Hrm

Human Resources Management in New Zealand
Richard Rudman
Fifth edition, 2010

History and development of human resources
management
Adapted from Chapter 2, Human Resources Management in New Zealand, fourth edition, 2002.

The origins of human resources management
Human resources management is not a new term. It was being used – mainly in the United States as a synonym for
personnel management – as far back as the 1950s. Personnel management has a much longer history, going back to the
Industrial Revolution and beyond. Just how much further back is mainly of interest to historians. But people have been
making personnel decisions since the earliest times, when tribal leaders had to be selected, and young people had to be
trained to hunt prey, cook food, tend crops, farm animals, and so on.
Ancient history has many examples of personnel management in action. As far back as 1750BC, the code of laws
proclaimed by Hammurabi, King of Babylon, set wages for people hired as agricultural labourers, ox-drivers and
shepherds. Craftsmen could be prosecuted if they failed to pass their skills on to apprentices, builders were held liable
for the standard of their work, and owners were required to pay for the health care of their slaves.
Many of the early examples are concerned with workers’ health. In the 1st century AD, a Roman scholar, Pliny the
Elder, warned about the hazards of handling zinc and sulphur and described a protective mask, made from an animal’s
bladder, which protected labourers from dust and lead fumes. In 1473, Ulrich Ellenbog wrote a pamphlet on
occupational diseases and injuries to gold miners. The field of occupational health was further advanced in 1556,
when the German scholar, Agricola, described diseases which affected miners and prescribed preventative measures.
The first comprehensive book on occupational medicine – Diseases of Workmen – was published in Italy in 1760 by
Bernadino Ramazzini, who became known as the ‘father of industrial medicine’.

Modern personnel management
People have been managed as long as they have worked for others, yet the origins of modern personnel management
lie mainly in the Industrial Revolution. Two principal themes began to emerge in those early days:
a concern for the welfare of workers

the employer’s need to guide and control workers and their efforts.
These themes feature throughout the development of personnel management and contain many of the conflicts and
ambiguities which have shaped its history. To a considerable extent, the key influences on the development of
personnel management – the scientific management, industrial welfare
and human relations movements, the development of trade unions and
Sources of personnel management
collective bargaining, and the growth of employment-related
Industrial Revolution
legislation – were responses to the interplay of these twin themes.
Scientific Management
Industrial Welfare movement
Industrial Revolution Human Relations movement
Before the Industrial Revolution, most manufacturing was carried on Development of trade unions
by individual craft workers in their own homes. With the development Collective bargaining
of coal-fired steam power, and the invention of new manufacturing Employment law

History and development of human resources management 1
© Pearson 2010 Supplement to Human Resources Management in New Zealand, 5e

machinery, the Industrial Revolution began around the middle of the 18th century. Power, plant and people –
harnessed in new factory-based production units – began to replace cottage-based industry and agricultural work as
the major sources of employment. These new employment patterns led to population shifts – chiefly, the process of
urbanisation – which would alter the nature of society dramatically. Workers could get higher wages in the factories
than they earned under the cottage system, so there was a ready supply of labour.
But along with increased wealth and better job opportunities, the factory system had its less attractive
consequences. Workers who had carried out a wide range of tasks in the cottage now found themselves doing the same
operation time and time again. And the factory brought regimentation to working life which had not been part of
cottage industry or agricultural work. The employment of large numbers of people, and the interdependence of their
tasks and positions in the production process, seemed to require detailed – and often harsh – rules to govern many
aspects of working life.
Working life became more organised in other ways also. A hierarchy of managers developed, and the social
distance between workers and owners increased as a consequence. Most factory employees worked long hours for low
pay, in working conditions which offered little protection against extreme temperatures, noise or dust, and largely
ignored safety considerations. Child labour was common. In 1833,
Britain adopted its first effective factories legislation, which
Thousands of little children, from seven
restricted the hours that children could work in factories. It was a
to fourteen years of age, are daily
forerunner to modern health and safety legislation.
compelled to labour from six o'clock in
There were more subtle evils as well. In both Britain and the
the morning to seven in the evening, with
United States, for example, employees were frequently given
only — Britons, blush while you read it
vouchers on the ‘company store’ instead of wages. It was not until
— with only thirty minutes allowed for
the Truck Act of 1891 that employers in Britain were required to
eating and recreation. Poor infants —
pay wages in cash. Such factors profoundly influenced the
feel and mourn that ye are slaves.
development of personnel management.
Oastler (1830)

