PERSONNEL MANAGEMENT - HISTORY

• The history of Personnel Management begins around the end of the 19th century, when
welfare officers (sometimes called 'welfare secretaries‘) came into being.
• The first welfare workers were women, and were only concerned with the protection of
women and girls, which was seen as a worthy aim.
• The Second World War brought about welfare and personnel work on a full-time basis at
all establishments producing war materials on Ministry order
• Industrial relations grew in importance. Strikes were made illegal. Productivity
improvements came to be linked with joint consultation or negotiation
• By the end of the seventies, following were main features of Personnel Management:
• the collective bargaining role (centered around dealing with trade unions)
• the implementer of legislation role (understanding and implementing a growing
amount of legislation)
• the bureaucratic role (implementing a series of rules about behavior at work, dealing
with recruitment, absence etc)
• the social conscience of the business role (welfare function for the workers)
• a growing performance improvement role (integrating personnel function with
business needs)

EVOLUTION OF HR MANAGEMENT
• Around the mid-80s, the term 'human resource management' (HRM) arrived from the
USA.
• To some, HRM was mainly connected with minimizing trade union influence
• To others, though, it implied a more strategic role, with the HR department helping to
achieve business objectives and planning
• The term 'human resources' was (and is) an interesting one: it seemed to suggest that
employees were an asset or resource-like machine.
• HRM has encouraged the devolution of certain operational personnel tasks from
personnel specialists to line managers;
CHANGING CONCERN OF HRM
Time Period Subject of Primary Managerial Perceptions of HR Activities
Concern to Mgmt. Employees

Before 1890 Production technologies Indifference to needs Discipline systems

1890 to 1910 Employee welfare Employees need safe Safety programs, English
conditions and economic language classes, inspirational
opportunity programs

1910 to 1920 Task efficiency Employees need high earnings Motion and time studies
made possible with higher
productivity

1920 to 1930 Individual differences Employees' individual Psychological testing

differences considered employee counseling

Time Period Subject of Primary Managerial Perceptions of HR Activities

Concern to Mgmt. Employees
1930 to 1940 Unionization Employees as management Employee communication
adversaries programs, anti-unionization
techniques

1940 to 1950 Economic security Employees need economic Employee pension plans,
protection health plans, benefits

1950 to 1960 Human relations Employees need considerate Supervision training (role
supervision playing, sensitivity training)

1960 to 1970 Participation Employees need involvement in Participative management

Time Period Subject of Primary Managerial
task decisionsPerceptions of HR(MBO,
techniques Activities
etc)
Concern to Mgmt. Employees
1970 to 1980 Task Challenge Employees need work that is Job enrichment, integrated
challenging and congruent with task team, etc.
abilities

1980 to 1990 Employee displacement Employee need jobs to replace Outplacement, retraining,
those lost through economic restructuring
downturns, international
competition, and technology
changes

1990 to 2000 Workforce changes and Employees need more flexibility Strategic HR planning,
shortages in work schedules, benefits, employee rights, training,
policies flexible benefits,
computerization, etc.
DIFFERENCE BETWEEN PERSONNEL & HR MANAGEMENT
NATURE OF RELATIONS
The relationship between management and employees are merely on contractual basis
where one hires and the others perform. Whereas,
HRM focuses more building relationship, developing employees and treating employees
as partners in organisation
RELATION OF POWER AND MANAGEMENT:
The distribution of power in personnel management is centralised where the top
management has full authority in decision-making "depowerment".
HRM, on the other hand, sees the decentralisation of power where the power between top
management is shared with middle and lower management groups "empowerment".
PAY POLICIES AND JOB DESIGN
Pay policies in personnel management is merely based on skills and knowledge required
for the perspective jobs only. Value is based on the ability to perform the task & duties as
per the employment contract requirement only.
HRM, on the contrary, encourages organisations to look beyond pay for functional duties.
Here, the pay is designed to encourage continuous job performance and improvement
(Kaizen) which is linked to value-added incentives such as gain sharing schemes, group
profit sharing and individual incentive plans.

COMMUNICATION AND NEGOTIATION

PM restricts communication between line managers, employees and top management.
The communication process is very indirect and it is always difficult for the employees to
channel problems, grievances or ideas to the management because there are too many
layers of communication that slows decision.
HRM gives employees direct communication with the management. Problems or
grievances can be solved immediately through open-door policy where one need not
make an appointment to see the head of department or even the Chief Executive Officer
(CEO).
HRM AND COMPETITIVE ADVANTAGE
• HRM is a design of formal systems in an organization to ensure the effective and
efficient use of Human Talent to accomplish organizational goals.
 • HRM is key ingredient affecting organizational competitiveness
• Effective use of people can provide competitive advantage

TYPICAL DIVISION OF HR RESPONSIBILITIES

HR UNIT
• Develops legal, effective interviewing techniques
• Trains managers in conducting selection interviews
• Conducts interviews and testing
• Sends top three applicants to managers for final review
• Checks references
• Does final interviewing and hiring for certain job classifications

LINE MANAGERS
• Advise HR of job openings
• Decide whether to do own final interviewing
• Receive interview training from HR unit
• Do final interviewing and hiring where appropriate
• Review reference information
• Provide feedback to HR unit on hiring/rejection decisions
HR ACTIVITIES
• HR Planning and Analysis
• Staffing
• HR Development
• Compensation and Benefits
• Health, Safety, and Security
• Employee & Labor/Management Relations