Human Resource Management:

A Study of its Evolution

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Evolution of HRM
Stage 1: The Pre-Industrialization Era (1400- late
1700s)
Cessation of feudalism and beginning of the free
employment relationship
Shift from agriculture to a mixed economy
Growth in towns and villages along with a middle
class that included skilled craftsmen and merchants
who were the forerunners of factory owners
Emergence of labour specialization- merchants
provided craftsmen with supplies and promised to
buy the finished product. This system progressed to
the point where the merchants controlled the entire
production process
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Evolution of HRM (continued)

Stage 2: The Industrial Revolution and the Factory
System (late eighteenth century in GB and early
nineteenth century in America)

Replacement of human skills and efforts with machines

Introduction of the factory system as places of

production
based upon free or wage labour and fixed capital

Factory system displaced and finally replaced the self

employment household and handicraft.

Factory system created a class of permanent wage

earners and
brought them together

Division of labour: production tasks were subdivided

In the early stages factory owners were the managers

and
personnel policies were personal and paternalistic

With increase in size of factories laissez faire of

management
became prominent : personnel practices were

Evolution of HRM (continued)

e 3: The Emergence of the Modern Corporation and Manag

talism (lasted till the end of the nineteenth century)

Period of dramatic industrial growth and organizational
restructuring which set the stage for emergence of modern
HRM practice
Employment transformed from being primarily agricultural to
manufacturing
Industry transformed from being primarily small-scale,
employing craftsmen, to being large- scale, employing semi
skilled or unskilled operators and assemblers
Growth in size of the corporate and departmentalization of the
organizational functions, separation of operations from
ownership of the firm and employment of teams of salaried
managers
Focus on improvement in size and technology of production
instead of improving working conditions
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Evolution of HRM (continued)

3: The Emergence of the Modern Corporation and Ma

alism (lasted till the end of the nineteenth century

result of shift in economic focus there was economic turmoi

ssive unemployment, social upheaval and labour unrest
hanization led to dilution of workers skills and growing
mand for unskilled labour leading to fall in wages
above gave birth to management employee conflict, unrest,
ycotts and strikes and increase in union membership
one hand managements were adamant about refusing to
gotiate with unions and on the other government showed
ingness to side by the employees

Evolution of HRM (continued)

Stage 4: Scientific Management and Welfare Work
SM was an effort to deal with labour and management
inefficiencies
through the reorganization of production methods and
rationalization of
work

Taylor asserted that time and motion study helped in

substituting
guesswork with management based on exact knowledge
Taylor also proposed functional management. He called
for separation
of planning from execution

Functional management pointed towards need for a

separate HR
department
Taylor demonstrated the feasibility of job analysis as a
basis of

Evolution of HRM (continued)

Stage 4: Scientific Management and Welfare Work
WW was defined as representing anything for the comfort
and
improvement, intellectual and social ,of the employees,
over and above
the wages paid, which is not a necessity of the industry ,
nor required by
law . It took the form of housing, schools, medical care,
recreation. The
objective was to improve worker management relations.

Frederick Winslow Taylor (1856

1915)

Time and Motion Studies

Evolution of HRM (continued)

Stage 5: World War I and the Emergence of the HRM
function
Personnel or employment management department by the
end of the
war had developed into a separate function alongside sales,
finance and
production.
There was widespread labour shortage, especially for skilled
workers as
people were drawn into military, war related industries and
government
industries
Labour turnover was high and wages rose phenomenally.
Increase demand for wartime production and shortage of
labour, needed
employers to efficiently utilize the workers that they could
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secure.

Evolution of HRM (continued)

Stage 6: The Human Relations Movement (19451960s)
Was characterized by incorporation of human factor in SM.
Emphasis was on improving productivity by discovering
the needs of the
people, the proper way of managing people and increasing
their
productivity.
This movement had begun with Hawthorne Experiments

Worker was viewed as the most important element in

business and as a
complex personality that interacted in a group situation
that was difficult
to understand.

Workers were known (recognized) to have social needs.

