CHAPTER ONE

INTRODUCTION

1.1   Background of the Study

        Human Resources Investment also known as Human Resource Development is one of the key functions of an organization. It is the framework for the expansion of human resource talent within the organization (Azhar and Batool, 2004). Human capital is an inventory of human talent, skills and education at the disposal of organizations while human resource development is usually based on the training and educational programs designed to ensure the continuous improvement of both the individuals and organizations. HRD is the systematic process through which employees of any organization learn new and improved skills and talent that can be beneficial for the organizations. HRD is not a defined object, but is based on the series of organized processes with specific learning objectives (Nadler 2004).

        Human resource development as a theory is a framework for the expansion of human capital within an organization through the development of both the organization and individual to achieve performance improvement (Elwood, Holton and Trott 2006). Human resource development allows the employees to progress in their careers and enables the organization to achieve its goals efficiently and effectively as well. It treats employees as an asset to the organizations whose value can be enhanced through the enhancement of knowledge and talent through education, development. The primary focus of human resource development is on the growth and employee development. Organizations have now replaced use of the word training costs with human resource investment showing human resource as a strategic long term asset of the organization. The investment in employees learning is aimed at progressively upgrading the skills to increase the organization’s potential to efficiently achieve its goals. HRD activities aim to unleash the potential that lies within the employees of the organization.

        In recent years, ideas and practices relating to human resources investment (development) have moved beyond a narrow conception of training and development. Many organizations now attempt to take a holistic view that embraces the idea of learning at individual and organizational levels as a source of competitive advantage. Rapid changes in technology and fast changing administrative environment have all contributed to the view that learning is the only strategy to cope with change. The concept of knowledge economy has revolutionized the scope of human resources development. Human resources development has moved out of training department into every aspect of organizational life as many organizations have attempted to become learning organizations.