The term “human resource management” has been commonly used for about the last ten to fifteen years. Prior to that, the field was generally known as “personnel administration.”
Human resource development is a field with historical roots in both education and the world of work. Its broad foundations in related social and technical fields notwithstanding, human resource development is, first and foremost, a field of education that is for, and about work. Although the human resource development field has developed significantly since the Second World War, the historical origins of human resource development cannot be separated from the histories of education and training. The history of human resource development is the history of training and education for work.
The history of human resource development (HRD) has its roots in the origins of education and training. In tracing the history of HRD this chapter sketches man’s progress from survival-driven learning, to education shaped by the classics and Christianity, to the influences of war and military strategy on scientific and technical education, to the skills training and scientific management spawned by the industrial era, and finally, to the training of contemporary workers, technicians, and managers—the immediate predecessors of contemporary HRD.
The term “human resources” was coined only in the 20th century. However, the human race developed employee selection processes long before that. Even during the prehistoric period, humans carefully considered a candidate’s qualification before choosing him for a leadership position. In addition, the earliest human beings placed high importance on passing down necessary knowledge. Human resource development relies on education, which involves transmitting essential materials to employees so they can do their jobs better.
As human civilization continued to develop, so did the desire to improve employee performance and knowledge. Historians have found evidence of employment screening exams dating back to 1115 B.C. in China. The ancient Greeks and Babylonians created the apprenticeship system, which trained entry level employees in a particular trade. Apprenticeships continued well into the Middle Ages.
The Industrial Revolution
In the late 18th century, Europe and America’s economies shifted from agriculture to manufacturing. Inventors developed mechanisms to speed up production. However, mechanization led to injuries, a monotonous work environment and low wages in favor of more efficient production. Some employers realized productivity correlated strongly to worker satisfaction and attempted to improve training and salary.
Human Relations Movement
World War I brought about huge changes in the labor market. After World War I, the government and businesses realized that employees would no longer contribute to the economy if mistreated. In 1928, social scientist Elton Mayo began researching the effect of better working conditions on employees. Not surprisingly, workers under improved conditions produced more. Mayo discovered that under better conditions, employees worked as a team and generated a higher output. He promoted stronger human relations between subordinates and supervisors, which he called “the Human Relations movement.”
Human Resources Approach
By the 1960s, managers and researchers realized that just because an employee has better working conditions does not mean he will work harder. Instead, a new theory emerged. Both bosses and social scientists concluded that each worker has individual needs and requires a more personalized form of motivation in order to produce more. Businesses began treating employees as assets or resources, which needed cultivation and encouragement in order for the company to succeed.
During the last decades of the 20th century, supervisors began to focus on bringing organizational and individual employee goals closer together. To do this, managers strove to make work meaningful. Upper management gave human resources professionals the responsibility of optimizing employee skills to create a more valuable, skilled workforce. This trend has prevailed into the 21st century, with human resource departments emphasizing skill development and training for employees.
Personnel administration, which emerged as a clearly defined field by the 1920s (at least in the US), was largely concerned the technical aspects of hiring, evaluating, training, and compensating employees and was very much of “staff” function in most organizations. The field did not normally focus on the relationship of disparate employment practices on overall organizational performance or on the systematic relationships among such practices.
During pre-historic times, there existed consistent methods for selection of tribal leaders (Jones ; Bartlett, 2014). The practice of safety and health while hunting was passed on from generation to generation. From 2000BC to 1500BC, the Chinese used employee screening techniques and while Greeks used an apprentice system (History of Human Resource Management, 2010).
These actions recognized the need to select and train individuals for jobs. Early employee specialists were called personnel managers (or personnel administrators), and this term is still in use in various discourses. ‘Personnel management’ refers to a set of functions or activities (e.g. recruitment, selection, training, salary administration, industrial relations) often performed effectively but with little relationship between the various activities or with overall organizational objectives. Personnel management in the United Kingdom and the United States developed earlier than in Australia and Asia Pacific countries in response to their earlier and more widespread adoption of mass production work processes. Power-driven equipment and improved production systems enabled products to be manufactured more cheaply than before. This process also created many jobs that were monotonous, unhealthy or even hazardous, and led to divisions between management and the ‘working class’. The concentration of workers in factories served to focus public attention upon conditions of employment, and forced workers to act collectively to achieve better conditions. The Humanitarian, Cooperative and Marxist theories of the early 1900s highlighted the potential conflicts between employee and employer interests in modern industry – situations that laid the foundations for the growth of trade unionism and industrial relations systems which are important elements of contemporary HRM (Nankervis et.al (2011)
Human resource management (HRM), also called personnel management, consists of all the activities undertaken by an enterprise to ensure the effective utilization of employees toward the attainment of individual, group, and organizational goals.
