Re-tracing the history of Human Resource Management Dr. Arbab Akanda (FCIPD London, DPM Glasgow, PGDPM, Phd) The Development of Human Resource Management has been different in different countries. Social needs, economic needs, political pressures, pressures from international organisations, legal obligations, influence of the trade unions, the influence of the technological advancements, just to name a few, have all played their part in the development of Human Resource Management. In order to understand Human Resource Management, it is essential to understand the origin of Human Resource Management and how it transformed itself into a distinct branch of knowledge: Human Resource Management, with the passage of time. There is no single date as the origin of Human Resource Management. Today’s Human Resource Management has actually come through a process of evolution. But it will not be incorrect to state that the traceable origin of Human Resource Management was in the United States and historically, from the United Kingdom, to be followed by other countries, from a Western perspective. Much of the research into the history of Human Resource Management has been undertaken by Western scholars, at least at the initial stage. This is the reason why whenever to trace the history of Human Resource Management, we start off in the United Kingdom from where the basic idea behind Human Resource Management emerged and developed through various forms and stages. When I am referring United Kingdom as the starting point of Human Resource Management, I am essentially taking a Western perspective. I will start off with elaborating the Western Perspective of Human Resource Management. After discussion of the Western Perspective, I shall concentrate on the Eastern Perspective with particular emphasis on the Indian perspective of Human Resource Management. China has also made valuable contribution to the thinking of Human Resource Management. Also; from the Middle East: significant ideas have emerged to influence the HR practice. Actually, each continent and era have significant contributors to the concept and development of Human Resource Management. The great Taj Mohol or the Great Wall of China or the Pyrramids of Egypt, just to name a few, could not have been built, without People Management. Trying to trace the history of Human Resource Management is not only focusing on some individual philosophers but also the global power politics of the day accompanied with ideological demarcation of the world, social awareness and technological advancements have all significant interventions into HRM thinking. Tracing the history will be unfolded under the following headings: • The Middle East and HRM • The Western Perspective of HRM • The Indian Perspective of HRM • The Far Eastern Perspective of HRM Devoting time to understand the historical development of a concept is helpful to market and internalize the concept. This is the reason why I shall focus at length with the historical development of HRM. Knowing the history of HR, from a very unbiased perspective, should provide greater understanding of the subject matter which adds overall value at the practitioner level and marketing level. The Middle East Perspective of Human Resource Management: From the Middle East context, SHRM can be traced to ancient times, for example, the Chaldean period, where a sound incentive wage plan was in place. But the records of ‘Chaldea, the homeland of the Chaldeans, was in Southern Babylonia just northwest of the Persian Gulf,’ comes from the Bible (Old Testament). The Chaldea was a small Semitic nation and people who resided in the southern Babylonia and today it would be the Southern part of Iraq. The Chaldeans lived during the 10th and early 9th century and survived until the mid- 6th century when the Chaldean tribes became a part of Babylonia. The people were known to be intelligent and history tells us that they developed a radical incentive wage plan. The Semitic Nation was Jews living in Europe and speaking the Semitic languages which are one of the branches of the Afro-asiatic language family and originated in the Middle East. Human Resource Management from the historical perspective can be very much linked to the Middle East, although and obviously there was no reference to Human Resource Management at that time. But the theme centred on how to manage people. The Western Perspective: Another notable period of the development of SHRM can be linked to the Pre-Industrial Revolution which was characterized by Slavery, Seldom and the Guild System. Slavery was a form of trade where human beings were sold in the market like any other item, for example rice, sugar, coffee etc and were subject to torture, sexual exploitation and most importantly, had no human rights whatsoever. They were captive. The Europeans started the trade where slaves were brought from Africa and sold as any other commercial commodity. All the great European Powers like the Portuguese, the Dutch and the British Empire engaged in this very profitable business. America was one of the places where such inhuman trading took