The Evolution Of Human Resource Management
Human Resource Management (HRM)
Human Resource Management is basically the management of internal people of the organization. The process of acquisition, training, compensation, appraisal and maintenance of people can be referred as Human Resource Management (HRM). HRM is of recent origin; which came to use from 1980 onwards. It is a developing concept and the meaning changes with time.
To understand HRM fully we need to know how it developed to present time. It will help us to know the origin and where we are standing now.
Evolution of Human Resource Management
Over the past centuries, there has been an evolution in the concept of “human resources” – a term that was not actually used in its current form until the mid-1950s when economist and Yale professor E. Wight Bakke published a report entitled “The Human Resources Function.” Changes in the culture, politics, and economics of society have influenced these shifts over time.
Evolution of HRM can be described into three phrases. They are described below-
Pre-Industrial Revolution Era
Pre-Industrial Revolution mainly goes back to historical era, when people were mainly engaged in agricultural economy with limited production capacity. During ancient times and for a long period in the medieval era, production of goods was done primarily by skilled artisans and craftsmen. They themselves owned the tools and instruments, produced articles and sold these in the market. The question of employer-employee or master-servant relationship did not arise in their cases as they managed their affairs themselves and with the help of the family members. However, many affluent craftsmen also employed apprentices and hired labourers. There existed a very close relationship between the master craftsmen and the apprentices, and they themselves took care of the problems facing the apprentices and their family members; kind of human approach was involved in their relationship.
After a prolonged period of training, many apprentices established their own enterprises, and many others remained attached with their master craftsmen on lucrative terms. During the medieval period, the skilled craftsmen also formed their guilds primarily with a view to protecting the interests of their respective trades. These guilds also determined the price of their products, the wages of the journeymen and hired labourers, and regulated the terms and conditions of their employment. The ancient and a major part of the medieval period also witnessed prevalence of certain other distinct types of labourers. These comprised slaves, serfs and indentured labourers. Their conditions are described below-
Slaves comprised an important source of manpower in almost all ancient civilizations. They could be sold and purchased like commodities. Their main purchasers were the wealthy rulers, landlords, tribal chiefs and wealthy businessmen. The purchasers of slaves had a rather complete control over their slaves. The masters of the slaves took a variety of work from them such as carrying heavy loads, rowing ships and boats, construction of buildings and forts, digging canals, cattle-rearing and tillage of soil. The remuneration or compensation for their efforts comprised mainly food, shelter and clothing. The slaves were dealt with iron hands. They were subjected to strict supervision, and non-compliance of the orders of their masters or supervisors was generally punishable with physical tortures, and occasionally with mutilation of their limbs and even death sentence for grave offences.
Serfdom was widely prevalent in the feudal societies of the pre-and early medieval era. Serfs were involved mainly in agricultural and allied activities by landlords. The landlords would usually give them a piece of land for their habitat and often, some land for their own cultivation. In many cases, a paltry sum of money was advanced to them in order that they could remain attached to their masters. In lieu of these facilities, the serfs and their family members were required to serve their masters. The work assigned to serfs mainly comprised – tillage of soil, cattle-rearing, domestic work and similar other activities. Many landlords would also give them a meagre amount as wages, whether in cash or in kind. Usually, serfs could become free after returning to their masters the habitat, the piece of land and advances with interest. They could also be transferred to some other landlord on payment. Under serfdom, some measure of personal relationship existed between the landlords and the serfs. Many landlords often tried to solve their genuine grievances and extended some help to those who were in distress. The feudal lords also occasionally gave some economic inducements to their serfs in the form of additional supply of food-grains and some money for their increased productivity and good behaviour. Although the management of serfs was based on the principle of authoritarianism, the element of human treatment was often found in their relationship. With the abolition of the feudal system, serfdom also came to an end. However, some remnants of the past can still be found even today, especially in rural areas. The bonded labour system in India is comparable to the system of serfdom prevalent in European countries during the medieval period.