Effect in New Zealand
The impact of the Industrial Revolution was felt early in the European period of New Zealand’s history, because many
immigrants came to this country to escape the working and living conditions of Victorian Britain. The stand for the
eight-hour day made by Samuel Parnell, a carpenter, in 1840 at Petone, has become a key event in New Zealand’s
industrial history and is still celebrated in the annual Labour Day holiday. The churches and other sponsors of
settlement in New Zealand held views similar to those of the great English social reformers, and were determined not
to replicate the miseries of the Industrial Revolution in the new country. In this they were not successful. By the
1880s, New Zealand had an increasing number of manufacturers who were able to compete internationally, partly
because raw materials were cheap and readily available, partly because labour was also cheap, and partly because
there was no restrictive labour legislation. In 1890, a Royal Commission into industrial conditions found many
instances of ‘sweated’ labour and recommended the introduction of employment legislation and a system of
conciliation and arbitration.

Scientific Management
The Industrial Revolution introduced The first case inquired into by the pressman (Mr Silas
specialisation, division of labour, and the Spragg, a reporter for the Otago Daily Times) was that of
concentration of employment in factories. In this Mrs M, who was busily employed finishing boys'
way, it anticipated the scientific management knickerbockers. The home was scrupulously clean. 'How
movement which came at the end of the 19th long will you work tonight?' asked the pressman. Mrs M
century. Its most prominent name is that of an replied: 'Till just about 11 o'clock, but then I shall have made
American engineer, Frederick Winslow Taylor. 3s 6d today — that is, by working from half-past 8 this
He believed that managers could use scientific morning till 11 o'clock tonight. But this is a special day — it
techniques to improve productivity and efficiency is all the better class of work. It is only when one gets the
and achieve greater co-operation. Taylor (1911) first-class work that you can make anything like that.'
Paul (1939)


laid an early foundation for personnel management:
First. Develop a science for each element of a man’s work, which replaces the old rule-of-thumb method.

Second. Scientifically select and then train, teach, and develop the workman, whereas in the past he chose his own
work and trained himself as best he could.

Third. Heartily co-operate with the men so as to insure all of the work being done in accordance with principles
which have been developed.

Fourth. There is an almost equal division of the work and the responsibility between the management and the
workmen. The management take over all work for which they are better fitted than workmen, while in the past all
of the work and the greater part of the responsibility was thrown upon the men.
Taylor and his colleagues were pioneers in work study, ergonomics and production-related payment systems.
Although they are often scorned today for their apparently impersonal techniques, the advocates of scientific
management loudly proclaimed that they were concerned about the welfare of workers. Psychologist Lillian Gilbreth
(1914) wrote that scientific management provided for:
the physical improvement of workers (increased health, better colour and general appearance);

mental development (wider interest, deeper interest, increased mental capabilities);

moral development (personal responsibility, responsibility for others, appreciation of standing, self-control,
‘squareness’);

contentment, brotherhood, and the ‘will to do’ (developments which are natural consequences of moral
development).
The scientific management school dominated management thinking until the 1920s. It provided a foundation for the
modern professionalisation of management, including the development of personnel management as a discipline in its
own right.

Industrial Welfare movement
Reaction against the Industrial Revolution’s impact on people was another contributor to the development of modern
personnel management. For example:
Cuming (1975) argues that ‘the origins of personnel management can be found wherever enlightened
employers have tried to improve the lot of their workers’; and

