EVOLUTION OF HUMAN RESOURCES MANAGEMENT

1. EARLY YEAR : (Before 1900)

• people organized themselves into guild. They used their unity to improve their
work conditions.These guilds became forerunners of trade unions.

• Before 1900,most hiring ,firing,training and pay adjustment decisions were made
by individual supervisors.

• The HRM field further developed with the arrival of the Industrial Revolution in
1870s.The Industrial Revolution began with the substitution of steam power and
machinery for time consuming hand labour.Due to the Industrial
Revolution,working conditions,social patterns and division of labour were
significantly changed.

• The direct cause of employers seeking better HRM programs was not poor
working conditions, but rather the protests and pressures generated by workers
and organized labor unions. Indeed, labor unions, which had existed as early as
1790 in the United States, became much more powerful during the late 1800s and
early 1900s.

• There were two other particularly important contributing factors to the origination
of modem HRM during that period. The first was the industrial welfare
movement, which represented a shift in the way that managers viewed employees
—from nonhuman resources to human beings. That movement resulted in the
creation of medical care and educational facilities. The second factor was
Frederick W. Taylor's (1856-1915)Scientific Management

• The scientific management studies conducted by Frederick W.Taylor and

others,beginning in 1885,helped management to identify different ways of doing
work and to increase the work productivity.

2. GROWTH YEAR: (Between 1900 to 1946)

• 1908 – Various laws in USA brought by India

 • Abolish child labour

• Development of Welfare work and labour management

• 1910 – personnel department

• Right man for right job after the first world war

• The First World War gave a significant boost to welfare work, particularly as
Rowntree was appointed as Director of Welfare at the Ministry of Munitions in
1916, the Ministry which co-ordinated wartime industrial production, and by the
end of the war controlled the employment of nearly 3.5 million workers

• A parallel development was an increase in the appointment by firms of 'Labour

Officers', mostly males, to assist in the management of recruitment, discipline,
dismissal and industrial relations at plant level amongst unionised male workers.

• 1920 – insurance, vacation for employees

• 1930 – trade union

• During the 1930s and 1940s the general focus of HRM changed from a focus on
worker efficiency and skills to employee satisfaction. That shift became
especially pronounced after World War II, when a shortage of skilled labor forced
companies to pay more attention to workers' needs. Employers, influenced by the
famous Hawthorne productivity studies and similar research, began to emphasize
personal development and improved working conditions as a means of motivating
employees.

• 1940 – concentrating training in employees

3. MATURATION YEAR: (1946 TO 1970)

• As in the Second World War the term employment manager started to take care of
women employees the combination of both welfare officers and employment
manager leads to personnel management. Though in the war times the
productivity increased due to number of employment policies undertaken but the
role of personnel management during war time was small that to implement the
rules demanded to produce large scale goods but it was not focusing on other
aspect of managing human resource that is by motivation, promotion, increasing
 morale, performance appraisal etc but the role of negotiation of union has gain
important role.
• But there is an increasing in the bargaining between employer and unions during
pre world war. During there is an enormous growth in an engineering industry but
in 1950,s and 60,s there was an enormous growth in other type of industry which
leads to the increasing the role of personnel management at same time large
companies wanted to develop their own employment policies which suites to their
company which leads to improve emerging new aspect in personnel management.
• In the year mid of 1960’s organization started giving much importance to employ
the personnel specialist to perform different activities in order to make the
employees as a whole package to perform in the organization. the world is
becoming global village and labour started moving from one country to another
this resulted in managing the workforce diversity this become the challenge for
the personnel management to manage these workforce diversity.
• In the year 1960 Even the domestic rules and regulation was increased towards
employability the new legislation was introduced towards employment, training,
and redundancy payments, equal pay opportunities, employment protection. The
year 1960 was high inflation so there was a regulation on wages paid by the
employer personnel manager has to understand this new aspect of regulation
regarding inflation to develop policies to implement new measures which aligned
with employee’s satisfaction level.
• Improvement in selection training appraisal and new management techniques has
been expanded(1960-1970) to improve the performance of the employees which
demands to improve the profile of personnel management.
• Thus, by the end of the seventies, the main features of personnel management as it
appears today were in place, and can be distinguished as:

