Everything you need to know about the history of human resource management. The correct period of the origin of HRM is debatable subject but its activities have been performed since ancient times.

HRM appears to have its origins in the United States in the 1950s but it did not gain wide recognition until the beginning of the 1980s and in the U.K. until the mid to late 1980s.

In India, the origin of human resource management can be traced to the concern for welfare of factory workers during the 1920s.

The Royal Commission on Labour recommended in 1931 the appointment of labour officers in order to protect the workers from the evils of jobbery and indebtedness to check corrupt practices in recruitment and selection in Indian industry, to act as a spokesman of labour and to promote an amicable settlement between the workers and management.


In this article we will discuss about the history of human resource management.

The phases are:- 1. Early Phase 2. Industrial Revolution 3. Scientific Management 4. Classical Organization Theory 5. Human Relation Movement 6. Behavioural Science Movement 7. Organization Development Movement 8. Modern Movement.

Also learn about the two most important periods in the history of HRM in India. They are:- 1. Development before Independence and 2. Development after Independence.

History of Human Resource Management – From Early Phase to Modern Movement of HRM

History of Human Resource Management – Origin of HRM Since Ancient Times: Early Phase, Industrial Revolution, Scientific Management and a Few Others

The correct period of the origin of HRM is debatable subject but its activities have been performed since ancient times. It appears to have its origins in the United States in the 1950s but it did not gain wide recognition until the beginning of the 1980s and in the U.K. until the mid to late 1980s.

1. Early Phase:


The concept of organisation was well understood by Moses around 1250 B.C. The Chinese, as early as 1650 B.C. had originated the principle of division of labour. Around 1800 B.C. the minimum wage rate and incentive wage plans were included in the Babylonian Code of Hammurabi. In India, Kautilya mentioned various concepts such as job analysis, selection, and development and performance appraisal in his book Arthasastra.

2. The Industrial Revolution:

The foundation of industrial revolution was laid between 1850 to 1875. This period was characterized by the development of machines and technology made rapid progress. The result was an increase in job specialization and the enterprises started grouping but the working and living conditions of the labours were poor and their working hours were long.

The employers were only interested to meet production targets rather than satisfy workers’ demands. As a result of the prevailing poor working conditions and low wage rates the adversarial relationship between employers and labours was established. This lead to gradual evolution of systematic attention towards welfare of workers and laid the foundations of the HRM.

3. Scientific Management:


In early 1900s, Frederick Winslow Taylor advocated scientific management. This was an instrument which brings the logic of efficiency to management.

The salient features of this approach are:

(i) Scientific selection of person on the job;

(ii) Systematic analysis of job;


(iii) Breakdown the job into small mechanical elements then rearrange into their most efficient combination;

(iv) Employees must be trained carefully by supervisors so that they performed the task as specified by prior scientific analysis;

(v) A fair piece rate system of wage;

(vi) Overqualified workers should be excluded from the job;


(vii) There should be close cooperation between managers and non-managers.

Taylor believed that the above techniques could be used by management to increase efficiency and output in the work place. This approach was accepted by workers and managers because it placed a strong emphasis on the mutual benefit of productivity; the organisation produced more and increased its profits, while workers made more money and lived.

D. C. Wilson and R. H. Rosenfeld, 1990, have listed some of the key reason for the gradual decline of scientific management:

(i) Workforce became a critical factor in the organization;


(ii) Increasing complexity of markets and products;

(iii) Political, social and cultural changes; and

(iv) Organizations became large and more complex

4. Classical Organization Theory:

Another contribution to management thought was popularized by Henry Fayol in 1929 in the form of Classical Organization Theory. He listed fourteen principles. These must be flexible, and adaptable to large variety of changing and special conditions.


These are:

(i) Division of labours

(ii) Authority

(iii) Discipline

(iv) Units of command

(v) Units of direction


(vi) Subordination of individual interest to the general interest

(vii) Remuneration

(viii) Centralization

(ix) Hierarchy of authority

(x) Order

(xi) Equity


(xii) Stability of sense

(xiii) Initiative

(xiv) Esprit de corps

Fayol found that the activities of industrial undertaking can be divided into six groups:

(i) Technical (production);

(ii) Commercial (buying, selling and exchange);


(iii) Financial;

(iv) Security of property and persons;

(v) Accounting; and

(vi) Managerial.

He further identified five specific functions must perform by all manners in the organization.

There function are:


(i) Planning;

(ii) Organising;

(iii) Commanding;

(iv) Coordinating; and

(v) Controlling

Mr. Fayol known as “Father of Modern Management Theory” because his perceptions are considered valid by management experts and practitioners even today.

