Evolution of Human Resource Management (HRM)

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resource-management-hrm/31460

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Everything you need to learn about the evolution of HRM (human resource management.) Evolution of
HRM over the period of time is important for understanding the philosophy, functions, and practices of
HRM that are followed in different situations so that relevant HRM practices are evolved in the present
situation.

HRM, being a part of management discipline, has followed the pattern of development of management
because of the interrelationship of the problems of both the fields.

Human Resource Management (HRM) is relatively a very recent term considered for managing human
resources in an organisation. HRM is still evolving to become an amalgam of organisational behaviour,
personnel management, industrial relations and labour legislation.

In this article we will discuss about the evolution of human resource management. Learn about:- 1.
Managing Slaves 2. Managing Serfs 3. Managing Indentured Labour 4. Industrial Revolution Era;

5. Trade Union Movement Era 6. Social Responsibility Era 7. Scientific Management Era 8. Human
Relations Era 9. Behavioural Science Era 10. Systems and Contingency Approach Era and 11. Human
Resource Management Era.

Also, learn about the history of modern HRM:- 1. Early Philosophy (Before 1900) 2. Efficiency and
Productivity Movement (1900-1920) 3. Period of Welfarism and Industrial Psychology (1920-1930) 4.
Period of Human Relations (1930-1950) and 5. Modern Times (After 1950).

Summing up, with the three important stages for growth of HRM are:- 1. Labour Welfare Stage 2.
Personnel Management Stage and 3. HRM Stage.

Evolution of Human Resource Management (with Phases)

Evolution of Human Resource Management – Historical Perspective of Human Resource Management

The term “human resource management” is of recent origin. In its modern connotation, it came to be
used mainly from the 1980s onwards. During ancient times and for a long period in the medieval era,
production of goods was done mainly by skilled artisans and craftsmen. They themselves owned the
tools and instruments, produced articles and sold these in the market.

As such, the question of employer-employee or master-servant relationship did not arise in their cases.
They managed their affairs themselves and with the help of the family members. However, many
effluent craftsmen also employed apprentices and certain categories of hired labourers. There existed a
very close relationship between the master craftsmen and the apprentices, and they themselves took
care of the problems facing the apprentices and their family members.
A sort of human approach was involved in their relationship. After a prolonged period of training, many
apprentices established their own enterprises, and many others remained attached with their master
craftsmen on lucrative terms. During the medieval period, the skilled craftsmen also formed their guilds
primarily with a view to protecting the interests of their respective trades.

These guilds also determined the price of their products, the wages of the journeymen and hired
labourers, and regulated the terms and conditions of their employment. The ancient and a major part of
the medieval period also witnessed prevalence of certain other distinct types of labourers. These
comprised slaves, serfs and indentured labourers.

A brief description of the manner in which they were treated and managed will be relevant for a proper
understanding of human resource management in a historical perspective.

1. Managing Slaves:

Slaves comprised an important source of manpower in almost all ancient civilisations. They could be sold
and purchased like commodities. Their main purchasers were the wealthy rulers, landlords, tribal chiefs
and effluent businessmen. The purchasers of slaves had a rather complete control over their slaves.

The masters of the slaves took a variety of arduous work from them such as carrying heavy loads, rowing
ships and boats, construction of buildings and forts, digging canals, cattle-rearing and tillage of soil. The
remuneration or compensation for their efforts comprised mainly food, shelter and clothing. The slaves
were dealt with iron hands.

They were subjected to strict supervision, and non-compliance of the orders of their masters or
supervisors was generally punishable with physical tortures, and occasionally with mutilation of their
limbs and even death sentence for grave offences.

2. Managing Serfs:

Serfdom was widely prevalent in the feudal societies of the pre-and early medieval era. Serfs were
engaged by landlords mainly in agricultural operations and allied activities. The landlords would usually
give them a piece of land for their habitat and often, some land for their own cultivation. In many cases,
a paltry sum of money was advanced to them in order that they could remain attached to their masters.

In lieu of these facilities, the serfs and their family members were required to serve their masters. The
work assigned to serfs mainly comprised – tillage of soil, cattle-rearing, domestic work and similar other
activities. Many landlords would also give them a meagre amount as wages, whether in cash or in kind.
Usually, serfs could become free after returning to their masters the habitat, the piece of land and
advances with interest. They could also be transferred to some other landlord on payment.

Under serfdom, some measure of personal relationship existed between the landlords and the serfs.
Many landlords often tried to solve their genuine grievances and extended some help to those who
were in distress. The feudal lords also occasionally gave some economic inducements to their serfs in
the form of additional supply of food-grains and some money for their increased productivity and good
behaviour.

Although the management of serfs was based on the principle of authoritarianism, the element of
human treatment was often found in their relationship. With the abolition of the feudal system, serfdom
also came to an end. However, some remnants of the past can still be found even today, especially in
rural areas. The bonded labour system in India is comparable to the system of serfdom prevalent in
European countries during the medieval period.

3. Managing Indentured Labour:

The system of indentured labour emerged primarily with the flourishing of mercantilism and advent of
industrial revolution. The discovery of new lands through sea and land routes led to a substantial
increase in the demand of European goods abroad, and at the same time, gave a fillip to the
establishment of industries in the continent.