An organization’s HRM function focuses on the people side of management. It consists of practices that help the organization to deal effectively with its people during the various phases of the employment cycle, including pre-hire, staffing, and post-hire. The pre-hire phase involves planning practices. The organization must decide what types of job openings will exist in the upcoming period and determine the necessary qualifications for performing these jobs. During the hire phase, the organization selects its employees. Selection practices include recruiting applicants, assessing their qualifications, and ultimately selecting those who are deemed to be the most qualified.
Human resource management has changed in name various times throughout history. The name change was mainly due to the change in social and economic activities throughout history.
Industrial Welfare Industrial welfare was the first form of human resource management (HRM). In 1833 the factories act stated that there should be male factory inspectors. In 1878 legislation was passed to regulate the hours of work for children and women by having a 60 hour week. During this time trade unions started to be formed. In 1868 the 1st trade union conference was held. This was the start of collective bargaining. In 1913 the number of industrial welfare workers had grown so a conference organized by Seebohm Rowntree was held. The welfare workers association was formed later changed to Chartered Institute of Personnel and Development. Recruitment and Selection It all started when Mary Wood was asked to start engaging girls during the 1st world war. In the 1st world war personnel development increased due to government initiatives to encourage the best use of people. In 1916 it became compulsory to have a welfare worker in explosive factories and was encouraged in munitions factories. A lot of work was done in this field by the army forces. The armed forces focused on how to test abilities and IQ along with other research in human factors at work. In 1921 the national institute of psychologists established and published results of studies on selection tests, interviewing techniques and training methods.
Acquisition of other Personnel Activities
During the 2nd world war the focus was on recruitment and selection and later on training; improving morale and motivation; discipline; health and safety; joint consultation and wage policies. This meant that a personnel department had to be established with trained staff. Industrial Relations Consultation between management and the workforce spread during the war. This meant that personnel departments became responsible for its organization and administration. Health and safety and the need for specialists became the focus. The need for specialists to deal with industrial relations was recognized so that the personnel manager became as spokesman for the organization when discussions where held with trade unions/shop stewards. In the 1970’s industrial relations was very important. The heated climate during this period reinforced the importance of a specialist role in industrial relations negotiation. The personnel manager had the authority to negotiate deals about pay and other collective issues. Legislation In the 1970’s employment legislation increased and the personnel function took the role of the specialist advisor ensuring that managers do not violate the law and that cases did not end up in industrial tribunals. Flexibility and Diversity In the 1990’s a major trend emerged where employers were seeking increasing flexible arrangements in the hours worked by employees due to an increase in number of part-time and temporary contracts and the invention of distance working. The workforce and patterns of work are becoming diverse in which traditional recruitment practices are useless. In the year 2000, growth in the use of internet meant a move to a 24/7 society. This created new jobs in e-commerce while jobs were lost in traditional areas like shops. This meant an increased potential for employees to work from home. Organizations need to think strategically about the issues these developments raise. HRM managers role will change as changes occur.
