History of HRM

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HUMAN RESOURCE MANAGEMENT

What is meant by the term Human Resource

Management and why did it emerge as an
employment relations strategy in the 1980s?

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TABLE OF CONTENTS
1. Introduction....................................................................................................... 3
2. Definitions of HRM............................................................................................. 3
3. History of HRM................................................................................................... 4
4. Objectives and Supporting functions of HRM.....................................................5
5. Functions of HRM............................................................................................... 6
6. Emergence of HRM as an Employment Relations in 1980s................................7
7. Reasons of Emergence of HRM in 1980s............................................................8
8. Conclusion......................................................................................................... 9
References............................................................................................................. 9

1. Introduction
The efficient and effective management of people at work place is called management of
Human Resources. Human Resource Management (HRM) is an approach which can make
the working of labour more satisfied and productive for any organisation. A major role HRM
is playing today is to clarify the problems of a firm regarding human resources and suggest
some solutions for these problems. HRM is a new approach in which labour is considered as
an asset. Nowadays, it seems to be very difficult for any organisation to achieve its desired
goal of without the activities and programs of HRM. Further the definitions, objectives and
functions of the term HRM are discussing to understand the meaning of term HRM with a
brief explanation of its history about its emergence in the era of 1980.

2. Definitions of HRM
HRM is a practice to achieve organisational goals by bringing organisation and people
together. In any organisation, HRM is concerned as the most important part of management
process which manages human resources. It provides the best environment to the people of an
organisation to secure the best from them by their team work (Lall and Zaidi, 2008).
Randhawa (2007) defines HRM as it is planning, organising, directing and controlling of
procurement, development, compensation, integration, maintenance of the separation of
human resources to the end that individual, organizational and societal objectives are
accomplished (p. 2). Similarly, Kumar (2010) quotes the definition of HRM given by
Michael Jucious as It is that field of management which has to do with planning, organizing
and controlling the functions of procuring, developing, maintaining and utilizing labour force
such as that the: (a) objectives for which the company is established are effectively, (b)
objectives of the levels of personnel are served to the highest possible degree, (c) objectives
of society are duly considered and severed (p. 3).
The term HRM can also be identified as the part of the management process in an
organisation which deals with all the aspect deal directly or indirectly with the people and
their relationship with other employees in any organisation. In addition, it also deals with all
the factors, operations, functions, strategies, activities, decisions, methods and practices
linked with the management of the organisations employee or human resources (Mahapotra,
2010).

Similarly, according to Invancevich and Glueck (2007), HRM is an art of using people in the
most effective manner to gain individual and organisational goals. It the process deals with
the management of workforce within organisation to enable them to give their best output.
Kleiman (2003) described HRM in two different approaches such as Hard and Soft approach
of HRM. Hard approach of HRM distinguishes people as Human Resource and they consider
human resource like any other resource of the company or organisation, want to get them in
low price as much as possible and used them in an efficient manner. Whereas Soft approach
of HRM deal with Human Relations within the organisation and focus on the individual
needs of the employee so that they can give their best to the organisation and take part in
fulfilling the goals of their organisation.

3. History of HRM
In the early 1980s, during the period of apprenticeship and craftsman the term HRM came
into existence in England and became more popular among organisation in the late 1980s
after the arrival of the Industrial Revolution. Frederick introduced the need of a mixture of
industrial psychology of worker and scientific management, in the 19 th century. The idea of
Frederick was to manage the workforce not only considering the efficiencies and work but to
manage the workers for their psychology and needs as well. Additionally, some changes took
place as a result of development in personnel department in 1920s and these changes included
the rise of union, development of organisations and technology (Ivancevich, 2001).
According to some intellectuals the term HRM derived from the term Personnel
Management where Personnel Management (PM) has introduced in 1945 after the World
War. The PM is a process which differentiates the functions of personnel management with
other functions of the organisation. It not only deals with the hiring and firing of employees
in the organisation but also with their training, payments and salary related issues but many
other critics said that HRM is different in its role and purposes and not only showing
concerns with the action to different situations but also demand for trade union when needed
(Tyson, 1995). So, in the early years of 1980s, HRM was used as an online approach of
managing workforce within the organisation. Hence, the term Personnel Management
changed with the term HRM. Although, Beer and Spector (1985) stated that the term HRM
and Personnel Management are same in meaning and functions because both deal with the
same functions in the organisation such as organising, directing, motivating and obtaining of
Human Resources.

