Examining Historical Changes in Human Resource Management



As our wants and needs grow, so do the ways of satisfying them. Consider the growth of the home computer industry, for example, and how firms within it are racing to deliver software games, puzzles and the educational exercises to meet customer demands for such products. None of our wants and needs is satisfied randomly or haphazardly. When you go to a store that sells computers, for example, the store will be open, and you will be able to buy the product of your choice even though the salesperson who helped you last time has the day off. In the process of satisfying needs and wants, continually and predictability are essential in the delivery of goods and services. In a modern society, community and predictability are made possible by organizations. Some of the organizations that accommodate our wants and needs are fast food restaurants, movie theaters, sporting goods store, hospitals, universities, accounting firms and the antique stores, to name just a few. Each of these organizations exists because consumers demand its product or services. So a number of people are brought together, and each is assigned a part of the total task. It is most efficient to divide a large task (such as building a house) into its component part so that specially qualified individuals can perform the sub-functions. Specialization by sub function and coordination among all the tasks to be accomplished make the largest scale possible. Although there are great differences among the organizations in our society but they also have much in common. Every organization is made up of people who perform specialized tasks that are coordinated to enhance the value or utility of some goods or services that is wanted by and provided to a set of customers or clients.

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The modern corporation is a thing of a past. The twentieth century enterprise was defined by Alfered P. Sloan, the legendary chairman of General Motors Corporation and the most influential professional manager of the time. His classic work set forth a management philosophy that has dominated U.S corporations for decades. Company success, he argued, was based on efficiency and economies of scales he however mentioned the words of "creativity" or "flexibility". Large, efficient organizations, he theorized must have decentralize manufacturing while centralizing corporate policy and financial controls in the hierarchical structures. This new paradigm values teamwork over individualism seeks global markets over domestic ones and focuses on the customers rather than on short-term profits. It views time, than a single minded focus on costs, as the key competitive advantage. It recognizes the value of multicultural workforce in an increasingly diverse labor pool and customer base. The new form of organization is based on a network of alliances and partnerships, not on the self-sufficient hierarchy. It is governed by an independent board with a broad view of the company's constituent's not just shareholders, but also employees, suppliers, customers and the local community.

Organizations are managed and staffed by people. Without people, organizations cannot exist. Indeed, the challenge, the opportunity, and also the frustration of creating and managing organizations frequently stem from the people related problems that arise within them. People related problems, in turn, frequently stem from the mistaken belief that people are all alike, that they can be treated identically. Nothing could be further from the truth. Like snow-flakes, no two people are exactly alike, and everyone differs physically and psychologically from everyone else (Cascio, 5th Edition). Sitting in a sports arena, for example, will be tall people, small people, fat people, thin people, people of color, while people, elderly people, young people and so on. Even within any single physical category there will be enormous variability in psychological characteristics. Some will be outgoing, others reversed; some will be intelligent, others not so intelligent: some will prefer indoor activities, others outdoor activities. The point is that these differences demand attention so that each person can maximize his or her potential, so that organizations can maximize their effectiveness, and so that society as a whole can make the wisest use of its human resources.

Human Resources are an important part of the organization and may be defined as the total knowledge, skills, creative abilities, talents and aptitudes of an organization's workforce, as well as the values, attitudes, approaches and beliefs of the individuals involved in the affairs of the organization. It is the sum total or aggregate of inherent abilities, acquired knowledge and skills represented by the talents and aptitudes of the persons employed in the organization. The human resources are multidimensional in nature. From the national point of view, human resources may be defined as the knowledge, skills, creative abilities, talents and aptitudes obtained in the population; whereas from the viewpoint of the individual enterprise, they represent the total of the inherent abilities, acquired knowledge and skills as exemplified in the talents and aptitudes of its employees.