Stages in the Development of HRM Human resource management in Australia and the Asia Pacific region has progressed along similar lines to its United States and United Kingdom counterparts, but with differences in the stages of development, and in the relative influence of social, economic, political and industrial relations factors. The two main features of the US development of HRM are its initial emphasis on largely administrative activities, directed by senior management, and then the move to a more confident, business-oriented and professional approach in the 1980s and 1990s. Similar processes occurred in the United Kingdom, with more early emphasis on the ‘welfare’ roles of personnel practitioners because of the excesses of early capitalist industry, a strong humanitarian movement and developing trade unionism. In Asian countries, there has been a blend of administrative, paternalistic, cooperative, and business-focused HRM that varies between countries depending on their cultures, stages of development, extent of government intervention in the economy and industrial relations systems (Nankervis, Chatterjee ; Coffey, 2007)
In Australia, HRM has developed through the following general stages.
a) Stage one (1900–1940s): administration stage
b) Stage two (1940s–mid-1970s): welfare and administration stage
c) Stage three (mid-1970s–late 1990s): human resource management and strategic human resource management (SHRM) stage
d) Stage four (Beyond 2000): SHRM into the future These stages largely reflect the development of Human Resource Management in the rest of the world notably, the UK and the USA. A critical discussion of these stages is presented below:
Stage one (1900–1940s)
Welfare Stage: During this period personnel functions were performed by supervisors, line managers and early specialists (e.g. recruitment officers, trainers, welfare officers) long before the establishment of a national association representing a ‘profession’ of personnel or human resource management.
The early management theorists contributed ideas that would later be incorporated into personnel management theory and practice. Through job design, structured reward systems, ‘scientific’ selection techniques espoused by scientific management (see Frederick Taylor, Frank Gilbreth and Alfred Sloan) personnel management practice were refined especially in the recruitment and placement of skilled employees. Behavioural science (or industrial psychology) added psychological testing and motivational systems (see Elton Mayo), while management science contributed to performance management programs.
Stage two (1940s–mid-1970s)
Welfare and administration Stage: This second stage marks the beginning of a specialist and more professional approach to personnel management in Australia. World War II had significant repercussions for both those who went overseas and those who stayed behind, and particularly for business, the economy and the labour market. During World War II, not only was there a scarcity of labour for essential industries such as munitions and food, but there was also a corresponding increase in the problems and performance of existing employees. Many more women had become involved in all areas of Australian industry, to replace their husbands and brothers who were in military service. Financial, social and family pressures began to hinder the productivity and output of such employees, and they became increasingly harder to recruit. When the war ended, returning soldiers flooded the labour market, often with few work skills. Thus, employers – spurred on by government initiatives and their own post-war requirements for skilled employees in a developing economy – began to focus on the importance of a wider range of personnel functions.
Stage Three (mid-1970s–late 1990s)
HRM and SHRM During the 1970s, the majority of Australian organizations found themselves in turbulent business and economic environments, with severe competition from US and European organizations and emerging Asian markets. The influences of the ‘Excellence’ theories (e.g. Peters and Waterman) were beginning to affect the management of employees, together with increasing cost–benefit pressures. At the same time, the professional association (IPMA) and training institutions (TAFE and the universities) were becoming more sophisticated in their approaches, incorporating the ideas of the ‘excellence’, leadership and Total Quality Management (TQM) theories, with more recent developments such as Kaplan and Norton’s (2005) ‘Balanced Scorecard.’ During this period, the IPMA held a number of international conferences, initiated relationships with the Asia Pacific region, developed minimum criteria for practitioner accreditation (the 1987 rule) and a journal for academic and practitioner discussion ( Human Resource Management Australia , later retitled Asia Pacific HRM , and still later the Asia Pacific Journal of Human Resources ).
Personnel management was becoming human resource management, representing a change towards the integration of personnel functions, strategically focused on overall organizational effectiveness. Significantly, the use of the term ‘human resource management’ was first noted in Australia in these years, (Kelly, 2003) reflected in the formation of the Australian Human Resources Institute to replace the IPMA. It was enhanced by industrial relations changes, including award restructuring and enterprise agreements, increasing employment legislation, and economic realities such as declining trade with Britain and Europe and increasing opportunities in the Asia Pacific region. (Ogier, 2003)
In essence, human resource management recasts ’employees’ as ‘human resources’ who are vital organizational ‘assets’, possessing knowledge, skills, aptitudes and future potential; and who therefore require integrated and complementary management strategies (through, for example, human resource planning, job design, effective attraction and retention techniques, performance management and rewards programs, occupational health and safety systems) in order to assure their individual and collective contributions to the achievement of organizational goals and objectives. According to Taylor (2011) this transition of personnel management to human resource management signaled not just new rhetoric, but also significant new thinking on the part of managers.
