The history of human resource management (HRM)

The history of personnel management begins around the end of the 19th century, when
welfare officers (sometimes called welfare secretaries) came into being. They were women
and concerned only with the protection of women and girls. Their creation was a reaction to
the harshness of industrial conditions, coupled with pressures arising from the extension of the
franchise, the influence of trade unions and the labour movement, and the campaigning of
enlightened employers, often Quakers, for what was called industrial betterment. As the role
grew there was some tension between the aim of moral protection of women and children and
the needs for higher output.
The First World War accelerated change in the development of personnel management, with
women being recruited in large numbers to fill the gaps left by men going to fight, which in turn
meant reaching agreement with trade unions (often after bitter disputes) about dilution
accepting unskilled women into craftsmens jobs and changing manning levels.
During the 1920s, jobs with the titles of labour manager or employment manager came into
being in the engineering industry and other industries where there were large factories, to
handle absence, recruitment, dismissal and queries over bonuses and so on. Employers
federations, particularly in engineering and shipbuilding, negotiated national pay rates with the
unions, but there were local and district variations and there was plenty of scope for disputes.
During the 1930s, with the economy beginning to pick up, big corporations in these newer
sectors saw value in improving employee benefits as a way of recruiting, retaining and
motivating employees. But older industries such as textiles, mining and shipbuilding which were
hit by the worldwide recession did not adopt new techniques, seeing no need to do so because
they had no difficulty in recruiting labour.
The Second World War brought about welfare and personnel work on a full-time basis at all
establishments producing war materials because an expanded Ministry of Labour and National
Service insisted on it, just as the Government had insisted on welfare workers in munitions
factories in the previous conflict. The government saw specialist personnel management as part
of the drive for greater efficiency and the number of people in the personnel function grew
substantially; there were around 5,300 in 1943.
By 1945, employment management and welfare work had become integrated under the broad
term personnel management. Experience of the war had shown that output and productivity
could be influenced by employment policies. The role of the personnel function in wartime had
been largely that of implementing the rules demanded by large-scale, state-governed
production, and thus the image of an emerging profession was very much a bureaucratic one.
Following the development of poor industrial relations during the 1960s a Royal Commission
under Lord Donovan was set up. Reporting in 1968
1
, it was critical of both employers and
unions; personnel managers were criticised for lacking negotiation skills and failing to plan
industrial relations strategies. At least in part, Donovan suggested, these deficiencies were a
consequence of managements failure to give personnel management sufficiently high priority.
In the 1960s and 70s employment started to develop significantly. At the same time personnel
techniques developed using theories from the social sciences about motivation and
organizational behavior; selection testing became more widely used, and management training
expanded. During the 1970s, specialisms started to develop, with reward and resourcing, for
example, being addressed as separate issues.
Around the mid-80s, the term human resource management arrived from the USA. The term
human resources is an interesting one: it seemed to suggest that employees were an asset or
resource-like machines, but at the same time HR also appeared to emphasize employee
commitment and motivation.
Todays HR profession encompasses a number of specialist disciplines, including diversity,
reward (including compensation, benefits, pensions), resourcing, employee relations,
organization development and design, and learning and development (the history of which is
covered in detail in the next section of this factsheet). Most recently, in developing
the Profession Map, the CIPD has defined ten professional areas covered by the HR profession.
Difference between Personnel Management and Human Resource Management
Human resource management is the new version of personnel management. There is no any
watertight difference between human resource management and personnel management.
However, there are some differences in the following matters. Personnel management is a
traditional approach of managing people in the organization. Human resource management is a
modern approach of managing people and their strengths in the organization.
1. Personnel management focuses on personnel administration, employee welfare and
labor relation. Human resource management focuses on acquisition, development,
motivation and maintenance of human resources in the organization.

2. Personnel management assumes people as a input for achieving desired output. Human
resource management assumes people as an important and valuable resource for
achieving desired output.


3. Under personnel management, personnel function is undertaken for employee's
satisfaction. Under human resource management, administrative function is undertaken
for goal achievement.

4. Under personnel management, job design is done on the basis of division of labor.
Under human resource management, job design function is done on the basis of group
work/team work.

5. Under personnel management, employees are provided with less training and
development opportunities. Under human resource management, employees are
provided with more training and development opportunities.

6. In personnel management, decisions are made by the top management as per the rules
and regulation of the organization. In human resource management, decisions are made
collectively after considering employee's participation, authority, decentralization,
competitive environment etc.

7. Personnel management focuses on increased production and satisfied employees.
Human resource management focuses on effectiveness, culture, productivity and
employee's participation.

8. Personnel management is concerned with personnel manager. Human resource
management is concerned with all level of managers from top to bottom.

9. Personnel management is a routine function. Human resource management is a
strategic function.

The major difference between personnel management vs. human resource management is that
personnel management is the traditional approach and human resource management
represents the modern approach toward managing people in an enterprise.
Personnel management is a predominantly administrative record-keeping function that aims to
establish and maintain equitable terms and conditions of employment.
Human resource management integrates the traditional personnel management functions to
corporate goals and strategies, and performs additional people-centered organizational
developmental activities.
Significant difference exists between personnel management and human resource
management in terms of scope, approach, and application.

