Human Resource Management 4EVOLUATION HISTORY OF H.docx

Human Resource Management
4
EVOLUATION HISTORY OF HRM
Human Resource Management can be described as the
comprehensive set of managerial
activities and tasks concerned with developing and maintaining
a qualified workforce- human
resource – in ways that contribute to organizational
effectiveness.
This chapter explores changes in Human Resource Management
thoughts from the evolution era
to present age.
Historical Review of HRM
When we study HRM history we may identify man stages that
show many development and
shifts in thinking that have conspired to bring about the
evolution of HRM.
Pre and post Industrial Age

The earliest forms Human Resource Management were the
working arrangements struck
between craftsman and their apprentices during the pre-
industrial cotton-base guild system. The
apprentice lived in the workplace or home of his master and the
master took care of his health
and welfare.
After the industrial revolution in 18th century the small cotton-
based guild manufacturing
converted into large factories and more people employed to
produce through machines. The
unhygienic and arduous work in factories led to many labor
riots and the government stepped in
to provide basic rights and protections for workers. The need
comply with such statutory
regulations forced factory owners to set up a formal mechanism
to redress issues concerning
labor.
Adam Smith and Robert Owen
In 1776 Adam Smith in his book “The Wealth of Nations”
introduced the concept of Division of
Labor. He proposed that work could be made more efficient

through division of labor and
suggested that work should be broken down into simple tasks.
This division led the three
advantages. This was a development towards, the development
of skills, time-saving – the
possibility of using specialized tools. Smith suggestion led
many changes in manufacturing
processes. Ford applied it in his factory to increase
productivity.
Robert Owen the pioneer of HRM was a zealous supporter of
the factory legislation resulting in
the factory Act 1819. He emphasized o performance appraisal
and pay for performance (fair
treatment for employees).
Lecture : 02
Evolution History of HRM / For Class Room use only
5
Personnel Management (early 20th Century)

By the early 1900s, increased competition and pressing demands
to fulfill orders made factory
owner take serious note of productivity and issues such as
employee absenteeism and high turn
over came into focus.
Frederic Winslow Taylor
The dominant philosophy during this time was that employees
would accept rigid standards and
work faster if provided training and more wages. This approach
led to Frederic Winslow
Taylor’s scientific management theory that involved time
studies in an attempt to establish the
most productive way to undertake a process. This was a step
towards job analysis, selection,
training and rewards.
Personnel management gained a more professional role in the
aftermath of World War 01 and
the Great Depression of early 1930’s. The demands of wartime
production had led to enactment
of several provisions to ensure that issues related to wages or
working conditions did not hinder
production. Among the social security measures initiated in the
aftermath of the Great

Depression was the Norris-La Guardia Act that made “yellow
dog” contacts unenforceable and
the National Labor Relation Act (NLRA) or Wagner Act (1935)
that gave employees the right to
form unions and bargain collectively and listed unfair labor
practices.
The Human Relations Movement
The movement presents an alternative and opposite approach to
scientific management as it
focuses on the individual and not the task. During this moment
different theories came into being
regarding motivating employees.
The Hawthorne Studies
Elton Mayo, the father of human relation, had conducted his
famous Hawthorne Studies (1924-
1932) and concluded that human factors or non-monetary
rewards were more important than
physical factors or monetary rewards in motivating employees.
Trade unions now began to
challenge the fairness of Tailors scientific management
theories, forcing employers to take a
more behavioral-oriented approach.

Lecture : 02
6
Other behavioral approach
1. Abraham Maslow. The Hierarchy of Needs (1943)
Abraham Maslow was a Psychologist who proposed that within
every person is hierarchy of five
needs (psychological needs, safety needs, social needs, esteem
needs and self actualization
needs). Maslow argued that each level in the needs hierarchy
must be substantially satisfied
before the next is activated.
2. Douglas McGregor. Theory X and Theory Y (1960)
Douglas McGregor is best known for proposing two set of
assumption about human nature:
Theory X and Theory Y. Theory X is a negative view of people
that workers have little ambitions,

dislike works, want to avoid responsibility and need to be
closely controlled to work efficiently.
Theory Y is positive that assumes workers can exercise self-
direction, accept and actually seek
out responsibility and consider work to be a natural activity.
McGregor believed that theory Y
assumptions best captured true nature of workers and should
guide management practice.
3. Frederick Herzberg. The Hygiene-motivation Theory (1959)
Frederick Herzberg’s two factor theory suggest intrinsic factors
are associated with job
satisfaction, while extrinsic factors are associated with job
satisfaction.
Human Resource Movement
After the Korean War, a new class of college-educated
managers emerged with a greater sense
of social responsibility than their predecessors. Throughout the
second half of the 20th century,
social well-being coupled with upheaval-best exemplified by the
struggle for desegregation-
changed the thinking of employees in the United States.
Take care of your human resources like other resources.

As the 1960s and 1970s unfolded, a more personable group of
managers emerged and their
interests in people and feeling influenced all facets of business,
including the growth of market
research, communications and public relations. This group of
mangers emphasized the
relationship between employers and employees rather than
scientific management. Programs to
increase wages and fringe benefits continued to be developed.
New studies linked greater
productivity to management philosophies that encouraged
worker ideas and initiatives.
Change in labor legislations such as the Equal Pay Act (1963),
the Civil Rights Act (1964),
Occupational Safety and Health Act (1970), and the Employee
Retirement Income Security Act
Lecture : 02
7

(1974) manifested. The need to comply with such legislation
increased the importance of the
human resource function.
In 1981 Harvard Business School first introduced HRM course
and then spread Europe and
other part of the world.
Strategic Human Resource Management (21st Century)
The new business environment in the post cold- War age,
combined with the technological
revolution which changed the business ways and workforce
management was not immune to the
change. The increase in service industries, the infusion of more
and more women into the
workforce and other changes all made obsolete the traditional
paradigms of people management.
Employees become the major source of competitive advantage
for firms. The human resource
department tries to retain such knowledgeable worker by
facilitating conducive work environment,
enriching the work, communication objective clearly,
encouraging innovation and many other
behavioral interventions.

In modern business the human resource management is complex
and such has resulted in the
formation of human resource department/ division in companies
to handle this function. The
human resource function has become wholly integrated part of
the total corporate strategy.
The function is diverse and covers many facts including
Manpower planning, recruitment and
selection, employee motivation, performance monitoring and
appraisal, industrial relations
provision management of employee benefits and employee
education, training and development.
By doing complete analysis of the history of we can conclude
that HRM has progressed through
the stages of history when people were abused in slave like
working conditions to the modern
environment where people are viewed as assets to business and
are treated accordingly. During
these stages there occurred many shifts like personnel
management to HRM and HRM to SHRM.
The human resource function will have to adapt with the times
as staff become more dynamic
and less limited in their roles and bound by a job description. In
future being HRM a social

science there will be other shifts in this area.
Lecture : 02
Global Journal of Human Resource Management
Vol.3, No.3, pp.58-73, May 2015
Published by European Centre for Research Training
and Development UK (www.eajournals.org)
58
HISTORY, EVOLUTION AND DEVELOPMENT OF HUMAN
RESOURCE
MANAGEMENT: A CONTEMPORARY PERSPECTIVE
Kipkemboi Jacob Rotich1,
Moi University, School of Human Resource Development,
Department of Development Studies,
P.o Box 3900-30100, Eldoret, Kenya.

ABSTRACT: Various attempts have been made towards tracing
the historical development of
the discipline of Human Resource Management (HRM).
However, these initiatives have largely
been concentrated on certain specific periods of time and
experiences of specific countries and
regions such as Australia, the USA, the UK and Asia (Nankervis
et.al, 2011; Kelly, 2003; Ogier,
2003). This paper attempts to document the entire history of the
discipline of Human Resource
Management from a holistic perspective. The evolution and
development of HRM will be traced
right from the pre-historic times through to the postmodern
world. Major characteristics in the
evolution and development of HRM will also be examined and
documented.
KEYWORDS: Human Resource Management (HRM), evolution,
history
INTRODUCTION
Defining Human Resource Management (HRM)

According to Armstrong (2006) Human Resource Management
(HRM) is defined as a strategic
and coherent approach to the management of an organization’s
most valued assets – the people
working there who individually and collectively contribute to
the achievement of its objectives.
From this definition, we can deduce that HRM or simply HR is
a function in organizations
designed to maximize employee performance in service of their
employer’s strategic objectives
(Johanson, 2009). HR is primarily concerned with how people
are managed within organizations,
focusing on policies and systems (Collings & Wood, 2009). HR
departments and units in
organizations are typically responsible for a number of
activities, including employee
recruitment, training and development, performance appraisal,
and rewarding (e.g., managing
pay and benefit systems) (Paauwe & Boon, 2009). HR is also
concerned with industrial relations,
that is, the balancing of organizational practices with
regulations arising from collective
bargaining and governmental laws (Klerck, 2009)

HRM is a product of the human relations movement of the early
20th century, when researchers
began documenting ways of creating business value through the
strategic management of the
workforce. The function was initially dominated by
transactional work, such as payroll and
benefits administration, but due to globalization, company
consolidation, technological
advancement, and further research, HR now focuses on strategic
initiatives like mergers and
acquisitions, talent management, succession planning, industrial
and labor relations, ethical
considerations, diversity and inclusion. These, among other
initiatives contribute to the
understanding of Human Resource Management as a
contemporary issue owing to their
sustained evolutionary nature.
http://en.wikipedia.org/wiki/Recruitment
http://en.wikipedia.org/wiki/Training
http://en.wikipedia.org/wiki/Performance_appraisal
http://en.wikipedia.org/wiki/Industrial_relations
http://en.wikipedia.org/wiki/Human_relations_movement
http://en.wikipedia.org/wiki/Strategic_management
http://en.wikipedia.org/wiki/Payroll
http://en.wikipedia.org/wiki/Employee_benefits
http://en.wikipedia.org/wiki/Globalization
http://en.wikipedia.org/wiki/Mergers_and_acquisitions

http://en.wikipedia.org/wiki/Mergers_and_acquisitions
http://en.wikipedia.org/wiki/Talent_management
http://en.wikipedia.org/wiki/Succession_planning
http://en.wikipedia.org/wiki/Industrial_relations
http://en.wikipedia.org/wiki/Labor_relations
http://en.wikipedia.org/wiki/Multiculturalism
http://en.wikipedia.org/wiki/Inclusion_%28value_and_practice
%29
Vol.3, No.3, pp.58-73, May 2015
59
In this paper, I will discuss the historical development of
Human Resource Management (HRM)
as a discipline. I will consider its various evolutionary phases
outlining the specific
characteristics of each phase and the contributions of these
characteristics in shaping the
development of Human Resource Management as a field of
study as well as a profession. Lastly
I will provide a summary of key issues that justify Human
Resource Management as a
contemporary subject.

