Evolution of HRM

The evolution of human resource management as a distinct profession dates back to to the
industrial revolution when factories established personnel departments to look into wages
and welfare of workers. The Personnel Management Approach gave way to the Human
Resource Approach. Read on to learn more

To understand the evolution of Human Resource Management, one must first understand
its basis. The origins of workforce management lies in the arrangements made for the
welfare of apprentices working with the master craftsmen in the putting out system that
prevailed during the medieval ages. The industrial revolution that led to the establishment
of factories displaced the putting out system.

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.

Image Credit: flickr.com/woodleywonderworks

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
Image Credit: N Nayab

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.

Staff and Line Functions Defined. "Generally, a line function is one which is involved
in or contributes directly to the main business activity of a firm…. [While] Staff
functions are those functions which help or assist line functions accomplish the primary
objectives of the enterprise. They are activities which are indirectly related to the major
objectives of the firm" (Carvell, HRB p178). Additionally, Line functions are those
activities that give definition to the organization structure and which ensure that the
product or service is produced and reaches the customer at a profit. Whereas, Staff
functions are subsequently added to assist Line managers in accomplishing their goals.