5. Human Relation Movement:


Human relations means the relations between person to person and in respect of organization, the relations between management and employees. The success of organization depends upon harmonious relations between employers and employees. This lead to turn in higher productivity of the organization.

The Hawthrone experiments conducted by Elton Mayo and his colleagues at the Western Electric Company concluded that the employee productivity was affected by social and psychological factors. Supervisors and managers should develop effective human relations skills in counseling employees.

It emphasized the necessity for management to recognize the need of employees for recognition and social acceptance.

The message was that interpersonal relationships should be fostered for the fullest realization of the potential of individual and groups. Accordingly some concepts such as social system, informal. Organisation, group control of behaviour, equilibrium and logical and non logical behaviour entered in the field of human relations.

The good human relations can be created by constant contact with the employees, empathy and understanding of their problems and needs, their good will and cooperation. In short, worker should be treated as a human being. As per views of Barnard in year 1938;

(i) Natural Groups – Employees tend to form natural groups in the organization to satisfy their social needs.

(ii) Upward Communication – Two way communications system (Top to Bottom and Bottom to Top) is the best method for receiving the feedback from the workers.

(iii) Cohesive Leadership – Cohesive leadership should ensure effective and coherent decision making with organization.

Thus, human relations are not merely sentimental require­ment of an organization but they are perquisite to higher pro­ductivity and with better understanding and team work, maxi­mum productivity can be achieved at minimum cost. Therefore, it is the responsibility of the management to look after the total wellbeing of the individual worker in the organization. A happy worker is an asset to the organization. He turns out more work in less and less time.

6. The Behavioural Science Movement:

This movement came during early 1960s.

In 1959, Peter Drucker wrote:

An effective management must direct the vision and effort of all managers towards a common goal.

His concept was based on goal directed leadership means “management by objectives” or “MBO”.

Again in the year 1973, he wrote:

“Each member of the enterprise contributes something different, but all must contribute toward a common goal. Their efforts must all put in the same direction, and their contributions must fit together to produce a whole-without gaps, without friction, without unnecessary duplicating of effort.”

MBO require major effort and continual commitment, it gives rise to system of joint target setting and performance review. Each employee or supervisor or manager is interactive with his superior and actively involved in setting his own goals. He further wrote in year 1974.

The greatest advantage of MBO is perhaps that it makes it possible for a manager to control his own performance. Self-control means stronger motivation – A desire to do the best rather than do just enough to get by. It means higher performance goals and broader vision.

MBO and self-control asks for self-discipline. It forces the manager to make high demands on himself. It is anything but permissive. It may well lead to demanding too much rather than too little……………….

MBO and self-control assumes that people want to be responsible, want to contribute, want to achieve, and that is a bold assumption………

But MBO and self-control is more than a slogan more than a technique, more than a policy even. If is, so to speak, constitutional principle.

In short, MBO refers to:

(i) Establishment of goals and objectives;

(ii) Formulation of action plans; and

(iii) Reviewing and modifying human behavior.

Douglas Mc Gregor, 1960, described two sets of assumption about the nature of person at work.

(a) Theory ‘X’:

Stands for the set of traditional beliefs that is pessimistic, static and rigid which holds that:

(i) Employees dislike work and tend to avoid it;

(ii) They will shrink responsibility and seek formal direction;

(iii) They seek security and display little ambition, and

(iv) They must be corrected and controlled.

(b) Theory ‘Y’:

Is concerned with a different understanding of person at work. This theory is optimistic, dynamic and flexible with an emphasis on self-direction and the integration of individual needs with organisational demands.

Theory Y assumes that:

(i) Employees like work under proper conditions;

(ii) They will exercise self-direction and self-control when committed to objectives;

(iii) The average person can learn to accept and seek responsibility; and

(iv) The capacity for creativity is solving organizational problems is widely distributed among the population.

Drucker and Mc Gregor paved the way to the HRM philosophy that human resource policies and programmes must be built into the strategic objectives and plans of the business and must also aim to get everyone involved in the achievement of these objectives and plans.

Abraham Maslow (1954) propounded a theory regarding hierarchy of human needs also human as Deficit Theory Motivation. He divided human needs into five categories.

In ascending order, they are:

(i) Physiological Needs – These are basic to life such as food, clothing, sex, etc.

(ii) Safety Needs – For protection against danger and deprivation.

(iii) Social Needs – To be given love affection belonging and acceptance by others.

(iv) Esteem Needs – For self-esteem, recognition appreciation in the eyes of others.

(v) Self Actualization – For realising and fulfilling one’s potential, also known as self-fulfillment.

