EVOULUTION OF HRM

Evolution and development of HRM consist of 11 stages beginning prior to the industrial revolutions in UK and continuing up to the present.

STAGE I: PRE-INDUSTRIAL ERA (1400 AD-1700 AD)

Pre-industrial period is characterized by the absence of any formal HRM with in organizations .But there were some dramatic changes which ignited the modern HRM. They are

• Cessation of feudalism, release of labour from land and the beginning of the free employment relationship.

• Shift from subsistence agriculture to a commercial mixed economy, a diffusion of economic control and distribution of wealth and income.

• Spectacular growth of town with the middle class and villages along with the middle class that included skilled craftsmen and merchants.

• Development of putting out or domestic system.

• Science, not rule of thumb.

• Harmony not discord.

• Cooperation not individualism and

• Maximum output in place of restricted output.

• Taylor’s proposal for functional management called attention to the need for a separate human resource function in organizations.

• Taylor demonstrated the feasibility of job analysis as a basis for employee selection, training, job evaluation and compensation.

• Taylor demonstrated that work and jobs can be systematically studied, analyzed, redesigned or improved upon.

• Taylor stressed the importance of proper selection procedures and training methods.

• Taylor advanced the idea of differential pay on the basis of productivity.

• Taylor highlighted the need for workers to be won over and led by management.

• The averting of industrial conflict and unionization.

• The promotion of good management and worker relations.

• The efforts to increase worker productivity and reduce turnover.

• Organizations became productivity conscious due to the need to operate in a global economy and the realization that competitive advantage is due to managing human resources.

• Widespread downsizing, restructuring and redesigning of organizations. As a result old hierarchical type structure with tight controls has given way to flatter structures and larger spans of control.

• Need for sound human resources strategy to effectively manage the highly diverse workforce of the future.

Today’s HRM functions are different from that of the past in many ways. Firstly today’s HRM is characterised by the emphasis on the integration of traditional PM activities as well as HRM’s involvement in overall organisational planning and change. Secondly HRM today is characterized as a partner in organisational change, creator of organisational culture and facilitator of organisational commitment. Third, HRM is characterised by the decentralisation of many of the traditional HRM activities from personnel specialists to senior line management. Fourth current HRM is characterized by a focus on individual employees rather than on collective management-trade union relations. Furthermore HRM has become a partner with other management functions and has become increasingly responsible to cultivate the requisite culture that is conducive of required behaviours.

STAGE II: INDUSTRIAL REVOLUTION AND THE FACTORY SYSTEM

Industrialization replaced the human effort and skill by machines. Factory system which was developed due to the industrial revolution gave birth to rationalization of work and division of work. Necessity of supervising was also introduced.

The personal practices become autocratic, based upon a commodity concept of labour, there was a total neglect of the human factor the focus was upon materials, markets and production. The factory owner delegated the responsibility to the foreman which eventually resulted in drive system of management that was characterized by the use of force and fear.

Stage III: Emergence of the Modern Corporation and Managerial Capitalism

The period of 1860 to 1900’s witnessed a growth in corporate form of organization, the separation of the operation from the ownership of firms and the employment of salaried managers. The modern enterprise along with managerial capitalism emerged.

In spite of organizational growth and technological advances there was no improvement in HRM. The traditional factory management practices were responsible for low productivity and wages, high rates of turnover and increase in labour and management conflicts.

Stage IV: Scientific Management, Welfare Work and Industrial Psychology

Scientific management (SM) and Welfare Work were responses by management to worker related problems in the factory. SM represented an effort to deal with labour and management inefficiencies through reorganization of production methods and rationalization of work. Welfare work represented the efforts to deal with labour problems by improving worker conditions. Industrial psychology represented the application of psychological principles towards increasing the efficiency of industrial workers.

The last quarter of the 19^th century saw engineers introducing dramatic changes that rationalized factory production and industrial management system. They introduced personnel practices to rationalize employment procedures.

FW Taylor’s Scientific Management

FW Taylor was the father of scientific management. He was concerned with worker inefficiency and the need for managers to gain the co-operative effort of the employees. Time and Motion studies became the heart of SM and represented a way of accurately determining the amount of work a man could do.

Taylor sums up SM as:

Taylor proposed SM as partial solution to labour problem because it would increase production at lower cost to employers and result in higher wages for workers as they would compensated according to their output.

Contributions of SM to HRM

Welfare Work:

Welfare Work like SM was an attempt at a more systematic approach to management. It has been defined as anything done for the comfort and improvement, intellectual or social, of the employees, over and above the wages paid, which is not a necessity of the industry, nor required by the law. The primary purpose was:

Industrial Psychology:

While SM focused on the job, Industrial Psychology focused on the worker and decreasing the psychological and physiological costs of work. Industrial Psychology began in 1931 when Hugo Munsterberg published Psychology and Industrial efficiency.

