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IB DP Business Management Study Notes

2.1.2 Historical Evolution of HRM

Dive into the transformative journey of Human Resource Management, exploring how historical events and societal shifts have sculpted its contemporary frameworks and practices.

Stage One: The Pre-Industrial Era

Before the advent of industrialisation, the majority of people worked in small, agrarian communities. Employment relationships were straightforward and were primarily governed by the customary and practice of the local area.

  • The Master and Servant Relationship
    • A hierarchical and authoritative structure.
    • Workers were largely subservient to the people who employed them.
    • Employment laws heavily favoured employers.

Stage Two: The Industrial Revolution

A significant transformational period, the Industrial Revolution drastically altered working conditions and the employer-employee relationship.

  • Emergence of Complex Organisations
    • Factories and large-scale establishments emerged.
    • The worker-employer relationship became more transactional and less personal.
    • Anonymity within the workforce increased due to the surge in factory jobs.
  • The Birth of Employee Rights
    • Working conditions during this period were often appalling.
    • The rise of labour unions began to bring about changes in employee rights and working conditions.

Stage Three: Scientific Management

In the early 20th century, new approaches aimed to increase productivity and efficiency within organisations.

  • Taylorism
    • Introduced by Frederick Taylor, focusing on scientific methods to enhance productivity.
    • Advocated for a more systematic and organised form of labour.
    • Birthed the "time and motion studies" to ascertain the most efficient methods of working.
  • Bureaucratic Management
    • Max Weber introduced a structured and hierarchical organisational approach.
    • Established clear lines of authority and formalised job roles.

Stage Four: The Human Relations Movement

A shift towards understanding the social and human aspects of work paved the way for new management theories.

  • Hawthorne Studies
    • Revealed the influence of social and psychological factors on productivity.
    • Signified the beginning of considering employee well-being and motivation.
  • Maslow's Hierarchy of Needs

Stage Five: The 1960s to 1980s – Employee Rights and Diversification

This period witnessed remarkable advancements in employee rights, equality, and workplace diversification.

  • Equal Rights Legislation
    • Legal advancements, such as the Civil Rights Act in the US (1964), addressed workplace discrimination.
    • Globally, various legislations were implemented to promote equality and prohibit discriminatory practices.
  • Diversity and Inclusion
    • There was a growing acknowledgment and appreciation for workplace diversity.
    • HRM began to evolve strategies aimed at promoting inclusivity and examining the advantages and disadvantages of diverse workforce management.

Stage Six: The Rise of Strategic HRM

The late 20th century observed HRM becoming a strategic partner within organisations.

  • Aligning HR with Strategy
    • HR began to play a critical role in shaping organisational strategies and enhancing competitiveness.
    • HR professionals became integral in decision-making processes at a strategic level.

This alignment often required a robust approach like Total Quality Management (TQM) to maintain high standards across the board.

Stage Seven: The Digital Age and Globalisation

Advancements in technology and the onset of globalisation have sculpted contemporary HRM.

  • Technology in HRM
    • The advent of HR Information Systems (HRIS), Applicant Tracking Systems (ATS), and various HR tech tools.
    • Enabling more efficient and effective HR practices.
  • Global HRM
    • Managing and coordinating HR practices across global operations.
    • Navigating through the complexities of managing a diverse, global workforce has similarities to strategies used in global vs. local marketing.

Stage Eight: Future Directions - Towards Sustainability and Well-being

The future of HRM is being shaped by emerging trends focusing on sustainability, employee well-being, and technological advancements.

  • Sustainability
    • Integrating sustainability into HR practices, such as green HRM, which involves developing environmental management systems and ecological sustainability into HR practices.
  • Employee Well-being
    • A growing emphasis on ensuring the holistic well-being of employees.
    • Incorporating wellness programmes and initiatives aimed at promoting mental, physical, and emotional health.

The historical evolution of HRM illustrates a dynamic transition from transactional and administrative functions to becoming a strategic partner that navigates through technological advancements, globalisation, and contemporary challenges. These historical milestones have shaped HRM into a function that not only manages administrative tasks but also plays a critical role in shaping organisational strategies, promoting sustainability, and ensuring the overall well-being of the workforce.

