Wednesday, January 27, 2010

History of Human Resource

The term 'human resource' is traditionally called 'labor' in the political economy and economics, one of the three factors of production. It was used as labor right management in the olden day's organiztions.

In economics human resource in the beginning was known as 'human capital'. Then it was later realized that humans are capitals which can be run through a particular time in fact they are social beings and things change day to day for them. It cannot be that if one person is told to work for a particular time till a year, it is not necessary that he will make it. There are many eventualities and circumstances those may stop him to do so. Sot his term was then decided to change. But still in macro economics they use this term for employees as a factor of production.

The socialist parties from the starting of human employment have played a role of working the human rights. They explained that humans themselves are not assets for a company but the work they produce are the asset for them. And that they should be treated on the basis of their potentials and hard work. This act of their started the hiring and firing in a better manner.

This argument of 'human capital' and 'human resource' began until the United Nations recognized the same and supported the developing countries for this view.

This argument's extreme version is that of African people's slavery. They were treated as slaves and their potentials were taken as capitals by the developed nations of that time without paying them properly. This was the more extreme version of human capitalizing. This was then recognized by the United Nations.

As the above given information clearly states that in the olden days when people were not treated as humans but as an asset of the company there were many socialist parties those who wanted there to be a system by which these human beings could have their own problems and their own matters solved. This then gave rise to a concept of having a department which would only be meant for this purpose.

The idea was that the human resource department must be more than of just hiring and firing. It must be related to employee's problems like for instance their medical facilities, their salaries on time and thing like these. The employees must be free enough to consult his problems to someone who could take to the upper head.

It was considered that a separate department should be made devoted only to the human resources or the employees. This was the birth period of the human resource department.

Although it cannot be denied that this department was always there in a firm but hidden. But then it was made a separate department, there were rules made for its working and its conduct. And now human resource occupies a bigger position and is consider being an important part of a firm. If the employees are not satisfied they won't produce sufficient quality work.

The Historical Review of Human Resource Management


This assignment traces the history of Human Resource Management from
the Industrial Revolution in the 18th century to present times.

The assignment discusses key periods and movements in this field and
expands on their contribution to modern Human Resource Management.

In discussing the history of Human Resources Management it is
important to offer a definition of the subject. Human Resource
Management can be described as "The comprehensive set of managerial
activities and tasks concerned with developing and maintaining a
qualified workforce - human resources - in ways that contribute to
organisational effectiveness." (DeNisi and Griffin, 2004)


The Industrial Revolution.

The momentum for the industrial revolution grew through the 17th
century. Agricultural methods were continually improving, creating
surpluses that were used for trade. In addition, technical advances
were also occurring, for example the Spinning Jenny and the Steam
Engine. These advances created a need for improved work methods,
productivity and quality that led to the beginning of the Industrial

Adam Smith.

In 1776, Adam Smith wrote about the economic advantages of the
division of labour in his work The Wealth of Nations. Smith (1776)
proposed that work could be made more efficient through specialisation
and he suggested that work should be broken down into simple tasks.
From this division he saw three advantages:

- the development of skills

- time saving

- the possibility of using specialised tools.

Smith's suggestions led to many changes in manufacturing processes.

"…every individual necessarily labours to render the annual revenue of
the society as great as he can. He generally, indeed, neither intends
to promote the public interest, nor knows how much he is promoting it.
By preferring the support of domestic to that of foreign industry, he
intends only his own security; and by directing that industry in such
a manner as its produce may be of the greatest value, he intends only
his own gain, and he is in this, as in many other cases, led by an
invisible hand to promote an end which was no part of his intention.
Nor is it always the worse for the society that it was no part of it."
(Smith, 1776)

Adam Smith, considered by many to be the father of Capitalism, also
discussed the Invisible Hand or Laissez Faire approach (this term is
not used in the book but argues the case). "According to the hidden
hand approach, the only responsibility of business is to maximise
profits according to the market principle and within the constraints
of the law. If government interference in business is restricted to a
minimum, society will benefit automatically from the activities of the
business sector." (Rossouw, 1994, pg18).

According to Rossouw (1994) the hidden hand approach lost value when
societies did not benefit automatically from business activity. It was
clear that business could not be relied upon to act in the best
interests of is staff, consumers and the society within which it was

In 1832, Charles Babbage examined and expanded upon the division of
labour in his work, On the Economy of Machinery and Manufacturers. In
this book Babbage offered, as an advantage to the division of labour,
that the amount of skill needed to undertake a specialised task was
only the skill the necessary to complete the task. Babbage analysed
and documented the manufacture of a pin and broke the process down
into seven elements to illustrate his point. This study became
important to employers in that they only had to pay for the amount of
skill required to complete a task (, 2004).

