Lecture 2

Date:
Topics Discussed: Nature and Development of Personnel Management.
Instructor: Mr. Parikshit Joshi

EVOLUTION OF HRM
Earlier References: In Western countries HRM had its primitive beginning in 1930s. Not
much thought was given on this subject in particular and no written records or
documents existed on this subject even as a philosophy in Western ancient literature.
However, it is quite interesting to note HRM concepts were available, in ancient
philosophies of Greek, Indian and Chinese. This is not to suggest that industrial
establishment and factories system, as it is known today, existed in ancient Greece, India
or China. The philosophy of managing human being, as a concept was found developed in
ancient literatures in general and in Indian philosophy in particular. Some references are
given in Table 1.

Table 1

Personnel Functions: Till 1930s, it was not felt necessary to have a separate discipline of
management called "Personnel Management". In fact, this job was assigned as part of
the factory manager. Adam Smith's concept of factory was that it consists of three
resources, land, labour and capital. This factory manager is expected to "procure,
process and peddle (sell or get rid of)" labour as one of the resources. The first time
when such a specialist “person” was used; it was to maintain a "buffer" between
employer and employee to meet the "legitimate need" of employees. However, it is the
employer who decided what “legitimate need” of his employees is. In fact, the specialist
"person" was more needed to prevent "unionisation" of employees. This was the case
before 1930s all over the world.

Environmental Influences on HRM: Since 1930s, certain developments took place which
greatly contributed to the evolution and growth of human resources management (HRM).
These developments are given below:
• Scientific Management
• Labour Movements
• Government Regulations
P ERSONNEL M ANAGEMENT IN INDIA
The Personnel Management in India has been a product of various factors, labour
legislation being one of them. The importance of labour officers in Indian industry was
realised as early as 1929, when the Royal Commission on Labour was set up. In
1931, the Commission recommended the appointment of a labour officer in order to
"protect the workers from the evils of jobbery and indebtedness, to act as a
spokesman of labour and to promote an amicable settlement between the workers and
management." The Commission observed that:
(i) The jobber should be excluded from the engagement and dismissal of labour
and that, instead, a labour officer be appointed for this purpose;
(ii) The qualities required of a labour officer should be integrity, personality,
energy, and the gift of understanding individuals and he should have a
linguistic facility. If he is of the right type, the workers will rapidly learn to
place confidence in him and regard him as a friend;
(iii) All labour should be engaged by him, and none should be dismissed
without consulting him; and
(iv) The labour officer should fulfill many duties, and should particularly initiate
and administer welfare measures.
In 1931, the Bombay Mill owners Association appointed labour officers on their
own, who were required to attempt to settle grievances and disputes. Similar officers
were appointed in the jute industry in Bengal under the directions of the Jute Mills'
Association. These officers were entrusted with the responsibility of setting up food
shops, promoting sports and welfare activities. Personnel officers in the textile
industry came up from the department concerned with recruitment and the settlement
of grievances rather than from one administering welfare activities, as in other
countries (the USA and the UK). Their functions as Industrial Relations Officers to
handle grievances and prevent disputes were stressed from the beginning.
During the Second World War, these officers were generally entrusted with the
handling of welfare and labour administration. Their functions were subsequently
enlarged and were influenced by the social reform movement in the country, public
concern for improving labour administration and the growth of the modern
management movement.
Their functions thus included activities relating to welfare, personnel and
industrial relations.
The Factories Act of 1948 provides for the statutory appointment of a welfare
officer in a factory. Section 49 (1) and (2) of the Factories Act lays down that: (1) in
every factory wherein 500 or more workers are ordinarily employed the occupier shall
employ in the factory such number of welfare officers as may be prescribed; (2) the
state government may prescribe the duties, qualifications and conditions of service of
officers employed under sub-section (i). According to the Plantations Labour Act,
1951 every plantation wherein 300 or more workers are ordinarily employed the
employer shall employ such number of welfare officers as may be prescribed. The
state government may prescribe their duties, qualifications, and conditions of service.
The Mines Act, 1952 also provides that every mine wherein 500 or more persons are
ordinarily employed, the owner, agent or manager has to appoint a suitably qualified
person as welfare officer. These Acts also prescribed the manner of their recruitment,
their salaries and conditions of service; and also laid down an elaborate list of duties
to be performed by them, including those concerned with welfare, with day-to-day
personnel administration and with industrial relations.
In the beginning, personnel management was neither given any particular attention
nor place in the organisation system, nor did professionals find themselves involved in
the process. Its existence without any apparent assignment or responsibility was the
usual picture and the so called champions and protectors of labour welfare used to
remain only on the fringe of industrial activities as an appendage to the system.
Subsequently, it was entrusted with the policing /unction within the organisation,
i.e., to report on and assist the organisation in dealing with mostly discipline and
getting rid of trouble-makers. At this stage, it was mostly engaged in "fire fighting
tasks", i.e., going to the forefront at the moments of crisis, without having carried out
any preventive or organising action. Incidentally, it was at this stage that, at times, the
use of welfare officers for aiding and abetting the exploitation of the working class
by certain organisations brought them on the periphery of notoriety. However, by and
large, their appointment in industries remained only symbolic, satisfying the statutory
requirements, without any specific, constructive role to play. The "personnel man,"
who was initially known as "welfare officer," has moved on to be known as "labour
welfare officer," "personnel officer,'" "industrial relations officer" and is now
identified as "human resource manager."