 the collective bargaining role - centred around dealing with trade unions, to
which might be added the development of strategies for handling industrial
relations
 the implementer of legislation role - implying understanding and implementing
a growing amount of legislation
 the bureaucratic role - implementing a series of rules about behaviour at work,
dealing with recruitment, managing absence and so on
 the social conscience of the business role, or 'value champion' - a residue from
the welfare worker function
 a growing performance improvement role (in some organisations and sectors) -
about integrating the personnel function with business needs and taking a more
strategic view.

4. TRANSITION YEAR: (1970 TILL TODAY)

 • 1970 – Companies Act, ESI, benefits, responsibility of manager, motivation,
leadership, group dynamics.

• The role of HRM has gain more important in the year 1980

• There was a complete shift from post war collectivism and towards individualism
and changes in structure of economy. Some people thought that HRM was
evolved to solve union problem as there is an demand to take care of employees
of an organization as a whole it performs different function.
• Strict and rigorous selection and recruitment
• High level of training, especially induction training and on the job training
• Team working
• Multitasking
• Better management-worker communications
• Use of quality circles and an emphasis on right first time quality
• Encouragement of employee suggestions and innovation
• Single status symbols such as common canteens and corporate uniforms
• 1990 – shift system (Day and Night)
• As the 21st century advances, there seems no reason to suppose that the various
roles and traditions will disappear, although their relative importance will change
and evolve depending on the political, legislative and intellectual climate of the
time and organisational needs and culture. For the immediate future, the change
agent and business partner roles seem likely to grow in importance, although there
will continue to be a part of the function which, if it is not about implementing
rules and legislation, is about ensuring that line managers are enabled to do so
competently.

FEATURES OF HRM / NATURE OF HRM

1. Integral part of management –HRM is integral in the process of management. This
function is performed by all the managers throughout the organization rather than the
personnel department only. The manager must undertake the basic responsibility of lining the
right people, thereafter providing them with the right training & motivation and
appraising their performance for improving their quality.

2. Comprehensive function - HRM is concerned with managing people at work. It covers all
types of people at all levels the organization. It applies to workers, supervisors, officers,
managers and other types of personnel.

3. People oriented - HRM is concerned with employees as individuals as well as groups. It is the
task of dealing with human relationship within an organization.
It is concerned with all categories of personnel from top to the bottom of the organization. It is
the process of bringing together people and organizations so that the
goals of each are met.
4. Action-oriented –HRM focuses on action rather than on recordkeeping or procedures. It
stresses the solution of personnel problems to achieve both organizational objective and
employees personal goals.

5. Personnel activities or function- Personnel management involves various functions of

managing people at work like manpower planning, employment, placement, training
appraisal and compensation of employees. “Personnel Department” is created in the
organizations which is responsible for all these activities.

6. Individual-oriented - Every employee is considered as an individual so as to provide

services & programmes to facilitate employee satisfaction and growth.

7. Development–oriented – HRM is concerned with developing potential of employees so that

they get maximum satisfaction from their work and give their best to the
organization. For this, it takes into account the personality, interests and capacities of
employees.

8. Continuous Process - Personnel Management is not a “one-shot” function, but a

continuous one which requires constant alertness and awareness of human relations and their
importance in day-to-day operations.

9. Pervasive function – HRM is a pervasive function of management which is performed by all

managers at various level in the organization, across the different industries. When a personnel
department is created other managers are not relieved of this responsibility. However, they can
always seek advice and help in managing people from experts who specialize in personnel
management.

10. Future-oriented - HRM is concerned with helping an organization achieve its objectives in
the future by providing for competent and well motivated employees.

11. Based on Human Relations - Personnel management is concerned with the motivation of
human resources in the organization. Every person has different needs, perceptions and
expectation. Managers must have the human relations skills to deal with the people at work.
Human relations skills are also required in training, performance appraisal, transfer & promation
of subordinates.

