Introduction p.4
Main terms defined p.4-7
Evolution of HRM concept p.7-10
Modern challenges of HRM p.10-12
Conclusion p.12
Abstract
The paper is dedicated to researching into historical roots of HR Management over the period from nineteenth to twenty first century. Particular attention is paid to reasons, which underlie changes of the concept; earlier concepts, related to managing HR and existing challenges, which tend to influence modern stage of HRM concept evolution. Conclusion contains brief summary of results of the research.
Key words: human capital, management, development
Introduction
According to the opinion of A.Haslinda (2009), “human resources are organization’s greatest assets, because without them everyday business functions such as managing cash flows, making business transactions, communicating through all forms of media and dealing with customers could not be completed”(180). Human resources and their development tend to be considered to be one of the most important preconditions for company’s success. In order to maximize effectiveness of organization’s functioning, modern business pays particular attention to managing and developing employees’ capabilities, time and talent.
In their book “Human resource management”(2008) R.Mathis and J.Jackson claim that “ideally, HR should be finding the best hires, nurturing the stars and enhancing a productive work environment”. (3) Nonetheless, HR managers tend to concentrate on administrative tasks and are too busy to consider results. Therefore, understanding the importance of investments in developing human capital, modern businessmen tend to establish HR development departments along with the ones, concerned with HR management. Moreover, modern era of business’ development predetermines growing need of aligning HR management strategies with global strategy of business’ development. This factor contributes to the development of such branch of HR as strategic HRM. So, by my research I will try to pay attention to all aforementioned concepts, so that the full of picture of HR management’s development trends can be seen.
Most important terms defined
When considering evolution of HRM, it is crucial to research into what HRM and related concepts mean. Let us start with “human capital”. According to L.A.Weatherly (2003), “a company’s human capital asset is the collective sum of the attributes, life experiences, knowledge, inventiveness, energy and enthusiasm that its people choose to invest in their works” (1). Human capital is believed to encompass such values as tacit knowledge, education, vocational qualifications, professional certification, work-related know-how and work-related competence. By-turn, social capital represents the value of the relationships, which exist within the organization, in terms of transferring knowledge. Development of social capital is invaluable for knowledge-based society.
According to the definition by R.Dransfield (2000), “human resources are the people that work for an organization, and the contributions that they make through their skills, their knowledge and their competences”. (3)
There are lots of definitions of HR management and different opinions about what we can consider within the scope of this notion. Comprehensive analysis of modern scientific literature dedicated to HRM, performed by R.Dransfiled (2000) gave him a chance to “identify four main areas, which are emphasized, when considering HRM:
- HRM is a major concern for the organization
- HRM involves decentralizing people work to line managers
- HRM involves coordinated set of policies and activities
- HRM involves identifying the needs and requirements of people in the workplace” (7)
So, it can be defined with respect to any abovementioned emphasis. According to R.L.Mathis and J.H.Jackson (2008), HR management is “designing management systems to ensure that human talent is used effectively and efficiently to accomplish organizational goals” (4) According to John Storey (1995), HRM is a “distinctive approach to employment management, which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce, using an integrated array of cultural, structural and personal techniques. (5) John Storey distinguishes between “hard” and “soft” HRM. “Hard HRM emphasizes the need to manage people in ways, which will help to reach goals of the organization. “Soft” HRM is based on human relations managerial school, which states that employees must be treated as valued assets and a source of competitive advantage. This advantage is reached through developing employees’ commitment, adaptability and quality of their performance.
Some authors still prefer to define HR management with respect to its structure. According to Pieper (1990, “HR management is considered to include such elements as:
- traditional personnel administration (staffing, work design)
- personnel development
- a specific managerial theory, which values labour as the major asset of organization
- the integration of personnel function into strategic management” (3)
Major HRM activities include strategic HR management (HR planning, effectiveness, technologies), staffing (recruiting, selection, job analysis) ensuing equal employment opportunities, talent management (orientation, talent, HR development), total rewards, risk management and workers’ protection and creating a framework for the relationships between employer and employee. So, we can conclude that modern vision of HR management includes variety of activities; some of them (strategic HR management and HR development) can be considered separate branches of managerial work. HRM fulfils such roles as administrative, operation and employee advocate and strategic.
Strategic HR management deals with designing proactive ways of managing HR, so that employees’ needs were met, when considering company’s goals and company’s HR management strategies do not contradict strategies of business’ development. Human development is aimed at developing employees’ knowledge, skills and competence, so that they can make more valuable contributions into company’s activities.
Nowadays employees are considered the most valuable intangible asset of the company. Nonetheless, such a vision has been formed in the very end of twentieth century due to emergence of such concepts as knowledge-based society and information era. Let us transfer to considering historical roots of modern HR management and changes, experienced by this concept over the period of its development.
Evolution of HRM concept Ever since the personnel function emerged as an independent functional area in large companies at the very end of the nineteenth century, it has undergone a variety of significant changes. The history of HRM is believed to have started in England in the early 1800s during the era of craftsmen and apprenticeship and further developed with the start of industrial revolution. The first one to start considering the necessity of combining scientific management and industrial psychology of workers was F.Taylor. According to his theory, workers should have been managed not only in terms of getting the job done, but taking into consideration well-being of workers themselves. In the USA early personnel management was designed to help newcomers adjust to American way of life and their jobs. Industrial revolution with its substitution of handmade goods with machine-made ones, turning small-scale production to large-scale one and the development of labour relationships called forth the necessity of labour unions, aimed at helping employees protect their interests, connected with labour. At the same time the early preconditions for emergence of HR development were introduced.
