01. EVOLUTION OF HUMAN RESOURCES MANAGEMENT

figure 1

INTRODUCTION

Human Resource Management (HRM) refers to an organization’s function responsible for managing the workforce. The Evolution of HRM can be traced back to the early 20th century when the focus was on maintaining records and ensuring compliance with labor laws. Over time, the role of HRM has evolved to become more strategic and proactive in aligning human capital with the organization’s goals and objectives. With the rapid changes in the world today  it has become important  for the firms to develop strategy that can improve human resource performance which will consequently aid the accomplishment of firm’s objectives.   HRM is poised to enhance firms’ survival and effectiveness through human capital (Armstrong, 2005).

 

Figure 2

 

UNDERSTANDING THE HRM THEORIES

• Organizations in the era of Industrial Revolution were structured in line with Adam Smith’s pin factory with a simple structure (Kaplan & Norton, 2006; Feldberger, 2008).

• The second Industrial Revolution in the middle of the nineteenth century affected capital demanding industries, which included production and sales as the largest business sector (Kaplan & Norton, 2006).

• Later, theories discussing accounting related to employees emerged. In the same era employees were considered as assets for organizations (Paton, 1962; Feldberger, 2008).   

• Then, the Nobel price winners’ Schultz and Becker transcribed their first works on Human Capital and published a theory, which highlighted that investment in employee’s education is related to investments in equipment (Becker, 1964; Schultz, 1961).

• Hermanson in 1964 introduced a model to measure human resource value in external financial reports (FlamholtzBullen, & Hua, 2002), in which companies started investing in employees’ talent, knowledge and skills. Later, it was Flamholtz (1976) that later introduced the theory and measurement of an individual’s value to an organization (Theeke, 2005).

• Moreover, modern strategic HRM model was advanced by Boxall and Purcell in their book Strategy and human resource management (Palgrave Macmillan, third edition, 2011) (Coyle-Shapiro et al., 2013). The two scholars conceptualize workforce performance as a function of capabilities (the knowledge, skills and aptitudes necessary for employees to carry out their work), motivation (the incentives which employees require to encourage them to perform to the best of their abilities) and work organization (the way that work and organizations are structured so as to allow employees to perform well).

Figure 3

CONCLUSION

Human resource management have evolved over years, but the modern strategic HRM model conceptualizes that workforce performance depends on employee capabilities, motivation, work organization and employment relations. Likewise, the recent theories have emphasized strategic human resource management as a basis of competitive advantage. Organizations would accomplish goals or objectives that individuals cannot do alone, but this could only be made possible via employee capability, commitment, and productivity. The ability of an organisation to identify its business needs and its workforce needs, especially for highly productive workforce, is a reflective of accomplished competitive advantage of such organisations. HRM modern approaches highlight that strategics are composed to enhance the organisational effectiveness through human capital development. Studies throughout the time has enable a deeper understanding of the nature of human resource management approaches and its indispensability to the success of organizations.

REFERENCES

• Armstrong, M. (2005). A handbook of human resource management practice. (5th Ed.). Ohio: Kogan Page.

• Becker, B. E., Huselid, M. A., & Ulrich, D. (2001). The HR scorecard: linking people, strategy, and performance. Boston, MA; United Kingdom, Harvard Business School Press.

• Coyle-Shapiro, J., Hoque, K., Kessler, I., Pepper, A., Richardson, R., & Walker, L. (2013). Human resource management. In University of London (pp. 1–66).

• Feldberger, M. (2008). Modern Human Capital Management. © Al Marri, Majid & Abdullah Licensed under Creative Common Page 578

• Flamholtz, E. G., Bullen, M. L., & Hua, W. (2002). Human resource accounting: a historical perspective and future implications. Management Decision, 40(10), 947-954.

• Kaplan, R. S., & Norton, D. P. (2006). Alignment: using the balanced scorecard to create corporate synergies. Boston, Mass.: Harvard Business School; London: McGraw-Hill, distributor.

• Paton, W. (1962). Accounting Theory. Accounting Studies Press. Scholz, C.,

• Theeke, H. A. (2005). A human resource accounting transmission: shifting from failure to a future. Journal of Human Resource Costing & Accounting, 9, 40-59.