Maslow acknowledge that his hierarchy was flexible. A lower need does not have to be fulfilled completely before a higher need emerges. According to Maslow, if you want to motivate an employee, you need to understand where that employee currently is on the hierarchy and focus on satisfying those needs at or above that level. In under develop countries the workers give top priority to lower order needs.

The most influential member of the behavioural science school was Frederick Herzberg.

He concluded that individuals have two different categories of needs:

(i) Hygiene Factors (Maintenance Factors):

These factors are related to the context of the job and were classified as dissatisfies because they do not lead to growth but only prevent deterioration. These are-company policy and administration, salary, working conditions, relationships with supervisor, peers, and subordinates, quality of supervision and status.

(ii) Motivators:

They are related to the content of the job. Their existence would yield feelings of satisfaction. On the other hand, if they are not present they do no prove highly satisfying. These factors are-achievement, recognition for accomplishment, responsibility, opportunity for advancement and growth.

This theory is also called the dual factors theory and the Motivation Hygiene Theory of Motivation. The most basic implication of the theory is that in order to maximize human productivity, it is necessary to satisfy employees maintenance needs and provide the opportunity to gratify their motivation needs. This theory has made a significant contribution toward improving manager’s basic understanding of human behavior and to the importance of job content factors in work motivation.

The behavioural science movement made two very useful, contribution to HRM:

(i) It underlined the importance of integration and involve or participation; and

(ii) It highlighted the idea that management should accept the need to improve the quality of working life as a means to obtain increased motivation and improved results.

7. The Organization Development Movement:

This is another integrated type of approach of behavioral scientists, whose opinion were summarized by Bennis (Organizational Development, Addison Wesley, 1969) as follows:

(i) A new concept of man based on increased knowledge of his complex and shifting needs which replaces an over simplified, innocent push button idea of man.

(ii) A new concept of power based on collaboration and reason, which replaces a model of power based on coercion and threat.

(iii) A new concept of organization values, based on humanistic and democratic idea which replaces the mechanistic value system of bureaucracy.

Organization Development (OD) is an intervention strategy that used group processes to focus on the whole cultural of an organization in order to bring planned change. It seeks to change beliefs, attitudes, values structures and practices so that the organization can adopt better technology and live with the pace of change. OD emerged largely from applied behavioural sciences and the most widely accepted and comprehensive definition has been developed by W. L. French and C. H. Bell. 1991.

“Organization Development is a top management supported, long range effort to improve an organization’s problem solving and renewal & processes, particularly through a more effective and collaborative diagnosis and management of organization culture with special emphasis on formal team work, temporary team and inter group culture with the assistance of a consultant facilitator and the use of the theory and technology of applied behavioural science, including action research.”

In short, OD are improvement strategies focused on shaping a desirable organizational cultural with the help of trained consultants and behavioral science techniques. The techniques of OD may involve laboratory training, managerial grid training, survey feedback, team building, process consultant, job enrichment, behaviour modification, job redesign, stress management, career and life planning, management by objectives, sensitivity training (T-Group), role playing, gaming, and behaviour modelling as part of the overall approach.

8. Modern Movement:

Any discussion of HRM has to come to terms with at least three fundamental problems:

(i) HRM is derivative of a range of antecedents, the ultimate mix of which is wholly depend upon the stance of the analyst and which may be drawn from an eclectic range to sources;

(ii) HRM is itself a contributory factor in the analysis of the employment relationship;

(iii) It is difficult to distinguish where the significance of HRM lies – whether it is in its supposed transformation of styles of employee management in a specific sense, or whether in a broader sense it is in its capacity to sponsor a wholly redefined relationship between management and employees which overcomes the traditional issues of control and consent at work.

An early model of HRM, developed by Fombrun Tichy and Devanna (1984); introduced the concept of strategic HRM by which HRM Policies are inextricably linked to the formulation and implementation of strategic corporate and/or business objectives.

The key levers are to be used to seek not merely compliance but commitment. This he does by making a classificatory matrix of 27 points of difference between personnel and IR practices and HRM practices.

‘Light Fit’ between HR Strategy and Business Strategy:

HRM assumes a more important position in the formulation of organisational policies. A more flexible model was developed by Beer and his associates (1984) at Harvard University. The model recognises the legitimate interests of various groups and that the creation of HRM strategies would have to recognise these interests and fuse them as much as possible into the human resource strategy and ultimately the business strategy.

Guest (1987), asserts that the combination proposition which include strategic integration, high commitment, high quality and flexibility creates more effective organisations.

