HR has a Key Role Today

Human Resource Management (HRM) and/or Personnel Management (PM) has become a very vital part of the management process in the twenty-first century, and is getting significant attention in management discussions, or in the business strategy of most successful organisations today as compared to the past, more so post liberalisation. The importance of this function for the success of an organisation is highlighted in glowing terms with emphasis on human resource development (HRD), knowledge management, empowerment, motivated work groups, flat organization structure etc. More often than not, today Personnel Managers prefer to be termed as HR Managers, which seem to sound more modern way of managing this vital functional responsibility! To many others, they sound as jargon, but to serious minded people they seem to make a lot of sense, even if there are differences of opinion, which are often debated. It also seems that even professional managers often differ in their understanding of the role differences between HRM & PM, if any at all. Many feel that it is the same old wine in a new bottle with a different label, HRM being only a more modern terminology! The differing views or the lack of understanding is attempted to be clarified in this article.

It may be first worthwhile to look at the history of the development of this function of management in India over the past seven or eight decades to better understand the changing role and responsibility to what it is today - rather than the difference in the name with which to describe this important function in an organization.

Labour Mobilization & Welfare

In the early part of the last century, starting larger manufacturing organisations needed someone to locate and provide unskilled manpower to meet the needs of the industry, and for administering and generally to maintain the records of the employees. This was often done by getting a large number of people from different communities or from villages, as then done by the Indian Army in the recruitment of soldiers. These Labour Officers (LO) were initially labour providers, and acted as links with the mostly uneducated workers and their employers - many then being British Companies or expatriate Managers, who had difficulty in communicating or understanding with these uneducated workers. Their responsibilities gradually extended to looking after the increasing statutory requirements which had to be observed in accordance with the various labour laws and rules, that were being enacted one after the other to protect the rights of the workmen, and laying down rules for working conditions, safety and welfare measures etc. About the same time, the Government created the statutory position of Labour & Welfare Officer (LWO) in large organisations responsible for being "neutral", and to specifically ensure the welfare of the workmen or from being exploited.

Industrial Relations

The comparatively "docile and obedient" workforce of the past also started getting organised in the meanwhile, and many unions and managements found that they had to resolve their differences or disputes often through the legal process. The LO's were often involved with dealing and perusing these court cases through lawyers and advocates specialising in labour laws, which necessitated them to develop this expertise themselves, as often the union leaders were lawyers too.

This changed job demands, and to provide a career progression for LO's, as well as avoid conflict with the statutory LWO's designation called for the LO's to be redesignated as Personnel Officers or Managers (PO/PM), and the beginning of a separate Personnel Department or function became necessary, with enlarged responsibilities like Timekeeping, Security, Wage computation, Administration, etc. being allocated to them as well from about 1940-50's. Some larger organisations subdivided the Industrial Relations (IR) aspects, Welfare activities & Canteens, Administration, Training and Development activities, besides Personnel or Staff Department, as parts of the total man management system in the organizations.

It is well known that many of the unions had to take the assistance of political parties to grow and gather strength over the years, and often had to sacrifice their own objectives to meet the parties aim and philosophies. The labour leaders ranged from very committed to those seeking power or use the platform for their own gains. Militancy and non-observance of peaceful means, instead of the very slow legal system, became the quick solutions for many, and was seen as a very effective way for getting benefits for the workmen. The IR scenario was mostly a struggle between "we" and "they", despite the fact that the managers were employees themselves, and not owners, as in the past. The traditional PM's mostly were fire fighters to manage such volatile and untrusting environment.

Personnel Management Specialist

As mentioned above, for considerable period of time the Personnel people were lawyers or legally oriented individuals, who were considered to be more suitable, and who could deal with considerable labour litigation faced by the Company more competently. Gradually, it was realised that the demand on this function was getting far more complex, and required many other specialist knowledge and competencies, such as in Social Sciences, Industrial Psychology, etc., and only the legal approach to deal with people management was counter productive. With such felt needs came the growth of a large number of Management Education Institutes offering Courses and Training Programmes in different facets of Management, including Personnel. This resulted in people with professional background in Personnel being available in fair numbers mostly from the early sixties, and being inducted in the organisations, as in other functions, by progressive industries. It was felt that such all round professional knowledge was necessary, to be a better manager, who needed to manage total Industrial Relations (IR), and also many other personnel and organisational related issues, and not just concentrate on legal issues and court cases - the importance of the human face in managing was realized. However, the main priority for the PM's for very many decades, including even now for many organisations, remained to provide assistance and support the operations of the organisation as a subsidiary, and not as a direct contributing team member! The top management looked at this area of responsibility mostly as a "service function" to the main operating functions, and their role and importance only dominating at the time of industrial unrest, or during negotiations for reaching periodic settlements with the unions!