HISTORICAL DEVELOPMENT OF HUMAN RESOURCE
MANAGEMENT (HRM)
Tracing the roots of HRM
During pre-historic times, there existed consistent methods for
selection of tribal leaders (Jones
& Bartlett, 2014). The practice of safety and health while
hunting was passed on from generation
to generation. From 2000BC to 1500BC, the Chinese used
employee screening techniques and
while Greeks used an apprentice system (History of Human
Resource Management, 2010).
These actions recognized the need to select and train individuals
for jobs.
Early employee specialists were called personnel managers (or
personnel administrators), and
this term is still in use in various discourses. ‘Personnel
management’ refers to a set of functions
or activities (e.g. recruitment, selection, training, salary
administration, industrial relations) often
performed effectively but with little relationship between the
various activities or with overall

organizational objectives. Personnel management in the United
Kingdom and the United States
developed earlier than in Australia and Asia Pacific countries in
response to their earlier and
more widespread adoption of mass production work processes.
Power-driven equipment and
improved production systems enabled products to be
manufactured more cheaply than before.
This process also created many jobs that were monotonous,
unhealthy or even hazardous, and led
to divisions between management and the ‘working class’. The
concentration of workers in
factories served to focus public attention upon conditions of
employment, and forced workers to
act collectively to achieve better conditions. The Humanitarian,
Cooperative and Marxist
theories of the early 1900s highlighted the potential conflicts
between employee and employer
interests in modern industry – situations that laid the
foundations for the growth of trade
unionism and industrial relations systems which are important
elements of contemporary HRM
(Nankervis et.al (2011)

Governments in both the United Kingdom and the United States
became involved in these issues
and passed a series of laws to regulate the hours of work for
women and children, to establish
minimum wages for male labour and to protect workers from
unhealthy or hazardous working
conditions. Australian governments, both state and national,
gradually began to follow suit from
the early 1900s, although Australia and New Zealand adopted a
different system based on
conciliation and arbitration rather than mandated conditions.
During this period, management theorists in the United States
and United Kingdom began to
examine the nature of work and work systems, and to develop
models based upon emerging
psychological and sociological research. The ways in which
these theories have developed, and
have been applied by both general management and HR
professionals, reflect changing attitudes
to jobs, work processes and organizational structures. The
Classical school (or ‘Scientific

Vol.3, No.3, pp.58-73, May 2015
60
Management’, founded by Frederick Taylor, and best
exemplified by Henry Ford in his vehicle
manufacturing plants) puts its emphasis on the job itself and the
efficient adaptation of workers
to work processes. The Behavioural school (for example, Elton
Mayo’s Hawthorne Studies)
focuses on workers themselves, and the satisfaction of their
needs, to achieve greater
organizational productivity. Subsequent management theories
(e.g. systems theory, contingency
approaches) attempt to build on earlier ideas to benefit both
employees and their organizations.
Contingency, Excellence and Total Quality Management (TQM)
theorists have applied these
ideas to particular industries and organizations, or to different
economic and social situations.
The relevance of these theories to HRM is twofold. First,
personnel management has historically

developed into human resource management by incorporating
management theories (notably
strategic management); second, a sound knowledge of these
theories can assist HR managers to
more effectively adapt their practices to organizational
requirements and realities (Nankervis
et.al (2011)
Stages in the Development of HRM
Human resource management in Australia and the Asia Pacific
region has progressed along
similar lines to its United States and United Kingdom
counterparts, but with differences in the
stages of development, and in the relative influence of social,
economic, political and industrial
relations factors. The two main features of the US development
of HRM are its initial emphasis
on largely administrative activities, directed by senior
management, and then the move to a more
confident, business-oriented and professional approach in the
1980s and 1990s. Similar
processes occurred in the United Kingdom, with more early
emphasis on the ‘welfare’ roles of
personnel practitioners because of the excesses of early

capitalist industry, a strong humanitarian
movement and developing trade unionism. In Asian countries,
there has been a blend of
administrative, paternalistic, cooperative, and business-focused
HRM that varies between
countries depending on their cultures, stages of development,
extent of government intervention
in the economy and industrial relations systems (Nankervis,
Chatterjee & Coffey, 2007)
In Australia, HRM has developed through the following general
stages.
a) Stage one (1900–1940s): administration stage
b) Stage two (1940s–mid-1970s): welfare and administration
stage
c) Stage three (mid-1970s–late 1990s): human resource
management and strategic human
resource management (SHRM) stage
d) Stage four (Beyond 2000): SHRM into the future
These stages largely reflect the development of Human
Resource Management in the rest of the
world notably, the UK and the USA. A critical discussion of
these stages is presented below:
Stage one (1900–1940s)

Welfare Stage
During this period personnel functions were performed by
supervisors, line managers and early
specialists (e.g. recruitment officers, trainers, welfare officers)
long before the establishment of a
national association representing a ‘profession’ of personnel or
human resource management.
Vol.3, No.3, pp.58-73, May 2015
61
The early management theorists contributed ideas that would
later be incorporated into personnel
management theory and practice. Through job design, structured
reward systems, ‘scientific’
selection techniques espoused by scientific management (see
Frederick Taylor, Frank Gilbreth
and Alfred Sloan) personnel management practice were refined

especially in the recruitment and
placement of skilled employees. Behavioural science (or
industrial psychology) added
psychological testing and motivational systems (see Elton
Mayo), while management science
contributed to performance management programs.
In Australia, however, these overseas influences were of only
marginal importance until the
1940s. Prior to World War II, personnel management functions
were largely fragmented, and
often conducted by line managers as part of their overall
management responsibilities. At the
time, Australia had a relatively stable economy, with certain
markets for its agricultural and
limited manufacturing products in the United Kingdom and
Europe. Society was generally
stable, though disrupted by World War I and the Great
Depression (1930s). Unemployment was
low until the 1930s, when labour became readily available for
employers. Trade unions were
active, largely focusing on issues of pay and working
conditions. Personnel functions during this
period were mainly restricted to administrative areas (e.g.

wage/salary records, minor
disciplinary procedures and employee welfare activities). In
1927, A. H. Martin established the
Australian Institute of Industrial Psychology at Sydney
University to promote the ideas of
Behavioural scientists and industrial psychologists in Australia.
Stage two (1940s–mid-1970s)
Welfare and administration Stage
This second stage marks the beginning of a specialist and more
professional approach to
personnel management in Australia. World War II had
significant repercussions for both those
who went overseas and those who stayed behind, and
particularly for business, the economy and
the labour market. During World War II, not only was there a
scarcity of labour for essential
industries such as munitions and food, but there was also a
corresponding increase in the
problems and performance of existing employees. Many more
women had become involved in
all areas of Australian industry, to replace their husbands and
brothers who were in military

service. Financial, social and family pressures began to hinder
the productivity and output of
such employees, and they became increasingly harder to recruit.
When the war ended, returning
soldiers flooded the labour market, often with few work skills.
Thus, employers – spurred on by
government initiatives and their own post-war requirements for
skilled employees in a
developing economy – began to focus on the importance of a
wider range of personnel functions.
Increased provision of welfare services for employees was seen
by some employers (notably
government departments such as the Postmaster-General) as a
means of attracting and
maintaining employees and ensuring their continued
productivity. The Commonwealth
Department of Labour and National Service established an
Industrial Welfare Division in the
1940s to promote the welfare function, offering emergency
training courses to equip
practitioners with the necessary skills. These activities were
supported by the new human
relations theories that were filtering into Australia from the
United States. In addition, scientific

management, the quantitative school and behavioural science
contributed employee and
management assessment and development techniques such as
productivity measures,
Vol.3, No.3, pp.58-73, May 2015
62
management planning and control mechanisms (e.g. Drucker,
McGregor, Chandler),
psychological testing and applications of the emerging
employee motivation theories (e.g.
Maslow, Hertzberg, McGregor). Many more organizations began
to employ specialists to
conduct recruitment, training and welfare activities, taking
these functions away from line
managers.
In 1943, the first personnel officer was appointed to the St
Mary’s Explosives Factory in New