Niven (1967) asserts it was ‘the plight of the workers which was to mould the form welfare work was to take’.
Charity was a driving force for many of the early personnel practitioners, many of whom were women. But they were
genuinely concerned for the welfare of workers, even if somewhat paternalistic in their approach.
The great English social reformers of the nineteenth century – like Robert Owen, who is sometimes called the
father of personnel management, and Lord Shaftesbury – roundly criticised the working conditions and treatment of
workers provided by other employers, and set out to improve the lot of the workers in their own factories. Owen, for
example, introduced shorter working hours, meals for employees, and staff purchasing privileges to his textile mills in
Scotland. Other examples come from the Rowntree, Cadbury and Lever families – names which live on in modern
enterprises – who set up unemployment benefit, sick pay and employee housing schemes for their workers, partly
because it made good business sense, but mainly out of charity. Their criticisms of the terrible impact of the Industrial
Revolution are echoed in the writings of Charles Dickens and reflected in the pictures of William Hogarth.
Industrial welfare work involved ‘voluntary efforts on the part of employers to improve, within the existing
industrial system, the conditions of employment in their own factories’ (Pround, 1916). In addition, some employers
took their welfare concerns outside the workplace and provided libraries, recreational facilities and medical care, as
well as financial assistance for education and home purchase.
The first personnel officers were employed to administer these welfare programmes, and usually had titles like
social secretary or welfare secretary. The Institute of Welfare Officers, founded in Britain in 1913, is now the


Chartered Institute of Personnel and Development. The influence of the welfare tradition remains strong even today
when, for example, employee assistance programmes are a common feature of HR management.

Human Relations movement
The origins of the human relations movement lie in the Hawthorne Experiments – a research programme whose design
criteria would have satisfied any advocate of scientific management. In 1924, efficiency experts at the Hawthorne
plant of the Western Electric Company in Illinois set out to study the effects of lighting on workers’ productivity.
They assumed that increases in lighting would lead to higher output. Two groups of employees were selected: a test
group to work in conditions of changing light, and a control group whose lighting would be kept at normal levels. As
lighting increased, the test group’s output went up as expected, but so did the output of the control group – and
without any change in their lighting.
Over a period of 18 months, the researchers – led by Australian-born Elton Mayo (1949) of Harvard University –
improved the working conditions of the women who assembled telephone relays by introducing rest periods, providing
meals and shortening the working week. All the time, production increased. Next, anticipating that a return to the
original working conditions would affect production negatively, they took all the improvements away. Output reached
new peaks.
The explanation lay in the human dimensions of these experiments, not in the technical changes. The workers were
made to feel important by the attention they received from the researchers; they saw themselves as members of a team
rather than as individuals; and they developed relationships which met their needs for affiliation, competence and
achievement. Subsequent interviews with more than 20,000 Western Electric employees confirmed that they wanted to
be seen as important, both as individuals and as a group, and wanted opportunities to participate in the operations and
future of the company.
The methodology of the Hawthorne studies has been criticised, but their findings are the basic theme of the human
relations school: managers need to study and understand relationships among people. In summary:
Productivity is influenced more by interpersonal relationships on the job than by pay and working conditions.

Workers should be seen both as individuals and as members of groups which have norms and values that
influence the behaviour of their individual members.

Productivity rises when groups identify with management, but fall when their goals are different or opposed.
This happened at the Hawthorne plant when workers felt their sense of mastery and achievement was replaced
by close supervision and a loss of control over their jobs and environment.
The human relations movement is important for its recognition that an organisation is a social system, not just a formal
arrangement of functions. Thus it gave managers a new set of assumptions and decision criteria based on the
behavioural sciences. Traditionally, their assumptions had been based largely on economics.

Trade unions and collective bargaining
The question whether or not workers are to be permitted to act ‘in combination’ to advance and protect their interests
and welfare leads to a second theme in the historical development of personnel management – the need to seek
consensus or compromise between employers and their employees yet, at the same time, to maintain the organisation’s
need for control.
Associations of workers existed before the Industrial Revolution – most often in the form of guilds of craft
workers – but the changes that factory-based employment brought to working life encouraged the growth of unions.
At the end of the 18th century, when violent strikes made many fear there could be a repeat of the French Revolution
in Britain, the House of Commons enacted the Combination Laws. They made it a criminal offence for workers to
organise to increase their wages or reduce their working hours. In the United States, in 1842, workers gained the right
to organise and bargain collectively, but unions were not legal in Britain until the Trade Union Act 1871.
By then, socialism was growing in Europe. Marx and Engels published The Communist Manifesto in the
revolutionary year of 1848, the First International was held in London in 1864, social democratic parties were
increasing their representation in European parliaments, 1906 saw the formation of the British Labour Party, the


Bolshevik Revolution erupted in 1917, and Britain elected its first Labour government in 1924. Revolution, socialism,
war and government served to persuade organised labour that it should have both political and industrial agendas.