As a consequence, trade flourished leaps and bounds, and the mercantilists, taking advantage of the
expanding markets, tried to accumulate as much wealth as possible. In their quest for maximising
wealth, the mercantilists would offer attractive inducements to the artisans and skilled craftsmen for
accelerating production of goods in demand. The artisans and craftsmen responded and they started
engaging an increasing number of apprentices and hired labourers to cope with the demand of the
products.

Advent of Industrial Revolution and its Aftermath:

The advent of industrial revolution proved a boon to the mercantilists. The industrial revolution resulted
in a rapid growth of factories, large-scale production, improvement in technology and reduction in time
involved in producing goods. The mercantilists increasingly became owners of factories and other
establishments.

These developments resulted in an unprecedented demand for various categories of labour both within
the country and abroad. Although a major portion of the demand for labour was met by the large-scale
migration of people from rural areas to industrial centres and towns, the supply proved inadequate to
meet the increasing demand for various categories of labour.

In view of insufficiency of normal supply of labour, the employers resorted to the practice of advancing a
lucrative amount of money to the workers and of entering into agreements with them to the effect that
they would work with their employers for a stipulated period of time and on terms agreed upon, and
after completion of the period and complying with agreed terms, they would be set free.

The European employers engaged indentured labourers on a large scale. During the British rule in India,
the British employers contracted agreements with a large number on indentured labourers and sent
many of them in their colonies abroad such as South Africa, Mauritius and South-east Asian countries.

Management of Indentured Labour:

Management of indentured labour was substantially different from that of slaves and serfs. So long as
these indentured labourers remained with their employers, they had to abide by the terms and
conditions mutually agreed upon, and also those unilaterally laid down by their employers.

Breaking of the contract was a punishable offence under law. The indentured labourers and also their
free counterparts had to face numerous problems such as those related to low wages, excessive hours
of work, insanitary and hazardous physical working conditions and job insecurity.
As no relief was forthcoming either from their employers or from the state, they started organising for
exerting concerted pressure on both for improving their conditions. However, their combinations were
declared unlawful by the courts of law and under common law and special statutes.

Some of the notable features of management of indentured labour comprised – strict supervision,
ensuring compliance with the orders of employer and supervisors, harsh disciplinary action for
misconduct, provision of some amenities at the workplace, some inducements to increase productivity
and adopting steps to redress genuine grievances of workers.

The major responsibility for managing indentured labourers vested in the local managers and
supervisors. The employer generally took broad policy decisions and directed the local managers to
ensure their proper compliance. Thus, the main element in the management of indentured labourers
rested primarily on the principle of dominance and subordination.

The employers were, however, aware that after the completion of the period of contract, the
indentured labourers would be set free. Foreseeing the difficulties which might have to be faced in
procuring new hands with requisite skills, they started giving additional inducements to competent
indentured labourers in the forms of higher emoluments, promise of promotion and enhanced facilities,
so that they could stay on their jobs.

Emergence of Modern Industrial Labour and Improvement of Status:

Even during the periods when slavery and serfdom were rampant, there were various categories of
workers who enjoyed a certain amount of freedom in the relationships with their employers. They were
mainly skilled craftsmen and artisans and experienced apprentices. However, the composition of free
workers materially changed with the spread of industrialisation and establishment of factories and other
kinds of industrial and business establishments.

Industrialisation led to the congregation of a large number of workers at the same establishment owned
by an individual employer or a company. The employers were generally interested in maximising their
profits, and callously disregarded human aspects in managing the affairs of their enterprises.

The state also remained a mute spectator to the miseries and sufferings of the toiling masses of
workers, primarily because of the widespread prevalence of the doctrine of individualism and laissez
faire. These situations led to further deterioration in the conditions of industrial workers who had to
face numerous problems in their employment.

Notable among these problems were low wages, excessive hours of work, hazardous and strenuous
physical working conditions, instability of employment, and arbitrary treatment by supervisors and
managers.

The industrial workers, sooner or later, came to realise that individually they might be dispensable to
the employer, but collectively, they were indispensable as the running of the enterprise was in the
interests of both. This realisation induced them to organise and pressurise the employers and the state
to take positive steps to improve their conditions.

However, these early combinations received severe blows from the courts of law either under common
law or under special statutes such as Combination Acts, 1799 and 1800 of England.
The conditions, however, changed during the course of time. Certain notable developments relevant to
the management of human resources included spread of democratic ideals and principles, growth of
socialist ideas, emergence of the concept of welfare state, strengthening of workers’ organisations,
efforts of social reformers, and changes in the size and composition of the labour force.

These developments led to substantial changes in the attitude of the employers towards workers and
the role of the state in regard to labour matters.

The state started enacting labour laws with a view to ameliorating physical working conditions at the
place of work, laying down minimum standards in specified areas of terms and conditions of
employment, making available to workers certain welfare amenities, adopting social security measures
against certain contingencies such as disablement and death resulting from work-injuries, sickness and
maternity and establishing workers’ right to form trade union and bargain collectively with the
employer.

