The history of HRM can be divided into six distinct stages namely the welfare stage, personnel administration stage, personnel management stage, personnel management maturity stage, personnel management maturity stage, personnel management entrepreneurial stage and human resource management stage.
- a) The welfare stage
This covers the period 1900-1920 during which workers in Europe formed individual welfare groups which were concerned with their needs at work. These groups fought for the improvement in working conditions. During the First World War (1914-1918), many organizations were faced with acute shortage of labour but there was need to increase productivity. Governments in USA and Europe therefore encouraged systematic study of employee and employer relationships.
- b) Personnel administration stage (1920-1929)
During this period, neo-classical theorists carried out studies that improved the employee-employer relationship. The main contributors were Abraham Maslow, Elton Mayo, Douglas Macgregor. The services that were provided to workers during this period included transport facilities, canteens, sporting facilities etc. Systematic procedures relating to personnel such as recruitment and training also began during this period.
- c) Personnel management stage (1940-1950)
During this stage, the procedures introduced in the earlier stage were refined and other activities related to employees were introduced. These include salary scales and administration, industrial relations, training and development etc.
- d) Personnel management maturity stage (1950-1970)
Specialization developed during this period and personnel department was recognized as a unit that was independent from the others in an organization. There was also a continuous introduction of systematic training programmes, performance appraisal etc.
- e) Personnel management entrepreneurial stage (1970-1980)
During this period, there was intense business competition. This made many organizations introduce new management techniques. HR managers were therefore expected to be entrepreneurial in their approach to business. More studies were carried out in HR with the aim of giving an organization a competitive advantage over others. Employees became highly valued resource and were considered as the most strategic asset in an organization.
f)Human Resource Management stage (1980-date)
In this period, there was more involvement of HR specialists in management of an organization. The HR manager began to be involved in making top level decisions relating to employee and formulation of corporate strategy
A debate about the differences, between HRM and personnel management went on for some time but has died down recently, especially as the terms HRM and HR are now in general use both in their own right and as synonyms for personnel management. But understanding of the concept of HRM is enhanced by analyzing what the differences are and how traditional approaches to personnel management have evolved to become the present day practices of HRM.
Some commentators have highlighted the revolutionary nature of HRM. Others have denied that there is any significant difference in the concepts of personnel management and HRM. Personnel management has grown through assimilating a number of additional emphases to produce an even richer combination of experience. HRM is no revolution but a further dimension to a multi-faceted role.
The conclusion based on interviews with HR and personnel directors is that HRM is regarded by some personnel managers as just a set of initials or old wine in new bottles. It could indeed be no more and no less than another name for personnel management, but it has the virtue of emphasizing the treatment of people as a key resource, the management of which is the direct concern of top management as part of the strategic planning processes of the enterprise. Although there is nothing new in the idea, insufficient attention has been paid to it in many organizations.
The similarities between HRM and personnel management are summarized below;
- Personnel management strategies, like HRM strategies, flow from the business fit and integration.
- Personnel management, like HRM, recognizes that line managers are responsible for managing people. The personnel function provides the necessary advice and support services to enable managers to carry out their responsibilities
iii. The values of personnel management and at least the ‘soft’ version of HRM are identical with regard to ‘respect for the individual, balancing organizational and individual needs, and developing people to achieve their maximum level of competence both for their own satisfaction and to facilitate the achievement of organizational objectives.
- Both personnel management and HRM recognize that one of their most essential functions is that of matching people to ever changing organizational requirements i.e. placing and developing the right people in or for the right jobs.
- The same range of selection, competence, analysis, performance management, training, management development, and reward management techniques are used.
- Personnel management, like the ‘soft’ version of HRM, attaches importance to the processes of communication and participation within an employee relations system.
The differences between personnel management and HRM are:
- HRM places more emphasis on strategic fit and integration
- HRM is based on a management and business orientated philosophy.
- HRM attaches more importance to the management of culture and the achievement of commitment (mutuality).
- HRM places greater emphasis on the role of line managers as the implementers HR policies.
