HR Lesson-1

Evolution of

HUMAN RESOURCE MANAGEMENT

Historical Development of HRM

The Craft System

Industrial Revolution

The Personnel Administration Movement

Human Relations Movement

Personnel Department

Human Resource Management


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.

A guild (German: Gilde) is an association of craftsman in a particular trade. The guilds were responsible for supervision of apprentice training, production

methods and quality, and working conditions.

The guilds were the predecessors of trade unions.


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. It began in the UK then subsequently spread throughout Europe, North America, and

eventually the world. 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. Strict working conditions with long hours of labor dominated by a pace set by

machines, child labor, dirty living conditions, and long working hours.


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. 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.


The Personnel Administration Movement (Cont…) It's believed that the first Personnel Management department began at the National

Cash Register Co. (NCR) in 1902. It’s a separate department to handle employee grievances, record keeping, wage

management, training for supervisors on new laws and practices and other employee-related functions.

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.

John H. Patterson

John H. Patterson


The Personnel Administration Movement (Cont…):

Victorian entrepreneurs in the UK like Rowntree, Cadbury, Lever initiated programmes providing company housing, basic health care, canteens.

Business leaders still viewed the work itself as infinitely more important than the people doing it, and production rates remained the top concern.


The Personnel Administration Movement (Cont…):

Fredrick Taylor’s Scientific Management introduced the concept of ‘division of labor’ and advocated separate responsibilities for management and workers management’s 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

Frederick W. Taylor (1856- 1915)

• founder of scientific Management

• one of the first people to study the behavior and performance of people at work

• was a manufacturing manager

• became a consultant and taught other managers how to apply his scientific management techniques

• believed that by increasing specialization and the division of labor, the production process will be more efficient.

• The systematic study of relationships between people and tasks for the purpose of redesigning the work process to increase efficiency.

Scientific Management


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.

The Hawthorne Studies were conducted from 1927-1932 The Hawthorne Studies were conducted from 1927-1932 at the Western Electric Hawthorne Works in Chicago, at the Western Electric Hawthorne Works in Chicago, where Harvard Business School Professor Elton Mayo where Harvard Business School Professor Elton Mayo examined productivity and work conditions.examined productivity and work conditions.

Mayo wanted to find out what effect fatigue and monotony Mayo wanted to find out what effect fatigue and monotony had on job productivity and how to control them through had on job productivity and how to control them through such variables as rest breaks, work hours, temperatures such variables as rest breaks, work hours, temperatures and humidity.and humidity.


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


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 Management:

personnel Management is that part of management concerned with people at work and with their relationships within an enterprise.

HRM Human Resource Management (HRM) is the philosophy, policies, procedures, and practices related to the management of people within an organization. – Wendell French. HRM is the process of acquiring, training, appraising, and compensating employees , and attending to their labor relations, health and safety, and fairness concerns.- Gary DesslerA strategic approach to managing employment relations which emphasizes leveraging people’s 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 a variable cost People are social capital, capable of development

Self interest dominates, conflict between stakeholders

Co-incidence of interest between stakeholders can be developed

Seeks power advantages for bargaining and confrontation

Seeks power equalization for trust and collaboration

Control of information flow to enhance efficiency, power

Open channels of communication to build trust, commitment

Relationship orientation Goal orientation

Control from the top Participation and informed choice

HR Lesson-1

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Transcript of HR Lesson-1