How Did Human Resources Planning (HRP) Evolve?
In the early days of industrialization, managers rarely had to think ahead about
the numbers and kinds of people required to get the work out: Conditions outside
organizations were relatively stable. Most work demanded little by way of
specialized training and expertise. And managers could find all the people they
needed on short notice, provided they were willing to pay competitive wages.
However, there must have been some HR planning going on, even in earliest
times. It is hard to imagine that the builders of the Great Pyramids or of
Stonehenge completely disregarded planning those superhuman exertions that
were required to erect these monuments of antiquity over many generations.
Yet records from that time do not exist to reveal how managers planned for their
human resources.
The origin of manpower planning, the predecessor of modern HR planning,
predates the beginnings of twentieth-century management theory. Among
the first to raise the manpower-planning issue was the Frenchman Henri Fayol
(1841–1925). His famous fourteen points of management are still considered
valid today. One point had to do with what Fayol called stability of tenure of
personnel. For Fayol, administrators bear responsibility to plan for human
resources, ensuring that “human and material organization is consistent with
the objectives, resources, and requirements of the business concern” (Fayol,
1930, p. 53). This point resembles some modern definitions of HRP.
A deep recession in the late 1950s sparkled the need for a new way of thinking
about management. People were increasingly viewed as assets—human
resources—that could be either developed or wasted. This way of thinking became
even more pronounced during the 1960s and 1970s, when the focus was on
finding ways to design organizations and jobs to permit individuals greater latitudes
of self-expression. Human creativity and job satisfaction are still two of
the most important concerns of management.
The 1960s also spawned the term manpower planning. Initial manpower
planning efforts were typically tied to annual budgeting, as is still the case in
some organizations. The implication was that people are expense items, since
wages, salaries, and employee benefits constitute a major cost of doing business. Early planners were more often found in planning and budgeting
departments than in personnel or HR departments, but they did manage to
devote some attention to forecasting manpower demands. However, it was a
need to budget, not a desire to stimulate creativity or increase productivity,
that spurred them.
As the Human Resources school of management thought grew in importance
throughout the 1970s, manpower planning activities gradually shifted to
personnel departments. At the same time, the term human resources planning
supplanted manpower planning. Likewise, personnel departments were renamed
human resource departments, reflecting a new and more pronounced emphasis
on the human side of the enterprise.
Human resource practitioners and other contemporary observers of the
management scene have expressed a growing awareness ever since the 1990s
that people represent a key asset in competitiveness. While Western nations
have long placed enormous faith in the power of technology to enhance productivity,
the fact is that the greatest competitive gains stem from the exercise
of human creativity to identify new products and services, find new markets
and applications for existing products and services, and make use of the possible
gains to be realized from technology. Without the creative application of
human knowledge and skill, organizations would not be formed and would not
thrive for long. Human beings thus represent intellectual capital to be managed,
just like other forms of capital (Brown, 1998).