Purpose of Human Resources and its Historical development


Executive Summary

The role of Human Resource Management has greatly changed over the period of time and human resource managers today are not only just managing the workers but they are actively participating in devising the strategic plans for the organization. In the coming years human resource management will face many challenges like workforce diversification and economic and technological challenges. Only those organizations will successfully negotiate with these challenges which will make effective HR strategy.

Human Resource Management (HRM)

What is Human Resource?

Human Resource (HR) management deals with the development of formal systems in an organization to guarantee the effective and efficient use of human talent to achieve organizational objectives. In an organization, the management of human resources means that they must be recruited, compensated, trained, and developed. [1] 

Purpose of HRM

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It is not an easy task to be successful in business these days because of complex and intricate corporate world. Organization's employees play a vital role in the success of a business. This does not only mean that the employees are working hard and with devotion; this rather implies that every employee must be right for the job that they are doing.

Source of fig [2] 

This may seem very easy to achieve in a small business organization, but it is very difficult to carry out in big business entities. A very little direct contact between the top management executives and the regular employees is the main reason for this. This is where the human resources department starts its duties. The human resource department of a business not only helping to maintain most important asset of the company - the employees, it also safeguard the rights of the employees. [3] 

Development of office policies: The purpose of having a human resources department is to develop office policies, communicate them throughout the office and strive to maintain them. It also gives consultation and help to the employees while keeping the interest of the organization in mind.

Hiring Plan and Compensation: development of hiring plans and recruiting policies is also done by Human Resource Department. Human Resource Department also handles compensation and salary related issues. Most human resource departments also make official documentation, workplace code of conduct, workers handbooks, training and development programs and award & reward programs.

While above mentioned are the main purposes of HR department but it is playing a critical role in an organization these days. HR managers sit and make strategic planning with the top management. They not only make recommendations, but also initiate policy changes.

Top executives today recognize that that having a HR department is essential to ensuring economic growth. A responsible HR department not only helps to boost the spirits and efficiency of workforce, but also restricts and limits job turnovers. The purpose of human resource departments is thus to mainly make use of an employee's capabilities effectively by training them to increase those capabilities, while at the same time friendly work environment so that they are guaranteed job satisfaction.

Evolution of HRM

Human Resource Management is not a fresh term rather its roots are deep in the human civilization and it evolved developed with the development of human civilization. Back than when people started organized way of living they used to select candidates for the different duties on the basis of their talent and abilities. For instance they selected strong ones to be guards. Similarly they also used to train their young ones for Hunt, fight and cook food etc. There was also a mechanism to select the tribal chiefs.

Historical Development of HRM [4] 

Advent of concept of Modern HR

As discussed a generic activity the managing the labor of other people in production, human resource management (HRM) has pedigree in earliest of human civilizations. The first visible roots of the HRM as in practice nowadays modern business entities appeared in the last three decades of nineteenth century in Britain, France, Germany, and USA. Although HR was practice in earlier organizations but there was no formal department. This was practiced in late 19th and 20th century organizations even in large sized factories which employed several workers. Alternative ways were used to perform HR functions of hiring, training and development and award and reward. Labor markets were used to set the pay rates and the labors got motivation to work hard through the threat of losing job. This arrangement is how ever still in place in small organizations. As a research survey in, Freeman and Rogers (1999: 96) mid 1990s revealed that 30 % of the workers in USA were employed in firms that lacked HRM department.

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Two earlier developments stirred the growth of modern HRM department. The firstly the advent of industrial welfare work which in the 1890s as many companies started providing a selection of workplace and family facilities for their workforce. These facilities included separate lunch rooms, medical facility, leisure programs, libraries, and company-provided resident facility (Eilbirt 1959; Gospel 1992; Spencer 1984). As a result 'welfare secretary' was hired to look after these activities these activities. Welfare work pioneered by German companies and drive behind it was humanitarian concern for employees and religious principle. Later other employers also followed this practice.

The second development was the establishment of separate employment offices. These offices were created to centralize the employment related activities such as hiring, compensating and record-keeping. In the same era civil service laws were introduced in many countries and this also led to the creation of employment departments in many government offices. A German steel company Krupp had Personnel bureau in 1890s for administration, while the French steel company Le Creusot had a similar Bureau at that time Farmhand (1921). B. F. Goodrich Co. is reported to make the earliest employment department in USA in year 1906 (Eilbirt 1959).in the year 1912 with the formation of the Boston Employment Managers Association; the movement to create separate employment office was started. The term 'Employment Manager' was soon used to describe the functions of this employment office.

