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Human Resources and Personnel

Definition

Human Resources (HR) and Personnel and are essentially interchangeable terms that are used to describe the services and procedures associated with the acquisition, management and disposal of staff in an organisation. These services and procedures typically include: Recruitment; Training; Assessment; Pay and Pensions; Industrial Relations; Recreational and health services; Disciplinary procedures; Terminations; Retirement counselling; and, Conforming with Employment Legislation

In smaller organisations, these procedures would generally form part of the line manager's responsibilities. In medium-sized organisations (say, more than 50 staff) these procedures are often delegated to varying extents to specialist staff (often called Personnel or HR officers/managers) who may report directly to a line manager. In many large organizations (say, more than 500 staff) these specialist Personnel or HR staff often work in a separate department that has a fair degree of organisational autonomy, and may even report directly at Board level.

The Personnel Pioneers

The tradition of personnel and HR work can be traced back to the Industrial Revolution when large groups of people were being assembled in factories for the first time. In the absence of any trade (labor) unions or much legislative protection, workers throughout the developed world were treated very poorly. In the early nineteenth century working weeks of 70 hours or more were common, as was the employment of child labour. However for a mixture of moral, religious and pragmatic reasons, a handful of more enlightened US and UK employers chose to prioritise the welfare of their staff.

In the USA, brothers Edward & Lincoln Filene were drawing big crowds to their innovative Boston department store. The Filenes also instituted a profit sharing program, a minimum wage for women, a 40 hour work week, health clinics, paid vacations and an employee union. In 1908, together with their personnel manager, Ralph Albertson and his close friend Frank Parsons, the Filenes actively supported the creation of a Vocation Bureau for Boston. This Bureau soon became a keystone for the development of the new profession of personnel management. They created a local network of employers which four years later was to become the basis of the Boston Employment Managers' Association (EMA).

In England, the Quaker chocolate entrepreneur Joseph Rowntree was a major player in the intensely competitive UK and North American confectionary markets. In 1890 Rowntree asked his teenage son Seebohm, to take on the new post of Labour Director. Together they introduced free health and dental care, company pensions, a works canteen, school rooms, a gymnasium, widow's benefit fund, paid holidays and a works council. Seebohm Rowntree also carried out influential studies into community poverty and in 1913 helped set up the Welfare Workers' Association (WWA) the original precursor of the UK's current Chartered Institute of Personnel and Development.

During World War I, both in the UK and the US, personnel practice was preoccupied with assembling and motivating large groups of workers. In the UK, Seebohm Rowntree was appointed welfare director of the British government department that controlled weapon supply, and by the end of war more than 3.5 million were employed in these industries including around 1300 welfare officers. In the US it had become a legal requirement that all federal contractors employ personnel managers and by 1917 the Boston EMA had become a prototype for EMAs across the US. Ten of these decided to merge to become the National Association of Employment Managers. The NAEM became the Industrial Relations Association, then the National Personnel Association and finally, in 1923, the American Management Association. As a result, personnel management was to lack a specific national voice in the US until 1948 when the American Society for Personnel Administration was founded.

From Hawthorne to HR

In the 1920s and 30s, a significant contribution to the development of personnel management thinking came from an Australian-born Harvard academic, Elton Mayo. Mayo's analysis of staff reactions to changed working conditions at Western Electric's Hawthorne factory led to ground-breaking ideas on motivation. This, in turn, formed the basis of the human relations movement which proved influential in the inter-war years. In the 1940s, Abraham Maslow described his hierarchy of needs, and in the 50s, Frederick Herzberg coined the term job enrichment. But at around the same time Peter Drucker was questioning whether the personnel management was bankrupt. In the 1960s, there was the emergence of terms like human capital theory, the knowledge worker and human resource accounting.

In the 1980s, increases in unemployment contributed to a hard-line approach to industrial relations quite often spearheaded by the personnel function. This coincided with a widespread rebranding of the function as human resources (HR). Now in the 21^st century, many organisations have an HR Director with equivalent status to the Financial Director. Where this is the case, the HR function may also have a role in the organisation's approach to Balanced Scorecards, Corporate Social Responsibility and Knowledge Management. This strategic role seems to be more common in steady state organisations e.g. the public sector or private sector organisations in a dominant market position. In other organisations a combination of technology, outsourcing and globalisation have often tended to confer a more subordinate role on the HR function.

Professional Bodies

Currently the personnel management/HR profession is dominated by two professional bodies; one based in the UK the other in the US. The following table gives a brief summary of these two organisations.

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