place. The plantation owners bought the slaves and were used to produce agricultural products like sugar, coffee, cotton, tobacco etc. The slaves were held captive and had no say in anything. Slavery has been defined: ‘Slavery was one form of exploitation. Its special characteristics included the idea that slaves were property; that they were outsiders who were alien by origin or who had been denied their heritage through judicial or other sanctions; that coercion could be used at will; that their labour power was at the complete disposal of a master; that they did not have the right to their won sexuality and, by extension, to their own reproductive capacities; and that the slave status was inherited unless provision was made to ameliorate that status’. Source: Paul E. Lovejoy, Transformations in slavery: A History of slavery in Africa (Cambridge: Cambridge University Press, 1993) and taken from: The Atlantic Slave Trade by Jeremy Bell. Of the many causes of the civil war in America (1861-1865), one was the slavery which divided the country into the North and South (the Confederate and the Union). The President, Abraham Lincoln who won the presidential election in 1860, represented the North (Union). Abraham Lincoln termed this as ‘a house divided.’ The South seceded from the North. And the civil war started. The Civil War ended in 1865 with a victory for the Union and collapse for the Confederacy. As a result, slavery was abolished under the able leadership of Abraham Lincoln (Republican), the 16th President of United States (1861-1865). ‘…slavery was a fact of life throughout much of human history.’ In fact, slavery as a form of human exploitation, existed throughout history, in various forms. The horrific tales of the slave trade and through the passage of time emerged four basic concepts that have influenced the world of work: • Freedom • Equality • Security • Dignity And innumerable Acts have emerged to protect the Human Rights like the Human Rights Act 1998 in United Kingdom, The British Institute of Human Rights (BIHR), Universal Declaration of Human Rights, The European Convention on Human Rights, The European Court of Human Rights etc. The primary aim of all these Acts were to support the above four basic principles of People Management. As Human Resource Practitioners, it is important to understand the roots of Human Rights because as a profession we are devoted to protect people in the context of work and this is the reason why I have discussed briefly about slavery. What needs to be understood is that the dignity of the people must be upheld. The slavery was gradually disappearing and emerged the seldom stage where positive incentives was noticed. It was during this time that the people providing the labour were neither slaves nor labourers but received positive incentives. The quality of work also became better because people who provided the labour had dignity restored. Gradually, the seldom disappeared giving way to the Guild System: this was characterized by: owners, journeymen and the apprentice. It was during this time that we come across wage policies and working conditions. With the advent of the Industrial Revolution, the Guild System was disappearing. The industrial revolution was characterised by factories, industries and power generated machines and we also notice the deplorable working conditions that led to entrepreneurs like David Owen to come up with ideas to improve the working conditions of the workplace. He is one of those radical thinkers who understood that productivity is definitely linked to the working conditions, how workers are viewed and realized that organisations need people as well as people need organisations. David Owen was an 18th century mercantilist who owned spinning mills throughout Scotland. And during the 50s and 60s we really come across some outstanding theories related to HR or People Management: • The Principles of Administration by Henry Fayol • The Human Needs Theory by Abraham Maslow (1954) • The Worker-Structure Conflict by Chris Argyris (1957) • The Hygiene and Motivators by Frederick Herzberg (1959) • Manager’s assumptions about people by Douglas McGregor (1960) • And in contemporary times, David Ulrich, Demming’s, Peter Drucker, Peter Senge, Charles Handy, Senge, David Kolb etc All these outstanding thinkers have contributed towards the development of HR as a business discipline worth taking into consideration. The Indian PerspectiveHR in India has a very strong legacy. We can trace HR to ARTHASHASTRA written by Kautilya, sometimes in the 4th century BC. HR procedures and systems were developed. Kautilya was a great philosopher, scholar and intellect and was also a radical thinker for his time. He wrote the Arthashastra as a guideline to good governance and concentrated on three main issues: • International trade • Taxation • Labour theory of Value It is his Labour Theory of Value which can be very much linked to todays’ Human Resource Management thinking. The scholarly book, ‘Arthashastra’ was written two millennium before Adam Smith wrote his masterpiece: The Wealth of Nations, 1776. Kautilya