The employers increasingly came to realise that their prerogatives of “hiring and firing” workers at their
will and unilaterally laying down the terms and conditions of employment had been enormously
encroached upon by union pressures and state intervention, and it would be difficult for them to
manage their enterprises if they did not give due attention to human aspects in dealing with their
workers.

These conditions have come to exist even today, but in a greatly modified form. Some of the more
notable developments relating to human resources in modern perspective comprise – (i) substantial
change in the composition of labour force with the entry of a large number of educated and highly
skilled workers with specialisation, (ii) greatly improved status of all categories of employees, (iii)
extensive state intervention in the domain of human resources, (iv) development of liberal attitude of
employers towards employees with major attention on human aspects, (v) enhancement of strength
and status of unions, and (vi) growing international deliberations and exchanges in human resources
matters.

Evolution of Human Resource Management – From 19th Century till Recent Times: Different Eras of
Human Resource Management

Identification of evolution of HRM over the period of time is important for understanding the
philosophy, functions, and practices of HRM that are followed in different situations so that relevant
HRM practices are evolved in the present situation. HRM, being a part of management discipline, has
followed the pattern of development of management because of the interrelationship of the problems
of both the fields.

Though HRM as a field of study has relatively recent origin, history of management of people in the
organizations particularly in state administration, is quite old. However, these ancient developments
could not create much impact on the recent development of literature and practices of HRM as these
developments were concerned primarily to state administration.

Some serious thoughts were applied towards the effective utilization of labour force in industrial
organizations after the industrial revolution that started in 19th century. Since then, organized practices
relating to management of people, initially labour force and subsequently managerial personnel also,
started taking place and literature describing these practices started emerging.

From industrial revolution era to the present era, various stages to development of management of
human resource practices may be classified as follows:

1. Industrial revolution era— 19th century

2. Trade union movement era — close to the 19th century

3. Social responsibility era — beginning of the 20th century

4. Scientific management era— 1900-1920s

5. Human relations era— 1930s-1950s

6. Behavioural science era— 1950s-1960s

7. Systems and contingency approach era – 1960 onwards

8. Human resource management era — 1980 onwards

The classification of various stages of development of management of human resources in terms of

period shows the beginning of that era. In each era, emphasis has been put on a particular approach of
managing people at work. A succeeding era does not mean the complete end of preceding era but there
has been overlapping in these.

Main features of these eras and the type of practices related to managing human resources are as
follows:

1. Industrial Revolution Era:

The systematic development of HRM started with industrial revolution that started during 1850s in
Western Europe and USA. The industrial revolution consisted, essentially, the development of
machinery, the use of mechanical energy in production processes, and consequently the emergence of
the concept of factory with large number of workforce working together.

The factory system replaced the old cottage system. Industrial revolution brought out a number of
changes like centralized work locations with large number of workers working together, mechanized
production process, migration of workers from their place of origin, and indirect contact between
factory owners and workers.

In order to manage people in the factory system of industrial revolution, three systems of HRM were
developed- recruitment of workers, training for workers, and control of workers. However, the basic
philosophy of managing workers revolved around master-servant relationship.

2. Trade Union Movement Era:

Shortly after the emergence of factory system, workers started to organize themselves based on their
common interests to form workers’ associations which were subsequently known as trade unions. The
basic objectives of these associations were to safeguard interest of their members and to sort out their
problems which arose primarily because of employment of child labour, long hours of work, and poor
working conditions.

Later, other aspects of work such as economic problems and wages, employee benefits and services,
etc. also became issues. These trade unions started such weapons as strikes, slowdowns, walkouts,
boycotts, etc., for the acceptance of their demands.

These activities of the trade unions forced owners and managers to adopt employee grievance handling
systems, arbitration as a means of resolving conflicts between owners/managers and workers,
disciplinary practice, expansion of employee benefit programmes, holiday and vacation time, clear
definition of job duties, job rights through seniority, and installation of rational and defensible wage
structures.

3. Social Responsibility Era:

In the first decade of 20th century, some factory owners started adopting a more humanistic and
paternalistic approach towards workers. Paternalistic approach to labour management is based on the
philosophy that labour is just like a child and owner is just like a father and the owner should take care
of his labour just like a father takes care of his children.

Those industrialists who adopted paternalistic approach offered a number of concessions and facilities
to labour force like reduced number of work hours, improved facilities at workplace, model villages to
workers, etc. All these practices led to the development of social welfare aspect of labour management.

Many critics to paternalistic approach viewed that this approach was adopted to overcome the
problems posed by labour union movement as plenty of trade unions emerged which frequently
interrupted work performance. Employers observed that workers were going out of their control and to
overcome this problem, they implemented welfare scheme. Thus, this was a compulsion rather than a
philosophy.

4. Scientific Management Era:

Around the beginning of 20th century, Taylor started to find out ‘one best way of doing thing’ based on
time and motion studies. On the basis of his experiments, he was able to increase workers’ productivity
considerably and wrote many papers based on these experiments and a book on scientific management.

