The Royal Commission on Labor set up from 1929 to 1931 to examine the situation recommended the appointment of labor officers and other changes. The suggested changes led to the bringing in of standardization and that was the first step toward introducing personnel management, Formation of trade unions, with close links with political leaders like Mahatma Gandhi (the Textile Labor Association in Ahmedabad was founded in 1920), also influenced the way industrial workers are managed. This focus made an adequate number of employees available to the industry, disciplined the “rural” and “less educated workers” and implemented various legislations and settled disputes.
At the same time there were progressive employers who on their own cared about the well being of the employees. Tata Steel in Jamshedpur, for instance, had introduced a series of welfare measures for workers much before it became mandatory by law.
After India won independence in 1947, considerable changes happened in the personnel management approach of organizations. The post independence period encouraged a mixed economy as the growth model. Industrial organizations were broadly classified as the public sector (including the administrative arm of government) and the private sector. Public sector organizations were the largest employers and received huge investments. The Constitution of India had the objective of achieving a socialist society and various constitutional provisions supported protection to working class. Numerous legislations were introduced to protect workers.
Along with industrialization, the trade union movement also grew in India. The rapid growth of trade unions also catalyzed the development of personnel systems. The workers became more aware about their rights and it was increasingly difficult to exploit them. In the 1970s and 1980s typical HRM functions in organization included: (1) Personnel and administration, (2) Industrial Relation, and (3) Labor welfare. The prescribed and assumed role was “crisis driven” or “issue driven”. This high level of union activism also led to the situation where the decision framework took a legal turn.
The same period also saw the rise of managerial unionism, where non workers without formula union rights joined to form associations that acted as pressure groups. Managerial unions were able to exert an influence in the public sector and that called for attention to be given to managing the non worker staff also. Though not widespread, the industry was also open to adopting tools and techniques that could help improving efficiency and productivity. For examples, 1961, with the full cooperation from the trade union, the Indian Aluminum Company Ltd. Conducted a plant wide work study at its Alupuram, Kerala plant. This lead to defining the work output, staffing pattern, and productivity linked inventive scheme. The establishment of management training institutes and business schools like XLRI and the IIMs helped the industry to imbibe modern management principles and thought.
It could be very well summarized that up the mid 80s human resources management in Indian organizations grew through various phases under the influence of the following factors: (1) A Philanthropic viewpoint about doing good to workers, (2) A legislative framework, (3) government policies, (4) Trade unions, (5) emerging trends / concepts in management and (6) Changes in the economy. By then, most organizations, business as well as non business had established separate departments to handle the personnel function, with senior level managers heading them.
Shift to Human Resource Development Orientation:
Professors Udai Pareek and T V Rao were among the pioneers who not only introduced the human resource development (HRD) concept in India but also assisted many organizations in designing development oriented HR systems. The have discussed the paradigm shift from traditional personnel function to the human resources system.
The 1980s saw the large scale introduction of the developmental concept in Indian organizations. It was recognized by then that systematic attention to human resources was the only way to increase organizational effectiveness. This awareness created the stage for the direct involvement of top managers and line managers in the HRM process.