The First World War in 1914 greatly influenced the development of the HRM function in the entire industrial world (Eilbirt 1959). The main combatants piled up resources to maximum war production. As a result of higher labor unrest during the war many companies stretched out welfare activities, established employment department.

Some European organizations used the 'personnel' term for this establishment but particularly in England the term 'welfare work' was used to describe these activities.

HRM in the middle era 1930-1965

The great depression of 1930s left unemployed over a quarter of the population in the US. Similar was the case in the UK. Companies had no choice but to retrench and save costs. Relatively smaller businesses started layoffs, cut in wages and discontinue the welfare department other soon joined as them as a result of bankruptcy and continued losses (Cohen 1990). Leiserson (1933: 114) reports that the great depression has undone 15 years or so of good human resource work.

The incident Second World War augmented and extended these downwards trends HRM in the United States and elsewhere. The USA however emerged from the Second World War as the acknowledged world economic leader. As much parts of Asia and Europe were ruined USA enjoyed golden years for the next fifteen years. HRM further advanced in American after WWII as every large scale firm built an HR department and hired staff to perform organized HR functions. By mid-1950s almost every medium-large-scale company had HR department. Big corporations like General Motors and IBM. (Jacoby: 2003). Outside of the USA, HRM received small consideration in either research or teaching. Germany still used labor laws as guide for employee relations.

Contemporary HRM

By 1960s Human Resource management was recognized as subject. Through the 1960s and 1970s the subject and practice of personnel management had a low volume outside North America. In England and Australia, for example courses on personnel management were taught along with the commerce courses and a small amount of study material was available. In start of 1980s, the current version of HRM also rapidly spread from USA to parts of the world. The subject was now taught in universities all over the world.

In the 1990s HRM also spread quickly to Europe, Asia, South America and Africa. As was true in the British case, in each of these regions the concept of however the courses were largely influenced by the economic and political environments of these regions (Lawrence 1992).

Today HR is considered the most valuable asset of the company and companies spend millions on the training and development of the employees and providing facilities to the employees. Organization success today and tomorrow is being more and more seen as reliant on effective HRM. The significance of recruiting, selection, training and compensating employees is acknowledged by managers in today's organizations. HRM and other functions must work together to achieve organizational success and compete locally and internationally. In order for an organization to be successful, reasonable goals in each of these components much be achieved.

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How HR is regarded in present business scenario?

Google is one of the top companies to work for according to Fortune Magazine. Similar is the case is with CISCO and Research in Motion. [5] What makes them so attractive for the employees? Nothing else but the fact that they value their employees. Google for instance has bundle of employee benefits. These include:

Free food: the employees are provided free food in all the Google offices.

Onsite Child Care: Google provides its employees onsite childcare so that they don't have to worry about the child anymore and forces on the work.

Free medical: 100% free medical facility is available for Google employees and their families. In addition to this there is a facility of doctor and a dentist available in the campus.

Free transportation: free facility of Wi-Fi enabled shuttle service is available for the employees.

Free laundry and dry cleaning: workers can not only wash their clothes on campus but also can drop their clothes for dry cleaning service.

Sports activities: employees can play different sports including running, swimming wall climbing etc.

20% creative time: Google encourage its employees to work 20% of the time on projects of their personal interests. This worked out well for the company as many of the individual products were then became huge success for the company.

Going green: Google has made its environment highly energy efficient to preserve energy and similarly encourage its employees to use environment friendly products like solar panels and hybrid cars by subsidizing for them.

Leaves and holidays: along with 25 leaves and 12 holidays, the company provides 12 week paid maternity leave to women and 7 weeks new dad paternity leave for men.

Other facilities include hair dressing, changing oil of your car and even getting it washed and also opportunities to do different courses. [6] 

All this is done by the Google to make employees to feel free of worries and be happy. Google believe that this way they will perform to the optimum as they are satisfied and enjoy what they are doing.

Employers are not insane to spend that much on the employees. They do so for some motive. Google or any other company make a cost and benefit analysis of expending on employees. For example by spending $ 1 on an employee can bring a benefit of $ 1.5 then companies definitely opt for it.