Introduction to human resource management notes

Introduction to Human Resource Management

• Meaning of human resource management
• Role of Human Resource Management
• Functions of human resource management in an organization
• Structure of human resource management department
• Evolution of human resource management

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TOPIC 1
INTRODUCTION TO HUMAN RESOURCE MANAGEMENT
Meaning of Human Resource Management (HRM)
HRM concerns the human side of the management of enterprises and employees with their firms. Its purpose is to ensure that the employees of a company (its Human Resources) are used in such a way that the employer obtain the greatest possible benefit from their abilities and the employees obtain both material and psychological rewards for their work.
According to Armstrong, HRM is a strategic and coherent approach to the Management of an organization’s most valued assets – the people working there who individually and collectively contribute to the achievement of its goals.

Characteristics of Human Resource Management

1. The diversity of human resource management
A distinction is made between the ‘hard’ and ‘soft’ versions of HRM. The hard version emphasizes that people are important resources through which organizations achieve competitive advantage. These resources have therefore to be acquired, developed and deployed in ways that will benefit the organization. The focus is on the quantitative, calculative and business-strategic aspects of managing human resources in a rational a way as for any other economic factor. The emphasis is therefore on the interests of management, integration with business strategy, obtaining value from people by the processes of human resource development and performance management.
The soft version of HRM traces its roots to the human relations school of thought. It emphasizes on communication, motivation and leadership. It involves treating employees as a means rather than objects. The soft version of HRM stresses the need to gain commitment of employees through involvement, communications and other methods of developing a high-commitment, high-trust organization.

2. The Strategic Nature of HRM
Perhaps the most significant feature of HRM is the importance attached to strategic integration. This is a key policy goal of HRM, which is concerned with the ability of the organization to integrate HRM issues into its strategic plans, to ensure that the various aspects of HRM cohere and to encourage line mangers to incorporate an HRM perspective into their decision-making.

3. The commitment-oriented nature of HRM
HRM implies that human resources may be tapped most effectively by mutually consistent policies that promote commitment and which as a consequence, foster a willingness in employees to act flexibly in the interests of the adaptive organization’s pursuit of excellence.

4. People as human capital
This is the notion that people should be regarded as assets rather than variable costs in other words treated as human capital. HRM philosophy holds that human resources are valuable and a source of competitive advantage.

5. Unitary philosophy
In industrial relations context, people with unitary frames of reference regard both sides of industry as having identical interests and in consequence, believe that workers should naturally co-operate with management, should work together as a team and actively to assist management to achieve its objectives.

6. Individualistic nature of HRM
HRM is individualistic in that it emphasizes the importance of maintaining links between the organization and individual employees in preference to operating through group and Representative systems.

7. HRM as a management-driven activity
HRM can be described as a central, senior, management-driven strategic activity that is developed, owned and delivered by management as a whole to promote the interests of the organization they serve.

8. Focus on Business Values
The concept of HRM is largely on a management and business-oriented philosophy. It is concerned with the total interests of the organization – the interests of the members of the organization are recognized but subordinated to those of the enterprise. Hence the importance attached to strategic integration and strong cultures and which require people who will be committed to the strategy and will be adaptable to change and who fit the culture.

Principles of Human Resource Management
There are four fundamental principles of human resource management
1. In any organization, human resources are the most important resources it has, and therefore, the success of the organization depends entirely on how effectively its workers are managed.
2. The success of any organization is more easily achieved if the personnel policies and procedures are closely linked with, and make a major contribution to its corporate objectives and specific plan.
3. The corporate culture and the values, organizational and managerial behavior will exert a major influence on the achievement of excellence. Therefore, effort must be made to manage the culture in such a way as to enable the workers to accept and adopt the values.
4. Continuous effort is required in such a way as to achieve integration whereby all the members of the organization are involved and work together with a sense of common purpose.