South Wales, and in the same year a Personnel and Industrial
Welfare Officers’ Association was
established in both Victoria and New South Wales. These state
associations combined to form
the national Personnel Officers’ Association in 1949, renamed
the Institute of Personnel
Management Australia (IPMA) in 1954 (Nankervis, Chatterjee
& Coffey, 2007). Subsequently,
the Commonwealth Employment Service (CES) was set up to
help employers obtain suitable
employees, and both Sydney Technical College and Melbourne
University developed personnel
management courses. Business schools with personnel
management strands were established in
most Australian states during the 1950s, encouraged by the
development of the national
professional association, IPMA, with members in Victoria, New
South Wales, South Australia,
Western Australia and Queensland.
This stage is also characterised by the expansion of necessary
personnel functions for the post-
war Australian economy (welfare, recruitment, selection,
training); a gradual move from

specialist to more general approaches; the adoption of overseas
theories, including scientific
management, behavioural science and human relations; and the
emergence of professional
associations and courses. The resurgence of unionism during
these decades cannot, of course, be
overlooked. Unions in a buoyant economy focused on issues of
pay and work conditions, forcing
further expansion of personnel activities to include industrial
relations considerations. The
complex industrial relations structure at the national level was
originally established by the
Conciliation and Arbitration Act 1904, with similar
developments at each of the state levels.
They were further developed during the post-war period. While
the range of functions performed
by the growing number of personnel specialists expanded
greatly during this period, they were
often conducted in isolation from one another and generally
without any consideration of their
impact on overall organizational effectiveness. Personnel
management activities were largely
separated from those concerned with industrial relations, and a
clear professional philosophy did

not exist.
Stage Three (mid-1970s–late 1990s)
HRM and SHRM
During the 1970s, the majority of Australian organizations
found themselves in turbulent
business and economic environments, with severe competition
from US and European
organizations and emerging Asian markets. The influences of
the ‘Excellence’ theories (e.g.
Peters and Waterman) were beginning to affect the management
of employees, together with
increasing cost–benefit pressures.
At the same time, the professional association (IPMA) and
training institutions (TAFE and the
universities) were becoming more sophisticated in their
approaches, incorporating the ideas of
the ‘excellence’, leadership and Total Quality Management
(TQM) theories, with more recent

Vol.3, No.3, pp.58-73, May 2015
63
developments such as Kaplan and Norton’s (2005) ‘Balanced
Scorecard.’ During this period, the
IPMA held a number of international conferences, initiated
relationships with the Asia Pacific
region, developed minimum criteria for practitioner
accreditation (the 1987 rule) and a journal
for academic and practitioner discussion ( Human Resource
Management Australia , later re-
titled Asia Pacific HRM , and still later the Asia Pacific Journal
of Human Resources ).
Personnel management was becoming human resource
management, representing a change
towards the integration of personnel functions, strategically
focused on overall organizational
effectiveness. Significantly, the use of the term ‘human
resource management’ was first noted in
Australia in these years, (Kelly, 2003) reflected in the formation
of the Australian Human

Resources Institute to replace the IPMA. It was enhanced by
industrial relations changes,
including award restructuring and enterprise agreements,
increasing employment legislation, and
economic realities such as declining trade with Britain and
Europe and increasing opportunities
in the Asia Pacific region. (Ogier, 2003)
In essence, human resource management recasts ‘employees’ as
‘human resources’ who are vital
organizational ‘assets’, possessing knowledge, skills, aptitudes
and future potential; and who
therefore require integrated and complementary management
strategies (through, for example,
human resource planning, job design, effective attraction and
retention techniques, performance
management and rewards programs, occupational health and
safety systems) in order to assure
their individual and collective contributions to the achievement
of organizational goals and
objectives.
According to Taylor (2011) this transition of personnel
management to human resource

management signaled not just new rhetoric, but also significant
new thinking on the part of
managers. Donkin (2001) neatly sums up the result as follows:
“…Like an improved soap powder with a biological ingredient,
HRM, equipped with something
called strategy, promised a new set of tools and measures to
reward, motivate and organize
employees in the re-engineered workplace…”
For a generation, managers had been seriously constrained in
terms of how they approached the
people-related aspects of their activities (Taylor, 2011). Now
they had an opportunity to take
control and create approaches that were appropriate for their
own organizations’ particular
circumstances. HR strategies were developed, new
individualized pay arrangements introduced,
formal performance appraisal systems established and
competency frameworks defined.
Employers also seized the opportunity to employ people more
flexibly, establishing more part-
time and temporary jobs, outsourcing ‘non-core’ activities to
external providers and abolishing

long-established lines of demarcation which determined where
one group of workers’ duties
ended and another’s began.
At the same time, new methods of relating to workers had to be
established to replace union
consultation and negotiation arrangements, so there was the
spread of a range of new
involvement and communication initiatives along with a
preference for single-table or single-
union bargaining in circumstances where trade unions retained
an influence. In short, HRM can
Vol.3, No.3, pp.58-73, May 2015
64
largely be explained as a response on the part of organizations
to a newfound freedom to manage
their workforces in the way that they wanted to. Fewer
compromises had to be made, allowing

decisions to be made and strategies to be established which
operated exclusively in the long-term
interests of organizations.
Building upon previous developments, this stage represents the
integration of personnel
management and industrial relations and HRM into a
coordinated and strategic approach to the
management of an organization’s people, signaling the eventual
birth of strategic human
resource management (SHRM) (Nankervis et.al (2011) . SHRM
can be perceived as a ‘macro’
perspective (e.g. strategies and policies), whereas HRM
represents more of a ‘micro’ approach
(e.g. activities, functions and processes). SHRM adds the extra
dimension of the alignment of the
goals and outcomes of all HRM processes with those of their
organizations as a whole though
both are intertwined. SHRM also provides practitioners with
renewed confidence to perform
their activities as an integral component of organizational
success (Cengage, 2010).
The current discipline of Human Resource Management (HRM)
casts a radically different image

from its ancestor, Personnel Management (PM). The main
differences between HRM and PM are
shown in the table below:
Differences between Personnel Management and Human
Resource Management
Factor Personnel Management Human Resource Management
Time and planning
perspective
Short term, reactive, ad hoc ,
marginal
Long term, proactive, strategic,
integrated
Psychological contract Compliance Commitment
Employee relations
perspective
Pluralist, collective, low trust Unitarist, individual, high trust
Preferred

structure/system
Bureaucratic/mechanistic,
centralized, formal/defined
roles
Organic, devolved, flexible roles
Roles
Specialized/professional Largely integrated into line
management
Evaluation
Cost minimization Maximum utilization (human
asset
accounting)
Source: Adapted from ‘Human Resource and Industrial
Relations’, Journal of
Management Studies, 24 May, p. 507
Stage Four (Beyond 2000)

The present and future of Human Resource Management (HRM)
While it is difficult to predict the nature of HRM in the future,
there are strong indications that its
theory and practice will be continually transformed as a
consequence of globalization, new
technology and associated fundamental changes in the nature of
work and jobs. These external
Vol.3, No.3, pp.58-73, May 2015
65
and internal pressures and their possible impacts on
organizations, employees and overall
employment conditions is what informs the continuing evolution
of HRM as a contemporary
discourse as well as the need for continuous innovation on the
part of HRM professionals and
thinkers.
Some observers of HRM theory and practice (Patrickson and

Hartmann 2001; Weisner and
Millett 2003; Bartlett and Ghoshal 2003; Zanko 2003; Lansbury,
Kitay and Wailes 2003; Losey,
Meisinger and Ulrich , 2006; Boudreau and Ramstad 2009)
suggest that the implications of
global economic forces such as the shift to low inflation
economies, widespread tariff reductions,
and the growth in multilateral and bilateral free trade
agreements (e.g. Australia–Singapore, New
Zealand–Singapore, Australia–New Zealand, Australia–US,
APEC) demand more attention
towards international HRM models.
In addition, the globalization of business means that HR
professionals will need to be more
proactive in relation to such issues as business ethics, corporate
governance and the management
of employees’ work–life balance. Communication and
information technology changes such as
the digital revolution, satellite links, cellular telephone
networks and high speed fibre optic
cables (Hunt, 2003) will require the adoption of strategic
international or global HRM models
implemented through radical new approaches to HRM

strategies, structures, organizational
cultures, HRM practices and employment relationships as a
whole. As Erwee (2003) explains:
. . . in the competitive process of globalization and complexity,
it is becoming critical to manage
sustainable multinational organizations more effectively by
using Strategic Human Resource
Management (SHRM), and to link this with strategic needs in
the larger organizational context. .
. . However, (they) must also work within the confines of (their)
local environment as well as a
range of laws, politics, culture, economies and practices
between societies.
Human resource thinkers such as Ulrich, Huselid, Lepak &
Snell, and Collins imply that the
‘new’ HRM will either specialize in HRM ‘value management’,
‘strategic partnering’ and
establishing the HR ‘architecture’ for organizational success, or
will combine such ‘macro
connections’ with the devolvement or outsourcing of traditional
HR processes respectively to
line managers and external HR consultants (Kramar, 2003).

Ulrich (2006) has suggested that the survival of HRM demands
that HR professionals are
perceived to add value to four key stakeholders in
organizations, namely:
a) employees who want competence and commitment
b) line managers who want to make strategy happen
c) key customers who want to buy more products/services; and
d) investors who want the stock price to go up.
This will involve the formulation of HR strategies for the
business, the workforce and the HR
function itself. The theme of ‘partnership’ between senior
managers and HRM specialists is
echoed by HR professionals and by their general managers.
Chris Georgiou, HR Director, AGC
and Westpac Financial Services, suggests that ‘to be effective,
you need to partner with the
business very closely and that means not necessarily just
understanding the business but really
Vol.3, No.3, pp.58-73, May 2015

66
participating at the business level’ (Rance, 2000). John Cooper,
a partner at Freehills
consultancy, goes further, emphasizing that ‘HR needs to make
sure it is a critical part of the
decision making processes that go with the new technology and
the strategies to globalize’
(Willcoxson, 2003). Boudreau (2009) reinforces this notion,
asserting that ‘HR must extend its
focus from the services it provides to the decisions that it
supports’, as ‘like finance and
marketing, the HR function helps the firm operate within a
critical market . . . the market for
talent’.
In similar vein, Dowling and Roots (2009) suggest that strategic
HRM should now become
concerned with ‘finding the pivotal areas where optimization
and increased performance may be
attained . . . the new science of human capital’. Associated
imperatives include requirements for
HR professionals to demonstrate a deep understanding of their
organization’s business

environment, the industry challenges and opportunities, and the
ways in which HR programs
deliver human capability for the business to compete, the
nurturing of more creative
organizational cultures and the development of appropriate HR
metrics, and the formulation of
organizational ethical codes. These imperatives for transparency
and accountability have only
been strengthened following the 2009 global financial crisis
(Holdsworth & Lundgaard, 2009;
Wilson, 2009; Wilson, 2009).
Milestones in the History, Evolution and Development of
Arising from the synthesis of literature available on this topic
(Taylor, 2011; Nankervis et.al,
2011; History of Human Resource Management, 2010; Kelly,
2003; Ogier, 2003,), the history,
evolution and development of HRM can be summarized as
presented in the table below:
Period Time HR Factors/Issues/Characteristics
Pre World War II

2000BC – 1000BC
1700 – 1900
Mechanisms for selecting tribal leaders;
recording and dissemination of knowledge
about safety; health, hunting and gathering of
food; use of employee screening techniques by
the Chinese; use of the apprentice system by the
Greek.

