2.2 The Origins and Early
Development of HRM
.........................................................................................................................................................................................
Viewed as a generic activity involving the management of other people’s labor in
production, human resource management (HRM) goes back to the dawn of
human history. TheWrst visible roots of the HRM function as practiced today in
modern business organizations appeared in the late nineteenth century more or
less contemporaneously in England, France, Germany, and the United States. Japan
experienced a broadly similar development a decade or so later.
The generic practice of HRM does not require a formal human resource depart-
ment or any specialized personnel staV. This was the arrangement practiced in
most late nineteenth- to early twentieth-century enterprises, even in large-size
factories and mills employing several thousand people. The HRM functions
of hiring, training, compensation, and discipline/termination were performed
in alternative ways. Considerable reliance was placed on the labor market, for
example, to set pay rates and provide motivation for hard work (through the
threat of termination and unemployment), while other HRM functions were done
by the owner or plant manager or were delegated to foremen and inside contract-
ors. Interestingly, this arrangement is still the norm today in many smallWrms. In
their national survey conducted in the mid- 1990 s, for example, Freeman and
Rogers ( 1999 : 96 ) found that 30 percent of the American workers were employed
inWrms that had no formal HRM department.
The modern HRM department grew out of two earlier developments. TheWrst
was the emergence of industrial welfare work. Starting in the 1890 s, a number of
companies started to provide a variety of workplace and family amenities for their
employees, such as lunch rooms, medical care, recreational programs, libraries,
company magazines, and company-provided housing (Eilbirt 1959 ; Gospel 1992 ;
Spencer 1984 ). Frequently, a new staVposition was created to administer these
activities, called a ‘welfare secretary,’ and women or social workers were often
appointed. The impetus behind welfare work was an amalgam of good business,
humanitarian concern for employees, and religious principle. German companies
were pioneers in welfare work in the nineteenth century, but employers in all the
industrializing countries participated.
The second antecedent was the creation of some type of separate employment
oYce. These oYces, often staVed by one or several lower-level clerks and super-
visors, were created to centralize and standardize certain employment-related
functions, such as hiring, payroll, and record-keeping. The introduction of civil
service laws in several countries also led to the creation of employment depart-
ments in various levels of government. A stand-alone employment oYce report-
edly existed in large European companies as far back as the 1890 s. Farnham ( 1921 )
20 bruce e. kaufman