Early unionism in New Zealand
New Zealand had its first recorded strike in 1841. The first unions for skilled trades workers were formed about 20
years later, at the initiative of migrants from Britain and with rules copied from their British counterparts. Unions were
given legal standing by the Trade Union Act 1878 – which simply copied English legislation – but they tended to gain
and lose membership and strength rapidly. Unions were hit hard by economic depression at the end of the 1870s, but
revived in the early 1880s with the formation of district trades and labour councils.
A national trades and labour congress met in Dunedin in 1885, but the first real upsurge for the unions came in
1889–90. This was part of the international rise of political and industrial labour, but resulted also from the rising
public concern about working conditions – fuelled by newspapers and church leaders – which led in 1890 to the
appointment of a Sweating Commission. However, the crushing defeat of the unions in the 1890 Maritime Strike was
a blow from which they took many years to recover, despite the reforming zeal of the 1890 Liberal government.
The formation of the Labour Party in 1916 – largely at the initiative of unions – was clear recognition that
organised labour needed both industrial and political arms
to pursue its values and goals. Origins of human resources management
Systems theory
Employment legislation Behavioural sciences
The 1890 Liberal government in New Zealand was Organisation Development
sympathetic to labour, and set about a legislative 'New' management
programme that would have a significant impact on both of Competitive advantage
the main themes in the development of personnel Strategic management
management. It enacted the Industrial Conciliation and Managerialism and 'economic
Arbitration Act 1894 and, at the same time, brought in rationalism'
legislation to regulate conditions in factories and other
workplaces. The Labour Department was set up in 1891,
initially to help people find employment, but later as the administrative and enforcement machinery for the Liberal
government’s labour legislation. As Noel Woods (1963) writes:
By 1891, two distinct movements simultaneously reached a climax. The first, a movement for the state regulation
of conditions of work, was supported by a community whose conscience had been pricked by the exposure of
working conditions existing in the eighties. The second, a movement for state regulation of industrial relations,
was supported by a community determined that it should not again be subjected to the discomforts of widespread
industrial warfare.
These twin concerns have remained strong influences ever since. Any account of the development of industrial
relations and employment legislation in New Zealand must reflect their importance.

Towards Human Resources Management
As we have seen, human resources management is frequently used as a synonym for personnel management. Human
Resources Management – with those initial capital letters – is something different. Its foundations were laid –
probably unintentionally – when:
Peter Drucker (1955) advocated visionary goal-directed leadership as the best management approach for
modern organisations; and

Douglas McGregor (1960) stressed the importance of management by integration as the strategy for managing
people across an entire organisation.
However, the emergence of Human Resources Management as a specific management approach or philosophy dates
mainly from the mid-1980s.


Systems theory
Since the 1950s, systems theory has helped all managers – not just those in specialist HR roles – to appreciate how the
various parts and functions of an organisation relate to each other and, therefore, why a change in one area will have
an effect in other places. Rensis Likert (1961) argued that ‘all components of the system of management must be
consistent with each other and reflect the system’s basic philosophy’. The idea that HR policies and plans should
reflect the organisation’s culture and be integrated with its business plans is fundamental to HR management.

Behavioural sciences
The behavioural sciences can help managers:
improve their understanding of individual motivation, group behaviour, leadership and communication

take more systematic and better informed approaches to job design, recruitment and selection, training and
development, employee appraisal and counselling, and remuneration planning and management.
During its prominence in the 1960s, the behavioural science movement, led by Abraham Maslow, Christopher
Argyris, Frederick Herzberg, Rensis Likert and others, focused on issues of integration and involvement. It also
stressed quality of working life as a key factor in employee motivation, job satisfaction and performance.

Organisation Development
During the 1960s and 1970s, the behavioural sciences led to the development of Organisation Development. OD is a
series of interventions designed to help people to analyse and understand their organisations holistically, and to plan
and implement change strategies from this perspective. The development of teams and the management of change
were central aspects of the OD approach, which featured process consulting techniques as a means for people to
analyse their own situations and problems and generate solutions.

