October 09, 2006	Monday	Ramazan 15, 1427

IN an era of knowledge economy, human resource development and its management as key driver of growth, has assumed an added importance. But in this field, Pakistan has lagged behind.

The literacy rate is too low to provide a base for knowledge-intensive manufacturing export, and employment. It was in the nineties that policy-makers began to look at the people as productive assets. Although the recorded GDP growth rate was higher than the average of low income countries, the social indicators are dismal and are below the average when compared to the poor nations.

As percentage of GDP, Pakistan’s expenditure on human development is lowest, as compared to other countries of the South Asian region. Pakistan spends 2.1 per cent on education as compared to India (4.1 per cent), Bangladesh (2.4 per cent) and Nepal (4.1 per cent).

According to economic theory, there are four factors of production i.e. land, labour, capital and enterprises. In management literature, these factors are referred as human and non-human resources of an organisation. In a historic perspective, non-human resources are land or property, machinery-the capital which have occupied the over-riding importance as against human resource/skills.

Traditionally, this is one of the reasons that work-force, or employees are disposed of during depression time and entrepreneurs always try to keep hold of non-human factors. This attitude highlights the secondary position of human resources in corporate set-up.

However, this attitude has now started changing. Though many writers on management already started the terminology of human resources and human resource-management in late 1960’s, it was only in the 1970s that this terminology finally displaced the old ones like man management, personnel management and labour management.

In Pakistan till today, the key role of employees has not been recognised. Only the change in terminology has been adopted, for example, the administrative department has been renamed as “Human Resources Development Department’ and the personnel manager has been re-designated as human resource development manager.”

After abnormal increase in oil prices in the 1970s, Japan made investment in the human resources development and this resulted in substantial increase in the labour productivity greatly off-setting the increased energy bill. It showed that machinery is important, but the man behind the machine is still more important. The first phase of human resource-building starts from the easy access to basic education which is the fundamental right of every citizen. Education is indeed the most important instrument in enhancing human capabilities. It not only illuminates one’s mind, broadens mental faculties but also makes one productive citizen.

It is unfortunate that most of the educated youth are unemployed. While there is a growing unemployment among the educated youth, the right type of persons are not available for many jobs. It is a reflection on the standard and quality of education. The educational institutions are also not producing the right kind of trade skills required by a developing country. It is, however, reassuring that the government has initiated a number of measures to make-up the deficiency.

During the last four years, 249 additional technical and vocational institutions were established. Although a large number of technical and vocational training centres and institutions are working at federal and provincial level, they need to be properly co-ordinated and managed so that they could emerge as a real tool of human resource development.

In all 35 new universities were set up during the period 2001-02 to 2004-05, out of which 13 are in the public sector and 22 are in the private sector. This points to a greater public-private sector partnership in the education sector. On the same analogy, a well-defined public-private partnership can be evolved for human-resource-development on the modern lines.

The second phase of human-resource development starts at the working place of work-force/employees. Unfortunately, corporate sector, barring banking/insurance companies and a few others, has not emerged as a dependable source of human-resource development. A professional management class has yet to take its root, although some beginning has been made.

With some exceptions, a company is a family affair. A general perception is that an entrepreneur who undertakes risk in setting up an industry can better manage it. Nevertheless, the importance of a professional management cannot be under-estimated. The fundamental principles and practices of the modern management are: recruitment on merit, regular performance appraisal, security of service and judicious policy of reward and punishment.

The division of work, delegation of responsibility and authority with necessary trust and confidence in subordinates, cordial inter-personal relations, consultation with junior employees form a part of participative management, through planning.

A contended and satisfied workforce and employees as a whole can indeed prove to be an asset for an organization, leading to increased productivity and resultant profitability. This principle indeed constitutes the corner-stone of the modern management.

Finally, it must be emphasised that the twin forces of globalisation and technological changes have made education, highly trained and versatile workforce indispensable to any country that seeks to compete in the global economy and contribute to the welfare and prosperity of its people.

Corporate decision about production and location are driven by the dictators of global competitiveness and not by national consideration alone. The emerging global scenario offers manifold opportunities and challenges and only those nations can benefit which acquire knowledge and skill.