The combination of these proposition leads to a linkage between HRM aims, policies and outcomes are given below:

1. Strategic integration means the ability of organisations to integrate HRM issues into their strategic plans.

2. High commitment is concerned with both behavioural commitment and attitudinal commitment.

3. High quality refers to managerial behaviour including management of employees and investment in high quality employees.

4. Flexibility means functional flexibility with an adaptable organisational structure with the capacity to manage innovation.

History of Human Resource Management – Evolution of HRM

The evolution of human resource management in India can be divided into four phases:

1. Beginning phase

2. Legal phase

3. Welfare phase

4. Development phase

1. Beginning Phase:

Over many centuries India has absorbed managerial ideas and practices from around the world. Early records of trade, from 4500 B.C. to 300 B.C., not only indicate international economic and political links, but also the ideas of social and public administration. The world’s first management book, Arthashastra, written by Chanakya three millennium before Christ, codified many aspects of human resource practices in Ancient India.

This treatise presented notions of the financial administration of the state, guiding principles for trade and commerce, as well as the management of people. In this book Chanakya has mentioned about HR concepts like job analysis, selection, procedures, executive development, incentive systems and performance appraisal etc.

The minimum wage rate and incentive wage plans were included in the Babylonian Code of Hammurabi around 1800B.C. The socio-cultural roots of Indian heritage are diverse and have been drawn from multiple sources including ideas brought from other parts of the old world.

2. Legal Phase:

Human resource management in India dates back to the Report of the Royal Commission on Labour in India (1929-31) which recommended the appointment of labour officers to deal with recruitment in order to check corrupt practices in industries in India with respect to selection of workers. They were also accountable to represent the workers and to protect their interests.

During Second World War these labour officers were entrusted to handle grievances. After independence of India, the Factories Act, 1948 made it mandatory for the appointment of a labour welfare officer in every factory having 500 or more number of employees. In 1950s, two professional bodies, the Indian Institute of Personnel Management (IIPM) Kolkata and the National Institute of Labour Management (NILM) Mumbai, came into existence.

3. Welfare Phase:

The area of personnel function increased during 1960s. It covered labour welfare, participative management, industrial relations and industrial harmony etc. The human relations movement in Western countries put impact on Indian organizations in this period.

Proceeded by legal phase, this phase gave rise to harmonious industrial relations and good HR practices. This year also witnessed the development of an emerging field called personnel management.

4. Development Phase:

At the end of 1960s and in 1970s, the HR professionals gave more emphasis on developmental aspects of human resources. The emphasis was on striking a balance between employee demands and organizational requirements. Professionals began to talk and discuss about Human resource development in seminars, conferences and academic meets.

In the year 1980 the professional bodies IIPM and NILM merged to form a single body, i.e. National Institute of Personnel Management (NIPM) at Kolkata.

During 1990s HRM faced the challenges of liberalization, privatization and globalization. These forced the organizations to put emphasis on employee capability, productivity, quality of product/service, customer satisfaction etc. Organizations became more heterogeneous in terms of gender, age, race, ethnicity, sexual orientation, and inclusion of other diverse groups.

A diverse workforce, for instance, includes women, people of colour, the physically disabled, senior citizens, and gays and lesbians. Managing this diversity has become a global concern. Not only India but even the whole world is facing this issue.

History of Human Resource Management – 2 Main Periods of HRM in India: Development before Independence and Development after Independence

Over the past decade or so, human resource management has shed its old personnel image and gained recognition as a vital player in corporate strategy. In recent years, many organizations have come to realize that among the various resources available to an organization, human resource is the most valuable. When an organization acquires physical resources such as machines, it knows exactly what the machine is going to produce, how much it is going to produce, how it is going to produce, and the cost involved in its operations. But, that is not so with human resources.

Unless one gets to know the tools and techniques of managing human resources, one may find it difficult to manage or even relate to human resources. When organizations fail to accomplish their goals, it is always due to poor management of human resources. Managers at Electronics Arts, the world’s largest producer of computer games, state that commitment to human resource is one of the company’s four worldwide goals.

One can see the relationship between the commitment to human resources and the bottom-line. Whatever may be the nature and size of the organization,’ the work of organizations is to get things done through people. Thus, the greatest challenge faced by organizations is the management of human resources.

Human resource management basically deals with finding the right people, placing them in the right place or jobs, training and developing them for better performance, providing for and sustaining their motivation through quality of work life so that employer and employees can attain their rewards and become committed.

The financial statements of many firms proved that effective human resource management had a positive impact on strategic performance, including higher employee productivity and stronger financial results. How a company uses its human resource may be the single most important factor in sustained competitive success.