‘New’ management
In Search of Excellence was the first management blockbuster book, and the beginning of the modern boom in
management theory. In some ways, In Search of Excellence is most important for encouraging a whole generation of
managers to think more carefully about what they do. Its authors, Tom Peters and Robert Waterman (1982), clearly
described the significance of the so-called ‘soft’ skills of management in the success of American enterprises to what
became a huge international audience. And they stressed the need for all aspects of an organisation’s management to
be integrated, and in harmony with its overall values and objectives. Corporate values, culture and mission were
among the key focal points of ‘new’ management.
In a subsequent book, Peters and Austin (1985) summarised the ‘excellent’ characteristics of successful
organisations as a triangle of virtues: care for customers, innovation, and people. Leadership was at the centre of the
triangle – to be exercised largely through ‘management by walking around’ (MBWA). In addition, decentralisation
would reduce the number of management layers, and put decision making nearer to both customers and employees.
In Search of Excellence was, perhaps, most influential in
its attack on the ‘rationalist’ model which had dominated
American business and government during the Second World Behavioural sciences
War and beyond. Peters and Waterman advanced three psychology – study of human behaviour
arguments against the rationalist model (Mickelthwait & social psychology – human behaviour in
Wooldridge, 1996): social settings
It puts too much emphasis on financial analysis and organisation theory – organisational
too little on motivating workers or satisfying design and functions
customers. organisational behaviour – human
behaviour in organisational settings
It encourages bureaucratic conformity and the
expense of entrepreneurial innovation.


It rests on a misunderstanding of human nature.

The central problem with the rationalist view of organising people is that people are not very rational. To fit
Taylor’s old model, or today’s organisational charts, man is simply designed wrong (or, of course, vice versa). . .
. (Peters & Waterman, 1982, p. 55).

Around this time too, many organisations adopted ‘Japanese’ management techniques like Total Quality Management
(TQM) and continuous improvement (Kaizen). Employee empowerment, development and commitment are central to
these practices, which thus influenced the path which HR management took in those organisations.

People as competitive advantage
During the 1980s, the idea that ‘people are our most important asset’ began to give way to the proposition that ‘people
are a source of competitive advantage’. In other words, the ‘asset’ had to be turned to the organisation’s ‘advantage’
by the application of appropriate management techniques. As Charles Greer (1995) says:

In a growing number of organisations, human resources are now viewed as a source of competitive advantage.
There is greater recognition that distinctive competencies are obtained through highly developed employee
skills, distinctive organisational cultures, management processes, and systems. This is in contrast to the
traditional emphasis on transferable resources such as equipment. Increasingly, it is being recognised that
competitive advantage can be obtained with a high quality work force that enables organisations to compete on
the basis of market responsiveness, product and service quality, differentiated products, and technological
innovation.

This applies especially to organisations in the service sector where product and service differences have narrowed.
Most airlines, for example, operate similar aircraft on similar routes at similar prices: according to the ‘people as
competitive advantage’ argument, passengers choose their airline mainly for the service they receive from check-in
staff and cabin crews. Thus, how people are managed, and respond to that management, will be reflected in the
organisation’s performance.
The argument here is that organisations can achieve sustainable competitive advantage through their human
resources, if they meet these criteria:
The people improve the efficiency or effectiveness of the organisation.

Their skills, knowledge and abilities are not equally or easily available to competitor organisations.

The employees’ capabilities and contributions cannot be duplicated quickly or readily by other organisations.

The organisation’s human resources are appropriately organised for the present task, and easily adaptable to
move to future tasks when needed.

Rise of strategic management
The development of HRM as a distinct philosophy of management was encouraged by the rise of strategic
management thinking. Shareholders and managers have been forced to rethink the structure and operations of their
organisations – and how they should respond to increasing international competition, globalisation, the growing
complexity and size of organisations, technology changes, flatter organisational hierarchies, a better educated
workforce, changing workforce values, and changes in workforce demographics. Organisations have had to learn how
to manage strategically rather than operationally, and many have sought – but fewer have succeeded – to recognise the
central role of human resources in this new, integrated approach.

