The developed world continued its phenomenal economic growth in 60s and 70s of the 20th century. Organizations required large amounts of skilled and experienced employees; the employment relationship changed its balance as employees gained their vote and power in negotiating with employers. It was the moment when the personnel management started to evolve into early HR Management. The commitment and loyalty were the words, which spread quickly among managers and leaders of organizations. The early HR Management was born in 70s in the USA. It was the moment when employees became the most important asset of the company, not just a cost item on the balance sheet.
The loyalty of employees to employers decreased in 70s, because workers realized they had a wide range of employment opportunities. They stopped valuing the long term employment and loyalty with the organization, which offers too little in return. Turnover and lack of know how began to be a serious topic for the top management discussions.
Organizations expanded and strengthened the role of the personnel management department (see more about the personnel management) because it was the department that was tasked to find answers to the decreasing loyalty of employees. The personnel management became scientific and based on previous researches of the organizational behavior.
The new HR Department was tasked to find strategic and tactical answers so that the loyalty of employees increases again. The decisive answer was in the commitment of employees. The HR Department introduced new HR processes and policies, which were aimed to increase the commitment and motivation of employees.
The beginning of the HR Management is connected with the massive introduction of the performance management and career planning. Prior the introduction of the HR Management the succession planning was purely based on observations of line managers. From this moment, the practice changed, and employees were asked what kind of the job they wish in the organization.
The performance management was a real revolution in 70s and 80s. Most organizations were not interested in providing consistent and formal feedback to employees about their performance before the introduction of performance appraisals. The best practice spread quickly over the market, and largest companies introduced the customized performance evaluations and other related processes by mid-80s.
The introduction of the performance management had a significant impact on productivity of employees. The ambitious employees got a chance to highlight wish to be promoted and the path leading to promotion was drafted to them. It was the first version of the succession planning. Employees valued the opportunity to express their plans and agreeing next steps with managers.
The training and development processes were significantly improved because HR Department was able to utilize information gathered during performance appraisals. HR was able to react to demands of employees and managers. Training courses became one of the best motivators for employees as the demand was enormous, but the offer was made just to the best ones.
Employees in HR Department started to specialize to cover different HR agendas. The training and development became an independent agenda in Human Resources, followed by resourcing including recruitment and staffing. The specialization of HR jobs had a positive impact on professionalism of provided HR services to managers and employees. Additionally, the career in Human Resources became a good option for many fresh graduates.
As the scope of Human Resources enlarged new HR Management policies were introduced. The management of employees became more strict, and managers were forced to follow same policies and principles. The equal and fair approach in the organization became a required standard.
The introduction of HR Management was a significant change for organizations, managers and employees. The people were recognized as the most important ingredient of the success. They were identified as the source of a competitive advantage and the people segment was not missing in any successful business strategy from that moment.