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Human Resource Management has come to be recognized as an inherent part of management, which is concerned with the human resources of an organization. Its objective is the maintenance of better human relations in the organization by the development, application and evaluation of policies, procedures and programs relating to human resources to optimize their contribution towards the realization of organizational objectives (Ankur, 2009). In other words, HRM is concerned with getting better results with the collaboration of people. It is an integral but distinctive part of management, concerned with people at work and their relationships within the enterprise. HRM helps in attaining maximum individual development, desirable working relationship between employees and employers, employees and employees, and effective modeling of human resources as contrasted with physical resources. It is the recruitment, selection, development, utilization, compensation and motivation of human resources by the organization. When it comes to managing people, all managers must are concerned to some degree with the following five activities: staffing, retention, development, adjustment and managing change. Needless to say these activities can be carried out at the individual, work-team or larger organizational unit (e.g. department) level. Sometimes they are initiated by the organization (e.g. recruitment efforts or management development programs), and sometimes they are initiated by the individual or work team (e.g. voluntary retirement, safety improvements). Whatever the case the responsibilities for carrying out these activities are highly interrelated. Together these activities constitute the HRM system.

History of HRM:

Key principles and practices associated with HRM date back to the beginning of mankind. Mechanisms were developed for the selection of tribal leaders, and knowledge was recorded and passed on to youth about safety, health, hunting, and gathering. More advanced HRM functions were developed as early as 1000 and 2000 B.C. Employee screening tests have been traced back to 1115 B.C. in China, for instance. And the earliest form of industrial education, the apprentice system, was started in ancient Greek and Babylonian civilizations before gaining prominence during medieval times (Mote).

Since the inception of modem management theory, the terminology used to describe the role and function of workers has evolved from "personnel" to "industrial relations" to "employee relations" to "human resources." While all of these terms remain in use, "human resources" most accurately represents the view of workers by contemporary management theory: as valuable resources managed in the same manner as other valuable resources.

The need for an organized form of HRM emerged during the industrial revolution, as the manufacturing process evolved from a cottage system to factory production. As the United States shifted from an agricultural economy to an industrial economy, companies were forced to develop and implement effective ways of recruiting and keeping skilled workers. In addition, industrialization helped spur immigration, as the country opened its borders to fill industrial positions. Filling these jobs with immigrants, however, created an even greater need for adequate management of employees.

Between the 1880s and the 1940s, immigration rose significantly and remained robust until World War II. Advertisements circulated throughout the world depicting the United States as the land of opportunity where good-paying industrial jobs were plentiful. As a result, the country had a steady stream of low-skill, low-cost immigrant workers who occupied manufacturing, construction, and machinery operation positions. Even though these employees performed largely routine tasks, managers faced serious obstacles when trying to manage them since they spoke different languages.

Early human resource management techniques included social welfare approaches aimed at helping immigrants adjust to their jobs and to life in the United States. These programs assisted immigrants in learning English and obtaining housing and medical care. In addition, these techniques promoted supervisory training in order to increase productivity.

While some companies paid attention to the "human" side of employment, however, others did not. Therefore, other factors such as hazardous working conditions and pressure from labor unions also increased the importance of effective management of human resources. Along with the manufacturing efficiencies brought about by industrialization came several shortcomings related to working conditions. These problems included: hazardous tasks, long hours, and unhealthy work environments. The direct cause of employers seeking better HRM programs was not poor working conditions, but rather the protests and pressures generated by workers and organized labor unions. Indeed, labor unions, which had existed as early as 1790 in the United States, became much more powerful during the late 1800s and early 1900s.

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There were two other particularly important contributing factors to the origination of modem HRM during that period. The first was the industrial welfare movement, which represented a shift in the way that managers viewed employees from nonhuman resources to human beings. That movement resulted in the creation of medical care and educational facilities. The second factor was Frederick W. Taylor's (1856-1915) Scientific Management, a landmark book that outlined management methods for attaining greater productivity from low-level production workers.

The first corporate employment department designed to address employee concerns was created by the B.F. Goodrich Company in 1900. In 1902 National Cash Register formed a similar department to handle worker grievances, wage administration, record keeping, and many other functions that would later be relegated to HRM departments at most large

U.S. companies HRM as a professional discipline was especially bolstered by the passage of the Wagner Act in 1935 (also known as the National Labor Relations Act), which remained the basic U.S. labor law through the 1990s. It augmented the power of labor unions and increased the role and importance of personnel managers.