Emergence of Scientific Management Theory as
management philosophy of the time; start of
industrial revolution that led to replacement of
cottage industries by large factories; rise of
large workforce occasioned by immigrant
workers; introduction of personnel function
mainly for keeping workers records; rise of
middle level supervisors; maximum exploitation
of workers; increase in child labour; widened
gap between workers and supervisors; poor
working conditions; rise of labour unions to
agitate for workers rights; expansion of
personnel function to include welfare and
Vol.3, No.3, pp.58-73, May 2015

67
1920 – 1930
administration mainly in UK and USA.
Rise of motivation practices occasioned by the
Hawthone studies, various attempts at employee
satisfaction begin to be implemented such as
better wages and good working conditions.
Post World War II 1945 – 1960 The Human Relations
Movement shaped the
management ethos of the time; emphasis on
employee productivity through various
motivation techniques; emphasis on welfare
issues; emergence of job description which
improved recruitment and selection; emergence
of compensation and evaluation strategies;
official recognition of trade unions in various
countries mainly in UK and USA; emergence of

collective bargaining for increased employee
welfare; enactment of a significant number of
employment laws; emergence of computer
technology and use in record keeping;
emergence of job analysis; expansion of the
personnel function to include recruitment,
labour relations, training, benefits and
government relations divisions; first HRM
software Comprehensive Occupational Data
Analysis Program (CODAP) developed in the
USA mainly for job descriptions and assigning
roles; advancement of computer technology to
include payroll, inventory and accounts.
Social Issues Era 1963 - 1980 The Civil Rights Movement
shaped the
management thinking of the time; the civil
rights act (1964) brought in affirmative action,
abolished all forms of discrimination and

ushered in equal employment opportunity;
transition from personnel management to
human resources management; increased
computerization of the HR function for
accuracy, speed, storage and reporting of HR
data; development of Human Resource
Information System (HRIS); increased trade
unionism led to better working conditions and
terms of employment; adoption of various laws
on occupational health and safety, retirement
benefits and tax regulation; emergence of
employee participation in management decision
making, increased employee training and
Vol.3, No.3, pp.58-73, May 2015
68

empowerment;
Cost–Effectiveness Era 1980-early 1990s Increased automation
of the workplace to boost
production; shift from employee administration
to employee development and involvement;
emphasis on efficiency and effectiveness
through adoption of technology; emergence of
hard and soft HR approaches; emergence of
employee return on investment debate; is an
employee an unnecessary cost to be
minimized/eliminated or a vital resource to be
developed?
Technological
Advancement Era
1990 – present This era is shaped by increasing forces of
globalization, rapid change occasioned by
tremendous technological breakthroughs and
pressure for increased efficiency; cut throat

competition characterize all industries;
emergence of Strategic HRM; emergence of
business process reengineering strategies;
recognition of intellectual capital; increased
strategies for recognition, rewards, motivation,
greater awareness of the HR role as a strategic
business partner; emergence of improved
strategies for attracting, retaining, development
and engagement of talent; emergence of
workforce evaluation methods such as balanced
scorecard, performance appraisal techniques ;
emphasis on contribution of HRM to
competitive advantage; Human resource
planning techniques; diversity management;
talent management; emergence of e-HR; e-
training, e-recruitment, telecommuting, flexible
work arrangements, virtual teams; work life
balance; social media currently informs

transformation of HRM; improved networking;
influence of mass media; ethics; green
economy; new world order.
Human Resource Management as a Contemporary Issue
In essence, HRM differs from earlier personnel management
models in relation to its focus, its
principles and its applications. HRM can be simply described as
the convergence of three factors
– human beings, resources and management – where human
beings have the actual and potential
resources (knowledge, skills and capabilities) that can be
harnessed through effective
management techniques to achieve short- and long-term
organizational goals as well as personal
needs. Thus, the focus of HRM today is on the effective overall
management of an
Vol.3, No.3, pp.58-73, May 2015

69
organization’s workforce in order to contribute to the
achievement of desired objectives and
goals. All HR processes (e.g. recruitment, human resource
development, performance appraisal,
remuneration) are seen to be integrated components of overall
HRM strategies hence the
strategic nature of contemporary HRM. According to Beer et.al
(1985), the Harvard model
suggests that Strategic HRM strategies, policies and processes
fall into four broad areas:
a) Employee influence and involvement. This is the extent to
which employees are
encouraged to share their ideas and participate in organizational
consultation and decision-
making procedures;
b) Human resource flow. All HRM functions are involved in
employee management (e.g.
HR planning, job design, recruitment and selection,
performance review, termination etc)
c) Rewards systems. The monetary and non-monetary ways by
which staff are recognized;
d) Work systems. Includes consideration of the ‘fit’ between
employees and their

workplaces (e.g. technology, workplace design, teams etc)
The model further suggests that a strategic approach to HRM
strategy, policy and processes
fundamentally reflects management choice about how
employees are managed – a choice about
the nature of the employment relationship, including the
‘psychological contract’ between
employees and their employers. As this model indicates, the
principles on which HRM theories
are based are generally broader and more managerial in their
emphasis than personnel
management. The central principle is, of course, the effective
utilization of employees in order to
enable the achievement of organizational objectives. Thus, the
entire ‘resource’ of the employee
should be tapped (i.e. physical, creative, emotional, productive
and interpersonal components) in
order to achieve this goal. In contemporary organizations, the
emphasis may be more on the
‘intellectual capital’, ‘knowledge worker’, or on ‘emotional
intelligence’ than on manual or
physical skills. These issues are integral to the management of
the contemporary ‘knowledge

worker’ and will keep shaping the theory and practice of Human
Resource Management, moving
forward.
Contemporary HRM theories also recognize that the human
resource, unlike financial or
technological ‘resources’, cannot be manipulated or ‘exploited’,
and that it requires complex and
sensitive management in order to fully realize its potential.
Variations of HRM theory emphasize
different aspects of management of the employment
relationship, reflective of diverse national or
industry environments (Nankervis et.al (2011).
All HRM theories are, however, essentially managerialist in
their emphasis on the management
of the workforce and accountability to ensure the achievement
of desired objectives and goals.
Thus, HRM practitioners are seldom perceived as employee
‘advocates’ except when such
activities are necessary to assist the achievement of the
organization’s goals. As Ken Gilbert,
Head of Mercer Consulting’s human capital business explains,
“Aside from the need to survive,

one of the biggest challenges organizations face . . . is
managing competing workforce pressures
– the need to contain employment costs versus the ability to
maintain levels of engagement and
productivity for when the market upswings. . . . Doing both
simultaneously is the new challenge
(Gettler, 2009)
Vol.3, No.3, pp.58-73, May 2015
70
The imperatives of contemporary HRM theory include such
principles as efficiency,
effectiveness, productivity, labour flexibility and competitive
organizational advantage. Baird
and McGrath-Champ (1999) suggest that HRM concepts
represent the strengthening of
managerial prerogatives. Patrickson and Hartmann (2001)
summarize its dominant strategic

emphasis as ‘productivity enhancement, cost minimization and
work intensification. Some other
HRM observers note that recent trends in the nature of
employment (such as casualisation, more
flexible conditions and changes to industrial relations systems),
and the various impacts of
technology and globalization, together with innovative HR
practices such as rightsizing,
outsourcing and ‘offshoring’, present serious challenges and
opportunities to the future of HRM.
As Gandossy et al (2006) observe, the workforce is in the midst
of an unstoppable and dramatic
transformation. In the coming years, organizations will confront
challenges related to
demographic trends, global mobility, diversity, work/life issues,
technology changes and a
virtual workforce. Competition will be global; capital will be
abundant; leaders will be
developed swiftly; and talented people will be keen to change
jobs frequently. These changes
will influence how work is performed, where it is performed
and what skills are required. While
other resources will be abundant, the most important resource of

all – talent – will become
increasingly scarce. Organizations must ask themselves: Are we
prepared for this global
workforce revolution? Do we have the right strategies in place?
CONCLUSION
Beginning with a very humble start as ‘people management’ in
the 1700s, (earlier developments
acknowledged) Human Resource Management has evolved to
become an indispensable
academic field as well as an important function in the
management of organizations. The
functional areas that constitute the current outlook of the
Human Resource Management field
include:
a) human resource policy
b) human resource planning
c) human resource information management systems
d) knowledge management
e) ethics, governance and (sometimes) corporate social
responsibility
f) work and job analysis, design and evaluation
g) recruitment and selection
h) diversity management
i) career management
j) employee and management training and development

k) counseling, discipline and termination/separation
l) performance and quality management
m) remuneration and benefits
n) industrial relations management
o) financial management of employee schemes and overall
accountability and evaluation
p) occupational health and safety.
Vol.3, No.3, pp.58-73, May 2015
71
Indeed, Human Resource Management (HRM) is a complex and
rapidly changing field of
practice in industry and academia. Despite its comparatively
recent developments, and drawing
upon both overseas and local influences, HRM is a crucial
factor in the success of all
organizations. Beginning in the 1700s as a series of functions,
often neither integrated nor based
upon solid conceptual foundations, the modern Strategic HRM
is a dynamic specialization in the

process of refining its philosophies, practices and overall
contributions to organizational
effectiveness in response to external influences, including
economic, demographic, legislative
and social changes, as well as its own history,
HRM is adopting a strategic approach to the management of
human resources for corporate
benefit. As with other professions, HRM confronts a number of
difficult issues and dilemmas
concerning ethics, roles, practices and the nature of its
professional associations. Further
development of Strategic HRM will eventually resolve these
issues in creative and effective
ways. This ever evolving nature of Strategic HRM is what
informs its study as a contemporary
issue.
REFERENCES
"About CIPD". Chartered Institute of Personnel and
Development. Retrieved 22 December 2011.
"About Cornell ILR". Cornell University School of Industrial
and Labor Relations. Retrieved