How human resources are treated in an organization depends on the philosophy of the organization towards human resource management. In this respect, the Japanese corporations stand out distinctly. Over a quarter of a century ago, Abeggelen identified life-time employment (Shushinkoyo), seniority-based reward system, and company-based labor unions as the three pillars of Japanese human resource management.

At Honeywell, one of the leading American companies, the human resource management philosophy seems to be one of creating positive climate and relationships and providing maximum employment stability and opportunity for personal development. In companies such as Union Oil, human resource planning is integrated into the strategic corporate planning process thus giving it a high priority.

Hewlett-Packard is another global company noted for its human resource practices. The “HP” spirit prevails throughout the organization and the company considers this as one of the real strengths and contributing factors in their success. The employees take pride in identifying with the company. Throughout the company, participative style of management forms the foundation of its human resource management.

Mills contends that when human resource development works properly, unions and employees themselves benefit equally with management. When the quality of work life is improved in an organization, a win-win structure emerges. In Tung’s view the human power is a key ingredient to the successful operation of a multinational, without which technology, capital, and know-how could not be effectively and efficiently utilized or transferred from corporate headquarters to the various subsidiaries in the world.

In India and several other Asian countries, the development objectives are hampered by the neglect of human resource management. Since human resource is available in abundance, the decision-makers tend to take a lethargic attitude and neglect human resource planning. This attitude slowly affects the other areas of human resource development, such as raising the skill level of employees through training and development, motivating people in the right direction, and providing quality of work life.

Various branches of the United Nations Organization and particularly, the International Labor Organization have focused their attention on developing human resources in the Asian region by setting up full-fledged vocational training institutes, which focus on improving the quality of workforce through vocational education and training.

The human resource management function receives greater importance in Japanese companies. Lifetime employment and seniority determine most of the human resource activities and decisions related to them. Decisions at the hiring stage are crucial when people are going to be retained in the organization until their retirement.

Heavy emphasis is placed on training and development, and induction process is thorough and lengthy, and brings new recruits into the organizational family. The bonus and fringe benefits constitute a major portion of the compensation structure. Unions are company-based. Unions tend to support the efforts of their companies to improve profitability since they realize that their demands can be met only if the company succeeds.

The role of multinational companies in modernizing the human resource functions in India is significant. A high degree of objectivity can be seen in recruitment and selection, promotion, transfers, assessing performance, and reward systems. Slowly and painfully, the local companies are feeling this impact. Without such objectivity, they may have to sacrifice efficiency and success.

Evaluation of the concept of HRM in India and in other countries differs from each other. In western countries—UK and USA—the business provide better labour welfare facilities voluntarily; whereas in India management relations were developed mainly due to the unsatisfactory recruitment and selection system, more and more labour agitations and statutory provisions of various acts to improve the working conditions of labour in industry evolution of HRM in India can be studied under two periods—

(i) Development before independence, and

(ii) Development after independence.

(i) Development before Independence:

Before independence there was no significant effort on the part of employer or employees in the industrial field to have a lasting atmosphere of industrial relation. In 1930, labour welfare activities were initiated by some Indian business enterprises like TATA Business group, British India Corporation and so on started appointing labour welfare officers to look after the interests of working’ people.

This process was the outcome of 1920 Industrial unrest in India. This unrest was an eye opener for the government and it took some interest in this field to resolve better industrial relation. Before and during the World War II, the British Government was the important agency to improve industrial relation in Indian industries.

In 1934, it became mandatory for the industries employing 500 or more workers in the State of Bombay, must employ Labour Welfare Officer to settle the labour disputes with Labour Commissioner. At this stage, Labour Commissioner became the Chief Conciliation Officer. This initiative has been taken up in other states of India to appoint the Labour Welfare Officer.

(ii) Development after Independence:

In 1947, the Government of India took remarkable steps in the field of Industrial relation with the help of Central Labour investigating committee many enactments were passed in the field of industrial relation like Industrial Disputes Act, 1947, Factory Act, 1948 with provision of appointing a Lab our Welfare Officer in every factory, employing 500 or more workers for the purpose of helping the management in providing welfare measures to the needed employees, as stated in the Act.

During this period urgency of appointing Human Resource or Labour Officer is being felt even in such industries, where there is no legal compulsion to appoint Welfare Officer. It is because there is need of such agency to guide the management undertaking difficult labour problems by providing specialised services.

Therefore industrial relation became an important subject of management of personnel. Government also understood this need and arranged for training centres and institutes imparting training in industrial relation. In 1949, the first institute of industrial relation was started in India. Thereafter Indian Institute of Labour Relations, Indian Institute of Personnel Administration, Calcutta, Indian Labour Institute, Indian Institute of Labour Relations, Bangalore and many other training centres have come into being.

