Wednesday 4 April 2012

THE HISTORY / EVOLUTION OF HUMAN RESOURCE MANAGEMENT


Ancient People Management
The history of HRM can be traced back to early civilizations and even beyond. As the human beings evolved and started to live in small groups or tribes since then there started to emerge a division of labor for example who will be the tribal leader (Selection process), who will hunt and  cook the food (division of labor) and the trainer who will train younger tribal members about how to hunt, passing on important social skills and understanding the environment around (training and development). Similarly as human societies further developed(For example Indus civilization and Egyptian and Roman societies) it resulted in development of different occupations e.g. cobbler, farmer, traders and so on which further divide the work in society and increased specialization. The concept of slavery also started at this time.  Labor management at this time related to the issues of pay and  health and safety of slaves and employees. 

Modern People Management
Modern people management started to emerge during 17th and 18thcentury. Modern people management can be divided in to three stages including Industrial revolution, Human Relations movement and people as a competitive advantage. 

Time Frame
Main Era/ Philosophy towards People Management
Human Resource Role/ Person who Manage labor or People
Description
B.C. to 17th Century Ancient People Management Tribe Leader or elders, societal leaders and employer or master Early practices of HRM such as selection of tribal leader, division of work in families and  society, ensuring health and safety of workers and slaves
18th and 19th Century Industrial Revolution Labor Officer

Mostly dealing with Employees benefits and welfare issues such as sick pay and small loans
1914-1939 Scientific Management and Rise of Trade Unions Labor Manager

Dealing with both Trade unions and employees benefits. Negotiating with trade union on management behalf
1940-1980 Human Relation Movement and Rapid Industrialization Personnel   Managers Performing several complex functions such as compliance with labor laws, health and safety issues, employees benefits, trade unions management and employee relations
1980s - Onward People as a source of competitive advantage- Rise of Services Economy and Knowledge workers Human Resource Manager The strategic nature of labor management with wide variety of function including effective relations with labor, benefits and welfare, legislative issues and employees development

 Industrial Revolution:
Before Industrial revolution most of the people/ craftsman used to work for themselves at small scale and usually in their own houses. With the development of Science which brought coal powered steam engine, railway system and other better machineries and tools lead to the Industrial revolution. This was the 18th century when Europe started to move from Agriculture age to Industrial age which resulted in population migration from villages to nearby cities and towns where employment was available in these factories. In these factories a special role started to emerge named ‘Welfare Officer’. Their main job was to look after employees, visit their houses in case they get injured or fell sick and provision of some benefits including low interest loans and sick pay.
At the same time this revolution leads to huge differences or distances in societies because of widening gap between the employer and employees. Employer becomes richer and richer while employees started to realize the employer’s exploitation and their rights. To overcome their weaknesses employees started to join together and thus the concept of trade union/labor union emerged. The main objective of trade union/labor union was to protect the interest of labor and collectively negotiate with the management about issues such as higher pay, better working conditions and benefits such as holiday pays, overtime pay etc. With the rise of trade unions management also responded to this situation by replacing the old ‘Welfare Officer’ with  a new role in factories named ‘Labor Managers’. Their main job was to manage both the labor welfare activities as well as keeping the trade union under the management control to maintain smooth production. 

Human Relations Movement:
The Hawthorne Experiments carried on in Western Electric Company in Illinois which continued from 1924 to 1931 resulted in Human relations movement. The essence of Human relations movement was that human beings are human beings not just merely the workers, so if treated with respect and as a human along with good manager and employee relations it can lead to higher motivation and productivity.  A new role started to emerge after the Second World War 1945-1980 which was called ‘Personnel Manager’. They were merely replacing old Labor managers and Welfare officer but their duties did include the elements of old roles. Overall their job was to manage employee’s benefits and welfare, maintaining good employer and employee relations by managing trade union/labor unions effectively and managing all other administrative duties related to the management of people such as health and safety, protecting management interests, pay and ensuring compliance with legislation

People as a Source of Competitive Advantage:
 After 1980’s term ‘Personnel Manager’ started to be replaced by a new term’ Human Resource Managers’.  Basically after 1980’s most advanced economies such as America, Britons and other European countries shifted from Industrial era to Information era. With this shift most of their workers who used to be Industrial workers started to become knowledge workers or service workers. Now Industries started to move to other less developed countries where labor and raw material was cheaper and easily available. At this time most service sector organization such as blue chip companies, consumer electronics companies started to recognize that competitive advantage can be achieved by having a highly skilled and motivated employees. It is based on the assumption that if you have employees who have better knowledge, skills, abilities and attitudes and are highly motivated, then such organization can outperform their competitors or those organizations that have less developed staff. So now the role of HRM started to become strategic which means HR practices and policies are aimed to achieve competitive advantage for the organization by effectively managing its human resource.

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