Evolution of HUMAN RESOURCE MANAGEMENT

Historical Development of HRM

The Craft System
   The history of HRM can be traced back to England before the Industrial Revolution, where masons, carpenters, leather workers, and other craftsmen organized themselves into guilds. The guilds were responsible for supervision of apprentice training, production methods and quality, and working conditions. The guilds were the predecessors of trade unions.

Historical Development of HRM

Industrial Revolution:
 The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology. Conversion of the economy from agriculture-based to industry-based. The Industrial Revolution century replaced the time-consuming hand labor with mechanical means of production. With the rapid growth of manufacturing industry, emergence of supervisors and managers widened the gap between the workers and owners.

 

Historical Development of HRM

The personnel administration Movement:
  Late 1800s, people problems were a very real concern in the workplace. For the average blue-collar worker, most jobs were low-paying, monotonous and unsafe. Some industries experienced difficulty recruiting and retaining employees because of the poor working conditions workers were exposed to. . Concerns grew about wages, safety, child labor and 12-hour workdays. Workers began to band together in unions to protect their interests and improve living standards.

 

Historical Development of HRM

The personnel administration Movement (Cont):
 Forward-thinking employers recognized that productivity was connected to worker satisfaction and involvement

B.F. Goodrich Company was the pioneers in designing a corporate employee department to address the concerns of the employees in 1900.

John H. Patterson

 

It's believed that the first Personnel Management department began at the National Cash Register Co. (NCR) in 1902. Its a separate department to handle employee grievances, record keeping, wage management, training for supervisors on new laws and practices and other employee-related functions.

Historical Development of HRM

The personnel administration Movement (Cont):

 

Many attempted to ease labor unrest by increasing wages. Ford experienced employee turnover ratios of 380 percent in 1913; in 1914, the company doubled the daily salaries for line workers from $2.50 to $5, even though $2.50 was a fair wage at that time. Victorian entrepreneurs in the UK like Rowntree, Cadbury, Lever initiated programmes providing company housing, basic health care, canteens.

Historical Development of HRM

The personnel administration Movement (Cont):
 Business leaders still viewed the work itself as infinitely more important than the people doing it, and production rates remained the top concern. Fredrick Taylors Scientific Management introduced the concept of division of labor and advocated separate responsibilities for management and workers managements responsibility to plan and workers responsibility to execute. He attempted to increase worker efficiency through work methods, time and motion study, and job specialization. He also argues for incentive-based compensation systems to motivate employees

Historical Development of HRM

Human relations movement:

Elton Mayo and his associates conducted several studies on worker productivity. The studies pointed out the importance of social interaction and work group on output and satisfaction. The human relations movement eventually became a branch in the study of Organizational Behavior.

Historical Development of HRM

Personnel Department
 Personnel Departments emerged in the organizations first time in the 1920s in order to bridge the gap between the management and the workers. But early personnel departments were only concerned with the blue-collar workers. These departments were mostly involved in recordkeeping, dealing with union troubles, arranging farewell parties, annual picnic, etc. Greater emphasis on collective bargaining and labor relations within personnel management. compensation and benefits administration

 

Historical Development of HRM

Personnel Department
 Personnel Departments emerged in the organizations first time in the 1920s in order to bridge the gap between the management and the workers. But early personnel departments were only concerned with the blue-collar workers. These departments were mostly involved in recordkeeping, dealing with union troubles, arranging farewell parties, annual picnic, etc. Greater emphasis on collective bargaining and labor relations within personnel management. compensation and benefits administration

 

Historical Development of HRM

Human Resource Management
 Between the 1960s and 1970s, the HRM movement gained further momentum due to the passing of several acts like the Equal Pay Act of 1963, the Civil Rights Act of 1964, the Employee Retirement Income Security Act of 1974 (ERISA), and the Occupational Safety and Health Act of 1970 Income During 1970s, personnel management gradually evolved into human resource management broadening its scope in the organizations. HRM function was integrated into the organizational goals and strategies. The crucial role of HRM became gradually evident in attaining the strategic and competitive advantage of organizations for survivals

PM vs. HRM
Personnel Panagement: personnel Management is that part of management concerned with people at work and with their relationships within an enterprise.

HRM A strategic approach to managing employment relations which emphasizes leveraging peoples capabilities is critical to achieving sustainable competitive advantage, this being achieved through a distinctive set of integrated employment policies, programs and practices. (Bratton & Gold)

Basic Concepts
Old assumptions (PM) New assumptions (HRM)

Reactive piecemeal interventions in response to specific problems.

Proactive, system-wide interventions, with emphasis on fit, linking HRM with strategic planning and cultural change People are social capital, capable of development Co-incidence of interest between stakeholders can be developed Seeks power equalization for trust and collaboration Open channels of communication to build trust, commitment Goal orientation Participation and informed choice

People are a variable cost Self interest dominates, conflict between stakeholders Seeks power advantages for bargaining and confrontation Control of information flow to enhance efficiency, power Relationship orientation Control from the top