During the 1930s and 1940s the general focus of HRM changed from a focus on worker efficiency and skills to employee satisfaction. That shift became especially pronounced after World War II, when a shortage of skilled labor forced companies to pay more attention to workers' needs. Employers, influenced by the famous Hawthorne productivity studies and similar research, began to emphasize personal development and improved working conditions as a means of motivating employees.

In the 1960s and 1970s the federal government furthered the HRM movement with a battery of regulations created to enforce fair treatment of workers, such as the Equal Pay Act of 1963, the Civil Rights Act of 1964, the Employee Retirement Income Security Act of 1974 (ERISA), and the Occupational Safety and Health Act of 1970. Because of these acts, companies began placing greater emphasis on HRM in order to avoid lawsuits for violating this legislation. These regulations created an entirely new legal role for HRM professionals. Furthermore, during the 1970s, HRM gained status as a recognized profession with the advent of human resource programs in colleges.

By the end of the 1970s, virtually all medium-sized and large companies and institutions had some type of HRM program in place to handle recruitment, training, regulatory compliance, dismissal, and other related issues. HRM's importance continued to grow during the 1980s for several reasons. Changing workforce values, for example, required the skills of HRM professionals to adapt organizational structures to a new generation of workers with different attitudes about authority and conformity. Shifting demographics forced changes in the way workers were hired, fired, and managed. Other factors contributing to the importance of HRM during the 1980s and 1990s were increasing education levels, growth of service and white-collar jobs, corporate restructuring (including reductions in middle management), more women in the workforce, slower domestic market growth, greater international competition, and new federal and state regulations.

Importance of HRM:

In today's businesses, the right approach and management of the company's employees can greatly affect the company's overall performance. A strategic approach in Human Resource Management is vital especially in growing companies. Starting from right staffing to maintaining performing employees, HR management is the key in developing not only the employees, but the whole organization itself.

Human Resources encompass a broad scope in management. An expanding company dependent on its current success can maintain and further develop its business starting with the right staffing. As demands for the product or services increase, additional manpower is needed to comply with them. The current manpower should be checked but not simply if they can comply with the demands, but it has to ensure that it can still keep its quality and standards. Mass production or bulk orders should not be an excuse in decreasing quality, hence, increased customer dissatisfaction and decreased sales. For a company that is already recognized in the industry and is eyeing on expansion, their status and reliability should be maintained. The leaders of the company can now focus on the products itself and expansion, and let the HR Department handle the development of the organization. Keeping an eye on the company's log-term goals, mission and vision, the development of performance standards is essential to identify potential problems, non-performing employees and compliance to tasks and standards. Minor employee and performance problems should be seen immediately to avoid any future inconvenience and potential problems to the customers and thus become a liability to the company. HRM professionals can also identify the processes and the proper staffing for each of these activities, and in effect, the systems and approach in terms of the company's front line operations can be improved to decrease manpower hours, improve quality, streamline processes, and elevate standards (Facsimile).

The success and growth of a small company can be attributed to its culture. Due to its size, communication between all employees is not complicated. And alongside this communication, the trust and organizational goals are easily shared and understood by everyone. And in its growth, it is important that this culture is maintained and adjust to changes accordingly. HR professionals can work both with management and employees in doing this. With increase in employees and more demands in operations, communication may take a backseat for both parties. However, Human Resources Management can amend this and become a bridge in establishing what the management wants from employees and vice-versa.

In its continuous development, it is but imperative that the management or its owner be prepared for more arduous tasks in operations and leading the rest of the team towards continued success. Management should be equipped with the right skills in planning, leading, organizing and establishing standards. As they are the ones who will eventually be focused in developing the company instead of the operations and technical aspects, a higher understanding of this responsibility is essential, and this also plays a significant part once competition is put into the picture. Companies fail because of a number of reasons, and mismanagement can be one of them. Operations may spin out of control if personal agendas and politics are placed, and in growing companies, this should be monitored and prevented.