ROLE/IMPORTANCE OF HUMAN RESOURCE MANAGEMENT
Human resource management can help enterprise in achieving its goals more efficiently and effectively in following ways:
• Attracting and retaining the required talents through effective human resource planning, recruitment, selection, placement, orientation, compensation and promotion policies.
• Develop the necessary skills and right attitude among employees and through training, development, performance appraisal etc.
• Securing willing co-operation of employees through motivation, participation, grievance, handing etc.
• Utilizing effectively the available human resources.
• Ensuring that the enterprise will have in future a team of competent and dedicated employees Of all the factors of production, labour is the most dynamic and significant. This is because it is labour that makes it possible for the organization to manipulate the other resources. HRM is concerned with getting optimum use of the available knowledge, skills and abilities in the workforce. A HR manager can contribute to the company’s profits in a number of ways:-
1. Reduce unnecessary overtime expenses by increasing productivity during a normal days working regime.
2. Stay on top of absenteeism and institute programmes designed to reduce money spent for time not worked.
3. Eliminate time wastage through job design.
4. Install and monitor effective health and safety programmes.
5. Minimize employee turnover.
6. Properly train and develop all employees.
7. Decrease costly material wastage by eliminating bad work habits and attitudes and poor working conditions that lead to carelessness and mistakes.
8. Have the best people available.
9. Maintain competitive pay practices.

THE MAIN FUNCTIONS OF HR MANAGEMENT
This refers to those tasks and duties performed in both large and small organisations to provide for and coordinate human resources. The main functional areas include: –
1. Human Resource Planning, Recruitment and Selection: conducting job analysis, forecasting HR requirements, recruiting, selecting and hiring people.
2. Human Resource training and Development: Training, orientation, designing and implementing management and organisational development programmes, building effective teams, designing appraisal systems, assisting employees in developing career plans.
3. Compensation and benefits: design and implementation of compensation and benefits systems, ensuring fairness and consistency of the system.
4. Employee and labour practices: serve as an intermediary between the organisation and the union, design discipline systems and grievance handling systems.
5. Safety and Health: Design and implement programmes to ensure employees health and safety, provide assistance to employees with personal problems that impact on their performance.
6. Human Resource research: provide a HR information base, design and implement employee communication systems.

THE ROLE OF THE HR PRACTITIONER
The activities carried out by HR practitioner do vary according to the needs of the organization, the job they carry out and their own capabilities. In general however HR practitioners provide: –
1. Services,
2. Guidance and
3. Advice.

1. SERVICE PROVISION
HR specialists provide services to the internal customers, who include management, line managers, team leaders and employees.
The services cover all aspects of HRM; human resource planning, recruitment & selection, employee development, employee reward, employee relations, health & safety management and welfare.
Effective services are provided to meet the needs of the business, the management and its employees and to administer them efficiently.

2. GUIDANCE
Such guidance includes recommendations on HR strategies. Guidance may also be provided on HR policies and procedures and their implications of employment legislation. More general guidance may be given on the values the organization should adopt in managing people. Guidance is provided to managers to ensure that consistent decisions are made on such matters as performance ratings, pay increases and disciplinary actions.

3. ADVICE
HR practitioners provide advice on such matters as job design, advertising for staff, drawing up short-lists for selection, identifying methods of satisfying training on recruitment or promotion, health & safety requirements, employee relations issues (disputes, grievances and communication) and handling people problems (discipline, capability, absenteeism, time keeping etc).
Advice is usually given to managers, team leaders and even individuals. To individuals, such advice includes aspects of work & development, developing competence and employability; self managed learning and career development. It may cover problems arising from work ailment, stress, bullying or sexual harassment. Here the HR practitioner may take the role of counsellor or mentor as well as problem solver.

HR PRACTITIONER ROLE
HR practitioners take on a variety of roles depending on their position in the organization, expectations of the management on the contribution HR should make and the HR practitioners’ capacity to make an impact. The main roles include:-
1. Reactive/Proactive roles
2. Business partner role
3. Strategist role
4. Interventionist role
5. Innovation role
6. Internal Consultancy role
7. Monitoring role

REACTIVE/PROACTIVE ROLES
A reactive role, HR practitioners do what they are told or asked to do.
They respond to requests for service or advice, they provide the administrative systems required by management. This is a non-interventionary role and entails provision of service to meet demands of the line managers.
At a strategic level, HR specialists take on a proactive role. They help develop HR strategies and volunteer guidance to ensure consistency in the organization.
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BUSINESS PARTNER ROLE
Here, the HR practitioners share responsibility with their line management colleagues for the success of the enterprise. HR practitioners in this role have the capacity to identify business opportunities, to see the broad picture and to see how their HR role can help to achieve the company’s business objectives.
In this role, the HR practitioners are aware of the business strategies, the opportunities and threats facing the organization. They are capable of analysing organizational strengths & weaknesses and their HR implications. They are aware of the critical success factors and know that HR has the ability to give an organization competitive advantage.