The changed requirements on the role and responsibilities demanded a far greater professionalism from this group of managers, and also by the organization and its top management. From "flying by the seat of his pants" approach earlier, the use of specialized tools, tests and quantifiable data and measurements became necessary for better results, which this functional managers had to master quickly. They had to become the "change agents" for the successful organizations.

Human Resources Management - A Business / Strategic Partner

The management philosophy was undergoing changes in the meanwhile, and it was realised that most people did not need to be driven only by supervision and fear, but generally performed better on their own, given the freedom of decision making, adequate skills training, broad guidance and knowledge of the plans - these factors motivated people to perform better, and on their own. This called for creation of a more positive and a far greater level of interaction between the management and employee in the prevailing environment of trust and dependence, as well as an open organisation culture. The personnel function had to spearhead and contribute towards this kind of environment creation in the organisation, and to provide the plans & developmental inputs to increase competency across the organisation, as well as generate motivation amongst employees.

It was realised by the top management that rather than a limited "service" function role that was required from the P.M's in the past, a far greater contribution could be made by this function being a change agent as an "integrated management team member" in a far more professional manner to meet the organisational goals, rather than the limited functional objectives. These could be in the areas of strategic manpower planning, organisation development, competency analysis and identified training and development of employees, organisation culture and employee motivation & morale, team building, career planning, appraisal and incentive or reward system management, key employee retention, counselling, responsible labour & management attitude building, labour productivity improvement, environmental management etc., and not just the IR & welfare issues, recruitment and employee records, as in the past. These demanded a far greater understanding and interaction with other functions in the organisation, and not remain limited to the earlier functional boundaries. Lot more proactive function as a business manager with understanding the ultimate customer needs, rather than a reactive fire fighting supporting role became increasingly necessary by this growing & changing function to enable achievement of organisational excellence in the highly challenging and competitive environment of the twenty-first century.

Where is Your Organization in Evolution?

The pace of the development of such realisation and corrective measures in different organisations has been as per their perceived or felt needs in light of their own plans and priorities - and therefore, are at different or varying stages for each organisation. What is important is that the function must address to meet their own organisational goals - which and the solutions must, therefore, be quite unique and possibly different from one Company to the other, as with progression of time. The model cannot, and should not, be the same for each at a given time. The role definition requirements are, therefore, not the same in each organisation. Many still continue to need IR Management as the main priority, with the other issues requiring lesser attention - and as such PM and HRM would appear to be no different from each other in such organisations. However, others who have managed IR satisfactorily, are generally able to do a great deal of visible activity in the employee development and motivational areas, culture building and organisation development, etc., and therefore, may claim to be more HRM oriented, rather than the past priorities of so termed Personnel. Another major factor is the vastly differing types of the organisations itself, e.g. the IT & related industries having mostly knowledge workers need a very different solution, as does the new service providers, in comparison to the traditional manufacturing industry - which too cannot be standardized!

The people management process does not, and cannot, remain static, and will continue in future to demand the changing management style, philosophy, actions and solutions, which are best suited and needed to meet the differing & changing organizational challenges of each.

One thing is sure; this function is certainly no old wine in a new bottle - whether one calls it Personnel, or Human Resource Management!


NOTE: A subsequent follow-up article written almost ten years later HRM CHANGING CHALLENGES may be seen here. It is suggested that the follow-up article is an essential reading for those who wish to catch-up with the present.

Ashit K. Sarkar,

Management Advisor & Consultant, Ph: (080) 2554-0393 & 4112-8153

3E, Palmtree Place, 23 Palmgrove Road, Bangalore - 560 047

E-mail: [email protected]

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