Developments in HRM Concepts

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The concept of human resource management has undergone a “Gradual process of development. Its development can be divided into five major stages/ eras as explained below:

Stage 1: Historical Origins (Pre-Scientific Management Era)

Although human relationships and the management of people have existed since the beginning of human civilization, the art and science of trying to deal with them in complex organizations are relatively new. Its early history can be summarized as;

  • In the early days, people worked alone or in such small groups that their work relationships were easily handled.
  • Working conditions were cruel and backbreaking.
  • people worked from dawn to dusk (morning to evening) under intolerable conditions of diseases, danger, and scarcity of resources.

Industrial Revolution

One of the key components of the Pre-Scientific Management Era is the industrial revolution. In the beginning, the condition of people did not improve, but at least the seed was planted for improvement. Two leading contributors of that time are:

1. Robert Own: He was a young Welsh factory owner. He was one of the first contributors to emphasize the human needs Of employees.

2. Andrew Ure: He incorporated human factors into his “The philosophy of Manufacturers’ published in 1835. His major contributions are:

  • He recognized not only the mechanical and commercial parts of manufacturing but also added a third factor which was the HUMAN FACTOR.
  • He provided workers with hot tea, medical treatment, “a fan apparatus” for ventilation and sickness payments, etc.

stage 2: Scientific Management Era (the Early 1900s)

Interest in people at work was awakened by F.W. Taylor in the US in the early 1900s. He is often called “The father of Scientific Management Theory”. The changes he brought to management paved the way for HRM. The major principles of his theory are listed below:

  • Science is not the rule of thumb
  • Harmony, not discord (disagreement)
  • Cooperation, not individualism
  • Maximum outputs, not restricted outputs
  • Development of each man to his greatest efficiencies and prosperity.

Taylor’s major areas (which are important from an HRM point of view) are:

  • Time study (its emphasis is on a division of work, work time, speed,, and efficiency)
  • Piece rate system (Its focus is on worker’s productivity, and differential payment methods.)
  • Separations of planning from doing (it says that planning is the job of management and doing is the job of labor.)
  • Scientific selection and training of workers  
  • Functional foremanship, etc.        

‘The writers like (other than Taylor) Frank Gilbreth, Henry Gantt, Lilian Gilbreth, and Harington Emerson have also contributed to the growth and development of scientific management.

However, there are limitations of Scientific Management Theory, they are:

  • It is mainly concerned with the “shop-level” or operational level only.
  • He assumes workers as economic beings, who are interested only in money. But it is proved wrong afterward.
  • It fails to address the psychological and sociological aspects of work/workers.
  • Taylor and his colleagues are not in favor of freedom and workplace democracy.

Stage 3: Hawthorne Studies and HR Movement Era         

In the 1920s and 1930s, Elton Mayo and his Harvard associates conducted a study in the area of human behavior at work. The study was conducted at Western Electric Company, Hawthorne Plant.

Mayo and his associates concluded that HR managers besides economic rewards should also focus on the feelings, emotions, and sentiments of employees. Employees were greatly influenced by work conditions such as group relationships (mainly informal group relationships) and support from management. It was recognized that treating employees with respect would improve employee satisfaction and help in achieving higher productivity.

The contribution of Mayo and his associates and their findings laid the foundation for the human relations movement. By 1950, the subject became very much popular among experts and practitioners.

The Result: He concluded that an organization is a social system and the Worker is Indeed the most important element in it. To Taylor and his contemporaries, human problems stood in the way of production and so should be removed. To Mayo, the human problem became a broad, new field of study and an opportunity for progress. Mayo is regarded as the father of “Human  Relations in an Organization”, now known as OB,

stage 4: Theory X and Theory Y Era

In this era, managers started treating people as resources rather than factors of production. Most of the  contributors in this era/stage concluded that:       

  • Employees are the greatest assets to an organization.
  • The job and tasks are the primary motivators.    
  • Policies, programs, and practices must satisfy the needs of employees and should help them in their work and in their personal development.                                      
  • HR policies and practices should be in line with the goal of balancing individual and organizational needs.                         

Remarkable Development (Milestones) in this era/stage are:      

  • In the 1920s ‘Personal Management-PM’ subject was introduced in university curricula in the USA.
  • In between the First World War and the Economic Depression of the 1930s, many large organizations established ‘Personnel Departments’ in their organizations to look after employee-related matters.                                                                                                             
  • In between 1930 to 1950, laborers were exploited. Hence, it gave birth to Labour Relations Movement and Collective Bargaining Theory. The movement became successful on the part of employees’ well-being.

Major contributors and emerged in this era are:

A. Major Contributors

1. Peter F. Drucker (1909 – 2005):

He is also regarded as the ‘Father of Modern Management. His contributions are in both dimensions- theory and practices of HRM. Major contributions of Drucker in the area of I-IRM are:                                                                                                                                                                       

  • He introduced the idea of decentralizaüon (in the 1940s) which became a bedrock (foundation) principle for virtually every large organization in the world.
  • He was the first to advocate (in the 1950s) that workers should be treated as assets, not as liabilities to be eliminated.
  • He originated the view of a corporation as a human community (in the 1950s) built on trust and respect for the workers and not just a profit-making machine.

2. Douglas McGregor (1906 – 1964):

Theory ‘X’ and Theory Y’ was an idea developed by McGregor in his (1960) book “The Human side of Enterprise”. He is a well-known psychologist.

B. Major Concepts Emerged

1. Human Capital (Concept):

Human capital is a collection of resources, all the knowledge talents, skills, abilities, experiences, intelligence, training, judgments, and wisdom possessed individually and collectively by individuals in a population or enterprise. These resources are the total capacity of the people that represents a form of wealth that can be directed to accomplish the goals of the nation, state, or enterprise. It is an aggregate economic view of the human being acting within the economy/enterprise.

2. Corporate Culture:

Corporate cultures have an important role in approaches to managing people. It can strongly affect the education, political-legal system, and economic system of a country. It highly affects various HRM practices. Corporate culture strongly influences the appropriateness of HRM practices. It can influence compensation systems.

Ethical corporate cultures adopted by the organization (followed by top managers) play a vital role in the execution of HRM policies and practices.

stage 5: The New HRM – NHRM (Strategic HRM- SHRM) Era

The new HRM era roughly started in the 1980s and onwards. No doubt, every organization needs its HRM activities to be in line with strategic goals/objectives. SHRM means formulating and implementing HR policies and practices that develop the employee competencies and behaviors the company needs to attain its strategic plans.

The birth of SHRM/NHRM

Basically, two categories of factors gave birth to SHRM/NHRM, they are:

1. The rising interest in HRM and

2. HR issues and challenges.

The experts in HRM, today, argue that the integration of HRM activities with the long-term strategic goals of an organization is the key to understanding the NHRM or SHRM. (For further details also see evolutions/growth stages of HRM) and relationship of ‘HR planning to strategic planning topics which will be discussed later on in this course).

Major contributions of SHRM (among other) are: (i) Peter Drucker, (ii) Michael Beer and Colleagues, (iii) Douglas McGregor, (iv) society of HRM in the USA and other countries, (v) David Guest (vi) Chris Brewster, etc.


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