Evolution of HRM

Table of Contents:-

Evolution of HRM
Evolution of HRM in India

The evolution of HRM is influenced by technological advancements, globalization, and a growing focus on employee well-being and engagement. HR professionals need to navigate the ever-changing business environment and stay updated on emerging trends. They also need to utilise innovative strategies essential to attract, nurture, and retain top talent.

Human resource management has emerged as a wide field in today’s scenario. It began in India in 1800 in the form of private schools and charitable trusts. Ancient Indian societies managed all aspects of human life, including the business aspect, on a similar basis.

The evolution of HRM is like a journey of how HR management has developed and changed over the years. Earlier it used to be mostly about paperwork, but now it’s more about planning and taking care of employees in a company. It emphasises the fact that employees are important for making any business successful.

The evolution of HRM can be described in the following phases:

Industrial Revolution
Scientific Management
Trade Unionism
Human Relations Movement
Human Resource Approach

1) Industrial Revolution

During the Industrial Revolution phase, mechanization and technological improvement took place at a rapid speed. At that time, jobs were divided and workers had to do only a small part of their jobs rather than the entire work.

Thus, specialization increased workers’ speed and efficiency but at the same time, jobs became more tedious. The treatment that was given to workers was like that of glorified machine tools.

Employers’ concern was only with fulfilling the targets of production not with providing fulfilling the demands of workers. The government is also not active in working for the worker’s welfare.

2) Scientific Management

F.W. Taylor promoted the theory of scientific management to increase the performance of employees. Scientific management is a methodical analysis and breaking of tasks into many small parts and re-organizing them to get a perfect combination.

Taylor also stated that people’s physical and mental abilities must match the tasks that are to be performed on the job. Therefore, highly proficient people must be removed and supervisors should provide training to the low-performing employees to make them highly proficient. Taylor further emphasized using incentives to motivate employees.

3) Trade Unionism

Workers became aware of their rights and they collectively started protesting against the exploitation of employers. They also started protesting against unfair labour practices by taking the help of trade unions.

Collective bargaining, dealing with the worker’s grievance regarding the conditions of working, wages and perks, and disciplinary procedures are the ways through which trade unions generally help the workers.

4) Human Relations Movement

During the 1930s and 1940s, Elton Mayo along with his colleagues from Harvard conducted Hawthorne experiments which showed that job design and rewards were not the only factors that influenced the productivity of employees, but there are certain social and psychological factors which can also affect employee productivity. The wide implementation of behavioural science techniques was due to the human relations movement.

It involves using supervisory training techniques, providing assistance to workers, counselling programs, and strategies to make the relations between management and labour stronger. These programs help the workers to share their work-related problems as well as problems related to their personal lives with the counselling professionals.

The human relations movement was also affected by the increasing power of trade unions in the period of late 1930s and 1940s. The emergence of unions in this period was because of the Wagner Act. The Act gave workers the legal right of collective bargaining with management on subjects relating to job stability, benefits, salary, and other working conditions.

5) Human Resource Approach

In the early 60s, the ‘pet milk theory’ of human religionists had been discarded largely. According to ‘the pet milk theory’, “happy workers are productive workers or happy cows give more milk”.

Identifying the fact that every worker is different from the other worker and has different personal needs, the things that motivate one individual may not stimulate the other. Happiness and good feeling may influence the efficiency of some employees to a very small extent. Gradually, the practice of considering employees as assets became prominent.

“The Human Resource Approach assumes that the foremost source of satisfaction and motivation to employees is their job and their responsibility towards the organisation. This approach focuses on the involvement of individuals in the organizational decision making”.

Further, the focus of this approach (Evolution of HRM ) is on the following things:

i) People do not dislike their work if they are involved in the establishment of objectives that they have to attain.

ii) Many people show more self-direction, self-control, and creativity than are needed in their present jobs (Theory Y).

iii) The primary job of the manager is to exploit the full human potential to serve the organization.

iv) A healthy, safe, comfortable, and convenient work environment should be provided by the managers so that employees can fully utilize their capacities.

v) The manager must encourage employees to self-direct themselves and contribute to all significant matters of the organization.

vi) Increasing subordinates’ influence, self-control and self-direction will lead to improved working performance.

vii) Employees’ job satisfaction may increase if they can make maximum utilization of their work potential.

Behavioural science contributed to management by giving new dimensions instead of giving high-level methods. It has developed a valuable way of thinking about the manager’s role, the nature of organizations, and individual behaviour in the organization.

The applicability of HRM is very wide. HRM encompasses all the areas during the service of an employee starting from the time he enters till he quits.