Developing not only management but also its employees is significant. To keep up with competition, employees should be given with a number of reasons to stay with the company, and do their jobs exemplary well. Their continuous growth, the right compensation and benefits, and work-life balance are just some of the things that motivate employees to perform better, producing better results for the customers and ultimately, the company.

Modernization in HR Concept:

Modern analysis emphasizes that human beings are not "commodities" or "resources", but are creative and social beings in a productive enterprise. The 2000 revision of ISO 9001 in contrast requires identifying the processes, their sequence and interaction, and to define and communicate responsibilities and authorities. In general, heavily unionized nations such as France and Germany have adopted and encouraged such job descriptions especially within trade unions. One view of this trend is that a strong social consensus on political economy and a good social welfare system facilitates labor mobility and tends to make the entire economy more productive, as labor can move from one enterprise to another with little controversy or difficulty in adapting (Rivera, 2009).

An important controversy regarding labor mobility illustrates the broader philosophical issue with usage of the phrase "human resources": governments of developing nations often regard developed nations that encourage immigration or "guest workers" as appropriating human capital that is rightfully part of the developing nation and required to further its growth as a civilization. They argue that this appropriation is similar to colonial commodity fiat wherein a colonizing European power would define an arbitrary price for natural resources, extracting which diminished national natural capital.

The debate regarding "human resources" versus human capital thus in many ways echoes the debate regarding natural resources versus natural capital. Over time the United Nations have come to more generally support the developing nations' point of view, and have requested significant offsetting "foreign aid" contributions so that a developing nation losing human capital does not lose the capacity to continue to train new people in trades, professions, and the arts.

An extreme version of this view is that historical inequities such as African slavery must be compensated by current developed nations, which benefited from stolen "human resources" as they were developing. This is an extremely controversial view, but it echoes the general theme of converting human capital to "human resources" and thus greatly diminishing its value to the host society, i.e. "Africa", as it is put to narrow imitative use as "labor" in the using society.

In a series of reports of the UN Secretary General to the General Assembly over the last decade, a broad inter sectorial approach to developing human resourcefulness through HR training has been outlined as a priority for socio-economic development and particularly anti-poverty strategies. This calls for strategic and integrated public policies, for example in education, health, and employment sectors that promote occupational skills, knowledge and performance enhancement.

In the very narrow context of corporate "human resources", there is a contrasting pull to reflect and require workplace diversity that echoes the diversity of a global customer base. Foreign language and culture skills, ingenuity, humor, and careful listening, are examples of traits that such programs typically require. It would appear that these evidence a general shift to the human capital point of view, and an acknowledgment that human beings do contribute much more to a productive enterprise than "work": they bring their character, their ethics, their creativity; their social connections, in some cases even their pets and children, and alter the character of a workplace. The term corporate, culture is used to characterize such processes.

The traditional but extremely narrow context of hiring, firing, and job description is considered a 20th century anachronism. Most corporate organizations that compete in the modern global economy have adopted a view of human capital that mirrors the modern consensus as above. Some of these, in turn, deprecate the term "human resources" as useless.

As overall though human resources have been part of business and organizations since the first days of agriculture, the modern concept of human resources began in reaction to the efficiency focus of Taylorism in the early 1900s. By 1920, psychologists and employment experts in the United States started the human relations movement, which viewed workers in terms of their psychology and fit with companies, rather than as interchangeable parts. This movement grew throughout the middle of the 20th century, placing emphasis on how leadership, cohesion, and loyalty played important roles in organizational success. Although more increasingly challenged this view quantitatively, rigorous and less "soft" management techniques in the 1960s and beyond, human resources had gained a permanent role within an organization.