Workplace seen to
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have informal groups, governed by group norms and

George Elton Mayo (1880- 1949)

Relay Assembly Test Room

Evolution of HRM (continued)

Stage 7: The golden age of industrial relations and the personnel
management maintenance function
The HR function languished for a brief period during great depression.
From 1945 the focus shifted from PM to IR
A few laws passed in the US like Norris- LaGuardia Act (1932), National
Industrial Recovery Act (1933) and the Wagner Act (1935) , encouraged
unionization. The aim was to make the system more equitable for workers.
World war II created an enormous demand for labour and increase in union
membership and prestige.
The emergence of US economy (relatively unharmed from WW II) its
unchallenged hegemony and resultant growth of the manufacturing sector
gave impetus to IR and practice of collective bargaining
The question was no longer- whether to have a PM department but how to
run it
PM was considered as a functional collection of managerial activities and
practices directed (recruitment, training and evaluation) at people as
employees
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Evolution of HRM (continued)

Stage 8: Quality of Work Life Era (middle of 1960s to the
end of 1970s)

Practices that maximized organizational performance

and at the
same time employee well-being
The above encompassed inclusion of programs in such
areas as job
design and enrichment which along with career planning
and
development were intended to improve the
psychological quality of
work life of employees and presumably make them
more committed
and satisfied with the organization
These efforts were a recognition that investments in
people produced
significant results and also because of the changing
characteristics of

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Evolution of HRM (continued)

Stage 9: The Emergence of the Contemporary HRM Function
PM gained more prominence relative to IR as private sector
unionism started falling and there was a shift from employment
from manufacturing to the service sector.
Increased competition from across the world, changes in
technology and globalization of economy forced management to
make strategic choices that have represented aggressive unionavoidance policies and have resulted in decrease in union
representation of their workers.
More stress on dealing with employees directly as individuals
(employee relations) rather than on management- union
relations and dealing with employees indirectly and collectively.
Focus shifted to recognize employees as assets and vital
organizational resources
The term HRM started replacing PM.
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Evolution of HRM (continued)

PM

HRM

Evaluation
Criteria

Implies that human

resources as expenses. Cost
minimization.

Considers that human

resources are assets that
are to be managed along
with other organizational
assets. Maximum
utilization

Time and
Planning

Short term. Signifies a group

of discrete human resources
administrative subfunctions
and maintenance activities
that are reactive, passive,
and secondary to other
significant business
functions

Long term. Adopts a

proactive approach and
integration of human
resource sub-functions
and an enhancement and
expansion of the
function, position and
strategic importance of
HRM within the
organization

Psychologic
al Contract

Compliance

Commitment

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Evolution of HRM (continued)

PM

HRM

Employee
Relations

Pluralist, collective and low

trust

Unitarist, individual
and high trust

Roles

Specialist/ Professional

Largely integrated
in management

Audience

Generally directed at nonmanagerial staff

Is less clearly
focused but is
concerned more
with managerial
staff

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Evolution of HRM (continued)

Stage 10: Strategic Focus Era

Started with the emergence of the concept of business

strategy and its alignment with other areas like HRM
Strategic HRM refers to long time view of HR policy and a
simultaneous integration horizontally among the various HR
functions and a vertical integration with corporate strategic
planning
Strategic HRM gained prominence due to
widespread
redesigning, downsizing and restructuring of organizations that
has caused old structures with tight control and small span of
control to give way to flatter structures with larger spans of
control.
The challenge of managing a diverse workforce in terms of
gender, age, race, ethnicity and new employees who give due
importance to self interest alongside organizational interest.
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HR Roles in Building a Competitive Organization

Future/ Strategic Focus

Management of Strategic Human

Resources

Management of
Transformation and
Change

Strategic Partner
Change Agent
People

Processes

Management of
Employee Contribution

Management of Firm
Infrastructure
Administrative Expert

Employee Champion

Day to Day/Operational Focus

Human resource champions, by David Ulrich. (1996). Boston: Harvard Business School Press.

Competencies of HR Professionals

Technical CompetenciesHR Expertise (HR Knowledge)

Interpersonal CompetenciesRelationship Management,

Communication, and Global & Cultural Effectiveness

Business CompetenciesBusiness Acumen, Critical Evaluation,

and Consultation

Leadership CompetenciesLeadership & Navigation and Ethical

Practice

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