2010-01-29.
"About SHRM". Society for Human Resource Management.
Retrieved 22 December 2011.
Armstrong, M. (2006) A Handbook of Human Resource
Management Practice, (10th ed.) Kogan
Page, London.
Baird, M. and McGrath-Champ, S. in Kaye, L. (1999) Strategic
in Australia: The Human Cost. International Journal of
Manpower , 20(8) , pp. 577–81.
Beer, M., Spector, B., Lawrence, P., Mills, D. and Walton ,R.
(1985) Human resource
management: A general manager’s perspective , New York, Free
Press. Quoted in Gettler,
L. (2009) When the only way is up. HR Monthly , May, p.12.
Boudreau, J. and Ramstad, P. (2009) Beyond HR: The new
science of human capital ,US: HBS.
Boudreau, J. and Ramstad, P. (2009) HR’s evolution. HR
Monthly , April, p. 34.
Collings, D. G., & Wood, G. (2009). Human resource
management: A critical approach. In D. G.
Collings & G. Wood (Eds.), Human resource management: A
critical approach (pp. 1-16).

London: Routledge.
Donkin, R. (2001) A quiet revolution in human resource
management. Financial Times. 16
August.
Dowling, P. and Roots, A. (2009) ‘Review of Boudreau, P. and
Ramstad, A. (2009) Beyond
HR: The new science of human capital, US, HBS Press’, in
Research and Practice in Human
Resource Management , July, p. 268.
Erwee, R. (2003) ‘Integrating diversity management initiatives
with strategic human resource
management,’ in Wiesner, R. and Millett, B. (2003) op. cit., p.
59.
Gandossy, R., Tucker, E. and Verma, N. (eds) (2006) Workforce
wake-up call: your workforce is
changing, are you? Hoboken, NJ: Wiley.
http://www.cipd.co.uk/cipd-hr-profession/about-us/
http://www.ilr.cornell.edu/about/
http://en.wikipedia.org/wiki/Cornell_University_School_of_Ind
ustrial_and_Labor_Relations
http://www.shrm.org/about/

Vol.3, No.3, pp.58-73, May 2015
72
Holdsworth, R. and Lundgaard, W. (2009) An HR intervention.
HR Monthly , May, p. 32.
Hunt, J. (2003) ‘The anatomy of organisational change in the
twenty first century’, in Wiesner,
R. and Millett, B. (2003) op. cit., pp. 3–4.
‘Human Resource and Industrial Relations’, Journal of
Management Studies, 24 May, 2010
Johnason, P. (2009). HRM in changing organizational contexts.
In D. G. Collings & G. Wood
(Eds.), Human resource management: A critical approach (pp.
19-37). London: Routledge.
Kelly D. (2003) A shock to the system? The impact of HRM on
academic IR in Australia in
comparison with the USA and UK, 1980–1995. Asia Pacific
Journal of Human Resources,
41(2), pp. 149–71.
Klerck, G. (2009). Industrial relations and human resource

management. In D. G. Collings & G.
Wood (Eds.), Human resource management: A critical approach
(pp. 238-259). London:
Routledge.
Kramar, R. 2003. ‘Changes in HR policies and practices:
Management’s dream come true?’, in
Wiesner and Millett, op. cit., pp. 10–13.
Lansbury, R., Kitay, J. and Wailes, N. (2003) The impact of
globalisation on employment
relations: Some research propositions. Asia Pacifi c Journal of
Human Resources, 41(1) ,
pp. 62–73;
Losey, M., Meisinger, S. and Ulrich, D. (eds) (2006) The future
of human resource management,
Singapore: John Wiley & Sons (Asia)
Mayo, Elton (1945). "Hawthorne and the Western Electric
Company". Harvard Business School.
Retrieved 28 December 2011.
Nankervis et.al (2011) Human Resource Management: Strategy
and Practice, (7th ed) Cencage
Learning, Melbourne, Australia.
Nankervis, A., Chatterjee, S. and Coffey, J. (2007) Perspectives

of Human Resource
Management in the Asia Pacific, Sydney, Pearson Education
Australia.
Ogier, J. (2003) Advancing the profession. HR Monthly ,
February, pp. 30–2.
Paauwe, J., & Boon, C. (2009). Strategic HRM: A critical
review. In D. G. Collings & G. Wood
(Eds.), Human resource management: A critical approach (pp.
38-54). London: Routledge.
Patrickson, M. and Hartmann, L. (2001) HRM in Australia –
Prospects for the twenty-first
century. International Journal of Manpower, 22(3), pp. 198–204.
Patrickson, M. and Hartmann, L. (2001) HRM in Australia –
Prospects for the Twenty-First
Century. International Journal of Manpower , 22(3) , pp. 198–
204.
Rance, C. (2000) ‘Human resources – branching out to face the
future,’ The Age , 12 October,
p.1.
Taylor, S. (2011) Contemporary Issues in Human Resource
Management, CIPD, UK
Ulrich, D. (2006) Human Capital , June, p. 3.
Weisner, R. and Millett, B. (2003) op. cit. Bartlett, C. and

Ghoshal, S. (2003) Reinventing
yesterday’s managers. HR Monthly, April, pp.12–18;
Willcoxson, L. (2003) ‘Creating the HRM context for
knowledge management’, in Wiesner and
Millett, op. cit., p. 72.
Wilson, P. (2009) True north. HR Monthly , May, pp. 16–18.
Wilson, P. (2009) No direction. HR Monthly , May, pp. 20–3.
Zanko, M. (2003) Change and diversity: HRM issues and trends
in the Asia Pacifi c region. Asia
Pacific Journal of Human Resources, 41(1), pp. 75–87;
http://www.buzzle.com/articles/history-of-human-resource-
management.html
http://xa.yimg.com/kq/groups/30802428/1886432542/name/elto
n+mayo+%2B+studiu+de+caz.pdf
http://www.buzzle.com/articles/history-of-human-resource-
management.html
Vol.3, No.3, pp.58-73, May 2015
73

The SAGE Handbook of Human Resource
Management
Human Resources Management: A Historical
Perspective
Contributors: Howard Gospel
Edited by: Adrian Wilkinson, Nicolas Bacon, Tom Redman &
Scott Snell
Book Title: The SAGE Handbook of Human Resource
Management
Chapter Title: "Human Resources Management: A Historical
Perspective"
Pub. Date: 2010
Access Date: August 29, 2019
Publishing Company: SAGE Publications Ltd

City: London
Print ISBN: 9781412928298
Online ISBN: 9780857021496
DOI: http://dx.doi.org/10.4135/9780857021496.n2
Print pages: 12-30
© 2010 SAGE Publications Ltd All Rights Reserved.
This PDF has been generated from SAGE Knowledge. Please
note that the pagination of the online
version will vary from the pagination of the print book.
javascript:void(0);
javascript:void(0);
javascript:void(0);
javascript:void(0);
http://dx.doi.org/10.4135/9780857021496.n2
Human Resources Management: A Historical Perspective
Introduction
In this chapter, the management of human resources is broadly
defined to cover three broad interconnected
areas – work relations, employment relations, and industrial
relations. Work relations are taken to cover the
way work is organised and the deployment of workers around
technologies and production systems. Employ-
ment relations deal with the arrangements governing such
aspects of employment as recruitment, training,

job tenure, and reward systems. Industrial relations are taken to
cover the voiced aspirations of workers and
institutional arrangements which may arise to address them,
such as joint consultation, works councils, trade
unions, and collective bargaining. The focus is therefore on
human resources management (lower case),
which has been an eternal phenomenon in all organisations over
time, and not on Human Resources Man-
agement (upper case), which is a term which has developed over
the last two decades. In addition, in this
chapter, the term the management of human resources and the
management of labour are used generically
and interchangeably.
The focus throughout this chapter is on major patterns in these
three areas as they have emerged over time,
especially in large private-sector firms, over a long period from
the nineteenth century onwards. It draws main-
ly on the core economies of the twentieth century, especially the
US, the UK, Germany, France, and Japan.
The focus is primarily on the management of lower and
intermediate classes of labour, which have constituted
the majority of employees and which are best covered in the
literature.
The next section provides a broad overview of the contexts
within which labour has been managed, including
market, technological, political, and business contexts. There
then follow sections which present broad
‘stages’ in the history of human resource management, taking
examples from leading sectors of the economy.
However, throughout, the aim is to stress continuities over time
between stages, the coexistence of systems,
and how older sectors adapt over time. The final section raises
some caveats and areas for further research
and draws broad conclusions.

The Historical Contexts of Human Resource Management
A number of major contexts are outlined schematically here and
used further in each section. These include
the changing technological, market, political/legal, social, and
business environments. Though these contexts
shape the activities of employers, managers, and workers, the
chapter also shows how the actors themselves
have shaped the situations within which they operate (Dunlop,
1958).
The technological context has historically shaped basic aspects
of labour management. Some writers have
suggested a broad movement over time from artisan or craft
production (with skilled workers having signifi-
cant control over work), to mass production (often associated
with Ford-type assembly-line systems in indus-
tries such as automobiles), and to more flexible production
systems (sometimes referred to as post-Fordist)
(Tolliday, 1998). In practice, changes have been complex, with
overlaps in types of production regimes over
time and with older sectors adopting aspects of new
arrangements. Thus, skilled, small-batch production was
never superseded in many areas often typified as mass
production, such as metalworking and light assem-
bly industries. Similarly, many aspects of work in modern retail
stores, fast-food restaurants, and call centres
are very much of a mass-production kind. A constant theme in
the history of labour management has been
employers’ introduction of new technologies, workers’ counter-
attempts to exert some control over these, and
managers' further attempts to develop and refine management
systems (Nelson, 1975; Hounshell, 1984; Pi-
ore and Sabel, 1984; Lazonick, 1990; Tolliday 1998; Scranton,
1997).