clearly stated that wages must be ‘just’ and depend on: • Level of skills • Labour hours worked • Units of output produced And should not be the other way round. The HR legacy does not end with Kautilya. SHRM has also its roots during the Mughal period and British Rule of India in the Indian Subcontinent that have greatly influenced the people management practice in India, Pakistan and Bangladesh. It was during the Mughal rule that we come across a very systematic administration accompanied with the establishment of Karchanas that meant literally factories and also included stores and administrative units and a method of workshop management that mainly started in the Northern India which was the seat of power at that time. These workshops were owned by courtiers and those close to the court and where we notice a new sort of Karkhans: imperial Karkhanas. At this time unwritten rules were developed to manage the master-apprenticeship relations The products of the Karkhanas were for the Royal use. And the bazaar was not the normal marketing venue for the products of the Karkhanas. The Karkhanas hired experts and master of the trade who were the best. One point must be made clear: Karkhanas were often urban based commercial workshops and the products were for the royal family and the court, in most cases. The products were also exported to the European countries through the court. Gradually a new class of people developed who were known as the Karkhanders who managed and administered the administration, products, and finance and managed the factories. In today’s context, this class of people would be the managers who were also responsible for the recruitment and training and industrial relations, basically in a very informal manner. With the passage of time, the Karkhanders disintegrated into various professional areas like, production management, finance management, HR management, quality and general administration. I have to mention a few significant legal interventions in India that have influenced the way HR was being practiced: • Plantation Act of 1863 • Factory Act of 1881 • Factories Act 1948 • Trade Union Act 1926 • The Workman Compensation Act of 1923 • The ILO (International Labour Organisation) 1919 • Trade Dispute Act 1929 • Industrial Employment (Standing Orders) Act 1946 Another influential theory has been the Ghandian approach which is: exercise right in a peaceful and non-violent manner. According to the approach, disagreements in the industrial relations should be settled in a peaceful and non-violent manner. No need for violence or adversarial situation. These Acts influenced and shaped the thinking of Human Resource Practice by initially focussing on Industrial Relations matters. It must be understood that today’s HR has been initially driven by Industrial Relations. The Chartered Institute of Personnel and Development, London (CIPD) prefer the usage of Employee Relations instead of Industrial Relations. The subject matter remains to some extent the same. Starting from the Mughal rule to the British Period and the Independence of India, 1947 and the creation of Pakistan in 1947 and in 1971, the independence of Bangladesh: in all these periods, we see the development of several Acts to respond to the social needs of the time. Particular attention was made on the following issues: • Protection of employee rights • Health and safety • Work environment • Trade dispute • Terms and conditions of employment • Etc All these Acts and legislations have influenced the way HR is practiced in the Sub-Continent. But one point must be remembered: the people management practice of the Moghul Empire (from 1526) has its root in the Arab and Central Asia from where the Babur, the founder of the Moghul Empire, came. To be more precise, Babur, the founder came from Uzbekistan and Tajikistan. The Far East Perspective: Also, the legacy of Human Resource Management can be linked to the teachings of the great Chinese philosopher: Confucius (551BC-470BC). The teachings have greatly influenced Asian countries like China, Taiwan, Vietnam, Japan, Singapore and South Korea, from the perspective of running family, society and leadership The Australian-American media tycoon once said in the 90s, ‘The world is changing very fast. Big will not beat small anymore. It will be fast beating the slow.’ (BBL 2011) Far Eastern countries and many Asian countries are historically linked to the teachings of the great philosopher Confucius (551BC-479BC). He was an outstanding Chinese thinker and social philosopher. Confucius teaches how to embrace business code of ethics and be socially responsible. With the passage of time, the principles of ethics are changing. Yet the debate between the two below mentioned concepts remain the same: The means may justify the ends (how did you reach?) End justifies means (results matter) Confucius has made explicit statements about leadership in his: Analects of Confucius. The teachings on leadership are still valid and universal. According to Confucius, leaders must be upright and act with integrity. By being upright is meant to be ethical in having virtuous characters and attitudes. Confucius has also mentioned leaders need a value which is a quality and way of behaving. According to Confucius: ‘unending strength, resoluteness, simplicity and reticence are close to benevolence.’ These can be achieved through self-cultivation, education and performance or code of behaviour. (Storey 2007, cited in Low, 2010c). Recitance means to be reserved, restrained, keeping feelings to oneself, quiet and not to be confused with reluctance which means unwillingness. Confucius always advocated in simplifying things. He also stressed the importance of what is right. One should treat others as one would like others to treat oneself. This is the reciprocity of Confucius. Confucius explained the value of prudence. Prudence is care and good sense when making decisions. Being prudent is being wise in practical matters. Resilience is another aspect which means having the courage and patience and refusing to give up. It is this quality of character to carry on and come back from misfortune that is very important to leaders. Bhuddist saying: If we are facing in the right direction, all we have to do is keep on walking. Chinese saying: not being afraid of going slow but be very careful of standing still. Confucius has said leaders must understand the value of personal commitment. It is the responsibility to keep the promise to do something or not to do something. Leaders must understand the value of sincerity and integrity which is being truthful to oneself. Also, leaders must understand the virtue in thinking and doing what is right and avoiding what is wrong. Likes and dislikes must not affect judgement. Referring to ethics, Solzhenitsyn (1918-2008), Russian novelist said: ‘Even the most rational approach to ethics is defenceless if there is not the will to do what is right.’ According to Confucius: ‘Love all and serve all, without discrimination.’ Just imagine, so many years ago, Confucius had the foresight and wisdom to mention about the value of continuous learning. He attached tremendous importance to learning which should be continuous. Education opens the mind. It has profound influence on behaviour, attitude, performance and move forward. Education is about long-terminism. It creates positive thinking. In order for organisations to succeed and move forward, the realization that human capital is the most important factor was discussed by Confucius. This human capital may be referred to as Talent, the common phrase used these days. The education Confucius was referring to was Morale Education which will lead to ethical behaviour, virtuous leadership and harmony within the society, by way of which the society will also benefit. In fact, Confucius strongly opines that it is the duty of every entrepreneur to contribute to the well-being of the society. The features of traditional Chinese culture have been greatly influenced by the teachings of Confucius: • Obedience to authority • Understanding the importance of structure • Rules and regulations • Status in hierarchy • Formal communication • Logical thinking • Cause and effect • Patience • Group membership Today’s Human Resource Management as a function today occupies a central role within organisations in every sense to provide support and take on the leadership role to manage People within the organisation. Today’s’ HR themes include talent management, performance management, ethics, culture, HR strategy, organisational communication, retention, accountability, transparency and dealing with the ever-changing complex world of work. It is no longer an issue of just sustainability but serving and knowing how to survive in the market is what HR is about at the moment. The role of HR, as I would like to see, to be more focused on society and social needs. Conclusion: The principles of contemporary Human Resource Management have been greatly influenced by the Middle East where SHRM can be traced to ancient times, for example, the Chaldean period where historians have traced sound incentive wage plan, which definitely play a part of people management. From this perspective, yes, the wage plan can be linked to today’s Human Resource Management. Then I have discussed briefly the Western thinking on HR that have been greatly influenced by Henry Fayol, Adam Smith, Maslow, Herzberz, David Owen, Frederick Tayler (Scientific Management) and many more. From the Far East perspective, the teachings of Confucius mostly from the perspective of Far East and Asia along with the teachings of Taoism and Bhuddism and last but not least, from the Indian soil came Kautilya’s Arthasastra, Mughol rule and the British rule. Human Resource Management has not only strong historical ties, but at the same time, the discipline is contextual and situational which means, it is dynamic in nature. Bibliography: 1. Chen, J. (1990). Confucius as a teacher: philosophy of Confucius with special reference to its educational implications. Beijing, Chine: Foreign Language Press 2. Lin Y. (ed.) (1994). The wisdom of Confucius, The Modern Library, New York 3. Low, K.C.P. 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