12. Challenging Fucnction - Managing of human resources is a challenging job due to the
dynamic nature of people. People have to be dealt with tactfully as they have sentiments &
emotions.
13. Interdisciplinary - HRM involves application of knowledge drawn from disciplines like
sociology, anthropology, psychology etc. HRM is a highly specialized job.

14. Science as well as Art - HRM is a sciences as it contains an orgnised body of knowledge
consisting of principles & techniques. It is also an art because it involves application of
theoretical knowledge to the problems of human resources.
15. Staff Function - The function of HRM is advisory in nature. HR managers contribute to the
growth & success of the organization by advising the operating department on

CONCEPTS OF HRM:
1) The Commodity concept – Prior to the Industrial Revolution, the guild system was the
onset of personnel management. “Guild” refers to a closely knit group concerned with
selecting, training rewarding, and maintaining workers. The industrial revolution gave
rise to the Factory System wherein factory owners employed workers on fixed wages.
The workers were treated as a commodity which could be bought & sold. The close
relationships between owners and workers were broken.

2) The Factor of Production Concept – In this, employees were considered a factor of

production just like capital, materials & machinery. Taylor’s scientific management laid
stress on the proper selection and training of employee’s inorder to maximize productivity. The
employees were treated as mere operators of machines. However, unlike in the commodity
concept, employees gained through higher earnings & better working conditions in this concept.
Personnel Management was believed to be concerned with keeping records of production,
employment, wage payments, training etc.

3) The Paternalistic Concept – Employees organized together on the basis of their

common interest & formed trade unions. The growing democracy and the growth of trade unions
stimulated the employees to have a paternalistic (fatherly & protective) attitude towards the
workers. Employees launched health and welfare schemes like housing facilities, recreation
facilities, medical facilities, worker’s education, pension plans, etc. In several factories, welfare
officers were appointed to provide welfare services to the workers. Employers & Employees
both realized that they cannot survive without each other. All the benefits were treated as a
favour to the employees by their workers.

4) The Humanitarian Concept – In the 1920s and 30s, industrial psychologists and human
relations activists advocated the adoption of humanitarian concept. They opined that workers
should be treated as human beings and the employer’s responsibility is to
provide facilities for the social and psychological satisfaction of the workers. Hawthorne
Experiments generated considerable interest in human problems of the workplace. This approach
is also known as human relations concept.

5) The Behavioral Human Resource Concept – The emergence of behavioral science approach
in 1950s led to the application of behavioral sciences to the problems of individual and group
behavior at work. There was a rise in the concepts of motivation,
leadership, group dynamics, organizational climate, organizational conflict etc.

Employees were considered as a valuable asset of the organization. Focus was on the integration
of employee with the organization so that organizational & individual’s goals could be achieved
simultaneously. Focus was on management practices like two-way communication, management
by objectives, quality circles etc.

6) The Partnership Concept – The modern trend is to view employees as partners in industry.
Worker’s participation is of utmost importance, several companies have launched stock option
plans to retain their employee and achieve their commitment to the organization. The employees
are treated as a valuable resource and “Human Resource Development (HRD)” is the buzz word
in the industry today.

FUNCTIONS OF HRM

There are 3 broad functions of HRM –

• Managerial Functions
• Operative Functions
• Advisory Functions

Managerial Functions – Like any other manager, a Human Resource Manager

performs the functions of –

· Planning
· Organising
· Directing
· Controlling

1) Planning – A Plan is a predetermined course of action. Planning is the process of deciding the
goals and formulating policies and programmes to achieve the goals. HRM
involves forecasting vacancies for human resources, predicting trends in labour market, wages,
union demands etc and their impact on the organization. In the area of HRM, “Planning”
involves deciding personnel goals, formulating personnel policies & programmes, preparing the
human resource budget etc.

2) Organising – In order to implement the plans, a sound organization structure is required..

The organization structure includes the following –

· Grouping of personnel activity logically into functions or positions.