During 1975, the Government of India declared a state of emergency and took several administrative reforms to eradicate bonded labour and that gave way to bring the scheme of workers’ participation in Indian industries. Thereafter, in 1978 a bill was introduced called “Industrial Relation Bill.” In 1982 the Government amended general labour laws including Industrial Disputes Act and many other legislations regarding labour.

History of Human Resource Management – 5 Phases of Development: Earlier Philosophy, Movement for Increasing Efficiency and Productivity and a Few More

Although it is difficult to trace the origin of the modern philosophy of human resource management, certain stages of its development can be determined. Broadly speaking, the stream of the philosophy of human resource management can be divided into five phases.

First Phase – Earlier Philosophy of Personnel Management:

The history of human resource management can be traced to England, where masons, carpenters, leather workers and other crafts people organised themselves into guilds. They used their unity to improve their work conditions. During the first phase, an attempt was made by industrialists like Robert Owen to pay attention towards improving the working and living conditions of workers.

J. S. Mill and Charles Babbage, who were contemporaries of Robert Owen, also contributed towards the development of personnel management. Although Babbage was a mathematical management scien­tist, he took equal interest in the human element also. He stood for the integration of management’s and workers’ interests. He stressed that workers should get a fixed pay according to the nature of their work, plus a share in profits and bonuses for their suggestions for improving productivity.

The contribution of Henry Varnum Poor lies in his recognition of human factor for the success of an enterprise. Subsequently, the human factor has started getting the desired importance by and by.

Second Phase – Movement for Increasing Efficiency and Productivity:

Towards the end of the 19th century, there developed a scientific approach towards management. At that time, there were a number of difficulties in the way of industrial production and thus in the way of accomplishing the desired objectives of the organisation. It was with the intention of solving these prob­lems with the help of science that the scientific approach came into popularity.

During the second phase, an employee was considered as an ‘economic man’, introduction of scientific methods in recruitment, selection and training was recommended and human element in industry was recognised. Frank Gilbreth, Lillian Gilbreth, F. W. Taylor and Henry L. Gantt were other main authors who contributed towards the growth of personnel management.

Henry L. Gantt stressed that in all problems of management, the human element is the most impor­tant. Edward A. Filene was another noted contributor in this direction. He was very much concerned with human elements in his business.

Third Phase – Beginning of Welfare and Industrial Psychology:

Around 1900, there started a phase of labour welfare in the labour movement. This movement was aimed at the physical, economic, social and educational betterment of the workers. Hence, employment departments started coming into existence for the recruitment and selection of workers.

To begin with, these departments were entrusted with the job of recruitment and selection of workers and the mainte­nance of employee records. However, later on, these departments were asked to look after the training, labour welfare administration, and lay-off and retrenchment of workers.

The employment departments can be called the precursors of the modern personnel departments. Thus, during the third phase, the labour welfare movement was initiated, the human element in industry was recognised, and a personnel department was established in an organisation for the first time in 1914. Hugo Munsterberg, who is acknowledged as the father of industrial psychology, applied psychology in the service of industry.

Henry Ford, the well-known industrial autocrat, established a personnel department called the Sociological Department in 1914. He was concerned about the attitude and behaviour of workers and worried about labour turnover.

Fourth Phase – Growth of Human Relations Concept:

Initiation of human relations approach in personnel management was the major contribution during the period. Human relations approach in personnel management was a reaction to the dehumanising aspect of scientific management started by Taylor and his associates and followers.

Due to mechanical approach of the management towards workers, they lost their overall involvement in the organisation and pride in their job. But to say this is not to say that Taylor and others had been totally indifferent to the cause of workers. The point is that their primary concern was to increase efficiency and productivity of the work­ers through scientific methods.

But at the same time, they also made efforts in the direction of giving physical and mental ease to the workers in the discharge of their duties. They also laid emphasis on the mutuality of interest between the management and the workers. What was mainly lacking in the scien­tific approach was the indifference towards the individuality of the worker.

He was primarily considered as an ‘economic man’. Not much heed was paid to his emotions, sentiments, group behaviour, personality and so on. Although a beginning in this direction had already been made by Hugo Munsterberg, Lillian Gilbreth, Walter Dill Scott, Henry Ford, B. Seebohm Rountree, Edward D. Jones, Harrington Emerson, Oliver Shelton and so on, it were Elton Mayo, F. J. Roethlisberger and their associates who after conduct­ing the famous Hawthorne experiments at Hawthorne plant of the Western Electric Company between 1927 and 1932 stated that an organisation is a social system and that in order to accomplish the desired objectives of the organisation, the management should adopt human relations approach towards its per­sonnel.