STRATEGIST ROLE
As strategists, HR practitioners address long-term issues concerning the management & development of people and the employment relationship. The HR practitioner ensures other managers focus on the HR implications of their plan. The HR strategists strive to achieve strategic integration and fit. Integration means the strategies are linked together to form a coherent whole. Vertical integration occurs when HR strategies are linked to and support business strategies. Horizontal integration occurs when a range of coherent, interconnected and mutually reinforced are established. Strategic fit means that both the business and HR strategies meet the needs of the organization.

INTERVENTIONIST ROLE
HR specialists are expected to have a holistic approach to understanding organizational issues and their effect on people. Following their analysis, the HR specialists can produce a diagnosis of any problems and their causes and formulate proposals on what should be done about them.
Intervention can be concerned with organizational processes such as interaction between departments and people, teamwork and structural change. It may be necessary to intervene with proposals on job design, team building, training, communication, introduction of new technology etc.
The practitioners may also intervene when they believe that existing people management processes need to be improved or changed. Other areas of intervention include performance, productivity, competence, motivation and commitment.

INNOVATION ROLE
HR practitioners are expected to introduce new processes and procedures towards improving organizational processes and effectiveness

INTERNAL CONSULTANCY ROLE
HR practitioners work like external management consultants, working alongside their colleagues their clients in analysing problems, diagnosing issues and proposing solutions.
The practitioners are concerned with the development of HR processes or systems performance management, personal development, new pay structures. This role requires skill and credibility.

THE MONITORING ROLE
HR practitioners monitoring role entails ensuring that the policies and procedures of the organization are implemented with a reasonable degree of consistency. They act as regulators through formulation and monitoring of employment rules. E.g. the line managers may be given responsibility over salary levels, but the practitioner may monitor proposals made and question unusual awards. When a disciplinary case arises, the HR practitioner has the right to insist that the standard disciplinary procedure is followed.
The HR practitioners also act as guardians of the organisation’s values concerning people. They point out when behaviour conflicts with those values or where proposed actions will be inconsistent with them.
The practitioner also ensures that organizational policies and procedures comply with the necessary employment legislation and are implemented correctly by the managers.

CONCERNS FOR HRM

1. CONCERN FOR PEOPLE
This means attracting, retaining, developing and motivating the right sort of employees and helping to develop a n appropriate culture and climate. Concern for people implies an ethical approach to their management. This entails the following 4 ethical issues.
• Respect for the individual giving people a voice
• Mutual respect – establishing community’s interest in the organization and reconciling conflict due to poor communication.
• Procedural Fairness – covering all aspect of the ways in which people are treated.
• Transparency – opening up and explaining management’s proposals, decisions and procedures.

2. CONCERN FOR PERFORMANCE
HR specialists have to be concerned about the contribution individuals and teams make to improve organizational performance. This means ensuring the right skills are available and developed. It also means that performance management processes are adopted by managers and individuals.

HR MANAGEMENT VS PERSONNEL MANAGEMENT
Personnel management is an important element of the broader subject of HRM. The following are some of the differences between the two.
1. Personnel management is practical, utilitarian and mostly concerned with the administration and implementation of policies. HRM on the other hand is strategic and tends to integrate personnel and other HRM considerations in a company’s planning.
2. HRM is more concerned with the wider implications of the management of change, whereas personnel management worries about the effects of such change on working practices.
3. Personnel management is reactive and diagnostic. It responds to changes in its environment – labour laws, labour market conditions and so on. HRM is prescriptive and concerns itself with strategies, new activities and new ideas.
4. Personnel management is concerned with imposing compliance with rules and procedures – through use of force, coercion, threat of punishment and so on.HRM is concerned with obtaining the employees commitment and loyalty through persuasion and motivation.
5. Personnel management has short term perspectives while HRM has long term perspectives – wanting to achieve integration of all human aspects of the organisation.