· Assignment of different groups of activities to different individuals.
· Delegation of authority according to the tasks assigned and responsibilities involved.
· Co-ordination of activities of different individuals.
3) Direction – Direction is the process of motivating, activating, leading and supervising
people. The direction function of the personnel manager involves encouraging people to work
willingly and effectively for the goals of the enterprise. The personnel manager can motivate the
employees in an organization through career planning, salary administration, ensuring employee
morale, developing cordial relationships and provision of safety requirements and welfare of
employees.

4) Controlling – It implies checking, verifying and regulating to ensure that everything is in

accordance with the plans. It is the observation and comparison of results with the standards and
corrections of deviations that may occur. Controlling the management of human resources
involves auditing training programmes, analyzing labour turnover records, directing morale
surveys, conducting separation interviews etc.

Operative Functions / Service Functions – These functions are undertaken by the personnel
manager of the personnel department. These are –

A) Procurement Function – It is concerned with securing and employing the right

kind and number of people so as to accomplish the organizational objectives. It consists
of the following activities –

 Job Analysis – It is the process of studying in detail the operations and responsibilities
involved in a job so as to identify the nature and level of human resources required to
perform the job effectively.

 Human Resource Planning – Is the process of estimating the present and future
manpower requirements of the organization.

 Recruitment – It is the process of searching for required personnel and stimulating them
to apply for jobs in the organization.

 Selection – Involves judging the suitability of different candidates for jobs in the
organization & choosing the most appropriate people.

 Placement – It means assigning suitable jobs to the selected candidates so as to match

employee’s qualifications with job requirements.

 Induction or Orientation – It involves familiarizing the new employees with the

company, the work environment and the existing employees so as the new employees feel
comfortable and get introduction to the work culture.

B) Development Function – HRD is the process of improving the knowledge, skills aptitudes
and values of employees so that they can perform the present and future jobs more effectively. It
consists of the following activities.

 Performance & Potential Appraisal – It consists of a systematic evaluation of

employees with respect to their performance once on the job and their potential for
development.

 Training – Is the process wherein employees learn knowledge, skills and attitudes which
help in the present job for which he has been engaged in the organization and also helps
to develop him for higher jobs in the organization.

 Executive Development – Is the process of developing managerial talent through

appropriate programmes.

 Career Planning & Development – Involves planning the career of employees so as to

fulfill the career aspirations of people. It involves promotions & transfers.

C) Compensation Function – It is providing of equitable and fair remuneration to employees

for their contributions to achieve the organizational objectives. They can be compensated both by
monetary and non-monetary rewards. It consists of the following activities:-

 Job Evaluation – It is the process of determining the relative worth of a job.

 Wage & Salary Administration – Consists of developing and operating a suitable wage
and salary programme.

• Bonus – Involves payment of bonus under the payment of Bonus Act, 1965 as well as
non-statutory bonus and other incentives.

D) Maintenance Function – (Working conditions & welfare) It is concerned with providing the
employees with good working conditions so that they like their work and workplace & maintain
their efficiency. This is important to increase the motivation & morale of employees several
fringe benefits like housing, medical aid, educational facilities etc are also given to the
employees, social security measures like provident fund, gratuity, maternity benefits, injury /
disablement allowance, group insurance etc are also given.Health, safety and welfare services are
designed to preserve the human resources of the organization.

E) Motivation – The personnel manager helps the various departmental managers to design a
system of financial and non-financial rewards which is a source of motivation to the employees.
F) Personnel Records – Personnel department keeps an updated record of the employees with
respect to the training, achievements, transfer, promotions etc. Records of absenteeism, labour
turnover and the personnel programmes & policies of the organization are also kept.

G) Industrial Relations – The personnel managers can help in collective bargaining, joint
consultation and settlement of disputes, if they arise, since he is associated with the committees
on discipline, labour welfare, safety, grievance etc, he helps in maintaining industrial peace in
the organization.
H) Separation – At the time of separation of the employees from the organization, the personnel
manager must ensure the release of retirement benefits to the retiring personnel in time.