- HRM is a holistic approach concerned with the total interests of the business; the interests of members of the organization are recognized but subordinated to those of the enterprise.
- HR specialists are expected to be business partners rather than personnel administrators
- HRM treats employees as assets not costs.
Generally, HRM possesses the following unique features;
The characteristics of HRM are by no means universal. There are many models and practices within different organizations are diverse, often only corresponding to the conceptual version of HRM in a few respects. A distinction is made between the ‘hard’ and ‘soft’ versions of HRM.
The hard version of HRM emphasizes that people are important resources through which organizations achieve competitive advantage. These resources have therefore to be acquired, developed and deployed in ways that will benefit the organization. The focus is on the quantitative, calculative and business-strategic aspects of managing human resources in as ‘rational’ a way as for any other economic factor The drive to adopt HRM is based on the business case of a need to respond to an external threat from increasing competition. It is a philosophy that appeals to managements who are striving to increase competitive advantage and appreciate that to do this they must invest in human resources as well as new technology.
The soft version of HRM traces its roots to the human-relations school; it emphasizes communication, motivation and leadership. It involves ‘treating employees as valued assets, a source of competitive advantage through their commitment, adaptability and high quality (of skills, performance and so on)’. It therefore views employees, as means rather than objects.
The soft approach to HRM stresses the need to gain the commitment – the ‘hearts and minds’ – of employees through involvement, communications and other methods of developing a high-commitment, high-trust organization. Attention is also drawn to the key role of organizational culture.
Perhaps the most significant feature of HRM is the importance attached to strategic integration, which flows from top management’s vision and leadership, and which requires the full commitment of people to it. Scholars believe that this is a key policy goal for HRM, which is concerned with the ability of the organization to integrate HRM issues into its strategic plans, to ensure that the various aspects of HRM cohere, and to encourage line managers to incorporate an HRM perspective into their decision-making.’
HRM model is composed of policies that promote mutuality – mutual goals, mutual influence, mutual respect, mutual rewards, and mutual responsibility. The theory is that policies of mutuality will elicit commitment, which in turn will yield both better economic performance and greater human development. HRM attempts to create behavioural commitment to pursue agreed goals, and attitudinal commitment reflected in a strong identification with the enterprise’. It is believed that human resources may be tapped most effectively by mutually consistent policies that promote commitment and which, as a consequence, foster a willingness in employees to act flexibly in the interests of the “adaptive organization’s” pursuit of excellence’.
d) People are regarded as ‘human capital’
The notion that people should be regarded as assets rather than variable costs, in other words, treated as human capital, was originally advanced by Beer et al (1984). People and their collective skills, abilities and experience, coupled with their ability to deploy these in the interests of the employing organization, are now recognized as making a significant contribution to organizational success and as constituting a significant source of competitive advantage.
e) Applies unitary philosophy
The HRM approach to employee relations is basically unitary – it is believed that employees share the same interests as employers. This contrasts with what could be regarded as the more realistic pluralist view, which says that all organizations contain a number of interest groups and that the interests of employers and employees do not necessarily coincide.
f) It is Individualistic
HRM is individualistic in that it emphasizes the importance of maintaining links between the organization and individual employees in preference to operating through group and representative systems.
HRM can be described as a central, senior management-driven strategic activity that is developed, owned and delivered by management as a whole to promote the interests of the organization that they serve. The adoption of HRM is both a product of and a cause of a significant concentration of power in the hands of management’, while the widespread use ‘of the language of HRM, if not its practice, is a combination of its intuitive appeal to managers and, more importantly, a response to the turbulence of product and financial markets’. HRM is about the rediscovery of management. HRM policies and practices are applied within a firm as a break from the past and are often associated with words such as commitment, competence, empowerment, flexibility, culture, performance, assessment, reward, teamwork, involvement, cooperation, harmonization, quality and learning.
The concept of HRM is largely based on a management and business-oriented philosophy. It is concerned with the total interests of the organization – the interests of the members of the organization are recognized but subordinated to those of the enterprise. Hence the importance attached to strategic integration and strong cultures, which flow from top management’s vision and leadership, and which require people who will be committed to the strategy