The main principles of scientific management are:

(i) Replacing rule of thumb with science, (ii) harmony, not conflict, (iii) cooperation, not individualism,
and (iv) development of each and every person. Scientific management techniques relevant to
management of workers are- functional foremanship, standardization and simplification of work, and
differential piece wage system.

5. Human Relations Era:

Around 1920s, management researchers gave a close look at the human factor at work and the variables
that affected people’s behaviour. Before that, Hugo Munsterberg wrote a book on ‘Psychology and
Industrial Efficiency’ which suggested the use of psychology in the field of personnel testing,
interviewing, attitude measurement, learning, etc.
This brief period was termed as ‘Industrial Psychology Era’. In 1924, a group of professors from Harvard
Business School, USA, began an enquiry into the human aspects of work and working conditions at
Hawthorne plant of Western Electric Company, Chicago.

They conducted researches from 1924 to 1932 and arrived at the conclusions that productivity of
workers depended on- (i) social factors at the workplace, (ii) group formation and group influence, (iii)
nature of leadership and supervision, and (iv) communication.

They concluded that in order to have better productivity, management should take care of human
relations besides the physical conditions at the workplace. Consequently, the concepts of social system,
informal organization, group influence, and non-logical behaviour entered the field of management of
personnel.

6. Behavioural Science Era:

In contrast to human relations which assume that happy workers are productive workers, the
behavioural scientists have been goal and efficiency- oriented and consider understanding of human
behaviour to be the major means to that end. They have tried several sophisticated research methods to
understand the nature of work and the people in the work environment.

The contribution of behavioural scientists to management practices consists primarily of producing new
insights rather than new techniques. It has developed or expanded a useful way of thinking about the
role of the manager, the nature of organizations, and the behaviour of individuals within organizations.
As against human relations model, they have given the concept of human resource model.

Major conclusions of the contributions made by behaviouralists are as follows:

i. People do not dislike work. If they have been helped to establish objectives, they will want to achieve
them. In fact, job itself is a source of motivation and satisfaction to employees.

ii. Most people can exercise a great deal of self-direction and self-control and generate more creativity
than required in their current job. Therefore, their untapped potential remains unutilized.

iii. Managers’ basic job is to use untapped human potential in the organization.

iv. Manager should create a healthy environment wherein all persons can contribute to the best of their
capacity. The environment should provide a healthy, safe, comfortable, and convenient place to work.

v. Managers should provide opportunity for self-direction by their subordinates and they must be
encouraged to participate fully in all important matters.

vi. Operating efficiency can be improved by expanding subordinate influence, self- direction, and self-
control.

vii. Work satisfaction may improve as a ‘by-product’ of subordinates making full use of their potential.

Behavioural science era led to the development of two-way communication, participation of employees
in decision making, joint goal-setting, group dynamics, management development, and management of
change in the organization. These contributions of behavioural science era are backbone of behavioural
approach of human resource management even in the present context.
7. Systems and Contingency Approach Era:

Systems and contingency approach has attracted maximum attention of thinkers in management in the
present era. It is an integrated approach which considers management of human resources in its totality
based on empirical data. The basic idea of this approach is that analysis of any object must rely on a
method of analysis involving simultaneous variations of mutually-dependent variables. This happens
when systems approach is applied in managing human resources.

8. Human Resource Management Era:

When the factory system was applied in production, large number of workers started working together.
A need was felt that there should be someone who should take care of recruiting, developing, and
looking after welfare of these workers. For this purpose, industrial relations department came into
existence in most of the large organizations which was concerned mostly with workers.

However, as the time passed and the complexity of managing human resources in large business
organizations increased, the scope of industrial relations department was extended to cover supervisory
staff and subsequently managerial personnel. Industrial relations department was named as personnel
department.

With the increasing competition for market share, competition for resources including human talents,
and increased knowledge in the field of managing human resources, people were not treated merely as
physiological beings but socio-psychological beings as a prime source of organizational effectiveness and
large organizations changed the nomenclature of their personnel department to human resource
‘department to reflect the contemporary view.

Even the American Society for Personnel Administration, the largest professional association in the field
of human resource management, changed its name to the Society for Human Resource Management in
1990. At the academic level, similar pattern was followed and the title of personnel management course
was changed to human resource management. Since then, the expression is gradually replacing the
hackneyed term ‘personnel management’.

Evolution of Human Resource Management – History of Modern Human Resource Management

1. Early Philosophy (Before 1900):

The history of modern Human Resource Management began with the efforts of Robert Owen. Owen is
called the founder of Human Resource Management. In 1813, he wrote a book, A New View of Society.
In it he propounded the need for better industrial relations and improvements in the service conditions.
His attitude towards workers was very cordial, liberal and paternalistic.

He got good houses constructed for his workers by the side of his factory. He eliminated child labour and
provided healthy working conditions. J.S. Mill, Andrew Yule and Charles Bewarage, contemporaries of
Robert Owen, developed Human Resource Management as a science and supported the idea of wage
incentives, profit sharing and labour welfare, etc.

2. Efficiency and Productivity Movement (1900-1920):

During the last year of the 19th century arrived the age of efficiency and productivity movement. The
two decades from 1900 to 1920 were the years of scientific management movement. Taylor’s Scientific
Management Thought was accepted during this period. Taylor opposed the idea of trade unionism and
workers’ organization.