Similarities between HRM and Personnel Management
1. PM strategies, like HRM strategies flow form the business strategy
2. PM like, HRM recognizes that line managers are responsible for managing people. The personnel function provides the necessary advise and support services to enable managers carry out their responsibilities.
3. The values of PM and at least the ‘soft’ version of HRM are identical with regard to ‘respect for the individual’, balancing organizational and individual needs, and developing people to achieve their maximum level of competence both for their own satisfaction and to facilitate the achievement of organizational objectives.
4. Both PM and HRM recognize that one of their most essential functions is that of matching people to ever-changing organizational requirements – placing and developing the right people in and for the right jobs.
5. The same range of selection, competence analysis, management development and reward management techniques are used both in HRM and PM.
6. PM like the ‘soft’ version of HRM, attaches importance to the processes of communication and participation within and employee relations system.

THE MULTI – DISCIPLINARY NATURE OF HRM
HR functions need to be performed by individuals who have the capacity and understanding from other knowledge areas. The knowledge areas include:
1. Philosophy. This is the rational investigation of the truth. It refers to the basic principles and concepts which deal with ethical matters. It focuses on morals or standards that have been set – good or bad, right or wrong. Decisions taken by HR practitioners must reflect on their morals or standards and those of the organisation. The decisions must be ethically acceptable.
2. Sociology. An organisation as a collection of people borrows immensely from sociological teachings. Sociology is the study of human interaction, how individuals conduct themselves in society. An organisation is a collection of interacting and independent individuals who work together towards common goals. Organisational social systems involve a number of relationships : –
• Cooperation over a task – an interaction takes place between team members, employees and their supervisors and employees and their managers.
• Managerial and supervisory roles and interaction – interaction between managers and supervisors as far as supervision is concerned.
• General social relationship – existing among all members of an organisation in an informal manner.
• Sociology helps understand the organisations social structure. This is the formal and informal structure. Formal structures are those made according to an organisations policy with the members. Activities are regulated by a set of rules and regulations. The leader of such a structure is formally known and the group’s purpose is to achieve set organisational goals.
• Informal groups on the other hand, come into existence by coincidence. Reasons for group formation do vary from one group to another, and what is known is that groups are formed with members who share a common goal. Informal groups have their own norms.
• Both groups are of immense significance to the HR practitioner. The practitioner must understand for instance the reasons that caused the formation of an informal group and what are its objectives. The practitioner must understand the probable impact of the activities of the informal group on company objectives. An informal group members interests reflect on a missing item or deficiency in the formal system. Dealing with informal groups is a delicate issue – one may get total support for the company from such groups or a reject of set company rules and policies.
3. Psychology. This is the study of human mental processes. The HR practitioner must understand the psychological processes in the employees. The practitioner must have psychological in; counselling of employees, compensation, reward systems, discipline, conflict resolution, training programmes, recruitment and selection and so on.
4. Communication. The HR practitioner is at the centre of the organisation in Communication matters. The role here is informational and decisional as well as interpersonal. The practitioner must be a good communicator – clear, precise, accurate, timely, objective and so on. These skills of communication are essential in all HR functional areas – recruitment and selection, training and development, policy formulation and interpretation, counselling, coaching and so on.
5. Technology. Technology is vital for information processing. The practitioner uses technology (HR management information systems, HRMIS) to access information when needed, make better decisions and store data. This is to free the practitioner from repetitive paper work and make time for more important and strategic matters.

STRUCTURE OF HUMAN RESOURCE DEPARTMENT

What is an HR department structure?
An HR department structure is a framework that outlines how various human resource tasks and responsibilities are organized and carried out in a company.
Depending on the size of your company, the structure can range from a simple setup with one person handling all HR roles to complex department structures where multiple team members focus on specialized HR functions.

Core components of a modern HR department
For many, the human resources department is the backbone of a company. Let’s explore the core components in detail:

1. Recruitment and talent acquisition
This is all about finding and bringing in the right people. Depending on the size of your company, you might have a dedicated team or just one person handling this. They use various strategies and tools, ranging from job portals to recruitment drives, to ensure the best talent joins the company.

