Large Firms

Armstrong (2012, p.4) defines human resource management (HRM) as a “strategic, integrated and coherent approach to the employment, development and wellbeing of people working in organisations”. Adopting a more rational approach, it was described by Boxall and Purcell (2003 cited in Armstrong, 2012, p.4) as “those activities associated with the management of employment relationships in the firm”. In this essay, a generalist approach to HRM will be embraced which, broadly outlined focuses on employment relation. To address and thus account for the rise of the human resource function within large firms , this paper will look back at the historical trends of the HR function and its developments by putting the focus on three main contributors; changes in productivity, political factors that constitute for changes in the HR function and finally, and most importantly as identified by Becker and Gerhard (1996), the HR function as an “untapped opportunity to obtain a sustainable competitive advantage” as an effect of organizational change. The evolution of the HR function will demonstrate the growing importance of an employee within the organisational context from being nothing but a means of production (dehumanizing the human being, or as Karl Marx (Rich, 2006) called it “human self-alienation”) in the 20th century industrial economy to evolving into a key source of sustainable advantage up until today. Showing how the HR function has changed and considerably grown over time, will demonstrate how the role of HRM in large firms has altered from being concerned with routine transactional HR activities to dealing with intricate transformational activities that resulted in the strategic significance and visibility of the HR function and lead for it to be a strategic factor of a companies’ competitive advantage (Coff, 1994) and simultaneously, allowed it into grow into strategic HRM.

‘Personnel Management’ (the pioneer to the term HRM) began in the late 18th century with the name of Robert Owen, often referred to as the father of PM. Owen worked on developing a spirit of co-operation between workers and management and was renowned for giving human treatment to workers as he was a firm believer that performance was subject to working conditions and the treatment of workers (Kumar and Sharma, 2000) in a time, when in actual fact, workers were treated with no tolerance and even less respect. Looking back at the early 20th century, prior to World War II, the PM function’s main concerns were with routine transactional HR activities (Kavanagh, Thite and Johnson, 2012), namely with welfare, administration and legal compliance.

During this period, the dominant managerial ideology was Taylor’s ‘scientific management’, the goal of which was to maximise employer productivity in a commonly known ‘one best way’ to fulfil a work task, which was determined via time and motion studies in order to define the most efficient