Elton Mayo is regarded as the father of human relations approach, the focus of which was ‘to study human behaviour at work’. Douglas McGregor, W. F. White, Lyndall Urwick, Mary Parker Follett and so on were the other authors who contributed to the human relations approach.

The crux of the human relations approach was that a worker should not be considered only as a factor of production. He/she is a human first and worker afterwards. Hence, he/she has his/her own desires, wants, attitude, emotions, sentiments and so on. It is, therefore, the primary responsibility of an effective management to adopt a human relations approach towards it personnel.

Economic depression, growth of trade unions, the Second World War and the management literature published during this period also gave impetus to human relations approach. This led to the establish­ment of personnel department in various organisations.

Today, everybody including the psychologists, sociologists, economists, managers, and so on recognises the significance of the study of human relations and tries to understand the human behaviour.

They, instead of regarding a worker as an ‘economic man’, extend a humanly treatment to the worker considering him a lively thing who is motivated by desires, ambitions, hobbies, likes and dislikes, and so on. The role of behavioural sciences in the field of personnel management is also getting momentum, especially since 1960.

Fifth Phase – Modern Period (1950-Present):

Remarkable advancement of human relations approach, MBO, HRM, HRD, human capital management, SHRM and so on are some of the major contributions during the fifth phase of personnel/HR manage­ment. The fifth phase started in 1950. This period is usually called as a period of refinement and exten­sion of earlier achievements.

There has been an equally remarkable advancement in the human relations approach as is evident from the rapid development in the field of personnel management, industrial relations and the allied areas. One of the latest developments is ‘MBO’. In it, specific objectives are jointly established by the supervisor and his/her subordinates.

These objectives should be related to the need of the organisation, realistic and attainable, expressed as far as possible in quantitative terms and control­lable. A periodic review of the achievements of these objectives is again done jointly, and necessary cor­rective steps are taken if the achievements are below the target. However, this system of MBO has its own limitations.

The renowned authors who have contributed in this period include R. B. Blake and J. S. Mouton, Douglas McGregor, Rensis Likert, Chris Argyris, Harold Koontz and Cyril O’Donnell, L. R. Sayles, F. E. Fiedler, G. E. Kimball and so on. It is difficult to prepare a complete list of the contribu­tors. However, today, management is quite a developed science as well as an art.

In the recent decades, a new wind is blowing in management literature which is fast driving out the traditional term ‘personnel management’ and substituting a new term ‘HRM’. A lot of developments have taken place in the realm of HRM, including international HRM and SHRM. ‘Human capital’ man­agement is a recent development.

History of Human Resource Management in India: Introduction, Stages, Limitation and Emerging Horizons


In India, the origin of human resource management can be traced to the concern for welfare of factory workers during the 1920s. The Royal Commission on Labour recommended in 1931 the appointment of labour officers in order to protect the workers from the evils of jobbery and indebtedness to check corrupt practices in recruitment and selection in Indian industry, to act as a spokesman of labour and to promote an amicable settlement between the workers and management.

During the 1960s the personnel function widened beyond the welfare aspect. Three major areas of practice, viz. labour welfare, industrial relations, and personnel administration emerged as a complimentary parts of personnel management. During the 1980s due to new technology and other environmental changes, human resource development became the major issue.

During 1990s the overwhelming role of human factor in industry has been realized. Growing awareness about the significance of human side of organization has led to the development of human resource management.

Stages of Human Resource Management in India:

The concept of human resource management has developed through the following stages:

1. First Stage-Labour Welfare:

The concern for the welfare of the workers in the management of the business enterprises has been in existence since ages. The business operated at the small scale and the trend of trade union was established. The mediator was appointed who was known as Labour Welfare officer; this Labour Welfare Officer worked for improving the employer-employee relations.

2. Second Stage-Personnel Management:

During the 1960s the personnel function began to expand beyond the welfare aspect. Industrial Relations and Personnel Administration integrated into the emerging profession called Personnel Management. Simultaneously the massive thrust given to the heavy industry in the context of planned economic development.

3. Third Stage-Human Resource Management:

By the 1970s, a shift in professional was discernible. It shifted from concern for welfare to a focus on efficiency. In the 1980s professionals began to talk about new technologies, Human Resource Management challenges, and Human Resource Development. Further, in 1990s the emphasis shifted to human values and productivity through people and with this the subject of Human Resource Management has grown into a matured profession. 

