HRM INITIATION & HISTORY
By : Dr. Helmy Ismail
Since the 1970s, the Personnel Management side of the Human ResourceManagement function has experienced an evolution from being a maintenance function, secondary to Industrial Relation function, representing one of critical importance to the effectiveness of the organization.
A number of environmental factors, leading to economic and structural upheaval, have resulted in this dramatic shift.
Environmental changes started to occur towards the end of the 1950s and have continued to the present which have resulted in the transformation of HRM.
First, beginning in 1956, private sector unionism started to fall as a percentage of the labor force from 33% to 12% in1992 ( Kochan, McKersie & Cappelli, 1984; McDonald, 1992)
Second, since World War II, the shift from manufacturing employment to service sector employment has continued.
Third, since the 1960s, there has been a dramatic expansion of government regulation of the terms and conditions of employment, requirements that business have had to comply with and implement into their human resources activities. ( Janger, 1977) .
Fourth,a number of political and economic changes have occurred since the late 1970s that have resulted in erosion of both the economic hegemony and the insulated and prosperous situation that the world had enjoyed during the first several decades following World War II.
These changes include the dramatic change of Russia, the unity of two parties of Germany, a growth in international competition, domestic competition, deregulation, market pressure and consumer power, technological change and the globalization of economic activity. The convergence of these factors has caused the New Deal industrial relations systems to become anachronistic and has required that companies and countries that wish to be high income, world-class players” adopt very different HRM policies “ Marchal,1992”.
In response to these changes, companies have had to make changes that have directly affected the HRM role and functions.
First, Much more reliance has been placed on the HRM (employee-relations) and dealing with employees directly as individuals rather than on management-union relations.
Second, There has been a trend by management to make strategic choices that have represented aggressive union-avoidance policies and have resulted in a decrease in union representation of their workers.
Third, The HRM function has been called upon to foster the sense of mutuality and trust in the relations between managers and workers, to develop employees as assets with the view of increasing competitiveness, and to assist the organization’s compliance with government regulations.
Fourth, The companies began to emulate the non-unionized HRM practices of successful international companies such as IBM as well as Japanese organizations. The successful application of TQM principles by Japanese companies contributed to the recognition that employees present a vital organizational resource and if managed properly they can be a primary competitive advantage.
As mentioned, the HRM function has changed enormously during the 1980s, and top HRM managers became directly involved in the corporate strategic management which established the interdependence and integration between the HR strategy and Business strategy.
The organization’s competitive strategy may include mergers acquisition, downsizing to increase efficiency, international operations, or the acquisition of automated production technology. These strategic decisions determine the demand for skills and employees.
The HR strategy, in turn, must include the correct employee make up to implement the organization’s strategy.
Consequently, without effective strategy of human resources management, company growth will be restricted and performance will continue to suffer.
Dr. Helmy Ismail
Expert, Consultant & Instructor of
International Business Administration & HRM2015-11-24
September 16, 2017
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