Managerialism and economic rationalism


The new philosophy of HRM has been attractive to managers who face the need to change rapidly and radically. Guest
(1989) describes HRM as ‘an attractive option to managements driven by market pressures to seek improved quality,
greater flexibility and constant innovation’.
At the same time, the move towards HRM reflects the ascendancy of ‘new right’ or ‘neo-classical’ philosophies,
and managerialism. Purcell (1989) comments that ‘in the entrepreneurial 1980s, the HRM philosophy was aligned
closely with prevailing ideas of enterprise and the freeing up of management initiatives’.
That alignment continued into the 1990s. As a result, HR management – as strategies and practices, as well as a
specialist function – was to become closely identified with the interests of the organisation. The new legitimacy for
managerialism is often most obvious in the public sector where successive governments have insisted that ‘market
conditions’ apply and new management structures be used to emphasise accountability. Paradoxically, this means that
the new ideology of HRM has been widely introduced to organisations which are not actually ‘businesses’ in the usual
sense of that word.
Predictably perhaps, in an increasingly individualistic world, the ideas of common interest and mutuality are not
necessarily shared by workers. Following the shift to HRM, employees in some organisations have become suspicious
of their HR managers, and some HR professionals have become rather cynical about their own roles and the
expectations that others have of them. In fairness, it should be noted that many changes were forced on organisations
by their general or line managers – often against the advice or over the opposition of their personnel specialists.

Personnel
management and War and the labour force
HRM in New Zealand Under manpower regulations, women and men were conscripted
The development of personnel and directed to essential work. In 1944, all men aged 18–59 and all
management in New Zealand followed women (without dependent children) aged 18–40 could be directed
a similar pattern to Britain, but to a job.
emphasised administration more than Acts of Parliament and Arbitration Court awards could be set
welfare (Ransom, 1966). Before the aside under wartime emergency regulations. Restrictions on
Second World War, the typical New overtime working and the requirement to pay penalty rates for
Zealand enterprise was small and overtime work were lifted. The minimum working age was lowered
lacked tradition: its owner-manager was and children were employed on shift work.
likely to be an individualist, often
without much sense of a social
responsibility to employees. Very few organisations had developed staff policies. Instead, they relied on the fact that it
was relatively easy for them to hire and fire individual employees, and left the details of their employment terms and
conditions to be dealt with in industrial awards and agreements negotiated by unions and employers’ associations.

After the war
During the Second World War, labour shortages forced both politicians and employers to rethink manpower policies.
Government regulations made it hard for employers to dismiss workers, and for workers who had been dismissed to
get new jobs. Employers realised that they would have to find tools other than dismissal to help them deal with
discipline, labour turnover, absenteeism, and industrial unrest.
New Zealand’s first welfare officers and industrial nurses were appointed during the war to deal with the problems
of those in directed labour, especially women who had not worked before, and now found themselves in jobs
previously done by men.


Twenty firms were known to employ welfare officers in the early 1940s, although these were low-level positions
with duties restricted to canteen services, first aid, handling personal difficulties and welfare, and controlling
absenteeism. Most of these welfare officers were untrained and not well suited to their positions. And, because they
were women, society allowed them to have no real authority over men: thus they were found mainly in female-
intensive organisations. But the general success of these appointments led to changes in management views.
After the war, the Department of Health encouraged the employment of industrial nurses. By 1946, some 38
industrial nurses had jobs, again in firms which employed predominantly women. Their duties were mainly limited to
health and first aid, but some were used to control discipline and absenteeism, although their training in autocratic
institutions did not prepare them for that very well. Only two organisations, both of them large, were known to employ
personnel officers, although they had no formal personnel management training.
At the same time, studies and reports from the industrial psychology division of the Department of Scientific and
Industrial Research, which had been set up in 1942 to investigate problems arising from wartime industry, were
encouraging interest in the business community in industrial psychology and systematic management.
In Stewart Ransom’s view, the greatest impetus for the introduction of personnel management to New Zealand was
the arrival of large organisations whose headquarters were overseas. The New Zealand operations had to conform to
the overseas model – both in working conditions and staff policies and in having a personnel department – and these
companies appointed experienced personnel managers and provided excellent training.
The development of major public works (like hydro-electric dams) and industrial projects (in the pulp and paper
industry, for example) led to the appointment of personnel officers to handle the challenges of employing large
numbers of people, often in isolated areas. Initially, the responsibilities of these personnel officers were usually
restricted to accommodation, canteens, social and recreational facilities, transport and welfare problems – but were
soon extended to employment activities like recruitment and selection, and later to staff development and personnel
policy issues.