2. Training and development
After hiring, comes the task of training and development. This is vital to enhance employee skills and ensure they grow in their roles. Methods can vary, but workshops, online courses, and on-the-job training are common ways HR departments ensure career progression.

3. Compensation and benefits
One of the key HR functions is defining pay structures, bonuses, and other benefits. Employee benefits, both monetary and non-monetary, play a huge role in keeping staff motivated. Whether it’s health benefits or compensation benefits, a dedicated HR team member or even a whole team might handle this, depending on the number of employees.

4. Employee relations
A harmonious workplace is crucial for productivity. The HR department ensures this by addressing grievances, managing conflicts, and ensuring open channels of communication. Good employee relations also mean celebrating achievements and recognizing team members’ contributions.

5. Compliance and legal
Staying on the right side of the law is non-negotiable. The HR team ensures the company adheres to employment laws, regulations, and internal policies. Whether it’s about employee contracts or workplace safety standards, HR professionals are on it.

6. HR information systems (HRIS)
In our digital age, technology plays a big role in HR processes. An HRIS helps in digitizing processes and managing data. This can range from attendance tracking to performance reviews, making life easier for both the HR team and other employees.

The changing landscape of HR: Emerging components
The way we structure our HR is undergoing significant changes. With newer challenges and a shift in workforce dynamics, modern HR roles are expanding to include areas that were once overlooked.

Diversity, equity, and inclusion (DEI)
In modern workplaces, DEI is more than just a buzzword—it’s a crucial component. Recognizing the importance of DEI means understanding that a diverse workforce brings in varied perspectives, fostering innovation.

The role of the HR manager has now expanded to include promoting these values, ensuring that practices around hiring, compensation and benefits administration, and more, are inclusive and equitable. This not only makes the workplace more inclusive but also appeals to a broader talent pool during recruitment.

Wellness and mental health
The well-being of employees is now center stage. With increasing awareness around mental health, companies are realizing that employee well-being directly impacts productivity and morale. As a result, HR roles now encompass initiatives to support mental health.
This includes ensuring the workplace abides by health and safety regulations, providing resources HR can offer, such as counseling, and even integrating wellness programs. The use of HR software can also help HR departments track and monitor wellness initiatives effectively.

How does an effective HR structure benefit the organization?
Structuring your HR department efficiently can bring about transformative benefits to an organization. Let’s delve into the major advantages:

1. Improved employee morale and job satisfaction: A well-structured HR department ensures that everything, from compensation and benefits administration to addressing grievances, is handled smoothly. This creates a supportive environment where employees feel valued and understood.
2. Efficient processes leading to cost savings: With well-defined HR roles and the aid of HR software, processes like recruitment, training, and benefits administration become streamlined. This not only saves time but also results in significant cost savings in the long run.
3. Enhanced company reputation and branding: A company that takes care of its employees and stays updated with the latest in HR, such as DEI and wellness initiatives, naturally earns a positive reputation. This can be a major advantage in recruitment and business dealings, setting the organization apart as a leader in its industry.
In essence, a meticulous and forward-thinking HR structure can be the cornerstone of an organization’s success, ensuring it’s ready to face future challenges head-on.

Steps to evaluate your HR department structure

Evaluating your HR department structure is essential to ensure that it remains responsive, efficient, and in line with your organization’s goals. Regular assessment can help identify gaps, streamline operations, and enhance overall performance.
Here’s a step-by-step guide to help you navigate this crucial process:

1. Define clear objectives for the evaluation
Start by understanding why you’re conducting the evaluation. Is it to streamline processes, improve employee satisfaction, or ensure compliance with new regulations? Having clear objectives will guide the assessment process and help determine its depth and focus.

2. Gather relevant data
Collect data on the current operations of your HR department. This might include:
• Number of employees managed by each HR team member
• Time taken for key HR processes like recruitment or benefits administration
• Employee feedback on HR services
• Costs associated with each HR function

3. Benchmark against industry standards
Compare your HR structure and performance metrics against industry best practices. This can help you understand where your department stands in comparison to others and identify areas for improvement.

