Whether you’re running a small or large organization, an NGO, a private or public limited company, or even a government department with contractual hiring, the need for Human Resources (HR) is inevitable to manage and oversee workers.

Firstly, it’s essential to understand the history of HRM (Human Resource Management). The roots of HRM date back approximately 150 years, originating from Eastern Europe and the USA around the 18th century. The conceptualization of HR is credited to two individuals, Robert Owen and Charles Babbage.

Robert Owen, a British industrialist and a successful entrepreneur, initiated various reforms at the management level, providing assistance to several companies in improving their business practices and operations. Owen introduced a policy refusing child employment under the age of 10, established fixed standard working hours (10/2), and emphasized the significance of a positive work environment influencing employee performance. He believed in employee involvement in decision-making, promoting motivation. Owen also advocated for better living conditions for workers and contributed to management by inventing the Open Rating System, a method of evaluating employee performance through colored codes on different aspects.

Often referred to as an 18th-century British reformer, Owen’s belief that the best investment for a company is to invest in its workers led to him being recognized as a forerunner of the behavioral school.

The second figure, Charles Babbage, also known as the father of the computer, was a professional mechanical engineer who brought a scientific approach to management. Babbage introduced the concept of the Division of Labor, emphasizing the need for proficiency in both physical and mental skills. His ideas laid the groundwork for modern assembly lines.

Babbage proposed a profit-sharing plan where workers offering valuable suggestions would receive bonuses. Additionally, he suggested that if a company is making a profit, workers’ wages should increase accordingly. This laid the foundation for what we now know as incentives, bonuses, daily allowances, and other forms of employee benefits.

Despite Owen and Babbage’s contributions, another key figure in modernizing HR was Frederick Taylor. 

Taylor focused on job responsibilities and aimed to eliminate favoritism, nepotism, and prejudice. Following him, Edwin B. Flippo made significant contributions to employee personnel management in the late 19th and early 20th centuries. Flippo worked towards eliminating discrimination based on race, religion, gender, and promoted better relations between managers and employees, striving to reduce conflicts.

This transformative period marked the beginning of the industrial and labor relations era, eventually leading to the term “HR.” In the 1940s, during World War II, HR became an academic subject integrated into school and university curricula.

Termed as Human Capital Management by some, it has now evolved into a field with extensive academic degrees, known as Human Resources Management. The foundation of HRM in India was laid in the early 19th century, around the 1920s. However, the systematic evolution of HRM took place after India gained independence in 1950, coinciding with the initiation of the industrial evolution in the country.

As India grew, so did HRM. In 1931, the Royal Commission suggested deploying a spokesperson in factories with more than 500 employees to protect their interests. After independence, The Factories Act of 1948 made it compulsory to appoint a labor welfare officer for the welfare of workers.

In 1950, two professional bodies were established in India—Indian Institute of Personnel Management (IIPM) in Kolkata and National Institute of Labour Management (NILM) in Mumbai—marking the beginning of working on labor welfare.

The 1970s witnessed significant developments in HRM, focusing on job roles, responsibilities, and labor interests. In the 1990s, the government merged the two bodies (IIPM and NILM) and formed a new entity called the National Institute of Personnel Management (NIPM).

India’s globalization journey began, opening doors for the economy during the Liberalization, Privatization, and Globalization (LPG) era. Post this phase, the landscape of HRM underwent a substantial transformation.

What is HRM and Its Introduction

Now, let’s delve into the introduction of HRM. Whether you are operating a large corporation or a small business, understanding the concept of HRM is crucial. Approximately 150 years ago, HRM became a significant aspect of organizational management, emerging from Eastern Europe and the USA in the 18th century.

The concept of HRM revolves around managing the human resources or workers in an organization, regardless of its size or nature. The term ‘HRM’ was coined by two renowned figures in the field, Robert Owen and Charles Babbage. These individuals laid the foundation for what we now recognize as the discipline of Human Resource Management.

Robert Owen, a British industrialist and entrepreneur, brought about substantial reforms in various companies. He advocated for policies such as refusing child employment for those under 10 years old, implementing fixed standard working hours, and emphasizing the importance of a positive work environment in influencing employee performance. Owen’s contributions extended to employee involvement in decision-making and considerations for their living conditions.

Charles Babbage, known as the father of the computer, was a professional mechanical engineer who introduced a scientific approach to management. His concept of the Division of Labor emphasized the need for specialization in both physical and mental skills. Babbage’s ideas, particularly those related to specialization, laid the groundwork for modern assembly lines.

Babbage also introduced the concept of a profit-sharing plan, suggesting that workers offering valuable suggestions should receive bonuses. Additionally, he proposed that if a company was making a profit, workers’ wages should increase accordingly. These concepts laid the foundation for various forms of employee benefits such as incentives, bonuses, and daily allowances.

While Owen and Babbage were pioneers in the field. Frederick Taylor played a crucial role in modernizing HR. Taylor focused on job responsibilities and aimed to eliminate favoritism, nepotism, and prejudice. Following him, Edwin B. Flippo contributed significantly to employee personnel management, particularly in addressing issues of discrimination based on race, religion, and gender. Flippo’s efforts aimed at improving relations between managers and employees, ultimately reducing conflicts in the workplace.

These transformative contributions shaped the industrial and labor relations era, leading to the term “HR.” The 1940s, during World War II, marked the academic incorporation of HR as a subject in schools and universities.

In contemporary times, HR has evolved into Human Capital Management, offering various academic degrees. The foundation of HRM in India dates back to the early 19th century, with systematic development occurring post-independence in 1950, aligning with the industrial evolution in the country.

As India progressed, so did HRM. In 1931, the Royal Commission recommended deploying a spokesperson in factories with more than 500 employees to protect workers’ interests. Post-independence, The Factories Act of 1948 made it mandatory to appoint a labor spokesperson.