Trade Unions.

During the late 1700's and early 1800's governments began to feel
pressure from the working class masses who started to question and
defy the power of the aristocracy. The working class began to form
workplace combinations and trade organisationsto provide a collective
voice for their rights. Governments tried to fight this using
legislation such as the Combination Acts of 1799/1800 in the UK, which
banned everything from meetings to combinations.

"There were also attempts to form general unions of all workers
irrespective of trade. William Benbow (a Lancashire shoemaker), Robert
Owen and many others looked upon trade unionism not just as a means
for protecting and improving workers' living standards, but also as a
vehicle for changing the entire political and economic order of
society. Owen experimented with co-operative ventures and 'labour
exchanges'; both attempts to bypass the existing order of wage
slavery." (Trade Unions Congress, 2004)

Trade Unions were and are still an influential force, working for
continued economic and social development of workers and societies in
many countries around the world.

Frederick Winslow Taylor.

F.W. Taylor is considered to be the father of Scientific Management.
In 1911, his seminal work, The Principles of Scientific Management was
published. This book contains four overriding principles of scientific

- Each part of an individuals work is analysed 'scientifically'.

- The most suitable person to undertake the job is 'scientifically
chosen' and is taught the exact way to do the job.

- Managers must co-operate with workers to ensure the job is done in a
scientific way.

- There is a clear division of work and responsibility between
management and workers. (Bloomsbury, 2002)

"Taylor's impact has been so great because he developed a concept of
work design, work measurement, production control and other functions,
that completely changed the nature of industry. Before scientific
management, such departments as work study, personnel, maintenance and
quality control did not exist." (, 2004)

The Hawthorne Studies

The Hawthorne Studies were a groundbreaking set of experiments
conducted at the Western Electric plant in Hawthorne, Chicago by Elton
Mayo. The studies were conducted from 1927 to 1932 and measured the
relationship between productivity and working environment. The studies
were based on preliminary experiments conducted in 1924 that measured
the effect of lighting on productivity. (Bloomsbury, 2002)

The results of the experiments showed that changes in the environment
did affect productivity, but this was not the sole factor. The workers
considered management to be showing an interest in them and this
improved motivation.

Mayo's studies and the subsequent results were a significant break
from the theories of F.W. Taylor in that the workers were not solely
motivated by self interest. Mayo's research has led to the
understanding that workplaces are more than machine like environments
in that there are social environments and human emotions that require
consideration. Mayo's studies led to the rise of the Human Relations

The Human Relations Movement

The Human Relations movement "…argues that people are not just logical
decision makers but have needs for creativity support, recognition and
self-affirmation." (, 2004).

The movement presents an alternative and opposite approach to
scientific management as it focuses on the individual and not the

The Human Relations movement boasts some of the world's foremost
management thinkers and theories in its ranks:

- Abraham Maslow. The Hierarchy of Needs. Presented in the US
Psychology Review in 1943

- Douglas McGregor. Theory X and Theory Y. Published in the book 'The
Human Side of Enterprise" in 1960.

- Frederick Herzberg. The Hygiene-Motivation Theory. Published in the
book "The Motivation to Work" in 1959. (, 2004)

Contemporary Human Resource Management.

In modern business the Human Resources Management function is complex
and as such has resulted in the formation of Human resource
departments/divisions in companies to handle this function. The Human
resource function has become a wholly integrated part of the total
corporate strategy.

The function is diverse and covers many facets 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.


The history of Human Resource Management has progressed through the
ages from times 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.

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

In future we may see employees being measured on the value they
contribute to a business and not their cost to the business.


Accel Team. (2004): "Historical Perspective - Growth of Scientific
03 April 2004.

Accel Team. (2004): "Historical Perspective - Growth of Scientific
03 April 2004.

Accel Team. (2004): "Considering Human Factors - The Human Relations
Approach", 04
April 2004.

Bloomsbury. (2002): Business, The Ultimate Resource, London:
Bloomsbury Publishing.

DeNisi, A.S., Griffin R.W. (2004): Human Resource Management, Boston:
Houghton Mifflin.

Rossouw, D. (1994): Business Ethics. A Southern African Perspective,
Halfway House: Southern Book Publishers.

Smith, A. (1776): An Inquiry into the Nature and Causes of the Wealth
of Nations, London; Penguin Books, 1982.

The Working Manager Ltd. (2004): "Human Relations Movement", 04
April 2004.

Trade Unions Congress. (2004): "Timeline", 04 April 2004.