The main contribution of these two decades has been the increase in the size of units, introduction of
scientific thinking into actions, job analysis, standards costing, scientific selection and training of workers
and the idea of mental revolution.

3. Period of Welfarism and Industrial Psychology (1920- 1930):

Up to 1925, the Human Resource Management had taken a definite form. Staff line organization became
the basis of Human Resource Management. The opposition of scientific management movement by
workers introduced the need of industrial psychology.

Industrial psychologists developed many new techniques like psychological testing, interviewing,
workers training and non-financial incentives. They helped to give a professional form to Human
Resource Management. The Human Resource Management began to be realized as a profession and a
specialist’s function.

4. Period of Human Relations (1930-1950):

When Prof. Elton Mayo and his companions conducted Hawthorn experiments, it was the beginning of
recognition of the fact that human resources have greater influence on production than other psychical
resources. A worker must be treated as a human being. His social, psychological and moral instincts
should be fully recognized by the management.

Due to these experiments the commodity concept of labour changed to social concept. The decade of
1940-1950 was very important for the development of Human Resource Management. During that
decade, many new techniques were developed for the selection, training and induction of workers. The
human resource philosophy became people-oriented. Trade unions flourished and provision of fringe
benefits for the workers became common.

5. Modern Times (After 1950):

The history of Human Resource Management since 1950 up to current times is the age of modern
developments. It is the period of the citizenship concept of labour where the workers have full right to
be consulted in determining the rules and regulations under which they work.

The concept of industrial democracy has imposed many new responsibilities upon the human resource
managers of industrial houses. In modern times, Human Resource Management is widely accepted as an
independent discipline. One finds two important developments during this period, after 1960, the
Human Resource Management began to be realized as a behavioural science which centred completely
on human elements with the study of organizational behaviour as its main crux.

After 1970s the belief of ‘open social and industrial system’ became very popular for business
organizations. In modern times, Human Resource Management is fully recognized as a profession
dealing with the management of human resources. These developments widened the scope of Human
Resource Management.
Evolution of Human Resource Management – 3 Stages for the Growth of Human Resource
Management

Historically, the beginning of HRM from the writing of Robert Owen, Charles Babbage and Henry Towde.
Especially, the HRM growth was particularly marked in the inter-war era. It has branched out specifically
along the domains of applied psychology and sociology. The latter in turn has evolved around the
concept of the “welfare state”. While the former has proceeded as the behavioural science movement.

Human Resource Management (HRM) is relatively a very recent term considered for managing human
resources in an organisation. HRM is still evolving to become an amalgam of organisational behaviour,
personnel management, industrial relations and labour legislation.

Following stages explain the process involved for reaching to the current HRM stage:

1. Labour Welfare Stage:

Formal beginnings of HRM may have emerged from industrial disputes and conflicts. An enquiry on
determining reasons for industrial disputes and conflicts gave light to several problems related to living
and working conditions of employees across industries. This enquiry highlighted limitations of
businesses that perceived human resources as machines for obtaining increased productivity and more
profits at lower costs.

Workers worked long hours in strenuous working conditions that led to the formation of trade unions.
These trade unions focused on protecting and promoting workers’ interests but faced resistance from
the management of businesses thus leading to industrial disputes and conflicts.

2. Personnel Management Stage:

When labour welfare issues were provided legal assurances, organisations began focusing on behaviour
of employees at all levels at an individual, group and overall organisational basis. A “Personnel” was
appointed to manage the employee-employer relationship by managing issues related to human
resource planning, recruitment and selection, training and development, performance and potential
appraisal, promotions, transfers, quality of working life, compensation, compliances to labour laws and
legislations.

3. HRM Stage:

Human Resource Management or HRM is a mix of labour welfare and personnel management. HRM
aims at maximising employee performance in accordance to the objectives set by an organisation. HRM
is a result of increasing organisational size, changing social and cultural norms, easy access to
information (via technology) and globalisation. Accordingly, it attempts to build worker-employees
relationship more humanely through motivation, training and development, retention, worker
protection, etc.

Also, under HRM, HR managers need to obtain and incorporate knowledge about possible changes that
may affect the overall organisation. HR managers thus attempt to execute relevant strategies to ensure
smooth transition of changes without disturbing inter-relationships and avoiding disputes/conflicts
within an organisation.
Evolution of Human Resource Management – From 18th Century to the Modern Times

In today’s global and competitive environment, human resource is the key to efficient running and
survival of an organisation. The concept of human resource management has emerged from the
personnel management. The term personnel management has emerged in 1945 after the World War.
During this stage, the personnel managers distinguished themselves from other managerial functions,
and personnel function being declared as a separate managerial function.

At that time, the scope of personnel function was criticised due to the ‘hire and fire’ policy of the
organisations. The concept of HRM has evolved through various stages of Industrial revolution, trade
union, scientific management, Behavioural science and human relations. Hence, the concept HRM has
gradually replaced the term Personnel Management. HRM is the most appropriate name to deal with
human resource, as it highlights the significance of the human beings working in an organisation.

