The term Employment Relations (ER) was conceived as a replacement for the term ‘industrial relations’, however, employment relations can be said to encapsulate both Human Resource Management (HRM) and Industrial Relations (IR). Industrial relations is generally understood to refer to the relationship between employers and employees collectively. The shift in the coverage and content of collective bargaining has been reflected in a dramatic reduction in industrial action. The emphasis of employee relations continues to shift from ‘collective’ institutions to the relationship with individual employees. ER skills and competencies are seen by employers as critical in achieving performance benefits through a focus on employee involvement, commitment and engagement. Thus, the basic responsibility of HRD as a subsystem of HRM is to imbibe positive attitudes and cordial relationship in the organization. Therefore, HRD as a strategy became forerunner in every organization to build confidence, commitment and also competencies required at all levels to meet global challenges as well as challenges of ER. The paper empirically examines the impact of HRD initiatives on the performance of ER system in a giant public sector steel industry in South India. The findings strongly support the hypothesis that HRD initiatives have an impact on the performance of employment relations system in the organization and provide limited support for the hypothesis that HRD initiatives help in reduction of unauthorized absenteeism and improve employee involvement in suggestion scheme.

The present day dynamics of the business world is portrayed by stiff competition, mergers, acquisitions, divestitures, outsourcing and restructuring as well as realignment of the workforce. Much water has flown under the bridge ever since the economy was liberalized. Employers of both public and private sectors adopted as well as adapted to innovative practices which can meet the challenges posed by globalization.

Henry Ford stated, “Take out my building, take out my machines and all capital but leave my men with me I will become Henry Ford again.”

The above statement signifies that human resource plays a crucial role in an organization. Development of human resource is of absolute significance in achieving the organizational goals and also to become capable of capturing the survivor position in this era of cut-throat competition. HRD is the pivot around which all other functions of an organization revolve. It is a system which nurtures learning and modification of behavior of employees. HRD is considered as the cardinal to higher productivity, better ER and greater profitability.

Management Research Journal, Effect of Human Resource Development, Employment Relations (ER), Human Resource Management (HRM), Industrial Relations (IR), According to the American Society of Training and Development (ASTD), Employment Relations.