For a generation, managers had been seriously constrained in terms of how they approached the people-related aspects of their activities (Taylor, 2011). Now they had an opportunity to take control and create approaches that were appropriate for their own organizations’ particular circumstances. HR strategies were developed, new individualized pay arrangements introduced, formal performance appraisal systems established and competency frameworks defined. Employers also seized the opportunity to employ people more flexibly, establishing more parttime and temporary jobs, outsourcing ‘non-core’ activities to external providers and abolishing long-established lines of demarcation which determined where one group of workers’ duties ended and another’s began.
At the same time, new methods of relating to workers had to be established to replace union consultation and negotiation arrangements, so there was the spread of a range of new involvement and communication initiatives along with a preference for single-table or singleunion bargaining in circumstances where trade unions retained an influence. In short, HRM can largely be explained as a response on the part of organizations to a newfound freedom to manage their workforces in the way that they wanted to. Fewer compromises had to be made, allowing decisions to be made and strategies to be established which operated exclusively in the long-term interests of organizations.
Building upon previous developments, this stage represents the integration of personnel management and industrial relations and HRM into a coordinated and strategic approach to the management of an organization’s people, signaling the eventual birth of strategic human resource management (SHRM) (Nankervis et.al (2011) . SHRM can be perceived as a ‘macro’ perspective (e.g. strategies and policies), whereas HRM represents more of a ‘micro’ approach (e.g. activities, functions and processes). SHRM adds the extra dimension of the alignment of the goals and outcomes of all HRM processes with those of their organizations as a whole though both are intertwined. SHRM also provides practitioners with renewed confidence to perform their activities as an integral component of organizational success (Cengage, 2010).
Stage Four (Beyond 2000)
The present and future of Human Resource Management (HRM): While it is difficult to predict the nature of HRM in the future, there are strong indications that its theory and practice will be continually transformed as a consequence of globalization, new technology and associated fundamental changes in the nature of work and jobs. These external and internal pressures and their possible impacts on organizations, employees and overall employment conditions is what informs the continuing evolution of HRM as a contemporary discourse as well as the need for continuous innovation on the part of HRM professionals and thinkers
In addition, the globalization of business means that HR professionals will need to be more proactive in relation to such issues as business ethics, corporate governance and the management of employees’ work–life balance. Communication and information technology changes such as the digital revolution, satellite links, cellular telephone networks and high speed fibre optic cables (Hunt, 2003) will require the adoption of strategic international or global HRM models implemented through radical new approaches to HRM strategies, structures, organizational cultures, HRM practices and employment relationships as a whole.
Ulrich (2006) has suggested that the survival of HRM demands that HR professionals are perceived to add value to four key stakeholders in organizations, namely:
a) employees who want competence and commitment
b) line managers who want to make strategy happen
c) key customers who want to buy more products/services; and
d) investors who want the stock price to go up.
Human resource management has expanded and moved beyond mere administration of the traditional activities of employment, labor relations, compensation, and benefi ts. Today HRM is much more integrated into both the management and the strategic planning process of the organization. 3 One reason for this expanded role is that the organizational environment has become much more diverse and complex. Compared to a workforce historically dominated by white males, today’s workforce is very diverse and projected to become more so. Diversity in the workforce encompasses many different dimensions, including sex, race, national origin, religion, age, sexual orientation, and disability. Diversity in the workplace presents new and different challenges for all managers. Other challenges are the result of changes in government requirements, organizational structures, technology, and management approaches.