The IPM surveys
In 1958, the Institute of Personnel Management – now the Human Resources Institute – surveyed 39 private sector
firms which employed 35,000 staff and a number of government departments which employed another 105,000
people. The survey found that 25% of organisations with 150 or more staff had a personnel department. This was a
post-war development, because only four personnel managers had been appointed before 1945, 10 between 1945 and
1949, another 10 between 1950 and 1954 and 13 between 1955 and 1958.
On average, larger
organisations in the Ratio of HR specialists to total staff
1958 IPM survey 1958 1968 1978 1987
employed one personnel
staff member for every Less than 600 employees 1:145 1:125 1:82 1:149
185 employees. The 1:185 1:173 1:195 1:172
More than 600 employees
ratio for organisations
with fewer than 600 staff was 1:145. By
1968, these ratios were 1:173 and 1:125 Women and the war
respectively; in 1978 they were 1:195 The national emergency of war had a liberating effect on women;
and 1:82. A 1987 survey showed a ratio they became more recognised as people who could and should
of 1:172 for organisations with more contribute to economic life. Hitherto, because of tradition, prejudice,
than 600 employees and 1:149 for and women’s lack of social equality in the community, they had
smaller organisations. been prevented from doing so. Now they drove tractors and buses,
In its 1978 survey, IPM said there did all types of farm work, mended the tram tracks, cleaned out the
had been significant economic and railway carriages, entered the public services as clerical workers. In
social change between 1969 to 1978, 1947 the percentage of women clerical workers in the public
the effects of which had made new service was 25; in 1939 it had been 5 per cent.
demands on all those concerned with Sutch (1969)


the management of people as employees. It had been a period of high immigration and emigration, with many
immigrants in the early 1970s unused to industrial employment and many of those who left being skilled tradesmen.
Legislation had created an almost new environment for the employer and employee: equal pay, human rights,
accident compensation, wage control, industrial training and industrial relations were some examples. It had been a
period of unprecedented economic change: expansion and great development in some industries; contraction, mergers
and close-downs for others; companies had had to become more efficient in order to survive. It had also been a period
of change for the trade union movement, with young professionals appearing in the movement, new strengths
discovered, and real challenges to the place of trade unions in society.

Power and position
A mid-1980s study of personnel and industrial relations staff (Gilbertson et al., 1987) showed that just over half of all
respondents (54%) were responsible for recommending or making personnel or industrial relations policy for their
organisations. However, one-third of them were neither personnel nor industrial relations executives: it appeared that
many organisations included personnel and industrial relations policy making as part of a wider management portfolio
such as corporate services or administration. This suggested that there may be evolutionary stages in the specialisation
of the personnel and industrial relations function:
It emerges as a series of duties incorporated with other managerial tasks, for example administration manager.

Next, the need emerges for a manager devoted full time to personnel and industrial relations matters, leading to
a combined personnel and industrial relations manager role.

The size or complexity of the combined task then demands further specialisation into personnel and industrial
relations matters, hence the emergence of a group of managers specialising in either personnel or industrial
relations work.

Eventually, sub-specialisation can occur within the function itself with the appointment of staff specialists at
both manager and officer level – for example, training managers.
The 1987 survey found that few New Zealand organisations had sufficiently large numbers of employees to justify the
final evolutionary stage of specialisation. It also found that:
almost half the people in personnel and industrial relations work had no tertiary or professional qualifications:
they relied on work experience as the basis for their knowledge; fewer than one in five had a tertiary
qualification, and only 28% of these qualifications were in personnel and industrial relations;

82% of the respondents were male, and women held only 9.5% of all policy-making positions; at the policy-
implementing level, 37% of personnel officers were women while only 8% of personnel managers were
women;

87% of the respondents had worked outside the personnel and industrial relations fields, in other business
functions, the armed services, general administration and a range of occupations. Nearly one-third of personnel
and industrial relations managers had come from non-business careers, while 51% of all the respondents
reported line working experience.