Evolution of HRM in India

The history of the evolution of HRM in India dates back to the early 1980s when Mr T.V. Rao and Mr Udai Pareek championed the HRM movement. Early adopters of this movement included public sector enterprises such as Bharat Heavy Electricals Limited (BHEL) and the State Bank of India. Initially, Indian organizations had industrial relations (IR) departments, which were later renamed the personnel and IR departments, with the welfare department as one of its sub-departments. The personnel department mainly served blue-collar employees due to their lower general awareness and educational levels, focusing on administrative tasks. The increasing importance of the service sector in the Indian economy emphasized the need for a change in approach by the personnel and administrative departments.

In the new scenario, the profile of an employee exhibits the following features :

All employees are educated, and they have a high level of general awareness.
The rates of attrition and employee mobility among organizations are high.
Most employees are in their mid-twenties or early thirties.
Employees are more committed to their profession than to the organization.

Organizations must compete for limited resources, with the most important resource being human resources, especially in the service sector. This has necessitated an important transformation of personnel and administrative departments into human resource departments to highlight the human aspect of organizations. A quick look at the structures of various Indian organizations shows that a majority of them have renamed their personnel and administrative departments as human resource development (HRD) departments. However, the change to HRM differs across organizations. Progressive leaders and market leaders, particularly in the IT and service sectors, have fully embraced this approach, while others are in the process of adopting it.

The HR department, after transformation, carries out the following functions:

Participating in the strategic planning sessions for business policy.
Preparing HR strategies in coordination with corporate strategies.
Implementing various HR policies and practices, including human resource planning, recruitment and induction, compensation structuring, career planning, competence mapping, performance management, etc.

Overall, the HR department has evolved beyond its initial functional role and has taken on the responsibility of building the brand to attract the best available talent in the market and retain existing talent. This not only reduces recruitment and replacement costs but also lowers attrition rates, allowing the organization to complete its projects on time (Jyothi, P. and Venkatesh, D.N., 2006).

Importance of Human Factor

Organizations can be seen as social systems with different roles, relationships, and interactions among individuals occupying various positions within the organizational structure. They are established to achieve their principal goals and objectives. With increased globalization and information flow, the workforce’s responsibility for achieving corporate objectives has risen more than ever.

Regardless of advancements in technology, the success of an organization ultimately relies on the efforts and contributions of its human workforce. While plant and machinery play a significant role in several functions performed within an organization, employees’ dedication and skills drive organizational performance.

Among various production factors such as land, capital, and others, only the human factor (also referred to as human resources) is a living and active factor within the organization. It energizes other factors of production and makes them worthy of utilization.

Organizations can achieve a temporary competitive advantage by adopting superior technology, product, or strategy. This is because competitors can eventually copy all of these factors.

However, factors like employee motivation, competence, and organisational culture are difficult to copy. It is a well-known fact that, unlike other factors of production, humans cannot be influenced because they have their own free will and react to the environment according to their motives, behaviour, feelings, and aspirations.

Key Importance of Human Factor

Organizational policies and practices significantly impact all these factors, but these policies still need procedures that do not fully control these factors. This underlines the importance of human resources as a critical factor in organizational success.

Further, unlike other resources, human resources appreciate over time as skills, knowledge, and competence keep growing due to training and experience. Therefore, the ability of an organization to optimize its operations depends to a large extent on its ability to integrate human resources with its goals and policies.

According to Kantowitz and Sorkin, “Tlumus factor is the discipline that tries to optimise the relationship between technology and the human.”

From the following points, one can understand the importance of human factors:

1) Develops Competitive Advantages

Human resources can be effectively used to develop competitive advantages. Competitive advantages may arise from new product development, lower production costs, new funding techniques, unique marketing methods, etc. As all these endeavours are the product of human efforts, human resources can be motivated to achieve them.

2) Acts as a Source of Creative Energy

Creativity is essential to every organization in today’s ever-changing world. Creative thinking can be seen as taking up the issue clearly with the help of visualization, imagination, supposing, musing, contemplating, and so on, and then coming up with a concept, idea, or picture on an altogether new line.

Only the human resources of the organization are sources of such creativity, as they can generate a wide variety of ideas. Generally, there is no limit to what people can achieve when they are suitably motivated to create novel ideas and concepts. No other resource within the organization can achieve such tremendous success.

3) Activates Non-Human Resources

All of an organization’s physical and financial resources are managed by human resources. Human resources are necessary for all other resources to remain active and helpful.

As such, human resources are one of the organization’s most important assets. It is they who make other resources active. They perform different activities in different functional fields like marketing, production, finance, etc.

Evolution of HRM – Human Resource Management