The market context comprises labour, product, and financial
markets. In the labour market, there are both
SAGE
© SAGE 2010
SAGE Reference
Page 2 of 18
The SAGE Handbook of Human Resource Management
longer- and shorter-term influences. For example, longer-term
factors include demographic change, the broad
balance of labour supply and demand, and the changing
composition of the labour force. Thus, in various peri-
ods in different countries, labour shortages have induced firms
to substitute capital for labour and to introduce
new production systems, as was the case in the United States in
the early/mid-nineteenth century (Lewis,
1952; Habbakuk, 1962). Shortages also induced firms to
introduce systems to attract and retain labour and
these have often become embedded and left continuing
inheritances, as for example with skilled labour short-
ages in Japan in the early twentieth century (Jacoby, 1979;
Gordon, 1985, 1998). Shorter-term labour market
influences include the fluctuating level of unemployment which
has immediate direct effects on the balance of
power between management and labour. In this respect, for
example, sharp rises in unemployment in the UK
in the early 1920s and early 1980s significantly affected the
bargaining power of management and unions,
strengthened managerial prerogatives, and led to major changes
in labour management and industrial rela-

tions (Gospel, 1992).
In the case of product markets, the boundaries of markets and
the degree of competition in them have an
effect on labour management, both directly and indirectly. For
example, Smith (1776), in his celebrated ex-
amination of a pin factory, pointed out that the extent of the
market shaped the division of labour. Similarly,
Commons (1909) used the extension of markets to explain the
organisation of production, the emergence
of distinct classes of masters and men, and the subsequent
growth and organisation of trade unions. In like
manner, a large and relatively homogeneous market in the US
facilitated mass production in that country com-
pared to the smaller and more fragmented markets of Europe
(Habbakuk, 1962; Rosenberg, 1969; Hounshell,
1984). The degree of competition within the product market also
influences the constraints on management.
Thus, over a long period from the interwar years onwards, high
levels of product market protection and collu-
sive behaviour underpinned the position of trade unions and the
development of internal labour market-type
arrangements in many countries. Subsequently, the progressive
opening-up of markets and the growth of in-
ternational competition, especially since the 1970s, have
reshaped the international division of labour and the
extent to which labour can extract rents from management
(Gospel, 2005).
Financial markets, ownership, and corporate governance have
also historically shaped human resource sys-
tems. Owner-financed and controlled firms historically often
had a personal form of paternalism and such
firms tended to oppose dealings with trade unions. From the
early twentieth century onwards, the growth of
equity financing and the separation of ownership and control in

countries such as the US and the UK allowed
for a more bureaucratic approach to labour and lay behind the
development of what some have described
as ‘welfare capitalism’, with strong internal labour market-type
arrangements (Brandes, 1976; Jacoby, 1985,
1997). In recent years, new financial pressures from
institutional owners and private equity capital have put
pressures on firms to adjust employment more directly to
market forces. By contrast, up until recently, the
continuation of private and more concentrated ownership and
greater reliance on insider finance has meant
that such pressures have been less strong in Germany and Japan
(Gospel and Pendleton, 2004).
The history of labour management systems has been profoundly
shaped by political and legal contexts. In
countries such as the US and the UK, liberal states have overall
been less interventionist in labour man-
agement than in some other countries, with so-called
‘voluntarism’ being a strong tradition. Even in these
countries, however, there have been major exceptions,
especially during two world wars, the New Deal in
the US, and in the 1980s under the Reagan and Thatcher
administrations. By contrast, in more coordinat-
ed economies, such as Germany, Japan, and France, there has
long been a tradition of state intervention
in labour matters (Crouch, 1993; Friedman, 1999; Hall and
Soskice, 2001; Yamamura and Streeck, 2003).
Nevertheless, it is probably true to say that over time, in most
countries, there has been a gradual build-up
in intervention in terms of rights off-the-job (state welfare and
pension systems), rights on-the-job (workmen's
compensation, health and safety, racial and sexual equality
legislation), and regulation of collective employ-
ment matters (the law on trade unions, collective bargaining,
and information and consultation at work). In

Europe, the European Union (EU) has in recent decades taken
these tendencies further (Supiot, 2001).
The social context is in many ways the most difficult to
categorise and summarise. Over the decades, the
SAGE
© SAGE 2010
SAGE Reference
Page 3 of 18
position of children and women at work has changed
profoundly, at least in advanced market economies. The
starting age of employment has slowly risen, the proportion of
women in paid employment has increased,
and the numbers of people who can retire from paid employment
have risen. Major changes have also come
with rising living standards and a greater awareness of social
and human rights. Over time, social identities
have also changed, with notions of ‘class’ playing a significant
part in worker mentalities through much of
the twentieth century, but becoming less powerful in more
recent decades. Other social identities at work
which have long existed, on the basis of gender, race, religion,
and immigrant status have been successively
reshaped and added to with new identities in terms of age,
sexual orientation, and disability (Noiriel, 1989;
Magraw, 1992; Piore and Safford, 2005). On the other hand,
traditional divides between works and staff or
between hourly/weekly and monthly-paid, have slowly eroded.
Managements have had to take account of

these changing social contexts. The so-called ‘management of
diversity’ in the workplace is now stressed in
modern management discourse; however, history shows that this
has always been a concern of management
(Kossek and Lobel, 1996).
A number of final points may be made about the business
context of the organisation in historical perspective.
First, most firms have been small and medium-sized – though in
practice least is known about human re-
source management in such firms. Over time, big firms have
come to constitute a larger proportion of total
output and of total employment, though this is larger in the US
and the UK than countries such as Germany,
Italy, and Japan, which have more employment in medium-sized
firms. Second, there have been major com-
positional shifts. Generalising, the typical large employer in the
early-to mid-nineteenth century was a textile
company; by the mid- to late-nineteenth century, the biggest
single group of major firms in most economies
were railway companies; by the mid-twentieth century, the main
groupings were manufacturers (steel, chem-
icals, automobiles, electrical); and by the end of the twentieth
century, the biggest single group of large firms
was to be found in retailing and financial services (Gospel and
Fiedler, 2008). This predominance of certain
industries played an important part in laying down patterns of
labour management. Third, over time, big firms
in particular have developed more sophisticated hierarchies, not
least in the labour area, with the growth
of ‘welfare’ or ‘labour’ managers, later ‘personnel’ managers,
and now ‘human resource’ managers (Niven,
1967; Jacoby, 1985; Morikawa and Kobayashi, 1986; Kocha,
1991; Tsutsui, 1998; Fombonne, 2003). How-
ever, it should be remembered that in some countries, especially
those of northern continental Europe, firms

still rely significantly on outside employers’ organisations and
their staff for the management of industrial re-
lations. Also, in recent years, there has been some growth in the
outsourcing of the human resource func-
tion (Gospel and Sako, 2008). Fourth, big firms have also
changed in structure from being historically either
loosely organised holding companies or centralised,
functionally organised firms at the beginning of the twen-
tieth century, to being more coordinated multidivisional
structures and sometimes decentralised networks of
firms by the end of the century (Chandler, 1962, 1977; 1990;
Cassis, 1997; Whittington and Mayer, 2000).
As will be shown below, this has also had implications for
labour management. Finally, as already suggested,
ownership and governance has changed, though differentially
between countries, with personal and family
ownership declining over the course of the twentieth century
and outsider ownership increasing in the big firm
sector, especially in the US and the UK (Gospel and Pendleton,
2004).
The Emergence of Labour Management in the First Industrial
Revolution
Here we provide a perspective on two key industries of the first
industrial revolution, viz. over the period of
time roughly from the late-eighteenth century to the late-
nineteenth century. The two industries are very dif-
ferent, textiles and railways, but they provide us with a set of
insights into how labour was managed during a
key period of economic transformation.
Textile industries have been at the forefront of industrialisation
in many countries. Classic problems for em-
ployers emerged in these industries – in terms of work relations
(how to organise production and the division

of labour), employment relations (how to attract, retain, and
motivate labour), and industrial relations (how
authority was to be maintained and whether or not to concede
employees a voice at work).
SAGE
© SAGE 2010
SAGE Reference
Page 4 of 18
In practice, nineteenth century textile and allied industries in
Europe and the US always had elements of both
older artisan and newer factory production. In artisanal sectors,
production was on a small scale, work was
often organised on the basis of putting-out to households or
small workshops, and family involvement was im-
portant. In these circumstances, masters relied on key (usually
male) workers to organise their own work and
controlled and paid them by piece-work where this was
possible. Problems for the masters were uncertainties
about the quality of production and the wage-effort relationship
(Mendels, 1972; Berg, 1985). As technologies
developed and markets expanded, masters increasingly built
their own factories and installed machinery. In
turn, this meant they had the problem of attracting larger labour
forces, especially where factories were locat-
ed in less populated areas near water power sources. In cotton
spinning, large numbers of women and chil-
dren were employed, usually under tight and often coercive
systems of direct control and often paid by time.
However, even within the new factories, there persisted forms