Stage V: World War 1 and the emergence of HRM as a profession (1911-1914).

World War 1 provided the apt conditions that resulted in the growth of business around the world, and the emergence of HRM as a profession. The war brought attention to the need for scientific personnel administration and the activities promoting the welfare and efficiency of workers. When the war ended personnel management evolved as a primary function along with financial, production and sales departments.

Effect of war on HRM.

A large number of firms  were established in us and the UK during 1951 and 1920 firms adopted functional management which removed the hiring and firing functions from the foreman and placed the responsibility to the employment or the personnel department, in addition the was an integration of HRM activities and welfare. The year 1981 recorded the birth of personnel management as a profession.

Stage VI: the human relations movement

From the early times HRM focused on human relations. Human relations were associated with Elton mayo. Human relations were responsible for the addition of the human factor.  Welfare work into industrial psychology in personnel profession it mainly focused on increasing productivity by discovering the needs of the workers, the way of managing people.

Hawthorne experiments actually showed that working conditions affected the productivity, which led to the beginning of human relations movement in 1945 and continued till 1960, it was later on was adapted as a new area of organizational behaviour. Human relations made the manager responsible for integrating the employees into work situation in a way that would motivate them to work together co-operatively and productively.

Differences between scientific management and human relations management

Scientific management focused on the requirements of the job and the economics rewards as motivational elements whereas human relations revealed the importance of non economic and social rewards as incentives. Sm helped to realize that workers have physical and psychological needs; human relations contributed the understanding that workers have social needs.

Stage V11: the golden age of industrial relations and the personnel management maintenance function, 1935-1970.

HRM function which evolved during the world war had a set back during the great depression. After depression there was an increased need of human relations management as a result of growth in formations of unions. The provision of several labour acts led to the formation of unions which resulted in the evolution of human relation functions. The general focus of HRM functions was on IR as the primary need was to operate in the collective bargaining framework of labour relations. Government involvement in the economy during the war also led to the evolution of personnel department in every company. 

Stage VIII: Quality of Work life Era.

During the mid 1960s and throughout 1970s there was a rise of viewpoint that employees should be considered as assets rather than liabilities. Efforts were taken to satisfy interest of both employer and employee through new policies and strategies that maximised overall productivity of the organisation.

Practises and programmes implemented.

The efforts of this era were driven by not only by a realisation that investment in human resource were sound and should show a considerable return but also by the changing nature of the workforce. As the work force is becoming more educated their attitude, value and belief about the role of the work and organisations were changing.

In many ways the quality of work life era was also promoted by a series of social security legislation passed during this period. These acts collectively exercised a substantial influence on both psychological and physical quality of work life in organisation.

Stage IX: The Emergence of Contemporary HRM Function.

Since the 1970s, the PM side of the HRM function has experienced an evolution from being a maintenance function, secondary to the IR function, to representing one of critical importance to the effectiveness of the organisation.

Changes in HRM Policies

Firstly there has been a trend in management to make strategic choices that has represented aggressive union avoidance policies and have resulted in a decrease in union representation of their workers.

Secondly much more reliance has been placed on the employer employee relations and dealing with employees directly as individuals rather than on management-union relations and dealing with employees indirectly and collectively.

Thirdly HRM aims at creating a sense of mutuality among the workers and management so that the workers are considered as assets to the organisations to attain competitive advantage.

Fourthly the successful application of Total Quality management (TQM) principles by Japanese companies contributed to the recognition that employees a virtual organisational resource.

Changes in HRM functions

Following were the changed functions-

Firstly PM implies human resource as expense whereas HRM indicates emphasis on human resource to be managed.

Secondly PM signifies human resource administrative sub functions, maintenance activities that are reactive, passive and secondary to other significant business function. On the other hand, HRM indicates a proactive approach, an integration of human resources sub functions, expansion of the function, position and strategic importance of HRM within the organisation.

STAGE X: STRATEGIC FOCUS ERA

By 1970 there was a complete change in the way people perceived HR function. Meyer referred HR directors as the new corporate heroes .There occurred many chief executive officers who rose to top ranks through HR function. In the M.B.A syllabus business strategy was merged with Human Resource Management which led to the emergence of Strategic Human Resource Management. Strategic HRM had brought HR function into closer contact with the top executives of the firm and has helped to graft a role for HRM as a strategic business partner.

STAGE XI: THE HRM FUNCTIONS TODAY

In the new era the function of HR get in to wide range which focus on the core results and objectives of the organisation. Thus the HR plays a immense role in identifying the  intellectual property to organisation and to create wealth.