The system of indentured labour emerged primarily with the flourishing of mercantilism and advent of industrial revolution. The discovery of new lands through sea and land routes led to a substantial increase in the demand of European goods abroad, and at the same time, gave a fillip to the establishment of industries in the continent. As a consequence, trade flourished leaps and bounds, and the mercantilists, taking advantage of the expanding markets, tried to accumulate as much wealth as possible. In their quest for maximizing wealth, the mercantilists would offer attractive inducements to the artisans and skilled craftsmen for accelerating production of goods in demand. The artisans and craftsmen responded and they started engaging an increasing number of apprentices and hired labourers to cope with the demand of the products.
Industrial Revolution Era
The systematic development of HRM began with industrial revolution that started during 1850s in Western Europe and USA. The industrial revolution composed of the development of machinery, the use of mechanical energy in production processes, and consequently the emergence of the concept of factory with large number of workforce working together.
The factory system replaced the old system. Industrial revolution brought out a number of changes such as- centralized work locations with large number of workers working together, mechanized production process, migration of workers from their place of origin, and indirect contact between factory owners and workers.
In order to manage people in the factory system of industrial revolution three systems of HRM were developed- recruitment of workers, training for workers, and control of workers. However, the basic philosophy of managing workers revolved around master-servant relationship.
With the flow of time, human resource management started to evolve in Industrial Era. For easy understanding we are dividing this ground breaking era in two sections- Trade Union Movement Era and Social Responsibility Era.
Trade Union Movement Era:
After the emergence of factory system, workers started to organize themselves based on their common interests to form workers’ associations. It was subsequently known as trade unions. The basic objectives of these associations were to safeguard interest of their members and to sort out their problems which arose primarily because of employment of child labour, long hours of work, and poor working conditions.
Later, other aspects of work such as economic problems and wages, employee benefits and services, etc. also became issues. These trade unions started such weapons as strikes, slowdowns, walkouts, boycotts, etc., to make their demands heard.
These activities of the trade unions forced owners and managers to adopt many system or programs such as- employee grievance handling systems, arbitration as a means of resolving conflicts between owners/managers and workers, disciplinary practice, expansion of employee benefit programs, holiday and vacation time, clear definition of job duties, job rights through seniority, and installation of rational and defensible wage structures.
Social Responsibility Era:
In the first decade of 20th century, some factory owners started adopting a more humanistic and paternalistic approach towards workers. Paternalistic approach to labour management is based on the philosophy that labour is just like a child and owner is just like a father and the owner should take care of his labour just like a father takes care of his children.
Those industrialists who adopted paternalistic approach offered a number of adjustments and facilities to labour force like reduced number of work hours, improved facilities at workplace, model villages to workers and so on. All these practices led to the development of social welfare aspect of labour management.
Many critics to paternalistic approach viewed that this approach was adopted to overcome the problems posed by labour union movement as plenty of trade unions emerged which frequently interrupted work performance. Employers observed that workers were going out of their control and to overcome this problem, they implemented welfare scheme. Thus, this was an obligation rather than a philosophy.
Post Industrial Revolution Era
Post Industrial Revolution mainly refers to the end of 19th century to present. The term Human resource Management noticed a major evolution after 1850. Various studies were released and many experiments were conducted during this period which gave HRM altogether a new meaning and importance.
This era made the concept HRM to what we know today. All the events of this era can be divided into five eras which are described below-
Scientific Management Era:
Around the beginning of 20th century, Frederick Taylor started to find out ‘one best way of doing thing’ based on time and motion studies. On the basis of his experiments, he was able to increase workers’ productivity considerably and wrote many papers based on these experiments and a book on scientific management.
The main principles of scientific management are:
(i) Replacing rule of thumb with science, (ii) harmony, not conflict, (iii) cooperation, not individualism, and (iv) development of each and every person. Scientific management techniques relevant to management of workers are- functional foremanship, standardization and simplification of work, and differential piece wage system.
