management and self-realisation were predictors of Managerial effectiveness in both private as well as in public sector organisations. Self-realisation, status enhancement and socio economic support (variables of Organization culture) along with HRD Practices were predictors of Managerial effectiveness.

The link between Organisation culture and Managerial effectiveness has increased substantially due to congruent human resource perspective, which has long advocated the development of effective methods of planning, recruiting, selecting, evaluating, training, career management and rewards managers to enhance Managerial effectiveness. This study clearly indicates that HRD practices along with organisation culture play a significant role and do affect the Managerial effectiveness of the organisation. Thus, the available body of knowledge on the subject has amply demonstrated the impact of HRD Practices and Organisation culture on Managerial effectiveness.

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Anil Kumar Singh is Associate Professor, Sri Aurobindo College (E.), University of Delhi, New Delhi 11017. E-mail: dranil.singh@gmail.com

Table 1: Predicting Managerial Effectiveness for Public Sector
(n=119)

Dependent Variable: Managerial effectiveness

S.no.       Variables       [R.sup.2]   [DELTA][R.sup.2]

1.         Training &
           Development        .43            .00
2.      Self Realisation      .56            .13
3.      Career Management     .60            .04
4.       Socio Economic
             Support          .65            .05

S.no.       Variables       [bar.[R.sup.2]]     F     b *    Beta *

1.         Training &
           Development           .42          87.84   .62    .47
2.      Self Realisation         .56          74.47   .33    .21
3.      Career Management        .59          58.63   .34    .29
4.       Socio Economic
             Support             .64          52.27   .59    .24

P < .01 * as shown in the last equation
ME = -6.18 + 0.62 TD +0.33 SR + 0.35 CM +0.59 SES
t-value = (-1.73,)(6.45) (3.04) (4.39) (3.71)
[bar.[R.sup.2]] = .64 F= 52.27 p < .O1

Table 2: Predicting Managerial Effectiveness for Private
Sector (n=95)

Dependent Variable: Managerial effectiveness

S.no.       Variables       [R.sup.2]   [DELTA][R.sup.2]

1.      Career management     .49            .00
2.      Self Realization      .60            .11
3.          Planning          .64            .04
4.      Status Enhancement    .68            .04

S.no.       Variables       [bar.[R.sup.2]]     F     b *    Beta *

1.      Career management        .48          88.56   .29    .19
2.      Self Realization         .59          68.52   .62    .32
3.          Planning             .63          54.95   .42    .31
4.      Status Enhancement       .67          48.52   .70    .25

P < .01 * as shown in the last equation
ME = 0.499+ 0.29 CM + 0.62 SR + 0.42 PL + 0.7 SE
t-value (0.16) (2.08) (3.85) (4) (3.3)
[bar.[R.sup.2]] = .67 F = 48.52 p < .001