4. Engage stakeholders
Include feedback from various stakeholders such as employees, managers, and even external partners. They can offer valuable insights into the effectiveness of the HR team, areas where they excel, and aspects that might need improvement.

5. Analyze HR roles and responsibilities
Check if roles are clearly defined and if there’s a balanced distribution of responsibilities. Ensure that no crucial HR functions are being overlooked and that there aren’t any redundancies causing inefficiencies.

6. Consider employee turnover and retention rates
High employee turnover can signal issues within the HR structure or its processes. Delve into the reasons behind departures to identify potential structural or procedural flaws.

7. Conduct a skills gap analysis
Determine if your HR team has all the necessary skills and expertise to handle current and future challenges. If there are gaps, consider training existing staff or hiring new members with the required skills.
A systematic evaluation of your HR department structure not only helps in identifying current shortcomings but also in anticipating future challenges. A proactive approach to assessment can pave the way for a more agile, responsive, and efficient HR team.

EFFECTIVE WAYS TO STRUCTURE YOUR HR DEPARTMENT

Organizing your HR department is pivotal for optimizing productivity, maintaining employee satisfaction, and ensuring regulatory compliance.

While the exact structure can vary based on factors such as company size, industry, and strategic goals, there are three commonly adopted frameworks that have proven effective for various organizations.

Here’s a detailed look at each:

1. FUNCTIONAL STRUCTURE
This traditional method divides the HR department based on specific HR functions. Each function has its dedicated team, ensuring specialization and focused attention.

Components
• Recruitment and talent acquisition: Responsible for identifying, attracting, and hiring new talent.
• Training and development: Focuses on enhancing employee skills and organizing training programs.
• Compensation and benefits: Manages payroll, bonuses, and other benefits.
• Employee relations: Handles grievances, maintains a harmonious work environment, and ensures employee satisfaction.
• Compliance and Legal: Ensures adherence to legal standards and regulations.

Advantages
• Clear definition of roles and responsibilities.
• Deep specialization in each function.
• Simplified decision-making within each function.

Considerations
• Potential for silos to develop, leading to reduced communication between functions.
• Might be less agile in rapidly changing environments.

2. MATRIX STRUCTURE
This approach combines the functional structure with a project-based or team-based structure. While HR professionals still have their primary functional roles, they also work across various projects or teams.

Components
• Functional teams (as described above).
• Cross-functional project or team groups, where members from different HR functions collaborate on specific initiatives or for particular departments.

Advantages
• Enhanced collaboration between different HR functions.
• More agile and responsive to specific project or departmental needs.
• Allows HR professionals to broaden their skill sets by working on diverse projects.

Considerations
• Requires effective communication and coordination.
• Potentially higher complexity in management and decision-making.

3. CENTRALIZED VS. DECENTRALIZED STRUCTURE
In a centralized structure, all HR decisions and processes originate from a single central HR department. Conversely, in a decentralized structure, individual departments or business units have their HR teams that operate semi-independently.

Components
• Centralized: A main HR hub that oversees all HR activities across the organization.
• Decentralized: HR representatives or teams within individual departments or business units.

Advantages
• Centralized: Uniformity in HR policies and processes; economies of scale; streamlined decision-making.
• Decentralized: Tailored HR approaches to specific department needs; agility in decision-making; closer relationships with departmental staff.

Considerations
• Centralized: May be less responsive to specific departmental needs.
• Decentralized: Potential for inconsistencies in HR practices across the organization.

OUTSOURCING HR FUNCTIONS

Pros of outsourcing HR functions
• Cost savings: Outsourcing can eliminate the overhead costs associated with full-time employees such as benefits, training, and office space.
• Expertise on demand: Firms specializing in HR bring a wealth of experience and knowledge, ensuring that best practices are followed without the need for extensive in-house training.
• Scalability: It’s easier to scale up or down based on business needs when outsourcing, without the commitments of long-term contracts or hiring.
• Risk management: Professional HR firms stay updated with compliance and regulatory changes, reducing the risk of legal complications for businesses.
• Focus on core activities: By outsourcing non-core HR activities, businesses can concentrate on their primary objectives and functions.