The evolution of HRM has evolved through the stage of the industrial revolution in the 18th century to
the modern times:

(1) Industrial Revolution:

The momentum for the industrial revolution started in 17 th century. Technical advances and improved
agriculture methods resulted into mass production of goods. The advancement in technology initiated
the need for skilled and trained labour and improved work methods for producing goods on large scale.
Hence, this period witnessed rapid technological improvement and led to the beginning of the industrial
revolution.

In 1776, Adam Smith in his work ‘The wealth of Nations’ proposed the concept of specialisation to
increase efficiency through division of labour in the work. Adam Smith, considered as father of
capitalism also lighted the term ‘Invisible Hand or Laissez Faire Approach’.

In the words of Rossouw, “according to hidden approach, the only responsibility of business is to
maximise profits according to the market principle and within the constraints of the law. If government
interference in business is restricted to a minimum, society will benefit automatically from the activities
of the business sector”.

However, this approach failed to benefit the employees, as the government failed to protect the interest
of employees. In 1832, Charles Babbage further elaborated the concept of division of labour in his work,
and explained the advantages of division of labour.

(2) Trade Unionism:

Trade union is a group or an organisation of workers formed to achieve common goals. These trade
union organisations may compose of workers, professionals, or unemployed workers. The working class
also formed general union of all workers irrespective of the trade and industry.

The basic purpose of the trade union is to bargain with employers on behalf of its members for better
ways. Working conditions grievance redressal, rules governing hiring and promotion, workers benefits
i.e. maintaining or improving the conditions of their employment.
Trade unions become very popular in many countries during Industrial Revolution. These unions
emerged as a result of concentration of bargaining power on the employer’s side resulting into
exploitation of workers.

Trade unions are in the current scenario still an influential force to protect the social and economic
development of its members in many countries around the world.

(3) Scientific Management:

The concept of scientific management focused on professional relationship between employer, and
employees to improve/enhance productivity. F. W. Taylor (1856-1915) is regarded as father of scientific
management and a great leader of the efficiency movement. He advocated the principles of scientific
management to improve industrial efficiency.

Taylor’s scientific management consisted of four principles mentioned as follows:

(i) Adopt work methods based on scientific study of the tasks instead of rule of thumb method.

(ii) Scientific methods of selection, training and development of each employee.

(iii) The managers should apply scientific management principles to plan the work.

(iv) Close supervision and detailed instructions to each worker in the performance of specific task. This
principle stresses on the fact that workers should be capable of understanding the task they were doing.

The concept of scientific management advocated the payment of wages should be linked to
productivity. The principles of scientific management have been challenged and criticised by trade
unions, as well as social intellectuals.

(4) Industrial Psychology:

Industrial Psychology is also known as I-O psychology (industrial organisational psychology) work and
organisational psychology occupational psychology and personnel psychology. It applies psychology to
industrial organisations and the work place. It attempts to achieve organisations goals by improving the
performance and welfare of its employees.

Industrial psychologist includes research in job performance, job analysis, performance

appraisal/management, compensation, work motivation, job attitudes, work/life balance, organisational
culture, leadership, ethics, and technology in workplace, job design and human resource. Industrial
psychologist believes in the “scientist-practitioner model”. Generally, I-O psychologist are employed
within organisation, generally as a part of HR Department.

(5) Human Resource Approach:

Human resource approach explored management from a social as well as psychological view. Advocates
of this approach are concerned with welfare of the employees, and treat them as people. Robert Owen,
Hugo Munsterberg, Walter Bill Scott, Mary Parket Follet, Abraham Marslow and Douglas Mc Gregor are
Popular as behavioural theorist.

These behavioural scientists believed that the managers should focus on employee’s motivation, MBO
and inter-personal communication, etc. instead of mechanist production. It would make the worker
more satisfied and productive. So these theorist advocated the need for scientific study of human
relations aspect of organisation.

(6) Human Relations Movement:

Human Relations movement gained momentum as a result of contributions of management thinkers like
Elton Mayo, Mary Parker Follet and Hawthrone Experiments. This movement identified and encouraged
the human relation factors which help improve the quantum of production and the level of satisfaction
of employees. Elton Mayo’s contribution in the development of human relations is unforgettable
approach.

Mayo is known as father of Human Relations movement. This movement considered that organisation is
not only a formal system but also a social system and principles of human relations and behavioural
sciences can be successfully applied in it to achieve the organisations objectives. Human relations
approach realised the significance of informal human relations in management.

Evolution of Human Resource Management – Brief Outline of Development of Human Resource

Management

HRM evolved over a period of years from the era of industrial revolution. The evolution of HRM dates
back to 18th century and the concept is very old in nature involving the management of human beings.
There were many phases of people management before reaching the current scenario as researched by
many authors.

A brief outline of the various stages of development of HRM stated below:

1. Industrial Revolution:

It started during 18th century in Britain and spread later to Western Europe and United States. Workers
were forced to indulge in monotonous and repetitive work activities. Workers were treated earlier as
machines and not as resources. The industrial revolution witnessed ill treatment and exploitation of
workers.