Limitations of Human Resource Management in India:

HRM approach helps in creating work culture in the organisation but it has some limitations, which affect its effectiveness.

Some of these limitations are:

1. Recent Origin:

HRM lacks universal approved academic base as it is of recent origin. It is defined differently by the different people. Some consider it as a new name of personnel management and some have named their traditional personnel department as human resource management department. Therefore, with the passage of time an acceptable approach will be developed.

2. Lack of Top Management Support:

HRM requires the support of top level management. HRM can only be implemented effectively, if it receives the cooperation of the top level management. Because of positive attitude of the top management this work can effectively be handled by the top level management.

3. Improper Implementation:

The human resource management can be effectively implemented by assessing the development needs of the employees. The needs and aspirations of the employees should be considered while developing the policies and strategies under human resource management.

4. Inadequate Development Programme:

HRM requires the implementation of various programmes like career planning, training, development, counseling etc. HRM requires the atmosphere of learning in the organisation. In reality the actual results are not coming from the HRM as the HRM programmes are only confined to the class rooms lectures.

5. Inadequate Information:

Some organisations do not have the required information about their personnel. The HRM cannot be effectively implemented in the absence of required information and the database. Therefore, there is a need for the collection of the required information about the organisation’s employees before implementing the HRM system.

Emerging Horizons in Human Resource Management in India:

Due to the changing business environment, the human resource managers have to face more problems in the management of workforce. There is a continuous change in each and every component of business environment i.e. political, social, economic etc., as a result there is a change in the nature and scope of the human resource management.

Some of the important changes, which are taking place in the human resource management:

1. Increase in the Size of Workforce:

Due to the increase in the size of the enterprises and the emergence of multinational corporations in the country, the number of employees working in the firms has also increased. The human resource managers face the challenge of managing the new and increased workforce who is more aware of its rights.

2. Changing Composition of Workforce:

The Composition of the workforce is also changing and creating the new problems for the human resource managers. These days there is easy to take education and employment opportunities to the minority groups who are becoming the important source of manpower in the organisations. The number of working women is also increasing. So human resource managers have to consider all these changes while formulating the human resource policies.

3. Increase in Education Level:

The level of education have also increased due to the technological progress and increase in the number of educational institutions. Educated workers are more aware of their rights and human resource managers have to consider them while formulating the policies for motivating the educated workers.

4. Technological Advancement:

Due to the advancement of technology, the automation and computerization of the organisations is taking place, which are making the job and skills of the employees obsolete. The new techniques of production are giving rise to the unemployment problem, which can be solved by properly assessing the manpower requirements and training the redundant employees in the alternative jobs. These problems are making the job of human resource manager more tough and complicated.

5. Change in Political Environment:

Government works for the welfare of the workers and the society. It interferes in the business to safeguard the interest of workers, consumers, and the image. Government participation in the business, trade, and commerce had posed many challenges before the management.

6. Changes in Legal Environment:

The human resource managers have to anticipate the future changes in the legal environment and prepare the organisation to face them without any interruption in the day to day working. It is the duty of the human resource manager to abreast with the changes taking place in the legal framework within which the industrial relation system is functioning.

7. Mobility of Professional and Technical Workforce:

Today employees have more technical and professional qualifications, which are demanded by many organizations’. Due to this the mobility of workforce increases, which poses the new challenge for the human resource managers.

8. Organisational Development:

In the coming years many changes will be made by the firm for improving the organisational effectiveness. Therefore, top management has to be continuously involved in the development of human resources. Further, the human resource managers will have to develop the work culture conducive to the organisational development.

9. New Work Ethics:

The human resource managers will have to develop new work ethics for setting up and enforcing new work standards. Changing work ethics will require the redesigning of the jobs for providing the challenge to the employees. They should be provided with the flexi time policy.

10. Development Planning:

Human resource managers should have to be actively involved in the development planning and the research for anticipating the impact of environmental changes on the organization and its employees.

11. New Personnel Policies:

New and better personnel policies will be required for the workforce of the future. The human resource managers have to concentrate on the goal oriented performance appraisal; development oriented training system, team building, participative management etc.

12. Industrial Relations:

Even though so many efforts are made by the government, yet on industrial relations front not much improvement has taken place. Many factors are responsible for the industrial unrest. In the coming time, the inter union rivalries would grow more and might create many problems for the human resource managers.

Management of human relations in the future will have to face new challenges and take up new responsibilities. Thus the jobs of human resource managers will be more complicated in the future. The managers will have to treat human resources as vital instruments in achieving the goals of the organization.