Evolution and development of HRM, and recent trends
Human Resource Management · Unit I · Topic 2 of 14 · 5 min read
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1. The stages of evolution
(a) The industrial revolution and the commodity approach (late 18th–19th century)
The factory system brought large numbers of workers together under one roof. Labour was treated as a commodity bought and sold like any other input, at the lowest price the market allowed. Hours were long, wages low, child and women labour common, and there was no security. The employer–employee relation was purely one of contract and the employer’s interest was output.
(b) The factory system and the welfare approach (late 19th–early 20th century)
Social reformers, early factory legislation and a few enlightened employers (Robert Owen at New Lanark is the usual example) began to treat workers as human beings needing care. Firms appointed welfare secretaries to look after housing, canteens, sanitation and medical aid. This paternalistic welfare work is the direct ancestor of the personnel department.
(c) Scientific management (from about 1900)
F.W. Taylor (The Principles of Scientific Management, 1911) applied systematic study to work: time and motion study, standard tasks, scientific selection and training of workers, differential piece rates, and the division of responsibility between management and workers. Its contribution to HRM: scientific selection, training, and incentive pay. Its weakness: it treated the worker as an extension of the machine.
(d) The human relations movement (1920s–1940s)
The Hawthorne studies at Western Electric (1924–1932), interpreted by Elton Mayo and Roethlisberger, showed that output depended on social and psychological factors — attention, group norms, morale and informal groups — and not only on lighting, rest pauses or pay. Management began to stress communication, supervision and morale. (See the management note on Hawthorne, Mayo and Drucker.)
(e) The behavioural science approach (1950s–1960s)
Maslow’s need hierarchy, McGregor’s Theory X and Theory Y, Herzberg’s two-factor theory and Likert’s systems of management gave a more rigorous account of motivation, leadership and group behaviour. Employees were seen as wanting responsibility and growth.
(f) Personnel management and the trade union phase
As unions grew and labour law multiplied, firms set up personnel departments to handle recruitment, records, wages, welfare, discipline and collective bargaining. The personnel officer was a specialist administrator and negotiator.
(g) Human resource management (1980s onwards)
Two American models of 1984 marked the shift. The Michigan model (Fombrun, Tichy and Devanna) linked selection, appraisal, rewards and development to business strategy. The Harvard model (Beer and colleagues) stressed stakeholder interests and four policy areas: employee influence, human resource flow, reward systems and work systems. People came to be seen as an asset and a source of competitive advantage.
(h) Strategic HRM and human capital (1990s to date)
HR became a business partner. Ideas of human capital, knowledge management, talent management, HR analytics and the “HR as a strategic partner” role (Dave Ulrich) define the present stage.
| Stage | Period | View of the worker |
|---|---|---|
| Commodity | Industrial revolution | An input bought at market price |
| Welfare / paternalism | Late 19th century | A dependant to be cared for |
| Scientific management | c. 1900–1920 | A factor of production to be made efficient |
| Human relations | 1924–1940s | A social being |
| Behavioural science | 1950s–1960s | A person seeking growth |
| Personnel management | 1940s–1970s | An employee under rules and agreements |
| HRM and SHRM | 1980s onwards | An asset and partner |
2. Development in India
- Early welfare work. Early factory legislation from 1881, and welfare measures by a few employers such as the Tata group.
- Royal Commission on Labour (1929–31), under J.H. Whitley, recommended the appointment of labour officers to deal with recruitment and grievances and to stop abuses by jobbers.
- Trade Unions Act, 1926 and Industrial Disputes Act, 1947 brought collective relations under law; the personnel officer became the firm’s link with unions.
- Factories Act, 1948, section 49, made welfare officers compulsory in factories employing 500 or more workers. The welfare officer was, for decades, the core of the Indian personnel function.
- Professional bodies. The Indian Institute of Personnel Management (Calcutta, 1947) and the National Institute of Labour Management (Bombay, 1950) merged in 1980 into the National Institute of Personnel Management.
- 1970s–1980s: HRD. Larsen & Toubro set up the first integrated HRD system in India in the mid-1970s, designed by Udai Pareek and T.V. Rao of IIM Ahmedabad. The National HRD Network followed in 1985.
- 1991 onwards. Liberalisation, competition and the IT services industry pushed firms towards performance pay, talent management and strategic HR.
- 2025. The four Labour Codes — on Wages (2019), Industrial Relations, Social Security, and Occupational Safety, Health and Working Conditions (all 2020) — came into force on 21 November 2025, replacing 29 central labour laws. HR departments now work under the Codes (for example, standing orders under the Industrial Relations Code: see standing orders).
3. Recent trends in HRM
The June 2025 paper set this as a six-mark short note. Eight trends are enough:
- HR analytics and HRIS — decisions on hiring, attrition and pay based on data from human resource information systems.
- E-recruitment and AI screening — job portals, social media, applicant tracking systems, video interviews.
- Remote and hybrid work and flexible hours, especially since 2020.
- Talent management — identifying, developing and keeping high performers; succession planning.
- Employee engagement and well-being — mental health support, employee assistance programmes, work–life balance.
- Continuous performance management — frequent feedback and 360-degree appraisal replacing the once-a-year rating.
- Diversity, equity and inclusion — gender diversity, persons with disabilities, prevention of sexual harassment under the POSH Act, 2013.
- Gig, contract and fixed-term work — the Industrial Relations Code recognises fixed term employment, and the Code on Social Security brings gig and platform workers within social security schemes.
- Outsourcing of HR activities (payroll, recruitment process outsourcing) and shared service centres.
- Learning organisation — e-learning, micro-learning and reskilling.
How this is examined
“Briefly describe evolution and development of HRM” (June 2025, 10 marks) and “Explain the evolution of Human Resource Management” (January 2026 100-mark paper, Q.1, 16 marks). “Recent trends in HRM” is a short note (June 2025). For the long answer, set out the stages under headings, put the summary table at the end, and add the Indian development in five or six dated points.
Now try the real questions: Human Resource Management past question papers.