The Purpose of HRD

HRD is about the functioning of individuals in productive systems (Swanson and Holton, 2001) and its purpose is to focus on the success the human resource can bring to the organisation. There are some HRD practitioners who object to this characterisation of people as “capital” on the grounds that it is demeaning to the individual and devalues their intrinsic worth, (Holton & Yamkovenko 2008). But if the fundamental premise of human capital theory is not embraced at least as a foundation, then the whole purpose for HRD within organisational boundaries is flawed. Chan et al., (2004) point out that human capital is important but the main driver for sustained superior performance is a combination of human capital management capabilities and an appropriate culture. According to Chan et al., (2004) there are researchers who propose that human capital itself as a source of sustained competitive advantage by testing it against the Resource based theory (RBT) criteria. These researchers emphasise that employees at all levels form the resource pool for a firm’s competitive advantage. However other researchers

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have argued that the source of sustained advantage is the capacity to manage human capital.

Pilbeam and Corbridge, (2002) explain that the origins of the resource based theory (RBT) based model emerged out of business strategy literature, and has been influential in the initiation of developments in pay systems, training and development and other HR issues. The resource based theory (RBT) places unique bundles of assets (including ‘human assets’) at the heart of any organisation. It is an organisations access and use of these assets that provides the source of its competitive advantage in the marketplace. This resource based view of the firm according to Pilbeam and Corbridge, (2002) concentrates on its internal resources, strategy and business performance, where the contribution of a firm’s human resources is to promote competitive advantage through developing ‘human capital’ rather than just aligning human resources to the firm’s strategic goals. It is not just the behaviour of human resources that is the main focus but also the skills, knowledge, attitudes and competencies which they bring the firm. All of these factors promote sustained competitive advantage and corporate growth.

In strategy research it has been identified that many firms differ in their competitive superiority and profitability, the most recent strategy literature highlights the resource based theory (RBT) as a leading paradigm in explaining a firm’s competitive superiority, (Hyvonen & Tuominen, 2007). At the heart of this RBT theory is a firm’s heterogeneity, the idea that firms differ in their resource positions, and that such resource heterogeneity is a source of performance differences across firms. The resources are defined as those attributes of physical and knowledge-based assets and capabilities that enable a firm to conceive and implement strategies that lead to positional advantages and performance differentials.

It is possible of course to argue that HRD outside organisational boundaries may have other purposes, but within those boundaries HRD must embrace the notion that the purpose is to help organisations achieve its goals. For when organisations are the targeted performance system, the purpose of HRD might be to develop and unleash human expertise to improve the performance and sustainability of the organisation by enhancing the learning and performance capabilities of individuals, processes, and social subgroups within the organisation (Lynham & Cunningham 2004). However when nations are the targeted performance system, the purpose of HRD becomes to develop and unleash human expertise for national economic performance, political and

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social development, growth, and well-being by enabling and enhancing the learning and performance capabilities of individuals, family units, communities, other social groupings, organisations and the nation as a whole. Garavan et al., 2001; Mankin, 2001; and McGoldrick et al., 2002 have all pointed out that different approaches to understanding the nature of learning has led to increasing controversy about both the nature and purpose of HRD itself.

Garavan et al. (2004) suggests that the purpose of HRD at the community-societal level is concerned with the provision of education and the development of human capital toward improving national competitiveness and the quality of life of citizens. Human capital is created by changing individuals and this change is defined by providing them with knowledge and skills necessary to act in new ways (Garavan et al. 2004). Such change is usually implemented by HRD because the purpose of HRD is to develop and unleash human expertise through training and development and organisational development to improve performance (Swanson & Holton, 2001). Furthermore Holton & Yamkovenko (2008) point out that training and development aims at increasing the knowledge of an individual and organisational development aims at improving organisational leaning. Therefore, HRD has a specific and distinct task of increasing human capital in organisations and a more general task of increasing the intellectual capital of the firm. In other instances HRD interventions may be aimed at improving commitment and loyalty of the organisational members, specifying purpose and mission of an organisation and instilling a sense of shared vision, improving climate, and developing distinct organisational culture.