Chapter 1

HISTORY OF HRM:

Human Resource Management can be described as the comprehensive set of managerial activities and
tasks concerned with developing and maintaining a qualified workforce- human resource – in ways that
contribute to organizational effectiveness.
This chapter explores changes in Human Resource Management thoughts from the evolution era to
present age.

Historical Review of HRM

When we study HRM history we may identify man stages that show many development andshifts in
thinking that have conspired to bring about the evolution of HRM.

Pre and post Industrial Age

 The earliest forms Human Resource Management were the working arrangements struckbetween
craftsman and their apprentices during the pre-industrial cotton-base guild system. Theapprentice lived
in the workplace or home of his master and the master took care of his healthand welfare.After the
industrial revolution in 18

th

century the small cotton-based guild manufacturingconverted into large factories and more people
employed to produce through machines. Theunhygienic and arduous work in factories led to many labor
riots and the government stepped into provide basic rights and protections for workers. The need
comply with such statutoryregulations forced factory owners to set up a formal mechanism to redress
issues concerninglabor.

 Adam Smith and Robert Owen

In 1776 Adam Smith in his book “The Wealth of Nations” introduced the concept of Division of Labor. He
proposed that work could be made more efficient through division of labor andsuggested that work
should be broken down into simple tasks. This division led the threeadvantages. This was a development
towards, the development of skills, time-saving – thepossibility of using specialized tools. Smith
suggestion led many changes in manufacturingprocesses. Ford applied it in his factory to increase
productivity.Robert Owen the pioneer of HRM was a zealous supporter of the factory legislation
resulting inthe factory Act 1819. He emphasized o performance appraisal and pay for performance
(fairtreatment for employees).

  Lecture : 02

Evolution History of HRM / For Class Room use only 

  Human Resource Management 

 Personnel Management (early 20

th

Century)

By the early 1900s, increased competition and pressing demands to fulfill orders made factoryowner
take serious note of productivity and issues such as employee absenteeism and high turnover came into
focus.

Frederic Winslow Taylor 

 The dominant philosophy during this time was that employees would accept rigid standards andwork

Frederic WinslowTaylor’s

scientific management theory that involved time studies in an attempt to establish themost productive
way to undertake a process. This was a step towards job analysis, selection,training and
rewards.Personnel management gained a more professional role in the aftermath of World War 01
andthe Great Depression of early 1930’s. The demands of wartime production had led to enactmentof
several provisions to ensure that issues related to wages or working conditions did not
hinderproduction. Among the social security measures initiated in the aftermath of the GreatDepression
was the Norris-La Guardia Act that made “yellow dog” contacts unenforceable andthe National Labor
Relation Act (NLRA) or Wagner Act (1935) that gave employees the right toform unions and bargain
collectively and listed unfair labor practices.

The Human Relations Movement

 The movement presents an alternative and opposite approach to scientific management as itfocuses on

The Hawthorne Studies

Elton Mayo, the father of human relation, had conducted his famous Hawthorne Studies (1924-1932)
and concluded that human factors or non-monetary rewards were more important thanphysical factors
or monetary rewards in motivating employees. Trade unions now began tochallenge the fairness of
Tailors scientific management theories, forcing employers to take amore behavioral-oriented approach.

  Lecture : 02

Evolution History of HRM / For Class Room use only 

  Human Resource Management 

6
Other behavioral approach1. Abraham Maslow. The Hierarchy of Needs (1943)

Abraham Maslow was a Psychologist who proposed that within every person is hierarchy of fiveneeds
(psychological needs, safety needs, social needs, esteem needs and self actualizationneeds). Maslow
argued that each level in the needs hierarchy must be substantially satisfiedbefore the next is activated.

2. Douglas McGregor. Theory X and Theory Y (1960)

Douglas McGregor is best known for proposing two set of assumption about human nature: Theory X
and Theory Y. Theory X is a negative view of people that workers have little ambitions,dislike works,
want to avoid responsibility and need to be closely controlled to work efficiently. Theory Y is positive
that assumes workers can exercise self-direction, accept and actually seekout responsibility and consider
work to be a natural activity. McGregor believed that theory Yassumptions best captured true nature of
workers and should guide management practice.

3. Frederick Herzberg. The Hygiene-motivation Theory (1959)

Frederick Herzberg’s two factor theory suggest intrinsic factors are associated with jobsatisfaction, while
extrinsic factors are associated with job satisfaction.

Human Resource Movement

After the Korean War, a new class of college-educated managers emerged with a greater senseof social
responsibility than their predecessors. Throughout the second half of the 20

th

century,social well-being coupled with upheaval-best exemplified by the struggle for desegregation-
changed the thinking of employees in the United
States. Take care of your human resources like other resources.As the 1960s and 1970s unfolded, a
more personable group of managers emerged and theirinterests in people and feeling influenced all
facets of business, including the growth of marketresearch, communications and public relations. This
group of mangers emphasized therelationship between employers and employees rather than
scientific management. Programs toincrease wages and fringe benefits continued to be developed. New
studies linked greaterproductivity to management philosophies that encouraged worker ideas and
initiatives.Change in labor legislations such as the Equal Pay Act (1963), the Civil Rights Act
(1964),Occupational Safety and Health Act (1970), and the Employee Retirement Income Security Act

  Lecture : 02

Evolution History of HRM / For Class Room use only