Human resource management is like old wine in new bottle.Our country witnesses the emergence of a new HRD culture with Prof. Udai Pareek and Prof T.V.Rao heading the movement.What we call human resource management today, dates back to 1800 b.c.,which is evident from the inscriptions of Babylonian code of Hammurabi and Kautilya's Arthasashtra, which explains in detail the importance of selection,incentives,performance evaluation, quality of a manager and wage rates.So,we understand that the concept ofmanaging people has existed even in the previous eras through ancient literature and philosophy.India,China and Greece have been the origin points of human resource management concepts.
Till, 1930's, there was no such department called "personnel management" that was considered necessary to cater to the needs and welfare of the labor society. The factory manager was acting as a link between the workers and the management, and most of the time he had to comply with the rules of the management to satisfy them, even if it were against the welfare of the workers. Also proper attention was not given to areas like, worker safety, security and living conditions. Industrial revolution saw mass exodus of workers to urban areas in search of jobs.
Application of science and technology in production made the rich owners even richer; the poor workers were not paid adequately and their life became miserable. Since the owners lost direct contact with the employees, managers came into the picture to take over control of production and administration. Machines ruled the industry and importance of labor got reduced. This condition existed for sometime until the advent of new and improved management concepts by people like F.W.Taylor who is considered to be the father of scientific management and B.F.Goodrich who was instrumental in forming the "employment department" which can be considered the fore runner of present human resource department.
Scientific methods were introduced to make the workers perform the job with ease and perfection. It also saved enormous time and reduced the monotony of work. Job-designs, job-specification, training and development and human relations were given due importance and the owners slowly started realizing the importance of labor. Through 1940's to 1970's behavioral approach was applied to professional management, the major architects being Abraham Maslow, Herzberg and Douglas McGregor. This approach suggested managers to modify their leadership styles to suit the type of followers and motivate the workers.
World War I and II also had profound influence on Human resource development. The concepts of role playing, improved training methods, supervision and group discussions came into the fray. The advent of labor unions also established a clear pathway for the workers to claim their rights, ably supported by the labor laws enacted by various governments. International labor organization was formed in 1919 which created sensation in the worker community all over the world. All said and done, empowerment of workers has been achieved only in developed nations where "job security" is no more a great concern because job opportunities are more. But in unorganized and small sectors, employers continue to exploit workers because "supply" is more than "demand".
- The workers in the early factories faced long hours of works under extremely unhygienic conditions, and mostly lived in slums. This soon resulted in several labor riots, the most famous being Ludds riots of 1811 in Nottingham, England, precipitated by reduced wages. The government soon intervened to provide basic rights and protections for workers, and the need to comply with such statutory regulations forced factory owners to set up a formal mechanism to look into workers wages and welfare, and redress other issues concerning labor. This led to the emergence of Personnel Management as a distinct profession.
The responsibility to develop and empower the employees solely lies on the shoulders of human resource department. It should try to address the problems of workers to the management and amicably settle issues relating to wages, welfare, safety and security.The principle resource of any organisation is its people and managing people is the most important and challenging aspect of an organisation.
The Personnel Management Approach
The Personnel Management approach that remained in vogue for much of the 20th Century remained administrative in nature. Arising out of the need to enforce statutory compliance, it concerned itself primarily with
- employee record keeping
- adherence to the stated policies while implementing functions such as recruitment, training and wage administration
- taking welfare oriented measures such as providing medical care, vaccinations, housing facilities and the like
- attempting to increase productivity through wage increases and training, and enforcement of standards derived from work studies influenced by the scientific management approach promulgated by Frederick Taylor and the like
- dealing with trade unions and trying to solve industrial disputes through collective bargaining and other industrial relations approaches.
- conducting performance appraisals or report card of past performance to determine pay and promotions
The Personnel Management approach tried to convince workers of the business interests, and convince management of workers interest and social obligations. It rarely had a direct say in the company’s strategy and did not involved itself with operations aspects, remaining a purely staff function.The Traditional Human Resource Approach
The latter decades of the twentieth century saw the winds of change starting to affect the personnel management profession. Elton Mayo’s Hawthorne Studies had debunked Taylor’s Scientific Management approach toward productivity increase, and established that the major drivers of productivity and motivation were non-monetary factors. A host of new theories emerged based on this new behavioral perspective. Some of the popular theories that struck ground was Douglas McGregor’s Theory X and Theory Y, Abraham Maslow’s hierarchy of needs theory that recognized the concept of individuals aspiring to reach a state of self actualization, Victor Vroom’s Expectation Theory, Alderfer’s ERG Theory, and more. Government interventions led to the enactment of new legislations that guaranteed workers more rights.All these changed soon led to the transition from the administrative and passive Personnel Management approach to a more dynamic Human Resource Management approach. This new approach considered workers as valuable resources, a marked improvement from the earlier approach of considering them as mere cogs.While Personnel Management was a strictly staff function, Human Resource management began to become an increasingly line management function, directly interlinked to the core business operations.
The major changes in approach from Personnel Management vs Human Resource Management manifested in many ways.- The recruitment and skill enhancement of the workforce having a direct bearing on organizational profitability, efforts began to increase worker’s commitment and loyalty.
- Motivation took the shape of challenging work environment, free holidays, creating an active social community within the workforce, fringe benefits and the like, besides monetary incentives.
- Training acquired a new “Training and Development” dimension with the focus on behavioral training to change attitudes and develop basic skills rather than remaining limited to inculcating work-related skills.
- Wage and Salary Administration became more complex with the introduction of performance related pay, employee stock options and the like
- The report-card based performance appraisal systems become more proactive with new techniques such as Management by Objectives, 360 degree appraisals and the like
- emphasis on leadership instead of managing
The Strategic Human Resource Approach
The evolution of Human Resource Management took a new turn at the end of the century. Increased free market competition at global level and the proliferation of technology and knowledge based industries raised the importance of human resources, and from an obscure role a century ago, human resource management rose to become the most critical function of an enterprise.The workforce, hitherto considered as “resources” now became “assets” and a valuable source of competitive advantage. The thrust of human resource management now lies in trying to align individual goals and objectives with corporate goals and objectives, and rather than enforce rules or dictate terms, act as a facilitator and promotes a participative approach.These changes influenced Human Resources functions in many ways.- Increased reliance on performance based short term contracts instead of long term employment
- Direct linkage of compensation to the profitability of the enterprise and the employee’s contribution towards such profitability
- New dimensions for training and development function by encouraging and facilitating innovation and creativity
- Motivation through enriching the work experience
- Performance and Talent Management displacing performance appraisals
Strategic Human Resource Management blurs the distinction between a specialized Human Resource Management function and core operational activity, and very often, Human Resource Management drives interventions such as Total Quality Management and the like.Below is a short video of 5 minutes where you can have a brief review of evolution of HR
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