end of the war many AmericanWrms took the two functions of welfare work and
employment management and combined them into a new department called
personnel management. At the time, this was framed as bringing under one roof
both the ‘employment’ and ‘service’ parts of the HRM function. Some European
Wrms also used the ‘personnel’ term, but particularly in Britain the most common
descriptor through the 1920 s remained ‘welfare work.’ Illustratively, theWrst pro-
fessional employment association in Britain was the Association of Welfare Work-
ers, established in 1913 , and it did not change its name to Institute of Labor
Management until 1931 (Niven 1967 ). The ‘personnel’ term, in turn, did not become
widely accepted until after the Second World War (Chartered Institute of Personnel
and Development 2005 ). In continental Europe, a number ofWrms established
employee ‘social’ departments, again emphasizing the welfare side of personnel
management.
The second new term wasindustrial relations(occasionally also called ‘employ-
ment relations’). The industrial relations term came into widespread usage in the
USA and Canada in 1919 – 20 , not coincidentally at the same time as corporate
worries about labor unrest and government regulation were at a peak. The term
was not, however, widely adopted in other countries until after the Second World
War and then typically with a narrower (union management) meaning.
In early usage, the subject domain of industrial relations was the entire
employer–employee relationship (Kaufman 2004 a). In the corporate world, it was
conceived as representing a more broad-based and strategic (‘management policy’)
approach to labor management, including the subject of workforce governance.
Industrial relations thus subsumed the narrower employment function of
personnel management, just as personnel management subsumed employment
management and welfare work. In this vein, Kennedy ( 1919 : 358 ) states, ‘employment
management is, and always must be, a subordinate function to the task of preparing
and administering a genuine labor policy, which is properly theWeld of industrial
relations.’
During the sharp recession of 1920 – 1 many companies disbanded their newly
formed personnel departments, partly as a cost-saving measure and partly because
employee turnover and the threat of unions dissipated. The setback was temporary,
however, and over the rest of the 1920 s the personnel/industrial relations move-
ment gradually regrouped and resumed growth. Jacoby ( 1985 ) provides these
suggestive data: in 1915 perhaps 3 – 5 percent of workers employed in medium–
largeWrms (over 250 employees) had a personnel/IR department; by 1920 thisWgure
had increased to 25 percent and to 34 percent by 1929 .By 1929 over one-half ofWrms
with over 5 , 000 employees had a formalized HRM function. In the vanguard of the
movement were leading corporate giants in the 1920 s Welfare Capitalist movement,
such as AT&T, Standard Oil, Dupont, and General Electric, and small- to
medium-sizeWrms run by progressive owner/entrepreneurs, such as Dennison
Manufacturing and Plimpton Press. TheseWrms abandoned the pre-war ‘market’
22 bruce e. kaufman