The Scope of Services
Human Resource Management is broader in scope than Personnel Management. The scope of
personnel management includes functional activities such as manpower planning, recruitment,
job analysis, job evaluation, payroll administration, performance appraisals, labor law
compliance, training administration, and related tasks. Human resources management includes
all these activities plus organizational developmental activities such as leadership, motivation,
developing organizational culture, communication of shared values, and so forth.
The human resource management approach remains integrated to the companys core strategy
and vision. It seeks to optimize the use of human resource for the fulfillment of organizational
goals. This strategic and philosophical context of human resource management makes it more
purposeful, relevant, and more effective compared to the personnel management approach.
Difference in Approach
The personnel management approach tends to attach much importance to norms, customs and
established practices, whereas the human resource approach gives importance to values and
mission.
The personnel management approach also concerns itself with establishing rules, policies,
procedures, and contracts, and strives to monitor and enforce compliance to such regulations,
with careful delineation of written contract. The human resource management approach
remains impatient with rules and regulations. HR managers tend to relax rules based on
business needs and exigencies, and aim to go by the spirit of the contract rather than the letter
of the contract.
An illustration of this difference in approach lies in the treatment of employee motivation. The
personnel management approach holds employee satisfaction as the key to keeping employees
motivated, and institutes compensation, bonuses, rewards, and work simplification initiatives
as possible motivators. The human resource philosophy holds improved performance as
the driver of employee satisfaction, and devises strategies such as work challenges, team work,
and creativity to improve motivation.

Difference in Nature
Another dimension of the difference is the proactive nature of human resource management
compared to the reactive nature of personnel management.
Personnel management remains aloof from core organizational activities, functions
independently, and takes a reactive approach to changes in corporate goals or strategy. Human
resource management remains integrated with corporate strategy and takes a proactive
approach to align the workforce toward achievement of corporate goals.For instance, while the
personnel management approach concerns itself with a reactive performance appraisal
process, human resource management approach has a more comprehensive and proactive
performance management system that aims to correct performance rather than make a report
card of past performance.
Difference in Application
Personnel management is an independent staff function of an organization, with little
involvement from line managers, and no linkage to the organization's core process. Human
resource management, on the other hand, remains integrated with the organization's core
strategy and functions. Although a distinct human resource department carries out much of the
human resource management tasks, human resource initiatives involve the line management
and operations staff heavily.
Personnel management also strives to reconcile the aspirations and views of the workforce
with management interest by institutional means such as collective bargaining, trade union-
based negotiations and similar processes. This leads to fixation of work conditions applicable
for all, and not necessarily aligned to overall corporate goals.
Human Resource management gives greater thrust on dealing with each employee
independently and gives more importance to customer-focused developmental activities and
facilitating individual employees rather than bargaining or negotiating with trade unions.
Finally, in any discussion of personnel management vs human resource management, we must
include that personnel management lays down rigid job description with many grades and a
fixed promotion policy--usually based on seniority and performance appraisal ratings. Human
resource management, on the other hand, has relatively fewer grades and ranks, with broadly
defined job responsibilities providing much scope for applying creativity and initiative, and
plenty of career paths, with skills, talent and commitment the key drivers of career
advancement.









27 Points of Difference between Personnel Management & HRD
No. Dimension Personnel Management Human Resource Development
Beliefs & Assumptions
1 Contract
Careful delineation of written
contracts Aim to go beyond contracts
2 Rules
Importance of devising clear
rules/mutuality Can-do outlook; impatience with rule
3
Guide to management
Action Procedures Business need
4 Behavior Referent Norms/custom & practice Values/Mission
5
Managerial Task vis--
vis Labour Monitoring Nurturing
6 Nature of Relations Pluralist Unitarist
7 Conflict Institutionalized De-emphasized
STRATEGIC ASPECTS
8 Key Relations Labour Management Customer
9 Initiatives Piecemeal Integrated
10 Corporate Plan Marginal to Central to
11 Speed of Decision Slow Fast
LINE MANAGEMENT
12 Management Role Transactional Transformational leadership
13 Key Managers Personnel/IR Specialists General/business/line managers
14 Communication Indirect Direct
15 Standardization High (e.g. parity an issue) Low (e.g. parity not seen as relevant)
16
Prized management
skills Negotiation Facilitation
KEY LEVERS
17 Selection Separate, marginal task Integrated, key task
18 Pay Job Evaluation (fixed grades) Performance related
19 Conditions Separately negotiated Harmonization
20 Labour Management
Collective bargaining
contracts Towards individual contracts
21 Thrust of relations
Regularized through facilities
& training
Marginalized (with exception of some
bargaining for change models)
22 Job categories & grades Many Few
23 Communication Restricted flow Increased flow
24 Job Design Division of Labour Teamwork
25 Conflict Handling Reach temporary truces Manage climate & culture
26 Training & Development Controlled access to courses Learning companies
27
Foci of attention of
interventions Personnel procedures
Wide ranging cultural, structural & personnel
strategies


Personnel Management is thus basically an administrative recordkeeping function, at the operational
level. Personnel Management attempts to maintain fair terms and conditions of employment, while at
the same time, efficiently managing personnel activities for individual departments etc. It is assumed
that the outcomes from providing justice and achieving efficiency in the management of personnel
activities will result ultimately in achieving organizational success. Human resource management is
concerned with the development and implementation of people strategies, which are integrated with
corporate strategies, and ensures that the culture, values and structure of the organization, and the
quality, motivation and commitment of its members contribute fully to the achievement of its goals.
HRM is concerned with carrying out the SAME functional activities traditionally performed by the
personnel function, such as HR planning, job analysis, recruitment and selection, employee relations,
performance management, employee appraisals, compensation management, training and
development etc. But, the HRM approach performs these functions in a qualitatively DISTINCT way,
when compared with Personnel Management.