Cons of outsourcing HR functions
• Less control: Outsourcing means relinquishing direct control over certain processes, which might not sit well with all businesses.
• Potential for misalignment: An external firm might not be as ingrained in a company’s culture or strategic vision, leading to potential misalignments.
• Privacy concerns: Outsourcing involves sharing sensitive employee data, which could raise concerns about data privacy and security.
• Potential quality issues: If not properly vetted, an outsourcing partner might not deliver the expected quality of service.
• Reduced employee engagement: In-house HR teams often have a better understanding and relationship with employees. Outsourced HR might not have the same level of engagement or trust.

EVOLUTION OF HUMAN RESOURCES MANAGEMENT

HRM has evolved through several stages since the industrial revolution. However the most noticeable developmental stages took place beginning the early 1900’s. The main developmental stages include: –
1. Stage I: Welfare
2. Stage II: Personnel Administration.
3. Stage III: Personnel Management
4. Stage IV: Personnel Management – Mature Phase
5. Stage V: Personnel Management – Entrepreneurial Phase
6. Stage VI: Personnel Management – Post Entrepreneurial Phase

STAGE I: WELFARE (1914 -1918)
This was during the 1st world war. Organisations that existed were more involved in the production of military hardware for the troops in the war. The military personnel were the ones most involved in the industries and the war. A main concern during this time was provision of transport facilities, canteens, sports activities and so on.

STAGE II: PERSONNEL ADMINISTRATION (1919 – 1938)
The services provided to the industries in the first stage i.e. transportation, canteen were also provided in this stage. But we now saw the advent of a systematic administrative procedures – personnel administrative support to management now included areas such as recruitment, basic training and record keeping.

STAGE III: PERSONNEL MANAGEMENT (1939 – 1950’s)
The stage saw a refinement in the manner in which the activities in stage I and II were being undertaken. Other activities also now came in and included salary administration, training for supervisory levels, the introduction of industrial relations. The employees now begun to get increasingly aware of their rights.

STAGE IV: PERSONNEL MANAGEMENT – MATURE PHASE (1960’s – 1970’s)
This stage saw the beginning of sophistication of the personnel function. The period saw the introduction of; organisational development, systematic training programmes, concept of performance management and appraisal systems. The most significant development of all was the introduction of manpower planning. The period also saw an increase in involvement of personnel managers in corporate strategy matters.

STAGE V: PERSONNEL MANAGEMENT ENTREPRENEURIAL PHASE (1980’s)
The 1980’s saw a surge in businesses demands that there be a change in approach in HRM. HR practitioners were now expected to be entrepreneurial in their approach to business matters. They now had to have a business approach to the management of HR.

More and more research in HR was now being conducted especially by independent researchers and scholars at the Harvard University. The main interest was to find out what it is in HR that could give an organisation competitive advantage. They singled out a number of corporations as being successful in HR implementation. These all had a common characteristic: they saw their employees as highly valued resources. The theorists and practitioners then began initiating changes that initiated HRM and sent out personnel management. From then onwards, people were seen as the most strategic asset in the organisation.

STAGE VI: PERSONNEL MANAGEMENT – POST ENTREPRENEURIAL
This is the stage we are in now globally. There is now a higher involvement of HR practitioners in strategic management in the company. HR practitioners now participate at the boardroom level in the formulation of corporate strategies. Some of the current developments in HR include:
1. Management via the web: companies are now under constant change, organised around networks, built on shifting partnerships and alliances and constructed on technological advantages.
2. Organisational structures: are becoming flat, with an intricately woven form that links partners, employees, external contractors, suppliers, and customers within areas of great interdependence.
3. Organisations are now turning customers into business partners. The companies are now tailoring their products to each individual who is expected to design and say exactly what he/she wants.
4. Intellectual capital will be important for business success. Companies now have to attract and retain the best thinkers – requiring huge pay cheques, excellent culture and reward systems.
5. Businesses are now doing away with the old command and control hierarchies in favour of organisations that empower vast numbers of people and reward the best of them as if they were the owners of the enterprise.
6. Talent is now being sought wherever it can be found globally.
7. There is speed in the processing of work. All work is now being done in an instant.
8. Concentration on the core business and the outsourcing of non core company activities is now the norm.