Into the 1990s
A 1990 survey (Geare & Stablein, 1993) found that the ‘typical’ New Zealand HR manager was a married man in his
forties, a New Zealander of British descent. He was a non-graduate with a fair amount of HR management training,
more than 10 years’ experience in management, but only about five years’ experience in the HR department. The
majority of HR managers were not graduates, but a significant proportion were (37%), and a significant proportion
were women (31%).
Later in the decade, a survey of IPM members (Pajo & Cleland, 1997) updated the profile of the New Zealand HR
specialist. It found that:
more than two-thirds of HR practitioners were aged between 30 and 49 years;


60% of HR practitioners were women, compared with only 20% in 1978;

there were more males in the older age groups, but women made up the majority of younger practitioners –
suggesting that HR management would increasingly become a female-dominated field;

ethnic groups other than Caucasian (96% of all respondents) were severely under-represented in HR positions;

85% of respondents had a tertiary qualification, compared with only 13% in 1968; and

the most common background for HR people was clerical and administration work (where nearly one-quarter
began their working careers), but almost the same proportion had started in HR-related work.
This profile had scarcely changed four years later when the Human Resources Institute (IPM changed its name in
1999) analysed its membership and found:

46% were aged 30-49 years;
56% were female;
74% of respondents identified themselves as New Zealanders and another 16% as Europeans;
87% held a tertiary qualification.

The ratio of HR specialists to total staff has often been used as an indicator of the development of the personnel and
HR functions. With the recent enthusiasm for outsourcing non-core functions and ‘devolving’ operational
responsibilities to line managers, this ratio may no longer have the same relevance. Of the respondents to a 1997
survey of New Zealand organisations with more than 50 employees (Johnson, 2000), 61% had an HR department or
manager. The median number of HR staff was three. The median ratio of HR staff to all employees was 1:73, similar
to organisations in Europe.

References
Cuming, M. W. 1975, The Theory and Practice of Personnel Management, Heinemann, London.
Drucker, P. F. 1955, The Practice of Management, Heinemann, London.
Geare, A. J. & Stablein, R. 1993, ‘Human resource management in New Zealand: profession and practice’, Asia
Pacific Journal of Human Resources, vol. 31, no. 2, pp. 26–38.
Gilbertson, D., Fogelberg, G. & Boswell, C. 1987, Personnel and Industrial Relations Staff in New Zealand: A
Research Report, Victoria University of Wellington and Institute of Personnel Management New Zealand,
Wellington.
Gilbreth, L. M. 1914, The Psychology of Management, Sturgis & Walton, New York, chap. 10.
Greer, Charles 1995, Strategy and Human Resources, Prentice-Hall, NJ, p. 105.
Guest, D. 1989. ‘Human resource management and industrial relations’. Journal of Management Studies, vol. 24, no 5.
Johnson, E. K. 2000, ‘The Practice of Human Resource Management in New Zealand: Strategic and Best Practice?’,
Asia Pacific Journal of Human Resources, vol. 38, no. 2.
Likert, R. 1961, New Patterns of Management, McGraw-Hill, New York, p. 222.
Mayo, E. 1949, ‘Hawthorne and the Western Electric Company’, in The Social Problems of an Industrial Civilisation, Routledge.
McGregor, D. 1960, The Human Side of Enterprise, McGraw-Hill, New York.
Mickelthwait, J. & Wooldridge, A. 1996, The Witch Doctors: Making Sense of the Management Gurus, Times Books,
New York, pp. 89–90.
Niven, M. M. 1967, Personnel Management 1913–1963, Institute of Personnel Management, London.
Oastler, R. 1830. ‘Slavery in Yorkshire’, Leeds Mercury, 29 September.


Pajo, K. & Cleland, J. 1997, Professionalism in Personnel, Massey University/IPM New Zealand.
Paul, J. T. 1939, Our Majority: And the After Years, Dunedin, p. 11.
Peters, T. J. & Waterman, R. H. 1982, In Search of Excellence, Harper & Row, New York.
Peters, T. J. & Austin, N., 1985, A Passion for Excellence, Collins, London.
Pround, E. D. 1916, Welfare Work, G. Bell & Sons, London, p. 5.
Purcell, J. 1989, ‘The impact of corporate strategy on human resource management’, in Storey, J. (ed), New
Perspectives in Human Resource Management, Routledge, London.
Ransom, S. W. N. 1966, ‘Background of Personnel Management’, in Hanley, G. (ed), Personnel Management in New
Zealand, Sweet and Maxwell, Wellington, pp. 9–21.
Sutch, W. B. 1969, Poverty and Progress in New Zealand, Reed, p. 252.
Taylor, F. W. 1911, Scientific Management, Harper & Row, New York, pp. 36–7.
Woods, N. S. 1963, Industrial Conciliation and Arbitration in New Zealand, Government Printer, Wellington, pp. 39–
40.


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