Personnel Management

Personnel management has been a recognised function in the USA since NCR opened a personnel office in the 1890s. American personnel managers worked within a unitarist tradition, identifying closely with the objectives of their organization (key concept 1.3). It was natural for HRM to emerge comparatively smoothly from this perspective.

In other countries, notably Australia, South Africa and the UK, the personnel management function arrived more slowly and came from a number of routes. Moreover, its orientation was not entirely managerial. In Britain its origins can be traced to the 'welfare officers' employed by Quaker-owned companies such as Cadburys. At an early stage it became evident that there was an inherent conflict between their activities and those of line managers. They were not seen to have a philosophy compatible with the worldview of senior managers. The welfare officer orientation placed personnel management as a buffer between the business and its employees. In terms of organizational politics this was not a politically viable position for individuals wishing to further their careers, increase their status and earn high salaries.

(...) The second tradition - industrial relations - further compounded this distinction between personnel and other managers. In the acrimonious industrial relations climate which prevailed in the UK throughout much of the 20th century, personnel/industrial relations managers played an intermediary role between unions and line management. Their function was legitimized by their role as 'honest brokers'.

But from the 1980s onwards governments with a neo-liberal or free market orientation such as Margaret Thatcher's administration in the UK reined in union freedom severely. Overall, there was a marked reduction in the importance of collective worker representation in many English-speaking countries. The perceived importance of collective bargaining reduced as managerial power increased. Trade union membership declined along with centralized pay bargaining and other forms of collective negotiation - and with them, the importance of the personnel manager with negotiating experience. The focus switched from the collective to the relationship between the employer and the individual employee. To support this change, a variety of essentially individualistic HR techniques were applied to achieve business goals. These include performance measurement, objective-setting, and skills development related to personal reward.

By the 1980s, personnel had become a well-defined but low status area of management (see table 1.1). Associations such as the British Institute of Personnel Management (now the Institute of Personnel and Development) recruited members in increasing numbers, developed a qualification structure and attempted to define 'best practice'. Although the knowledge and practices they encouraged drew on psychology and sociology, they were largely pragmatic and commonsensical and did not present a particularly coherent approach to people management. Moreover, in some instances  training and industrial relations were considered to be specialist fields outside mainstream personnel management. Traditional personnel managers were accused of having a narrow, functional outlook. Storey (1989: 5) commented that personnel management: '...has long been dogged by problems of credibility, marginality, ambiguity and a 'trash-can' labelling which has relegated it to a relatively disconnected set of duties - many of them tainted with a low-status 'welfare' connotation'.

In practice, the background and training of many personnel managers left them speaking a different language from other managers and unable to comprehend wider business issues such as business strategy, market competition, labour economics, the roles of other organizational functions - let alone balance sheets (Giles and Williams, 1991). The scene was set for a reintegration of personnel management with wider trends in management thinking.

Excerpt from chapter 1  - Human Resource Management in a Business Context, Thomson Learning. Copyright A. J. Price - this excerpt may be copied for personal use only and must be credited to the author if quoted in any text.

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