Wagner Act, Social Security Act of 1935 and the Fair Labour Standards Act have become the legal framework for future development of these departments.
Outbreak of the Second World War became a significant stage in the development of HR development as during the war lots of people were trained to produce military equipments and armaments. That time it was believed that personnel’s training and retraining is not a part of personnel management, but of general organization’s development.
According to Pieper (1990), the after-war “period from the mid-1950s to the early 1960s saw the first works by normative management researchers, who propagated a humanistic image of the employee (e,g, Argyris 1957, Maslow 1954, McGregor 1960)” (29)In 1965 in his book “Theories of management”, Miles introduced three theories of management: traditional, human relations and human resources, having put an emphasis on the distinction between human relations and human resources. In the traditional model the manager aims at constant monitoring the activities of the subordinate, as he is considered to be shy and demotivated. Human relations model is based on providing the employee with the feeling of his own importance and utility.
Human resource model, which is currently most wide-spread one, helps employees develop such skills as self-determination and self-management. In the 1960s fist attempts to prove that changes in management style from autocracy to participation will help employers make much better use of human resources. These statements have become a ground for the start of an important discourse on different aspects of HR management styles. The discourse was intensified due to passing such acts as the Civil Rights Act of 1964, Equal Pay Act of 1963, Occupational Safety and Health Act of 1970 and the Employee Retirement Income Security Act of 1974, which promoted the development of employees’ rights. Further main development of legal framework was associated with adoption of Americans with Disabilities Act of 1990.
Over the period from 1960s to late 1970s foundations of theory of “human capital” were laid by such scholars as Becker (1964) and Schutz (1978). According to their theories, each employee is an asset, which managers can evaluate as all other assets. So, investments in employees’ talents development were called investments in human capital. This period was special in terms of the evolution of HR development theory. According to Desimone et al (2002), in 1960s professional trainers have already understood that their role goes beyond classroom training and should also deal with counseling and couching employees. In late 1970s a Youth Opportunities Program, aimed at combating youth unemployment, was launched. It contained training and work preparation courses.
The concept of HRM was firstly applied to governmental HR management, which was believed to include HR development (different types of training and retraining), HR allocation (placing those, seeking the job with employers), CR conservation (job-creation measures) and HR utilization (minimization of illness and accidents). It is worth mentioning that despite the fact that a variety of definitions of personnel management and HR management exist, these terms are quite similar to each other. Nowadays many firms use the term “human capital management” instead of HRM.
Modern challenges of HRM
Modern stage of HR development is characterized by a variety of challenges of different nature. Some of them can be considered inner ones, whereas other ones are called forth by general trends of mankind’s development. According to Cindy Wright (), most important issues HR professionals should cope with are:
- productivity
- job satisfaction
- turnover (loss of workers from an organization)
- absenteeism
Moreover, it is worth remembering that people are not computers or building, so, HR managers cannot exercise direct control over their activities and motivation.
Outer challenges deal with trends, which determine the development of modern business. Economic and technological changes in this regard include occupational shift (from manufacturing and agriculture to service and telecommunications), shortages of workforce due to inadequate supply of workers with skills, which are being demanded, growth in contingent workforce (temporary workers, independent contractors, part-time workers). Special role in terms of economic and technological shifts belongs to the rapid development of information technologies, especially the Internet. For managers rapid growth of technology means always being “available” and able to work at different places. More and more people prefer freelance jobs to traditional employment and tend to work at night and during the weekend, sometimes being able to control the workload themselves. Specific challenges can be associated with workforce demographics and diversity. As a result of demographic shifts, modern HR managers have to obtain cross-cultural communication skills to be able to build relationships with labour force of different racial and ethnic origin and background. This challenge is also intensified due to the fact that lots of large companies tend to offshore some of their activities to other countries. Other challenges can be associated with organizational cost structure and restructurizing. In other words, modern HR managers are often asked to operate in a “cost-less” mode, which means paying particular attention to finding ways to reduce costs.
Conclusion
Basic notions and terms related to HRM have been evolving since early 1800s. Two major historical roots of HRM lie in the development of behavioural and economic theories, which let consider staff as an investment, which needs different types of economic protection. Modern HRM went far beyond “hard” management and is aimed at putting emphasis on HR development due to the fact that employees are treated as the major asset of the company. Modern stage of HRM’s development is influenced by a variety of outer challenges, which are called forth by general trends in mankind’s development.
References
Desimone, R.L., Werner, J.M. and Harris, D.M.(2002) Human Resource Development. (3rd ed) Orlando, Harcourt College Publishers
Dransfield, R. (2000). Human resource management. Oxford: Heinemann International Publishers
Haslinda, A. (2009). Evolving terms of human resource management and development. The Journal of International Social Research, 2(9), p.180-186
Mathis R., Jackson J. (2008) Human resource management. Stamford: Thomson Learning Inc.
Pieper, R. (1990) Human resource management: an international comparison. New York, NY: de Gruyter
Storey, J. (1995). Human resource management: a critical text. London: Routledge Weatherlie, L. (2003) Human capital – the elusive asset. Measuring and managing human capital: a strategic imperative for HR. Alexandria: The Society for HRM
