Human Resource Development: Concepts, Assumptions and Values, HRD Mechanisms, the Action-Research Model, HRD Culture and Climate, HRD Interventions, HR Accounting and Audit, the Consultant–Client Relationship, Knowledge Management and HRIS

Leonard Nadler, who introduced the term at a conference in 1969 and in Developing Human Resources (1970), defined HRD as "organised learning experiences in a definite time period to increase the possibility of improving job performance and growth"; he distinguished training (learning for the present job), education (learning for a future job) and development (learning for growth not tied to a job). T. V. Rao defines HRD in the organisational context as a process by which employees are continuously helped to acquire capabilities for their present and expected roles, to develop their general capabilities and discover their inner potential, and to develop an organisational culture in which superior–subordinate relationships, teamwork and collaboration contribute to professional well-being, motivation and pride. HRD thus works at four levels: the individual, the role (dyad), the team and the organisation. At the national level HRD also means the development of a population's health, education and skills; the Ministry of Education was called the Ministry of Human Resource Development from 1985 to 2020.

• Assumptions: people are the most important resource and can be developed without limit; every employee has untapped potential; development is continuous and self-directed as well as organisation-led; a climate of trust and openness releases capability; the line manager is responsible for developing subordinates.
• Values (Udai Pareek's OCTAPACE): Openness, Confrontation (facing problems rather than avoiding them), Trust, Authenticity (congruence between what one feels and says), Proaction (initiative and anticipation), Autonomy, Collaboration and Experimentation.

Pareek and Rao designed HRD as an integrated system of mechanisms (sub-systems), each feeding the others. The mechanisms usually listed are: performance appraisal (with an emphasis on development rather than control), potential appraisal and promotion, feedback and performance coaching, career planning and development, training, organisation development, rewards (recognising and reinforcing competence), employee welfare and quality of work life, and human resource information. The outcomes they aim at are more competent people, more committed people, better teamwork, better problem-solving and greater organisational health, which in turn improve productivity, growth, profits, cost reduction and the organisation's image.

Action research, from Kurt Lewin (who used the term in 1946), is the method on which organisation development and most HRD interventions rest: research and action proceed together in a cycle, and the client system takes part in diagnosing its own problems. French and Bell set out its steps as: problem identification by a key executive; consultation with a behavioural-science expert; data gathering and preliminary diagnosis; feedback to the client group; joint diagnosis of the problem; joint action planning; action; and data gathering after action, which begins the next cycle. Lewin's three-step model of change — unfreezing, moving (changing) and refreezing — and his force-field analysis of driving and restraining forces belong to the same work.

HRD culture is the set of shared values, beliefs and norms that make development a way of life in the organisation; HRD climate is how employees perceive the developmental environment day to day. T. V. Rao and E. Abraham's HRD climate survey (1986), a 38-item questionnaire widely used in Indian enterprises, measures three dimensions: the general climate (top management's commitment to development and the importance it gives to people), OCTAPACE culture, and the implementation of HRD mechanisms. A developmental climate shows in managers who spend time on subordinates' growth, in feedback given without fear, in mistakes treated as learning, in promotion based on potential, and in training nominations made on need rather than favour.

Human resource accounting (HRA) is, in the definition of the American Accounting Association's committee (1973), "the process of identifying and measuring data about human resources and communicating this information to interested parties". Rensis Likert argued in The Human Organization (1967) that conventional accounts, by treating people only as expenses, reward managers who run down their human assets. The R. G. Barry Corporation of Columbus, Ohio, is credited with the first HRA system (1967–68), with Likert and R. Lee Brummet. The models divide into cost-based and value-based. Cost-based: the historical cost model (Brummet, Flamholtz and Pyle), which capitalises the costs of recruiting, selecting, training and developing an employee and amortises them; the replacement cost model (Eric Flamholtz), the cost of replacing an employee with an equivalent one; and the opportunity cost model (Hekimian and Jones, 1967), in which divisions bid for scarce employees. Value-based: the Lev and Schwartz model (1971), the present value of an employee's future earnings until retirement, discounted at the cost of capital; and Flamholtz's stochastic rewards valuation model. In India, Bharat Heavy Electricals Limited first reported the value of its human resources in 1973–74, using the Lev and Schwartz model, and several public enterprises and software firms followed; disclosure is voluntary and does not appear in the balance sheet as an asset.

HR audit is the systematic examination of HR policies, practices, systems and results against objectives, law and good practice. It covers the HR function (planning, staffing, training, appraisal, compensation, welfare, industrial relations), statutory compliance (registers, returns and payments under the labour laws), and outcomes (turnover, absenteeism, accidents, grievances, disputes, productivity and cost per employee). T. V. Rao's HRD audit examines four aspects: HRD strategies, competencies, systems, and culture. Approaches may compare with competitors (benchmarking), with an outside authority or standard, with statistical norms, with the law (compliance audit), or with the organisation's own objectives (management by objectives approach).

HRD and OD are usually carried out with the help of a consultant, internal or external, and the relationship with the client system decides success. Edgar Schein (Process Consultation, 1969) distinguished three models of helping: the purchase-of-expertise model (the client buys information or a service it has diagnosed itself), the doctor–patient model (the consultant diagnoses and prescribes), and process consultation, in which the consultant helps the client perceive, understand and act on the processes in its own environment, so that the client owns the diagnosis and builds its own capacity. The stages of a consulting relationship are entry and contracting (agreeing expectations, roles, confidentiality and fees), diagnosis and data collection, feedback, planning and implementing the intervention, evaluation, and termination or institutionalisation. The consultant must manage dependence, confidentiality and the question of who the client really is, the person who called him in or the whole system.

Knowledge management is the creation, capture, sharing and use of an organisation's knowledge. Michael Polanyi distinguished tacit knowledge (personal, experiential, hard to articulate: "we know more than we can tell") from explicit knowledge (codified in documents and systems). Ikujiro Nonaka and Hirotaka Takeuchi's SECI model (The Knowledge-Creating Company, 1995) describes four conversions: socialisation (tacit to tacit, through shared experience and apprenticeship), externalisation (tacit to explicit, through metaphor and dialogue), combination (explicit to explicit, through systems and documents) and internalisation (explicit to tacit, through learning by doing). Peter Senge's The Fifth Discipline (1990) described the learning organisation through five disciplines: personal mastery, mental models, shared vision, team learning and systems thinking, the fifth. A human resource information system (HRIS) is the integrated database and software through which HR data — personal records, attendance, payroll, leave, skills inventory, training, appraisal and statutory returns — are collected, stored, analysed and reported; it supports HR planning, compliance and analytics, and raises questions of data accuracy, privacy and security.