Human Resource Management The history of HRM is said to have started in England in the early 1800s during the craftsmen and apprenticeship era and further developed with the arrival of the industrial revolution in the late 1800s. In the 19 th century, Frederick W. Taylor suggested that a combination of scientific management and industrial psychology of workers should be introduced. In this case, it was proposed that workers should be managed not only from the job and its efficiencies but the psychology and maximum wellbeing of the workers. Moreover, with the drastic changes in technology, the growth of organizations, the rise of unions and government concern and interventions resulted in the development of personnel departments in the 1920s. At this point, personnel administrators were called ‘welfare secretaries’ (Ivancevich, 2007). Some scholars argued that HRM is said to have started from the term ‘Personnel Management’ (PM). The term ‘PM’ emerges after the World War in 1945 as an approach by personnel practitioners to separate and distinguish themselves from other managerial functions and making the personnel function into a professional managerial function. Traditionally, the function of PM is claimed to ‘hire and fire’ personnel in organizations other than salary payments and training. But there were many criticisms and concerns of ambiguity expressed about the purpose and role of PM to HRM (Tyson, 1985) in that management planned HRM activities, and did not just respond reactively to different circumstances and situations, but in some cases, to demands of trade unions. In part to reflect these, none outline approaches to the management of employees in the mid 1980s. Therefore, the term HRM gradually tended to replace the term PM (Lloyd and Rawlinson, 1992). However, writers argued that the term HRM has no appreciable difference from PM as they are both concerned with the function of obtaining, organizing, and motivating human resources required by organizations. At the same time, writers are defining the terms HRM and PM in many different ways (Beer and Spector, 1985).
The rebranding for the term PM to HRM was argued as due to the evolvement and changes in the world of management and therefore a new term would seem appropriate to take new ideas, concepts and philosophies of human resources (Noon, 1992, Armstrong, 2000). Indeed, some writers commented that there are ‘little differences’ between PM and HRM and it has been criticized as pouring ‘old wine into new bottle’ with a different label (Legge, 2005). Whether HRM was considered to be different to personnel management – there is a continued debate on the meaning and practice of HRM as opposed to that of PM (Marchington & Wilkinson, 2002; Legge, 2005)
The origin of HRD was suggested to have started in the USA during the advent of the Industrial Revolution in 1800s. But some writers argued that the roots of HRD emerged in 1913 when Ford Motor started training its workers to produce mass production in the assembly line. However, a significant historical event was suggested during the outbreak of World War Two in the 1940’s as it was during this period that workers were trained to produce warships, machinery, and other military equipments and armaments (Desimone, Werner and Harris, 2002). Unlike Desimone et al (2002), Blake (1995) argued that HRD could have started a century later, in the early 1930s and its roots emerged from the concept of organization development (OD). On the other hand, Stead and Lee (1996) contested that the historical starting point of HRD was during the 1950s and 1960s when theories on employees’ developmental process was popularised and published by organizational psychologists such as Argyris (1957), McGregor (1960), Likert (1961) and Herzberg (1959). Hence, Stead and Lee (1996) believed that the development of human resources in an organization far encompasses merely ‘training’ but also motivation and development as suggested by organisational psychologists (Blake, 1995). This was supported by other writers, for instance, Desimone et al (2002) said that during 1960s and 1970s, professional trainers realised that their role extended far beyond classroom training and they were also begun to be required to coach and counsel employees. Realising, this extended role, Nadler introduced the term HRD in 1970s and it was placed under the big structure of human resources with the function of selection and development of employees under the term HRD (Blake, 1995). Subsequently, in early 1980s, the term HRD was approved by the American Society for Training and Development (ASTD) because they believed that training and development competencies expanded to include interpersonal skills such as coaching, group process facilitation and problem solving. And by then, organizations realised that human resources are important assets and emphasis was placed in investing in training and education for performance improvement to increase productivity and business success (Desimone et al, 2000). In the UK, Harrison (2000) argued that the historical development of HRD is more fragmented compared to the US. The history of HRD in UK was suggested to have started during World War Two in which ‘training’ was the symbiotic term. Similarly to the USA, during this period, training was the term because workers were trained in the production and manufacturing sector as well as becoming soldiers. The emergence of HRD began in early 1980s when the manufacturing industry was hit by a recession and a strategy was required to overcome the crises especially in multinational companies. Companies began to realise that human resource is an important asset and started developing their employees particularly to improve their performance and develop or enhance their skills to increase productivity. Since then, HRD is considered as an important business strategy and processes (Harrison, 2000) but viewpoints of HRD as a strategy for business success were argued by writers