2. Trade Unionism:

Workers joined together to form trade unions to protect their interests. The movement started within
the era of industrial revolution as there were common worker demands. The origin of Trade unions can
be traced back to 18th century in Europe and later it spread to many other parts of the world.

3. Taylorism or Scientific Management:

Scientific management was propounded by Frederick Winslow Taylor in 1911. It aimed to standardize
workflows and improve labour productivity through reduction of effort Human factor at work was given
more importance and procedures were simplified by time and motion studies.

4. Human Relations Movement:

The concepts of scientific management led to an awareness of improving procedures and productivity
through work simplification. In early 1930s the famous research by Elton Mayo et. al. namely, the
“Hawthorne Studies” opened up a new horizon of human relations at workplace. It revealed the impact
of social factors, informal groups, motivation and employee satisfaction on productivity. This was the
beginning of behavioural approaches and soft skill training to employees. The modern concept of HRM
sprouted from such movements.

5. Organizational Behaviour & Theory:

Other contemporary researchers like Abraham Maslow, David McClelland, Max Weber and others
propounded different concepts on organizational behaviour and developed organizational theory.
Motivation, leadership, workforce productivity and similar theoretical areas propped up and gained
significance.

6. Industrial and Labour Relations:

The field of industrial and labour relations started getting importance in many industries as there were
strained labour relationships. Legal framework was developed to protect the interest of labour and
amicably settle any industrial disputes.

7. HR Approach:

HR rooted itself strongly in the theoretical background of earlier researches backed by support from
industrialists and professional associations. The oldest HR association is the “Chartered Institute of
Personnel and Development” started in 1913 in England.

The Society for Human Resource Management was later formed in 1948 in the United States. The first
college level study on HR was from Cornell University, United States. At present, there are umpteen
numbers of specialized courses in HRM offered by renowned universities all over the world.

Evolution of Human Resource Management – 4 Broad Phases of Evolution of Human Resource

Management

The evolution of HRM can be described moving through four broad phases:

Phase # 1. Craft System:

From the earliest time in Egypt and Babylon, training in craft skills was organized to maintain an
adequate supply of craft workers. The workers/craftsmen worked in their own homes/workshop with
the help of their family members, with their own tools and implements.

A basic type of specialization of work such as shoe-making, blacksmith, carpentry, pottery, cloth weaving
etc. existed during this age. Generally, the master craftsmen committed to teach his craft to some young
persons who began their careers as apprentices. The apprentices were bound to work for the master
craftsman for a specified period during which they would learn the craft. The master craftsmen
possessed skill and ownership.

By the 13th century craft training became popular in Western Europe. Craft guilds supervised quality
and methods of production and regulated conditions of employment for each occupation. The master
crafts worker controlled the craft guilds, and the recruit entered after a period of training as an
apprentice.
The craft system was best suited to domestic industry, which the master operated on his own premises
with his assistants residing and working in the same house.

Phase # 2. Scientific Management:

During the first few years of the 20th century, productivity emerged as a serious business concern. This
phase saw expanding business, readily available capital, experience as well as short supply of labour.
Hence, managers started to look for ways to use existing labour more efficiently. In response to this
need, experts began to focus on ways to improve the performance of individual workers.

This led to the development of scientific management. F. W. Taylor, Frank Gilbreth and Lillian Gilbreth
were the earliest advocates of scientific management. At Midvale Steel Company in Philadelphia, Taylor
observed that employees were deliberately working at a pace slower than their capabilities. Taylor
studied and timed each element of the steel workers’ jobs.

He determined what each worker should be producing. He designed the most efficient way of doing
each part of the overall task and implemented a piecework pay system. Rather than paying all
employees the same wage, he began increasing the pay of each worker who met and exceeded the
target level of output set for his or her job.

Phase # 3. Human Relations Approach:

The Hawthorne experiments conducted by Elton Mayo and his colleagues during 1930s and 1940s
demonstrated that employees productivity was affected not only by the way the job was designed and
the manner in which employees were rewarded economically, but also by certain social and
psychological factors as well.

The human relations movement led to the wide scale implementation of behavioural science techniques
in industry for the first time that included supervisory training programmes, emphasizing support and
concern for workers, programmes to strengthen the bonds between labour and management and
counseling programmes whereby employees were encouraged to discuss both work and personal
problems with trained counselors.

The movement was also influenced by the growing strength of unions during the late 1930s and 1940s.

Phase # 4. Human Resource Approach:

Human resource approach deals with the people dimension in management. Over the past eighty years,
various approaches to human resource management have been adopted by companies. The human
resource approach currently in vogue, has redefined the way people are treated and managed in the
organizational context.

This approach requires that employees or the work force be treated as resources and not just as factors
of production (as in the scientific approach) or emotional beings with psychological needs (as in the
human relations approach).

Evolution of Human Resource Management – From Industrial Revolution Era to Present Era
The real strength of the country lies in the development of the human mind and body. India is a very big
country with people of different backgrounds. Organizations consists of all different people working
under one roof.

The role of the organization in society is changing the demands of the organization in society is changing
the demands of the organization and the expectations of the people that the employees perform their
task and challenges according to the changes in the environment.