Strategic HRM:

Strategic human resource management is a complex process which is constantly evolving and being studied and discussed by the academics and commentators. Strategic Human Resource Management (SHRM) is an area that continues to evoke a lot of debate as to what it actually embraces. Definitions of SHRM range from "human resource system that is tailored to the demands of the business strategy". "The pattern of planned human resource activities intended to enable an organization to achieve its goals". Although the difference between these two seems subtle, the implications of the difference are considerable. Where in the first definition human resource management is a 'reactive' management field in which human resource management becomes a tool to implement strategy, in the latter definition it has a proactive function in which human resource activities actually create and shape the business (Kumar, 2006).

Strategic human resource management (SHRM) is a concept that integrates traditional human resource management activities within a firm's overall strategic planning and implementation. SHRM integrates human resource considerations with other physical, financial, and technological resources in the setting of goals and solving complex organizational problems. SHRM also emphasizes the implementation of a set of policies and practices that will build employee pool of skills, knowledge, and abilities that are relevant to organizational goals.  Thus a larger variety and more complete set of solutions for solving organizational problems are provided and the likelihood that business goals of the organization will be attained is increased.

Strategic HRM can be regarded as a general approach to the strategic management of human resources in accordance with the intentions of the organization on the future direction it wants to take. It is concerned with longer term people issues and macro concerns about structure, quality, culture, values, commitment and matching resources to future need. It has been defined as: All those activities affecting the behavior of individuals in their efforts to formulate and implement the strategic needs of business. The pattern of planned human resource deployments and activities intended to enable the forms to achieve its goals. There are two approaches of the SHRM which are as follows:

Attempts to link Human Resource activities with competency based performance measures

Attempts to link Human Resource activities with business surpluses or profit

These two approaches indicate two factors in an organizational setting. The first one is the human factor, their performance and competency and the latter is the business surplus. An approach of people concern is based on the belief that human resources are uniquely important in sustained business success. An organization gains competitive advantage by using its people effectively, drawing on their expertise and ingenuity to meet clearly defined objectives. Integration of the business surplus to the human competency and performance required adequate strategies. Here the role of strategy comes into picture. The way in which people are managed, motivated and deployed, and the availability of skills and knowledge will all shape the business strategy. The strategic orientation of the business then requires the effective orientation of human resource to competency and performance excellence.

Benefits of SHRM

Identifying and analyzing external opportunities and threats that may be crucial to the company's success.

Provides a clear business strategy and vision for the future.

To supply competitive intelligence that may be useful in the strategic planning process.

To recruit, retain and motivate people.

To develop and retain of highly competent people.

To ensure that people development issues are addressed systematically.

To supply information regarding the company's internal strengths and weaknesses.

To meet the expectations of the customers effectively.

To ensure high productivity.

To ensure business surplus thorough competency.

Barriers of SHRM

Barriers to successful SHRM implementation are complex. The main reason is a lack of growth strategy or failure to implement one. Other major barriers are summarized as follows:

Inducing the vision and mission of the change effort.

High resistance due to lack of cooperation from the bottom line.

Interdepartmental conflict.

The commitment of the entire senior management team.

Plans that integrate internal resource with external requirements.

Limited time, money and the resources.

The statuesque approach of employees.

Fear of incompetency of senior level managers to take up strategic steps.

Diverse work-force with competitive skill sets.

Fear towards victimization in the wake of failures.

Improper strategic assignments and leadership conflict over authority.

Ramifications for power relations.

Vulnerability to legislative changes.

Resistance that comes through the legitimate labor institutions.

Presence of an active labor union.

Rapid structural changes.

Economic and market pressures influenced the adoption of strategic HRM.

More diverse, outward looking approach.

Global HRM:

With the advent of globalization, organizations big or small have ceased to be local, they have become global. This has increased the workforce diversity and cultural sensitivities have emerged like never before. All this led to the development of Global Human Resource Management.

Even those organizations who consider themselves immune to transactions across geographical boundaries are connected to the wider network globally. They are in one way or the other dependent upon organizations that may even not have heard about. There is interdependence between organizations in various areas and functions.

The preliminary function of global Human Resource Management is that the organization carries a local appeal in the host country despite maintaining an international feel. To exemplify, any multinational / international company would not like to be called as local, however the same wants a domestic touch in the host country and there lies the challenge (Juneja).