Impediments to the progress of HRM in India

There are various factors which have hindered the growth and development of
personnel management in India. Some of the important reasons are:-
1.The legal status of a Personnel Officer requires him to work in the field of welfare
and day-to-day personnel administration and industrial relations. But since the
personnel function is a line responsibility and a staff functions, it cannot be
properly performed by a personnel officer.
2.The attitude of the employees towards personnel officers has not been favourable.
Management in India is still traditional and does not take the personnel officer into
its Confidence. The line executives are often regarded as those who get the material,
cut it up and hold it together and ship it out, while staff executives are those who
attempt to prevent the line boys from doing their jobs." Such ideas about the role of
the personnel managers generate frustration among them. In the words of Peter
Drucker, "the personnel manager tends to conceive his job partly as a file clerk's
job, partly as a house-keeping job, partly as social worker’s job and partly as a fire-
fighter to head off union trouble or settle it."
3. Personnel Officers are even now required to spend a major portion of their time in
attending to disputes and the grievances of workers. The plethora of labour laws has
encouraged trade unions to keep some matters always under litigation for the
advancement of their selfish interests. This factor keeps a personnel officer preoccupied
in litigation and away from his more important duties. As a result, he has neither the
time nor inclination for long-range planning.
4. Lack of professional training facilities, a sense of insecurity and lack of
job
satisfaction among a large number of personnel executives drive them away from
the profession.
5. The profession has not so far attracted the most meritorious among young
persons. Mostly those of ordinary caliber have found place in this profession. One of
the reasons being that this profession is still considered by many to be somewhat
like a pinjrapole, an abode of useless cows.
6. The educational institutions which supply the 'material', have still the age-
old
curriculum which falls far short of equipping the incumbents with the desired type of
fast changing knowledge and skill — which could enable them to deal with human
problems effectively at the first instance.
7. The urge for updating the personnel people themselves is also mostly absent,
which keeps them from being developed. The lack of initiative renders them obsolete
and incompetent for the challenging jobs.
8. Their pre-occupation with their own personal aspirations make them overlook and,
at times, ignore the expectations of all others, including the organisations.
9. By and large such professionals have not been tested in any trying situation and,
when actually put in it, have generally emerged as failures succeeding rarely. In
their behaviour, tendencies like making false promises for cheap popularity and taking
credit for the performance of others make it difficult for them to be acceptable to
others.
10. The inability to take decisions and the lack of courage to take responsibility
for
decisions based on their advice have been their greatest handicaps. The
professional courage to disagree is a rare virtue. Absence of such professional courage
of conviction and lack of confidence in their own competence often compel them to
take the line of least resistance.
11. Many a time, the personnel mean — whether due to professional zeal or
personal ambition — have tried to impose their will on other professions. This
tendency has been responsible for their alienation. They should shed this trait and
make an effort to integrate the expectations of all other professionals in industry
without creating the feeling of an imposition.
12. Finally, personnel management has not yet been accorded the totality of
acceptance by all concerned. It is because unlike professions such as engineering
and medicine, where the result of any faulty action or decision becomes almost
immediately obvious, the loss felt and the person responsible identified, the result of
faulty decision on the management of human resources is not, by and large felt
immediately and the responsibility for it can safely be shifted to someone else. Further,
unlike other professions, the acceptance of "man-management" as a profession has
to come from employers, trade unions as well as the government. This fact makes
the profession an easy prey to politicization by government machinery, trade
unions and even by those within the organisation.
Influence of Labour Movement on HRM: Even though modern industry began to
grow in India from 1850s, till the end of First World War, there was no industrial dispute
or unrest of importance. By end of War, on account of high price rise and economic
depression, industrial unrest took place.