such as Garavan, Costine and Heraty (1995). In Malaysia, HRD could have started as early as 1980s. The historical development and emergence of HRD in Malaysia lacked empirical evidence, the development of HRD during this period was not very clear and focused. HRD may have started when the Commonwealth Countries Secretariat began developing the Human Resources Development Group (HRDG) in 1983 with the intention to assist the ASEAN countries in developing its human resources (Commonwealth Report, 1982:32; Commonwealth Secretariat, 1993). And in 1984, the ASEAN countries, including Malaysia being part of the ASEAN Pacific Rim commenced their proposals in providing assistance in developing human resources particularly, in education, training and skills development for new technology (Hashim, 2000). It may be argued that the emergence of HRD could have started during the mid 1970s when the Government began developing the Bumiputras’ in businesses to improve economic disparities (Malaysia, Government, 1971), or it may have started like the UK, during the economic recession in 1985 as it was during this period that the Government began its aggressive drive towards manufacturing and industrialisation (Malaysia, Government, 1991). However, clear evidence was seen when the Government of Malaysia began to include HRD strategies in the country’s development plans and policies in 1991 in the Second Outline Perspective Plan (OPP2) and the Sixth Malaysia Plan (6MP). One of the main thrusts of these plans is to become a fully industrialised nation with skilled and knowledge-based workforce by year 2020 (Malaysia, Government, 1991). Nevertheless, it could be argued that HRD could have started even before Malaysia’s independence, when workers migrated from India to work in the tin-ore mining fields and oil palm plantations.
The terms for human resource management and development has indeed evolved through the centuries. The term ‘human resource management” has evolved from personnel management in the early 1900s and through to the current use of the term ‘human capital management’- popularly used by many large firms. Similarly goes to the term ‘human resource development’- most practitioners understood the term ‘training’ as similar to HRD and the term ‘training’ is being popularly used to label departments and seen as synonymous to HRD. However, in the next decade or in very near future, it would not be surprising for us to see or hear new terms to represent HRM. Could it be ‘intellectual capital management and development? Or could it be expertise elite management and development, particularly in the era of knowledge-based workforce and the oncoming era of knowledge-expertise workforce. Indeed, these new terms would be oncoming and may be necessary to keep up with changes with the advent of globalization and internationalization and rapid technological advances. As such the field of human resource management and development will require new terms to describe its evolution and to take in new concepts, ideas and philosophies surrounding HRM and HRD.
In the past the concepts of education, training and development represented a division of work-related learning .They have since come to be seen as artificial boundaries around the facilitation, guiding and coordination of learning. In the past, education was differentiated from training. It was defined as academic learning undertaken in educational institutions in the pursuit of qualifications in advance of employment. Even if this learning was associated with employment, the participants in education were treated as consumers of bodies of knowledge, being taught subjects by professional teachers in institutions. The role and evolution of educational institutions and opportunities in a time of economic and social change is a critical concern for all. Some academic education is related to learning for work, but not all of it. Education, and academic learning, still seeks to promote learning for life and in aspects of life not connected with work and employment. Training meant learning undertaken for the development of skills for work and in work, on-job or off-job, to enable effective performance in a job or role. This was separate from education and development. The connotations of training were of specific kinds of formal learning provided in the workplace. Finally, development was distinguished from education and training but also seen as an process and outcome associated with both. Development was about the change of the whole person, not just the academic or vocational pieces of knowledge or skill needed for work. Development occurred during a person’s experience and growth throughout a career and lifespan. In the context of work and organisations, development was usually used to describe training for managers and professionals. Employees had to be trained; managers and professionals had to be developed. Development therefore signified superior and more elaborate learning. However, now that personal development is becoming an integral part of life for all employees, the concept of development is being applied more broadly to learning.
HRD is the part of people management that deals with the process of facilitating, guiding and coordinating work-related learning and development to ensure that individuals, teams and organisations can perform as desired. A young new recruit to a manufacturing company and an older, senior manager assuming a new leadership role in a large multinational bank have different learning needs, which present distinctive challenges. Nevertheless the HRD process involved will have some common, core features. Coming to know core parts of the HRD process, and being able to deal with them effectively, is a significant part of HRM in work organisations. And the nature of organisational learning needs will be distinctive, varying with the strategy, structure and culture of the organisation. The ability to analyse these is also a significant part of general HRM.