Human Relations Era:
Around 1920s, management researchers gave a close look at the human factor at work and the variables that affected people’s behaviour. Before that, Hugo Munsterberg wrote a book on ‘Psychology and Industrial Efficiency’ which suggested the use of psychology in the field of personnel testing, interviewing, attitude measurement, learning, and so on.
This brief period was termed as ‘Industrial Psychology Era’. In 1924, a group of professors from Harvard Business School, USA, began an enquiry into the human aspects of work and working conditions at Hawthorne plant of Western Electric Company, Chicago.
They conducted researches from 1924 to 1932 and arrived at the conclusions that productivity of workers depended on- (i) social factors at the workplace, (ii) group formation and group influence, (iii) nature of leadership and supervision, and (iv) communication.
They concluded that in order to have better productivity, management should take care of human relations besides the physical conditions at the workplace. Consequently, the concepts of social system, informal organization, group influence, and non-logical behaviour entered the field of management of personnel.
Behavioral Science Era:
In contrast to human relations which assume that happy workers are productive workers, the behavioural scientists have been goal and efficiency- oriented and consider understanding of human behaviour to be the major means to that end. They have tried several sophisticated research methods to understand the nature of work and the people in the work environment.
The contribution of behavioural scientists to management practices consists primarily of producing new insights rather than new techniques. It has developed or expanded a useful way of thinking about the role of the manager, the nature of organizations, and the behaviour of individuals within organizations. As against human relations model, they have given the concept of human resource model.
Major conclusions of the contributions made by behaviourists are as follows:
- People do not dislike work. If they have been helped to establish objectives, they will want to achieve them. In fact, job itself is a source of motivation and satisfaction to employees.
- Most people can exercise a great deal of self-direction and self-control and generate more creativity than required in their current job. Therefore, their unexploited potential remains unutilized.
- Managers’ basic job is to use intact human potential in the organization.
- Manager should create a healthy environment wherein all persons can contribute to the best of their capacity. The environment should provide a healthy, safe, comfortable, and convenient place to work.
- Managers should provide opportunity for self-direction by their subordinates and they must be encouraged to participate fully in all important matters.
- Operating efficiency can be improved by expanding subordinate influence, self- direction, and self-control.
- Work satisfaction may improve as a ‘by-product’ of subordinates making full use of their potential.
Behavioural science era led to the development of two-way communication, participation of employees in decision making, joint goal-setting, group dynamics, management development, and management of change in the organization. These contributions of behavioural science era are backbone of behavioural approach of human resource management even in the present context.
Systems and Contingency Approach Era:
Systems and contingency approach has attracted maximum attention of thinkers in management in the present era. It is an integrated approach which considers management of human resources in its entirety based on empirical data. The basic idea of this approach is that analysis of any object must rely on a method of analysis involving simultaneous variations of mutually-dependent variables. This happens when systems approach is applied in managing human resources.
Human Resource Management Era:
When the factory system was applied in production, large number of workers started working together. A need was felt that there should be someone who should take care of recruiting, developing, and looking after welfare of these workers. For this purpose, industrial relations department came into existence in most of the large organizations which was concerned mostly with workers.
However, as the time passed and the complexity of managing human resources in large business organizations increased, the scope of industrial relations department was extended to cover supervisory staff and subsequently managerial personnel. Industrial relations department was named as personnel department.
With the increasing competition for market share, competition for resources including human talents, and increased knowledge in the field of managing human resources, people were not treated merely as physiological beings but socio-psychological beings as a prime source of organizational effectiveness and large organizations changed the nomenclature of their personnel department to human resource ‘department to reflect the contemporary view.
Even the American Society for Personnel Administration, the largest professional association in the field of human resource management, changed its name to the Society for Human Resource Management in 1990. At the academic level, similar pattern was followed and the title of personnel management course was changed to human resource management. Since then, the expression is gradually replacing the hackneyed term ‘personnel management’.
With increase in technology and knowledge base industries and as a result of global competition, Human Resource Management is assuming more critical role today. Its major accomplishment is aligning individual goals and objectives with corporate goals and objectives.