Advisory Functions – The HR Manager offer advice to –

i) Top Management – In formulation & evaluation of personnel programmes &

policies; and gives advice on maintaining good human relations & a high employee
morale.

ii) Departmental Heads – The HR manager offers advice to the heads of different
departments on manpower planning, job analysis & design, recruitment & selection,
placement, training, performance appraisal etc.

OBJECTIVES OF HRM
The primary objective of HRM is to ensure the availability of competent and willing
workforce to an organisation. Apart from this, there are other objectives too.
Specifically, HRM objectives are four fold: societal, organisational, functional, and
personal.

Societal Objectives
The societal objectives are socially and ethically responsible for the needs and
challenges of society. While doing so, they have to minimize the negative impact of
such demands upon the organisation. The failure of organisations to use their
resources for society’s benefit in ethical ways may lead to restrictions. For example,
the society may limit human resource decisions to laws that enforce reservation in
hiring and laws that address discrimination, safety or other such areas of societal
concern.

Organisational Objectives
The organisational objectives recognise the role of human resource management in
bringing about organisational effectiveness. Human resource management is not an
end in itself; it is only a means to assist the organisation with its primary objectives.
Simply stated the human resource department exists to serve the rest of the
organisation.
Functional Objectives
Functional objectives try to maintain the department’s contribution at a level
appropriate to the organisation’s needs. Human resources are to be adjusted to suit the
organisation’s demands. The department’s level of service must be tailored to fit the
organisation it serves.

Personal Objectives
Personal objectives assist employees in achieving their personal goals, at least insofar
as these goals enhance the individual’s contribution to the organisation. Personal
objectives of employees must be met if they are to be maintained, retained and
motivated. Otherwise, employee performance and satisfaction may decline giving rise
to employee turnover.

QUALITIES OF A GOOD HR MANAGER

1. PERSONAL QUALITIES

• INTELLIGENCE

 Skill to communicate

 Skill to articulate

 Proper understanding

 Dealing with people intelligently

 Helps to understand the situation and prepare to react accordingly

• COMMUNICATIVE SKILLS
  Command over language

 Ability to express correctly

 Listening skills

 Ability to interpret policy and programmes

• EXECUTING SKILLS

 Ability to implement policies and programmes speedily and accurately

 Able to execute management’s decisions regarding personel issues with speed,

accuracy and objectively.

• LEADERSHIP SKILLS

 Physical fitness

 Moral courage

 Inspire confidence and win cooperation

 Ability to create enthusiasm

 Take initiatives

 Unbiased attitude

• HUMAN SKILLS

 Objective mind(free from bias)

 Ability to discriminate between right and wrong

 Insight in human nature

2. MANAGERAIL SKILLS
• CONCEPTUAL QUALITIES

 Find out the of WHY rather than HOW

 Ability to see whole picture and recognize significant elements

• ANALYTICAL QUALITIES

 Analyze the situation quickly and accurately in terms of core problem

 Identify important and less important issues

 Differentiate between these and get into reality

• MOTIVATIONAL QUALITIES

 Self motivated

 Motivate subordinates

 Better understanding of subordinates as to what activates them for better

performance

• EMOTIONAL STABILITY

 Consistency in action

 Free from anger

 Well adjusted and have no anti-social attitude

 Objective in approach

 Supported by relevant facts

 Decisions must be free from bias

3. JOB REALTED QUALITIES

• EMPATHY

 Observing things and situations from others point of view

 It requires respect for others, their rights, beliefs, feelings and values

• COMMUNICATIVE AND PERSUASIVE QUALITY

 Quality to communicate skillfully for persuasive, informative stimulating

purposes

• HUMAN RELATION QUALITY

 How to deal with human beings

 Understand their nature and way of behaving

 Develop people and get cooperation within the organization

 Interact with various agencies outside the organization

• TECHNICAL QUALITY

 Thorough knowledge of concept, principles and theories of HRM is required

 Apply relevant and correct concept in a given situation