For the last ten to fifteen years, HRM became a well known term while before that time
period, HRM was commonly used as a term Personnel Management. The change in name
was not only for decorative purpose but it can be seen clearly that Personnel management
emerged in US in 1920 and it focused on only the technical features of training, hiring,
compensation and evaluation of employees in the organisation and avoid the relationship of
employee with the performance of the organisation. Personnel Management also avoids the
aspect of being united. HRM came into being due to the pressure of competition worldwide.
In the era of the 1970s, American Business organisations introduced HRM to the
management department of their organisations due the quick change in technology and
globalization (Mahapatro, 2010).
Banfield and Kay (2012) concerned HRM as a planned process of management, development
and motivation of human resource. It is recognised as a field which ensures the success of an
organisation by the implementation of the different programs which enhance the value of the
organisation and also the cultural development of the organisation. HRM is a practical
approach such as it looks towards what to do to fulfil the needs and then do it. It does not
wait to be informed about the problems arise within an organisation regarding training, pay
and recruitment of people and relations of employees.
Additionally, the concept of HRM is the combination of the two meanings (1) there are
specific features of human resources and they cannot be compared with other resources of the
organisation (2) work force or employee in any organisation is the main source of progress,
therefore, it is essential to pay some effort for their individual and social development.
Furthermore, it is an approach which enhances the skills of employees and makes them
competitive and their competencies set some future roles to attain the goals of the
organisation and fulfil the needs of the employee as well (Mahapatro, 2010).

4. Objectives and Supporting functions of HRM

The objectives of HRM are derived from the overall objectives of an organisation. Werther
and Keith (1993) divided the objectives of HRM in four categories in which organisational,
functional and personal and social objectives are included. These objectives and its
supporting functions are given in a table 1.

Table 1: HRM objectives and functions

HRM objectives
1. Organisational objectives

o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o
o

2. Functional objectives

3. Personal objectives

4. Societal objectives

Supporting Functions
Planning of Human Resources
Selection
Employee relation
Development and training
Placement
Appraisal
Assessment
Placement
Assessment
Appraisal
Placement
Assessment
Appraisal
Training
Relations of Union management
Legal compliances
Benefits
Source: Werther & Keith (1993, p. 11)

5. Functions of HRM
The application techniques of HRM and Personnel Management having a quite similar
function for example training and development, improve communication systems, planning
and selection of human resource, performance appraisal, commitment, involvement and
productivity (Banfield and Kay, 2012). Moreover, Deb (2006) categorised the functions of
HRM into five major categories in which Managerial, Operational, Developmental,
Analytical and Strategic functions are included and are given in table 2.
Table 2: Functions of HRM
Managerial

Planning
Organising
Directing
Controlling

Operational

Employee Relations
HR planning
HRM information
and system
HR Acquisition
Compensation &
Benefits
Integration and
Maintenance
Occupational Safety

Developmental

Training &
Development
Performance
Management
Career &
Succession
development
Total Quality
Management
HR policy

Analytical

HR Reform
HR

Research
HR

Consultation

Strategic
HR Outsourcing
HR Mergers
and Acquisition
HR Strategy

and Health
Source: Deb (2006, p.12)