We may therefore, enumerate the objectives of global HRM as follows:

Create a local appeal without compromising upon the global identity.

Generating awareness of cross cultural sensitivities among managers globally and hiring of staff across geographic boundaries.

Training upon cultures and sensitivities of the host country.

The strategic role of Human resources Management in such a scenario is to ensure that HRM policies are in tandem with and in support of the firm's strategy, structure and controls. Specifically, when we talk of structures and controls the following become worth mentioning in the context of Global HRM.

Decision Making: There is a certain degree of centralization of operating decision making. Compare this to the International strategy, the core competencies are centralized and the rest are decentralized.

Co-ordination: A high degree of coordination is required in wake of the cross cultural sensitivities. There is in addition also a high need for cultural control.

Integrating Mechanisms: Many integrating mechanisms operate simultaneously.

Here also the role is no different i.e. hiring individuals with requisite skills to do a particular job. The challenge here is developing tools to promote a corporate culture that is almost the same everywhere except that the local sensitivities are taken care of.

Also, the deciding upon the top management or key positions gets very tricky. Whether to choose a local from the host country for a key position or deploy one from the headquarters assumes importance; and finally whether or not to have a uniform hiring policy globally remains a big challenge.

Nevertheless an organization can choose to hire according to any of the staffing policies mentioned below:

Ethnocentric: Here the Key management positions are filled by the parent country individuals.

Polycentric: In polycentric staffing policy the host country nationals manage subsidiaries whereas the headquarter positions are held by the parent company nationals.

Geocentric: In this staffing policy the best and the most competent individuals hold key positions irrespective of the nationalities.

Geocentric staffing policy it seems is the best when it comes to Global HRM. The human resources are deployed productively and it also helps build a strong cultural and informal management network. The flip side is that human resources become a bit expensive when hired on a geocentric basis. Besides the national immigration policies may limit implementation. Global HRM therefore is a very challenging front in HRM. If one is able to strike the right chord in designing structures and controls, the job is half done. Subsidiaries are held together by global HRM, different subsidiaries can function operate coherently only when it is enabled by efficient structures and controls.

Functions of HRM:

Human Resource Management involves the development of a perfect blend between traditional administrative functions and the well-being of all employees within an organization. Employee retention ratio is directly proportionate to the manner in which the employees are treated, in return for their imparted skills and experience. A Human Resource Manager ideally empowers inter-departmental employee relationships and nurtures scope for down-the-rung employee communication at various levels. The field is a derivative of System Theory and Organizational Psychology. Human resources have earned a number of related interpretations in time, but continue to defend the need to ensure employee well-being. Every organization now has an exclusive Human Resource Management Department to interact with representatives of all factors of production. The department is responsible for the development and application of ongoing research on strategic advances while hiring, terminating and training staff (Borade). The Human Resource Management Department is responsible for:

Understanding and relating to employees as individuals, thus identifying individual needs and career goals.

Developing positive interactions between workers, to ensure collated and constructive enterprise productivity and development of a uniform organizational culture.

Identify areas that suffer lack of knowledge and insufficient training, and accordingly provide remedial measures in the form of workshops and seminars.

Generate a rostrum for all employees to express their goals and provide the necessary resources to accomplish professional and personal agendas, essentially in that order.

Innovate new operating practices to minimize risk and generate an overall sense of belonging and accountability.

Recruiting the required workforce and making provisions for expressed and promised payroll and benefits.

Implementing resource strategies to subsequently create and sustain competitive advantage.

Empowerment of the organization, to successfully meet strategic goals by managing staff effectively.

Ideally, a Human Resource Management Department is responsible for an interdisciplinary examination of all staff members in the workplace. This strategy calls for applications from diverse fields such as psychology, paralegal studies, industrial engineering, sociology, and a critical understanding of theories pertaining to post-modernism and industrial structuralism. The department bears the onus of converting the available task-force or hired individuals into strategic business partners. This is achieved via dedicated Change Management and focused Employee Administration. The HR functions with the sole goal of motivating and encouraging the employees to prove their mettle and add value to the company. This is achieved via various management processes like workforce planning and recruitment, induction and orientation of hired task-force and employee training, administration and appraisals.