FAQ

Legislation has played a pivotal role in shaping HRM by enforcing policies that safeguard employee rights and protections. Laws regarding minimum wage, working hours, health and safety, and anti-discrimination, among others, necessitated HRM to adapt its practices to comply with legal standards. Consequently, HRM evolved to incorporate comprehensive practices that ensure organisational adherence to these laws. This involves developing policies, procedures, and workplace initiatives that protect employee rights, enhance working conditions, and safeguard organisations against legal repercussions. Thus, legislation has been instrumental in standardising HRM practices to ensure they are ethical, fair, and in compliance with the prevailing legal framework.

Various economic theories have substantially influenced HRM evolution by providing frameworks through which human resource practices are devised and implemented. For instance, classical economics, which emphasises rationality and self-interest, influenced HRM to focus on performance-related pay and clearly defined job roles. Meanwhile, behavioural economics, which considers the irrationality and biases of human decision-making, has encouraged HRM to develop strategies that address employee wellbeing, work-life balance, and organisational culture. Consequently, HRM practices have been shaped by these theories, aligning them with the economic principles believed to drive employee behaviour and thus, seeking to enhance productivity and organisational performance.

Globalisation has dynamically shaped HRM by necessitating the development of practices that address the challenges and opportunities presented by a globally interconnected business environment. This involves adapting HRM strategies to manage diverse, multicultural workforces, navigate international labour markets, and comply with varied legal and cultural frameworks across different countries. Globalisation has also facilitated the movement of people and ideas across borders, thereby introducing HRM to a plethora of practices, ideologies, and challenges that have enriched its development and encouraged the formulation of more comprehensive, adaptable, and globally-relevant HRM practices.

Workers' movements and strikes have been pivotal in illuminating employee grievances and pushing for change, thereby influencing the evolution of HRM. These events often highlight systemic issues within organisations, such as poor working conditions, inadequate pay, and unfair treatment, which necessitate HRM to re-evaluate and amend its practices. HRM has thus evolved to pre-emptively address potential sources of worker dissatisfaction and to constructively engage with employee representatives, such as unions, to mitigate conflicts and foster a harmonious working environment. Furthermore, they have led to the implementation of strategies aimed at enhancing employee engagement, representation, and satisfaction to not only comply with worker demands but also to foster a productive, satisfied, and stable workforce.

The feminist movement significantly moulded HRM by championing gender equality and advocating for women’s rights and opportunities within the workplace. Prior to its influence, female workers were often relegated to lower-paying, lower-status positions with limited opportunities for advancement. The movement raised critical awareness about these disparities and pressured organisations and legislatures to address them. Consequently, HRM practices evolved to incorporate gender-sensitive policies, equal opportunities, and diversity and inclusion strategies, ensuring a more equitable work environment. This change not only benefited female employees but also enriched organisations by tapping into a broader talent pool and fostering diverse perspectives, which are key to innovation and problem-solving.

Practice Questions

Explain the impact of the Human Relations Movement on the evolution of Human Resource Management practices within organisations.

The Human Relations Movement significantly impacted the evolution of HRM by steering attention towards the psychological and social aspects of employees in the workplace. Prior to this, Taylorism dominated, emphasizing efficiency and scientific approaches to management. The Hawthorne Studies, a pivotal component of the movement, revealed that workers were not merely influenced by physical and environmental conditions but were also significantly impacted by social factors and group norms. This engendered a paradigm shift, prompting managers to begin considering aspects like motivation, group dynamics, leadership, and organisational culture. Consequently, HRM practices evolved to incorporate strategies focusing on employee motivation, teamwork, leadership styles, and organisational behaviour, ensuring a more holistic approach to managing human resources, which acknowledged the inherent value and complexities of employees beyond mere physical inputs.

Evaluate the influence of technological advancements on HRM practices during the Digital Age, with reference to at least one specific technological tool.

Technological advancements during the Digital Age have profoundly reshaped HRM practices, introducing enhanced efficiency, accuracy, and strategic capabilities. One notable technological tool is the Human Resource Information System (HRIS). HRIS has revolutionised HRM by streamlining and automating numerous HR functions such as recruitment, payroll, training, and performance evaluations. This not only mitigates the risk of human error but also liberates HR professionals from administrative tasks, affording them more time to engage in strategic organisational activities. Furthermore, HRIS facilitates data analytics, enabling HR professionals to make data-driven decisions that can positively influence talent acquisition, retention strategies, and overall organisational performance. This evolution signifies a pivotal shift in HRM, where technology enables the function to be more strategic and data-oriented, thereby enhancing its contribution to organisational success.

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Cambridge University - BA Hons Economics

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