6. Emergence of HRM as an Employment Relations in

1980s
A literature study reveals that the term HRM was first originated in the 1980s in USA rather
than in the United Kingdom (UK). It was a different process to manage people in the
organisation with a change atmosphere. It was well known about how to use the labour
effectively and efficiently regarding the nature of work and also about how to increase the
potential of human resources of the organisation. After the arrival of term HRM, many
personnel departments of UK organisations became the department of Human Resources and
their officers replaced their name from Personnel Officers to Human Resource Managers or
Officers, this appreciable change came within a night in UK organisations and had
transformed the term PM to HRM (Banfield and Kay, 2012).
Additionally, the traces of the term HRM could be seen in the period of 1970s when Human
Resource Accounting became developed. It considered Human Resource as an asset for the
organisation. It stated that it a process which efficiently measure and identify the human
resources and deliver information about the cost and value of Human Resources to the higher
authorities.
Furthermore, during the era of 1980s, Japan was considered as a major threat for US
organisations. It was the period when the international economy facing a rapid change and
US organisations were unable to fulfil the commitments on time because of the low level
workforce (Budhwar and Debrah, 2001). Moreover, Western Europe and USA were far
enough in the race of competition in the International and National markets because of its
slow development therefore the need of reorganisation and recruiting became more
prominent. It was the time when the most of practitioners admitted the importance of Human
Resources and introduced a course of HRM at academic level in the 1980s for the students of
Master of Business and Administration (Deb, 2006).
The terms Personnel Management was interchanged with the term HRM during the era of the
1980s and many scholars and practitioners support the term Human Resource. For Instance,
the most important association of professionals for personnel managers shifted its name to the
Society for HRM from the American Society for Personnel Administration in 1989. Similarly,
the most popular titles such as Vice President of Industrial Relations and Vice President of

Personnel were changed to the title Vice President of Human Resources. In the same way, in
the mid of 1900, almost all the business schools replaced the title of their course from
Personnel Management to HRM and replaced the term from PM to HRM in their curriculum
and textbooks as well (Strauss, 2001).

7. Reasons of Emergence of HRM in 1980s

The term HRM emerged during the years of the late 1970s to early 1980s in USA in the
business industry. It reflects the meaning of managing people or employees by making some
policies for the betterment and development of the organisation. There were numerous
reasons of the popularity of HRM in the management department in the USA rather than
Personnel such as mass production has failed to fulfil the commitment and therefore lost faith
in the market place, rapid progress of Japanese Organisations and increased level of
competition in international and national market (Guest et al, 2003). In the 1970s and 1980s,
Japanese manufacturers were successful enough in the markets of Western Europe due to
some classy products like cars and electronics. Studies had shown that the Taylorist/Fordist
traditional models of working in the organisation were quite popular among Japanese because
this model contained some of the features like earning of the employee depends upon the
output and the rate of work was managed by the machine. Those models of work organisation
were popular before 1980s. But the rise of the Human Relation School in the early 1980s
revealed that those systems were not acceptable anymore because of weak commitments of
supplying products and lack of involvement of labour in the organisation (Marchington and
Wilkinson, 2005).
Additionally, employees were willing enough to attain financial and other rewards, either by
damaging the health of the organisation or by disturbing the production of the organisation.
This behaviour of the workers is only because of the traditional approaches that were used in
the organisation and these approaches basically damages the rate of mass production and
quality of products of the organisation in the market worldwide (Henderson, 2011).
The keen focus of USA till 1999 was on the service economy and less on manufacturing,
result the decline of labour union while it was considered as the ancestor of the department of
Human Resources because both HR and labour union tried to achieve the same goals of
management of employees within the environment of the organisation (Mathis and Jackson,
2006).

According to Wilton (2011) the impact of HRM had been seen in the time period from 1970s
to 1980s, when the competition at a domestic and international level was raised enough and
this also makes an impact on HRM. Additionally, most of the practitioners recognised that the
organisation had many features which cannot be properly deal with the management of
human resources of the organisation. Therefore, from 1980s, many organisational features
like size, culture, structure, product and life cycle of organisation were included under the
department of HRM (Schuler, 2000).
Now a day, the focus of HRM is on some factors like the environment, ethics of business,
availability of labour worldwide and the global competitions. Although, attention on these
factors are making the job of HRM more rewarding, existing and challenging but the
problems faced during the era of the late 1970s and the early 1980s have not forgotten
(Pieper, 1990).

8. Conclusion
After reviewing the literature, it is concluded that HRM has emerged as a term in the USA in
early 1980s and its main focus was on the satisfaction of individual at the workplace so that
they could give their best to the organisation. The most important reason of its emergence
was the competition at domestic and international levels.
Additionally, it is also concluded that the term HRM helps the organisation to reach at the
edges of global competition by engaging its labour efficiently. HRM is one of the most
existing approaches which provide an open environment for employees where they can share
their ideas and work hard for the reputation of the organisation.

References
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