of inside contracting to key workers and the
possibility of drawing on pools of specialised craft labour from
local industrial districts (Lazonick, 1990; Rose,
2000). The motivation to develop the factory system came from
market and technological opportunities, but it
also gave employers a means for better control over their labour
forces (Marglin, 1974; Landes, 1986).
The emergence of this system in the UK has been classically
described by Pollard (1965), who emphasised
its heavy reliance on child and female labour, extensive use of
piece-work, and devices such as factory hous-
ing. At the same time, there was, in most textile districts, a
reliance on external economies of scale, for ex-
ample in terms of apprentice-type training and piece-work price
lists. In the US, the more vertically integrated
cotton industry moved more quickly to introduce new
technologies, to build larger factories, and to develop
a greater internal division of labour within the workplace under
management control. Later, in Japan, during
industrialisation in the late-nineteenth and early-twentieth
centuries, some similar problems for management
and some similar responses are discernible. For example, in that
country, factory and artisan production also
coexisted, though the latter was much smaller; in the large
factory sector, employers used predominantly fe-
male workforces; they built factory dormitories and provided
various forms of paternalistic benefits; and used
tight supervision and simple pay and benefit systems to control
workers (Nakagawa, 1979; Hunter, 2003).
Today, many of these forms of work organisation and
employment relations have later appeared and are still
to be found in textile industries in India, China, Brazil and
other rapidly developing countries today.
Under early forms of labour management, industrial relations

systems were diverse. As suggested, the man-
agement of labour was often a mixture of both hard, direct
control and also of paternalistic oversight of a
personal ad hoc kind (Joyce, 1980). Nevertheless, some key
male workers could exert control over their work
and employers depended on them to organise production. In the
UK, by the final half of the twentieth century,
unions of male textile workers had grown to become the largest
in the country, along with unions for other
artisan and craft trades, engineering workers, and coalminers.
Those with skills or a strong position in the
production process were able to force recognition from
employers of their trade societies and to establish re-
gional or national collective bargaining where firms joined
together in employers’ organisations had to deal
with trade unions (Jowitt and McIvor, 1989; McIvor, 1996). In
the United States and continental Europe, by the
First World War, collective bargaining had also developed in
certain craft sectors, such as small metalworking,
printing, and footwear, but on the whole it was less extensive
than in the UK (Mommsen and Husung, 1985;
Montgomery, 1987).
From the mid-nineteenth century onwards, the railways
represented a further stage in the growth of the mod-
ern business enterprises in most countries (Chandler, 1977,
1990). In terms of labour management, railway
companies encountered both a traditional and a new set of
problems. Traditional problems were in terms of
recruiting, training, and controlling staff, albeit on a much
larger scale. New problems included the complexity
of scheduling, the safety of goods and passengers, and the
geographical dispersion of work. Under manage-
ments from various backgrounds (technical, governmental,
military, and accounting), the railway companies
were the first to put in place some of the first and largest

bureaucratic systems of employment. These included
more systematic recruitment, the creation of job and promotion
hierarchies, and related pay systems based
on fixed rates of pay. They also introduced welfare
arrangements, of a less personal and more bureaucratic
kind, such as housing, basic sick care, and later pension
benefits for some workers, usually dependent on
SAGE
© SAGE 2010
SAGE Reference
Page 5 of 18
length of service with the firm.
Talking industrial relations, the large railway companies of the
US, UK, and continental Europe were run ac-
cording to a ‘unitarist’ rather than a ‘pluralist’ model of
management (Fox, 1985). Management was the sole
source of authority, issued commands, and expected workers to
obey. A plurality of sources of authority, with
legitimate worker voice and checks and balances, was not
permitted. Discipline was based on the notion of a
‘uniformed’ service. In keeping with this and in contrast with
the sectors described above, trade unions were
not recognised and collective bargaining was rare, until just
before or after the First World War.
This pattern of bureaucratic management later grew in other
sectors, such as the gas, electricity, and water
utilities (Melling, 1979; Berlanstein, 1991). It also provided

something of a model for areas of industry such
as steel, chemicals, and, later, oil refining. Developed in the
late nineteenth and early twentieth centuries, the
model has in many respects persisted up to the present day in
both state and private railways and utility sys-
tems, albeit since the Second World War, with extensive
unionisation and collective bargaining.
This account of bureaucratic employment on the railways
prompts three further points. First, the railways
were some of the first companies to develop extensive
hierarchies of managerial and white-collar staff. These
were necessary to organise and coordinate diverse and dispersed
operations. Such employees were offered
something like ‘careers’ within the company and moved up
wage and benefit hierarchies. Though they learnt
on-the-job, there were books, magazines, and courses which
they could attend. Second, and by contrast, the
railways were constructed and to some extent maintained in
more traditional ways, by gangs of labourers,
who were apart from this bureaucratic system and did not
partake of the benefits of others who worked on
the railways. Third, the workshops owned by the railway
companies, where engines and rolling stock were
built and maintained, were also different. Here workers had
more control over production, belonged to occu-
pational craft communities, were paid wages which related more
to those in craft labour markets, and were
more likely to belong to trade unions. Within them, craft forms
of production and management existed and
unions were more likely to be recognised. However, it should
also be noted that the railway workshops includ-
ed some of the more sophisticated engineering shops of their
days, especially in terms of work organisation
(Coleman, 1981; Drummond, 1995).

The Development of Personnel Management in the Second
Industrial Revolu-
tion: The New Heavy Process and Assembly-Line Industries
In the late-nineteenth and early-twentieth centuries, major
industries were transformed or created entirely
anew with the advent of the new general purpose technology of
electricity and with new production processes
(steel, chemicals, and later electrical products and automobiles).
Employers in these sectors used some old
methods and developed other newer forms of what came to be
called personnel management.
For example, in steel and chemicals, systems of internal
contracting under skilled workers and gang masters
continued to exist, at least for a time. Much of the work
involved these arrangements and some more skilled
and strategically placed workers had considerable control over
work organisation. Employment was often
short-term and wage and benefit systems simple. Slowly,
however, different arrangements developed. Large
firms, such as Carnegie and US Steel in the United States,
Krupp in Germany, and Schneider in France,
substituted their own foremen for internal contractors, began to
recruit more systematically, trained workers
internally on the job and not usually through apprenticeship
systems, and developed employment hierarchies
and some of the welfare arrangements described above (notably
housing, workmen's compensation, sick pay
and pensions) (McCreary, 1968; Stone, 1975; Jacoby, 1985;
Fitzgerald, 1988; Vishniac, 1990; Gospel, 1992;
Welskopp, 1994).
In these sectors and in large-scale metalworking, there was a
desire on the part of employers to gain in-
formation on worker effort and to organise work more

systematically under managerial control. This devel-
SAGE
© SAGE 2010
SAGE Reference
Page 6 of 18
oped rapidly in the US, where fast-growing and large national
markets and a shortage of skilled labour gave
managers an incentive to invest in the development of skill-
displacing technologies. In metalworking and en-
gineering, as early as the mid- to late-nineteenth century, there
emerged a distinctive ‘American system of
manufactures’, based on standardised and interchangeable parts.
This in turn came more and more to use
semi-skilled or unskilled workers, who tended high throughput
machinery or worked on what came to be as-
sembly lines (Rosenberg, 1969; Hounshell, 1984).
By the early twentieth century onwards, in various forms, this
led to the development of so-called ‘systematic’
and ‘scientific’ management (Litterer, 1963; Nelson, 1975;
Littler, 1982; Merkle, 1980; Fridenson, 1986; Tsut-
sui, 1998). The latter is usually associated with Frederick
Taylor (Taylor, 1911; Nelson, 1980), but there were
other writers and practitioners at the time advocating new
systems of labour management. Usually some com-
bination of the following were used: a study of the organisation
of work by specialist ‘time’ and ‘work’ study
experts; the reorganisation of work, often leading to a greater
subdivision of jobs; and the fixing of wages by

new types of bonus systems related to performance. In practice,
such arrangements developed only slowly,
but with some acceleration after the First World War, especially
in lighter areas of manufacturing (Nelson,
1992). The most significant technological and organisational
development was the spread of the assembly
line and mass production from the early-twentieth century
onwards (Ford, 1926; Fridenson, 1978; Hounshell,
1984; Nelson, 1975; Meyer, 1981; Schatz, 1983; Lewchuk,
1987).
Especially where unions had a presence, these developments
often met with worker resistance. In part to
counter unions, there was some development of new welfare and
personnel policies, though these grew as
much in sectors of light industry such as food and light
assembly work. There was also some interest in
so-called ‘human relations’ techniques as a less collectivist
approach to the management of labour (Nelson,
1970; Nelson and Campbell, 1972; Jacoby, 1985; Gillespie,
1991; Gospel, 1992).
The Management of Industrial Relations: The Classic Case of
the Automobile
Industry
Up to the First World War, in all countries, employer
recognition of trade unions and collective bargaining was
a minority phenomenon (Bain and Price, 1980). Union
membership and recognition by employers was most
extensive in the UK, followed by Germany and the US.
Membership was much lower in countries such as
France, Italy, and Japan, in part reflecting larger agricultural
sectors and smaller scale industry in those coun-
tries. Even where unions were recognised in the UK in craft
industries such as metalworking and printing,

in parts of cotton spinning, and in coalmining, collective
bargaining was underdeveloped and often informal,
spasmodic, and subject to recurrent employer counteroffensives.
The position of trade unions was significantly strengthened
during the First World War: labour markets were
tight, product market competition was curtailed, and both
employers and the state were dependent on workers
to achieve production. In these circumstances, employers were
constrained to recognise unions, not least at
government prompting, and collective bargaining developed, in
many cases on a multi-employer basis, cov-
ering a whole industry either regionally or nationally. After the
war and especially where there was economic
depression in the 1920s, employers launched counter-offensives
and curtailed the scope of, or withdrew en-
tirely from, collective bargaining. The depression which
affected all countries from 1929 onwards further re-
duced union presence and collective bargaining declined in
coverage and content (Brody, 1980; Clegg, 1985;
Schneider, 1991).
From the mid-1930s onwards, however, this situation changed,
especially in the automobile, electrical, and
other growing industries. In the UK, unions slowly increased
their membership and managements had in-
creasingly to deal with them (Tolliday and Zeitlin, 1986;
Lewchuk, 1987). For the most part they chose to
do this on a multi-employer basis. In France, in the late 1930s,
a combination of economic and political fac-
tors led French employers to enter into new dealings with
unions, albeit temporarily (Vinen, 1991; Chapman,
SAGE
© SAGE 2010