Period 1900 to 1940. Important events occurred during this period are given below:
• "Workers Welfare League of India" was formed in UK inl911 to protect labour
interest and unity between British and Indian workers.
• Russian Revolution of 1917 and emergence of communist socialistic
movement and unionism.
• Growth of Indian national movement and participation of Industrial workers
in this movement.
• Formation of ILO in 1919.
• First World War and favourable condition it created to unions.
• President Woodrow Wilson's support to A.F.L, gave upper hand to labour. All
India Trade Union Congress (AITUC) was formed in 1920. Consolidation of TU
in India. First time in 1927, May Day (1st May) was celebrated in India at
Bombay and Indian labour formed part of international labour movement. In USA,
Congress of Industrial Organisation
(CIO) was formed in 1935. While AFL represents trade of all industries, CIO
represents all tradesmen of each Industry. Both AFL and CIO provided teeth
to trade union movement in USA.
• Great Depression of 1930, large-scale retrenchments, withdrawal of amenities. Ill-
effect continued up to 1935. Membership of Indian TU's dropped from 2,
42,355 in 1930 to 2, 08,071 in 1934. Split in TU movement in India (1930-35).
AITUC was split into four parts viz AITUC, Indian TU Federation (ITUF) under
moderates, Red Trade Union (RTU) under communists and Independent Trade
Union like that of Ail India Railwaymens Federation (AIRF).
• Formation of Congress Ministries under Government of India Act 1935, in
1937 after General Election.
• Spurt of activities of TU after 1937-40. Through the efforts of R.R. Gokhale, V.V.
Giri, N.M. Joshi and others TU unification was brought about-in 1940 at
Nagpur.

Period 1940 to 1970: Following are the major developments.

(1) World War Period
• Outbreak of Second World War and resignation of Congress Ministry in
India (1940).
• Strikes and lock-out and reign of terror unleashed by British Government on
workers and
unions opposing to British War efforts.
• In 1942, for the first time, Tripartite Labour Conference was convened. This
resulted in setting up a permanent. Tripartite Consultative Machinery
Consisting of the following;
 * Plenary conference
* Standing Labour Committee.

• This has enhanced the status of trade unions in India. Within a period of 4
years (viz.1942 to 1946), number of TU's increased from 562 to 1087, an
increase of 121.5 per cent and total membership to 8.64 lakhs.
• Second World War period consolidated T.U movements and employers acceded
some of their demands like DA adjudication and setting up tripartite bodies.
(2) Post-War Period. This was the period which saw favourable disposal towards
labour. Following events took place during this period:
• 1947-India becomes independent. A socialistic democratic government was set
up which favours labour.
• 1947-Indian National Trade Union Congress (INTUC) was formed owing
allegiance to
Congress party.
• In 1948, Hind Mazdoor Sabha (HMS) was supported by socialists. Leftist formed
United Trade Union Congress (UTUC) in the same year.
• All types of workers, professionals, technicians, journalists and even government
officers and teachers have organised unions. No. of registered TU increased to
22,484 by 1971 with a total membership of 5.5 million.
• In USA, AFL and CIO merged together in 1955 to become strong trade
union.
• In 1970, Communist party in Indian split into two CPI and CPM. CPM formed
another TU called Centre of Indian Trade Union (CITU).
• Political patronage became a pattern of Indian Trade Union. Even though
initially it helped TU eventually if went against long term TU interests
because of political interference and outside leadership.

Modern Period after 1970. Trade unionism and collective bargaining is an accepted
phenomenon in India and world over. The problem and prospects of TU and labour force
vary, between developed nations and developing nations. Some of these issues are
discussed here.
Developing Nations like India
• Problem of unemployment and under-employment. This cause frustration of
educated-unemployed and large scale migration. This is mostly due to absence of
realistic National Manpower Planning.
• Semi-skilled and manual labour in private and unorganized industries
are enormously exploited.
• Poor training leading to very low productivity.
• Multiple unionism, union rivalries and lack of union leadership goes
against working interests.
• Social security to employees is inadequate.
• Public opinion goes against frequent strikes and labour unrest. Political
interference and outside leadership are being resented by workers.
Alienation between leaders and members often frustrate unionism.
 Difference between Personnel Management and HRM
Dimensions Personnel Management Human Resource Management
Employment contract Careful delineation of written Aim to go beyond contract
contracts

Rules Importance of devising clear Can do, outlook, impatience with rule
rules

Guide to management Procedures Business need

action
Behavior referent Norms/customs and practices Values/mission
Managerial task vis-a vis Monitoring Nurturing
labor
Key relations Labor management Customer
Initiatives Piecemeal Integrated
Speed of decision Slow Fast
Management role Transactional Transformational leadership
Communication Indirect Direct
Prized management skills Negotiation Facilitation

Selection Separate, marginal task Integrated, key task

Pay
Conditions
Labor management
Job categories and grades
Job design
Conflict handling
Training and development
Job evaluation (fixed grades)
Separately negotiated
Collective-bargaining contracts
Many
Division of labor
Reach temporary truce
Controlled access to courses
Performance related
Harmonization
Individual contracts
Few
Team work
Manage climate and culture
Learning companies

Focus of attention for Personnel procedures Wide-ranging cultural, structural and

interventions personnel strategies
Respect for employees Labor is treated as a tool People are treated as assets to be used
which is expendable and for the benefit of an organization, its
replaceable employees and the society as a whole

Shared interests Interests of the organization are Mutuality of Interest

upper most
Evolution Precedes HRM Latest in the evolution of the
subject