Last Updated 10 Aug 2020

Human Resource Management Theories and History

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Personnel Management is that part of management concerned with people at work and their relationships within an enterprise. The personnel function has traditionally been regarded as a primarily administrative, reactive, problem-handling function, concerned with hiring and firing, employee welfare and industrial relations. Personnel management developed from the appointment of industrial welfare workers by some Victorian employers, with the aim of improving the living and working conditions of employees. Even at this early stage, the motivation for this service was acknowledged to be both philanthropic and business centered.

Labour shortages associated with the world wars fostered both a science of productivity and an increase in the power of organized labour. Management theory began with scientific management and was supposedly universalised by classical principals. Each developed a portrait of the employment relationship. With the human relations school, the importance of socio-psychological or human factors to organisational effectiveness was more fully recognised.

Frederick W Taylor pioneered the scientific management movement. In this classic theory, human emotion is ignored. Here are the four principles of scientific management. There are many managers today who would find nothing exceptional about Taylor's words, which also include a reference to leadership, something he sees as beyond scientific management. His results were incredible. For example, he achieved productivity increase of a group of workers loading pig iron from 12.5 tons per day to 47 tons. He reduced the number of yard labourers at Bethlehem Steel from 600 to 140 with no drop in output.

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At the time he was working, his basic assumptions about people were correct. Workers did not know the best way to do jobs, were insufficiently educated or trained to discover it themselves and were willing to accept direction to get more money. Today, in many countries, people are much more educated, far less willing to take direction and have many more alternatives both of life style and learning opportunity. Acute labour shortages during and following both World Wars created an urgent need to increase productivity, and Western governments encouraged the systematic study of the employment relationship and the human aspects of industrial work, which underpinned the personnel management function.

Henri Fayol (1841 - 1925), a French mining engineer who took a mining organisation from near collapse to great success, is best known for his analysis of the five key tasks of management Plan, Organise, Direct, Co-ordinate, Control. He put forward and popularised the concept of universal, rational principles according to which, organisations could be structured and managed: this came to be known as 'classical organisation theory'. He also spoke about authority and responsibility, organisational objectives, chain of command among many other topics some of which sound very modern today, despite the fact that his work was mainly in the 1920's (published in 1949.)

Fayol introduced the notion on one boss and the chain of command. Organisations in the 1920's were somewhat simpler than they are today. In fact, the earliest form of matrix management is said to stem from the US government needs in the 1960's and the need to keep tabs on the progress of orders for defense material. Dealing with all the people in a chain of command, in all parts of a manufacturing organisation, to see how things were going was clearly impossible. So the US government required each contractor to appoint a project manager, responsible for ensuring that everything was progressing to plan. In many ways, his logical and formal manner is still found within many professional service firms - such as accounting or law firms.

Governmental influence on workforce and industrial relations continued, alongside general social reforms in education and healthcare, until the mid 1970's when the idea that governments could and should maintain full employment finally gave way before the spectre of inflation and the rise of free market economies. The UK government would only get involved in employee / employer relationships in the area of a trade union reform. Nevertheless, the latter half of the 20th century saw a period of intense legislation in all areas of employment; health and safety, employment protection and equal opportunities.

Growing complexity and accelerating change led to the development of less prescriptive models of management, including the systems and contingency approaches, which began to integrate human relations more directly with strategic business issues. At the same time, personnel management came to require bureaucratic controls and a specialised body of knowledge. Read about paradigm shift in human resource management

The human relations movement stems from the work of Elton Mayo and his Hawthorne Studies, and argues that people are not logical decision makers but have needs for creativity, support, recognition and self-affirmation. The movement is in direct opposition to what is known as 'Scientific Management', first put forward by Frederick W Taylor, which concentrates upon the task and not the person. Taylor's work has been very largely misunderstood and even demonised. This is a pity because there are situations in which his approach, like the theory of bureaucracy, is very valuable.

Unfortunately, the human relations movement became the accepted dogma of the 60's and 70's. Today there are signs that task analysis (scientific management); system management (bureaucracy) and empowerment (human relations) are beginning to be seen as three equally useful approaches - dependent upon the situation. Mayo is known as the main advocate of the human relations movement in management. The Australian is most famous for what is generally referred to as the Hawthorne Experiment of the 1920's.

Studying changes in productivity of a group of workers at the Hawthorne Works of the Western Electric Company in Illinois, USA, he found, to his own surprise, that every change that he made to lighting, processes, work breaks (up or down) resulted in an increase in productivity. The conclusion drawn was that involving people in ideas and changes, improves morale and productivity. The Hawthorne experiment started with six women working in the relay assembly area and the results forced Mayo and his team to conclude (after a great deal of puzzlement) that the increase in productivity was the result, not of experimental changes in incentives or working conditions but of the changed social situation of the workers. The second stage of the Hawthorne studies involved interviewing 21,000 employees over three years.

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