Education in Pakistan:

It is widely acknowledged that education is amongst the single most important factor contributing to poverty alleviation. Education plays an overarching role and has a cross cutting impact on all aspects of human life. It is a vital investment for human and economic development. Education in Pakistan is overseen by Ministry of Education of Government of Pakistan. The academic institutions are the responsibility of the provincial governments whereas the federal government mostly assists in curriculum development, accreditation and some financing of research. The education in Pakistan is generally divided into five levels: primary (grades one through five); middle (grades six through eight); high (grades nine and ten, leading to the Secondary School Certificate or SSC); intermediate (grades eleven and twelve, leading to a Higher Secondary (School) Certificate or HSC); and university programs leading to graduate and advanced degrees. For secondary and high secondary school certificates and diplomas, Inter-Board Committee of Chairmen (IBCC) is responsible for issuance of equivalence status; whereas, Higher Education Commission (HEC) issues equivalence at graduate and post graduate level. According to the figures of 2000-2004 English is fast spreading in Pakistan, with 18 million Pakistanis (11% of the population) having a command over the English language, which makes it the 9th Largest English Speaking Nation in the world and the 3rd largest in the Asia. On top of that, Pakistan produces about 445,000 university graduates and 10,000 computer science graduates per year (Wikipedia, 2011).

Public Expenditure on Education as percentage to GDP is lowest in Pakistan as compared to other countries of the South Asian region. According to official data, Pakistan allocated 2.5% of GDP during 2006‐07, 2.47% in 2007‐08, 2.1% in 2008‐09 and 2.0 % in 2009‐10 which shows persistent declining trend (Farooq, 2009-10). Literacy is the acquisition of basic skills of reading, writing and numeracy. In other words, Literacy is the meaningful acquisition, development and use of the written language. In Pakistan, the definition of literate is structured at the time of Population Census. In the 1998 Population Census, a literate person has been defined as one who can read newspaper and write a simple letter in any language (Authority). The overall literacy rate (age 10 years and above) is 57% (69% for male and 45% for female) compared to 56% (69% for male and 44% for female) for 2007‐08. The data shows that literacy remains higher in urban areas (74%) than in rural areas (48%), and is more prevalent for men (69%) compared to women (45%). However, it is evident from the data that overall female literacy is significantly rising over time, but progress is uneven across the provinces. When analyzed provincially, literacy rate in Punjab stood at (59 %), Sindh (59%), Khyber Pakhtunkhwa (50%) and Balochistan at (45%) (Khan, 2008-2009). In Pakistan there are a total of 128 universities registered under the HEC; according to the figures of 2009-2010 there are a total of 70 universities in the public sector and 58 universities in the private sector. In the AJK there are 2 public and 2private universities, in the Balochistan there are 6 public and 2 private universities, in Islamabad there are 14 public and 3 private universities, in the Northern Areas there is only one public university, in the NWFP there are 13 public and 9 private universities, and in the Punjab there are 21 public and 17 private universities and in the Sindh there are 13 public and 25 private institutes (HEC, 2009).

Universities Ranking:

The universities in Pakistan are ranked under the following criteria i.e.; Students (17%), Facilities (15%), Finances (15%), Faculty (27%) and Research (26%). HEC divided the universities under 6 different groups (HEC, Ranking of Universities , 2009), of which details are as follows:

Agriculture/ Veterinary

University Names

Total Score


University of Agriculture (UAF), Faisalabad



NWFP University of Agriculture, Peshawar



University of Arid Agriculture, Rawalpindi



Sindh Agriculture University, Tandojam


Business / I.T

University Names

Total Score


Lahore Uni. of Management Sciences (LUMS), Lahore



Institute of Business Administration (IBA), Karachi



Shaheed Zulfikar Ali Bhutto Institute of Sci. & Tech., Karachi



Iqra University, Defence View, Karachi



Lahore School of Economics, Lahore



University Names

Total Score


Pakistan Institute of Engg. and Applied Sciences, Islamabad



National University of Sciences & Technology, Rawalpindi



Ghulam Ishaq Khan Institute of Engineering, Swabi 



University of Engg. & Technology (UET), Lahore



Mehran University of Engg. & Technology (MUET), Jamshoro


Health Sciences

University Names

Total Score


Aga Khan University, Karachi 



Liaquat University of Medical and Health Sciences, Jamshoro



Baqai Medical University, Karachi 



Zia-ud-din Medical University, Karachi


Art/ Design

University Names

Total Score


National College of Arts, Lahore



Textile Institute of Pakistan, Karachi



Indus Valley School of Art & Architecture, Karachi



University Names

Total Score


Quaid-i-Azam University (QAU), Islamabad



University of the Punjab, Lahore



University of Karachi, Karachi



University of Peshawar, Peshawar



Bahauddin Zakariya University, Multan



Government College Lahore University, Lahore



Isra University, Hyderabad



International Islamic University, Islamabad



University of Sindh, Jamshoro



Hamdard University, Karachi


According to the reports and the websites of (Baty, 2010), (Academic Ranking of World Universities, 2010), (QS World University Rankings, 2010), (World's Best Universities, 2010) none of the Pakistani educational institute has been listed in the top 300. Pakistan has been struglling with its educational system. A very low amount of international students have been enrolled in these institutes.

This research is about identifying a path for the institutes which they can follow and get into the top list, and by doing that they will not only contribute to the society but also to our country. My focus will be on the HRM practices which can be used as a compelling factor for the success of the educational system of the pakistan. HRM practices has a positve effect on the firm's financial and non-financial performance which will ulimately lead to the firm's productivity (Ahmad & Schroeder, 2003), (Huselid, 1995), (Arthur, 1994), (Bae & Lawler, 2000), (Becker & Gerhart, 1996), (Singh, 2004).

Research Objective:

The objectives of this research are listed as below:

Put emphasis on the importance of the HR and the HRM for the top management.

Identification of the best HRM practices.

Create a link between the HRM and the organizational performance.

Measure the extent to which the HRM practices are applied in the education sector of Pakistan.

Quantify the effects of the HRM practices with the organizational performance.

Provide recommendations for the educational institutes regarding the HRM.

Limitations of the Research:

The limitations of the research are as under:

The actual data of the performance of an institute was not publicly available.

The perceived performance of the organizational was taken as the dependent variable.

The respondents of the questionnaire were not comfortable while filling out the questionnaires.

Very limited data is available regarding the HRM and the organization performance in light of an educational institute.

Research Significance:

The significance of the research is as under:

No other published research is available in the context of HRM practices and the organizational performance (education sector of Pakistan).

This research will provide the benchmarks for the new researchers.

A large sample of _ institutes have been taken out of _ educational institutes working in Pakistan.

This research will highlight the key areas of improvement, for an educational institute.

With the implication of the correct HRM practices identified by this research the educational sector will move towards the productivity.

Thesis Overview:

The thesis is divided into six chapters outlined below:

Chapter 1, this chapter looks into the HRM comprehensively, and then focuses on the educational sector of the Pakistan, and its current standing. Later on the research objectives, limitations and its significance are listed.

Chapter 2 discusses and reviews the relevant literature pertaining to the HRM practices and its effect. HRM practices are examined under their various definitions and key components are identified. These components are used to find the best model for the best HRM practices which are used to structure this research.

Chapter 3 describes the research methodology used in the study and it also discusses the development of the survey instrument, sampling methodology and the sampling frame and its measurement.

Chapter 4 presents the empirical findings from the data and the data analysis.

Chapter 5 discusses the implications of the research and findings and how this relates to the current research in the area of HRM & the OP.

Chapter 6 covers the conclusion and the recommendations along with the limitations and the future research directions.