But some serious views were given and were applied for the effective utilization of labour force in
organization after the Industrial Revolution started in 19 th century. From the beginning of Industrial
Revolution era to the present era, various stages of development took place.

It is classified as follows:

1. Industrial Revolution Era:

It started in 19th century. In this the emphasis was given on the development of machinery for better
and large amount of production with so many people working together with these changes and the
replacement development was there as use of machinery was there for production and unskilled
workers were given training for the operation of machinery.

By this way large number of people migrated from their place of origin to their place of working creating
housing problems. In this way method of production was changed from manual or small tools to
mechanical with increasing emphasis on machineries.

2. Trade Union Movement Era:

The basic objectives of these unions is to safeguard the interest of the people and to sort out their
problems like labour problems, child labour and poor working conditions etc. In this aspect various
economic problems and wages, various benefits also became major issues. These trade unions started
such weapons as strikes, walkouts etc. for the acceptance of their demand.

3. Scientific Management Era:

It started in 19th century. Taylor started to find out the best way of doing the things in proper time
duration so that goals can be achieved. He was able to increase workers’ productivity by his experiment,
based on time and motion studies and named it as scientific management.

The principles are:

(a) Harmony in group action

(b) Cooperation between management and workers.

(c) Development of workers

(d) Replacing rule of thumb with science

These principles were implemented through the following elements:

(i) Job Analysis:

It is undertaken to find out the best way of doing. It can be determined by taking up method time –
motion – fatigue studies. To take minimum time for best performance with amount and frequency of
required rest is the basic aim.

(ii) Standardization and Simplification:

It should be maintained in respect of instruments and tools, period of work, working conditions etc.

(iii) Financial Incentives:

It plays an important role as it can motivate the workers to put their best efforts. In this scheme basically
a person who complete the work and those who do not complete the work are judged.

The person who complete the normal work on time gets higher rate per piece and who does not
complete the work on time get lower rate. In this Taylor suggested that wages should be given according
to the individuals performance and not on the position that the individuals hold.

(iv) Scientific Selection and Training of Workers:

Taylor suggested that selection of workers should be based on scientific approach taking into account
their work for which they are most suitable. Proper emphasis should be given on training of workers
which can make them more capable in performing the job and can increase the efficiency.

(v) Mental Revolution:

It all depends upon the mutual cooperation between management and workers. There should be a
mental change of views and ideas in both the parties to avoid conflict and to have proper cooperation
among each other. Taylor feel that it is one of the important feature of scientific management as
without this no principle of Scientific Management can be applied.

During the period of Taylor, other persons also worked to develop workers efficiency and suggested
some change in Taylor’s principles particularly in differential piece rate system.

4. Social Responsibility Era:

Robert Owen in 20th century an industrialist, reformer adopted the approach “the principal social and
economic environments influence the physical, mental and psychological development of
workers. Therefore in order to increase productivity, it is necessary to improve the conditions of
employees by removing them from an adverse environment by providing them more satisfactory living
and working conditions”.

5. Human Relations Era:

In this basically close look was given on human factors at work and the variables that affected people’s
behaviour.

It included the following factors:

(i) Social factors at the workplace

(ii) Group formation

(iii) Type of supervision

(iv) Proper Communication

By this they observed that there existed a conflict between management and workers. In order to have
better production, management should take care of human relations besides the physical conditions at
the workplace.

6. Behavioural Science Era:

In this it is assumed that if the workers are happy they can do more and proper production as human
behaviour can help in doing the work in a proper way. Behavioural scientists to management practices
consists primarily of producing new insights rather than new techniques.

Major conclusions of the contributions by behaviouralists are as follows:

(j) People like work and they want to achieve their objectives through motivation and with proper job
satisfaction,

(ii) Managers responsibility is to create a healthy environment, so that all subordinates can contribute to
the best of their capacity.

(iii) Manager should provide self-direction by subordinates and they must encourage to participate fully
in all matters.

(iv) Working satisfaction can be increased and improved by full potential utilization in right direction.

Behavioural science era led to the development of two way communication of employers in decision
making, management development story of the organization. These are all necessary for the right
approach of Human Resource Management in the present context.

7. System and Contingency Approach:

It has attracted maximum attention of thinkers in management in the present era. The basic idea of this
approach is that any object must rely in a method analysis involving simultaneous variations of
dependent variables.

It has the following features:

(i) It is a combination of various parts which can be known as subsystems. Each part may have various
subparts and it has same features of a system.

(ii) System and subsystem are mutually related to each other and if there is any kind of change, it affects
the other depending upon the relationship in between them.

(iii) A system has boundary which makes it different from other system.

(iv) A system is not only the total parts and supports but the arrangement of this as a whole plays an
important role.

Contingency approach suggests that where the behaviour of one sub unit is dependent on its
environmental relationship to other units that have control over the other sub units.
8. Human Resource Management Era:

When the factory system was started in production, large number of workers started together. After
observation need was there that someone should take care of recruiting, developing and looking after
the welfare of various activities taking place.

With the increase in the competition for market share, competition for resources including human
talents and increased knowledge in the field of Human resource management.