SAGE Reference
Page 7 of 18
1991). Employer opposition was particularly strong in the
United States. But, even there, the large automobile
firms recognised unions, in significant part in the context of a
change in the stance of government and legal
requirements introduced in the New Deal from the mid- 1930s
onwards and during the Second World War and
its aftermath (Dubofsky, 1994). Thus, General Motors
recognised the United Auto Workers in 1937 and Ford
followed suit in 1941. In the United States, in contrast to
Britain, employers chose to deal with unions more
at a company level and negotiated formal legally binding
contracts which regulated wide aspects of wages,
employment, and work organisation. There were elements of
pattern-setting and following within industries,
but, for the most part, dealings were at the level of the firm
(Slichter et al., 1960; Brody, 1980; Harris, 1985;
Jefferys, 1986; Tolliday and Zeitlin, 1986). By contrast, in the
UK, bargaining was often at multiple levels, in-
cluding informal bargaining with shop stewards at the
workplace (Edwards and Terry, 1988).
In Germany, France, Italy, and Japan, the settlement with
organised labour came after the war. Under Fascist
and military regimes and foreign occupation, independent
unions were outlawed, state- and employer-domi-
nated labour bodies were imposed, and most aspects of work
and employment were unilaterally determined
by management or government. After the war, in Germany, in a
situation of turmoil, unions were recognised

by employers and a system of regional and industry-wide
collective bargaining emerged which has largely
persisted up to the present day. Reverting to an earlier German
tradition, with origins in the nineteenth centu-
ry mining industry and in legislation after the First World War,
there was also established by law a system of
works councils at company and workplace level and worker
representation on the boards of German compa-
nies. In part this was at the prompting of the British occupation
authorities and met with some resistance from
German business. However, over time, German employers came
to accept these arrangements and accom-
modated them into their systems of labour management
(Teuteberg, 1961; Streeck, 1992; Dartmann, 1996).
It should be noted that works councils and board-level
representation are to be found in other continental Eu-
ropean countries, but not usually on the scale or with the
powers of those in Germany (Rogers and Streeck,
1995).
Also after the war, Japanese employers came to terms with
unions, though along different lines. At first, they
confronted demands from militant general and industrial unions.
With support from the American occupa-
tion authorities and the Japanese government, in the late 1940s
and early 1950s, employers confronted and
defeated these unions in major lockouts and strikes and replaced
them with a system of enterprise-based
unions. Collective bargaining was subsequently conducted
mainly at enterprise level, with some industry co-
ordination by employers’ organisations and federations of
unions. This settlement with enterprise unions in-
teracted with traditional and emerging Japanese management
practices and led, during the subsequent years
of economic growth in the 1950s and 1960s, to key aspects of
the Japanese employment system: the provi-

sion of job security for core male workers, the use of complex
wage and benefit hierarchies often related to
seniority, systems of management-led consultation within the
firm, and a strong ideological encouragement
of the notion of the company as a community. By the mid- to
late- 1950s, such a system was in place in
firms such as Toyota, Nissan, Toshiba, Hitachi, and other large
manufacturing companies. In the 1970s, this
came to be recognised as the ‘Japanese system of management’
and attracted considerable foreign atten-
tion (Dore, 1973; Taira, 1970; Gordon, 1985; 1998; Koike,
1988; Cusomano, 1985; Shiomi and Wada, 1995;
Hazama, 1997; Inagami and Whittaker, 2005). However, as will
be seen below, in the slowdown in the 1990s,
the system has come under growing pressure, with some
reduction of ‘lifetime employment’, an increase in
pay based more on merit and performance, and less of a role for
enterprise unions, especially in bargaining
about work organisation and wage levels.
The post-war industrial relations settlements in France and Italy
were rather less clear and in some ways
more akin to the British situation. After the war, employers
increasingly had to recognise unions and enter into
collective bargaining. However, they were less able to contain a
system of multi-unionism (including in these
two continental countries Communist-dominated unionism) and
multi-level collective bargaining. Large firms
such as Renault, Citroen, Peugeot, and Fiat made varying
compromises, depending on the economic and
political contexts at particular times (Fridenson, 1986; Durand
and Hatzfeld, 2003; Musso, 2008). In some
respects, it was only in the 1980s and 1990s, when union power
was on the wane, that French and Italian
SAGE

© SAGE 2010
SAGE Reference
Page 8 of 18
companies reached a settlement of their industrial relations
more acceptable to management.
In big firms in most of these countries, over the first three
decades after the war, with full employment and
union bargaining, there developed systems of relative job
security, possibilities for internal promotion to high-
er paying jobs, and wages based on seniority and hierarchical
grading systems. However, there were differ-
ences between countries. In Japan, the US, and Germany,
management maintained more control over the
production system than, say, in the UK or Italy. In Germany and
Japan, workers received more training than
in most of the other countries and were more involved in
improvements in processes and products. This was
to lead to what in Germany has been called the ‘diversified
quality production’ system and in Japan to what
came to be called the Toyota or ‘lean production’ system, with
more consultation and discretion given to bet-
ter trained workers (Ohno, 1982; Dohse et al., 1985: Streeck,
1992; Shimokawa, 1993; Wada, 1995; Tolliday,
1998).
The union-based system of personnel and industrial relations
management has declined differentially across
these countries. In the US, union membership fell from the mid-
1960s onwards, and the coverage of collec-

tive bargaining contracted (Kochan et al., 1986; Jacoby, 1997).
It is now restricted to a few areas of the private
sector, such as parts of the steel, automobile, engineering, and
transportation industries. In France, union
membership never attained very high levels; it has fallen since
the 1970s, and collective bargaining is much
constrained (Howell, 1992). In the UK, a change in the
economic and political climate in the 1980s led to a
hollowing out of the collective bargaining-based system of
labour management and the development of new
forms of human resource management such as will be discussed
below. Along with this, union membership
has fallen (Millward et al., 2000; Gospel, 2005). In Germany
and Japan, changes have been slower, but in
recent years employers have come to have less recourse to
collective bargaining with trade unions and more
to consultation with their workers, either via work councils in
Germany or more informal joint committees in
Japan (Thelen, 2001; Inagami and Whittaker, 2005).
The Development of Human Resource Management: Challenges
of Diversity
and Flexibility in the ‘Third’ Industrial Revolution
Alongside the developments described above, other trends may
be distinguished from the 1970s onwards.
In the post-war years, sectors which grew rapidly included
electrical goods, food and drink, and household
and personal consumer products. In the US and the UK, large
firms, which had often grown by merger and
acquisition and which had increasingly diversified into new
lines of business, developed multidivisional forms
of organisation to manage their diverse activities (Chandler,
1962, 1977, 1990; Whittington and Mayer, 2000).
Increasingly, such firms faced ‘new’ labour forces, enjoying
higher standards of living, with less commitment

to trade unions, and more heterogeneous in terms of interests.
Increasingly firms had to develop new policies to deal with
growing product market competition and changes
in labour market composition. Here we give the example of the
fast-moving consumer goods sector where
firms came to adapt and transform a set of centralised and often
paternalistic policies which they had first
developed in the late-nineteenth and early-twentieth centuries.
Some of these approaches have since come
to be collectively described as Human Resource Management
(Foulkes, 1980; Jacoby, 1997; Gospel, 1992).
In the US, for example, Procter & Gamble (P&G) had organised
its labour management centrally, though with
some plants unionised and others remaining non-unionised.
Employment systems were rather bureaucratic;
use was made of scientific management, and dealings with the
labour force had elements of paternalism.
As the company grew, in part organically and in part through
merger and acquisition and diversified into new
areas such as food and drink, paper goods, and personal care
products, so it faced new problems and chal-
lenges. These it came to manage with central direction in some
key areas (the development of manageri-
al staff and the non-recognition of unions in new plants).
Through the 1970s, in most other areas, human
resource management was increasingly left to the level of the
constituent divisions or companies, where a
SAGE
© SAGE 2010
SAGE Reference
Page 9 of 18

degree of differentiation and controlled experimentation was
allowed. On the basis of this, the company in-
troduced new forms of job flexibility, management-directed
team working, and pay for skills and performance,
wherever possible maintaining a non-union environment and
often with the use of contingent labour.
A similar flexible and decentralised trajectory can also be seen
in Unilever in the UK, though with a time lag
of a decade or more. Unilever had had a tradition of rather
centralised, somewhat paternalistic employment
practices which it had developed in the interwar years. In the
UK context, it was less able or inclined to es-
cape from a collective bargaining based system than P&G.
Nevertheless, through the 1970s and 1980s, it
transformed its practices into a more differentiated and flexible
set of arrangements, based on its divisions
and subsidiaries (Jones, 2005a). In France, a comparable
example is Danone, that country's largest food
company. Over the 1970s, BSND an one moved from being a
glass producer to a glass bottle, drinks, and
diversified food producer and then later restructured around a
range of food products. It developed a rhetoric
and practice of human resources and social partnership with its
employees, including unions, but essentially
ran its various parts in a decentralised, flexible manner. This
enabled experimentation and facilitated the ac-
quisition and disposal of companies. In many instances, these
and similar firms increased their flexibility by
employing a core labour force, supplemented by part-time and
temporary workers (Dyer et al., 2004).

Human Resource Management 4EVOLUATION HISTORY OF H.docx

Human Resource Management 4EVOLUATION HISTORY OF H.docx

Recommandé

Recommandé

Contenu connexe

Similaire à Human Resource Management 4EVOLUATION HISTORY OF H.docx

Similaire à Human Resource Management 4EVOLUATION HISTORY OF H.docx (20)

Plus de sheronlewthwaite

Plus de sheronlewthwaite (20)

Dernier

Dernier (20)

Human Resource Management 4EVOLUATION HISTORY OF H.docx