HR has come a long way since personnel was a department and outsourcing amounted to nothing more than a solitary payroll processing service offered by an entrepreneurial programmer who decided to make use of spare capacity on his company’s mainframe computer. Here Personnel Today selects 40 moments that have defined HR and, in the process, changed the workplace forever.
1963: First bureau payroll service begins
Ian Evans-Gordon, a programmer at Perkins Engines, Peterborough, sets up one of the first bureau payroll services using spare capacity on his firm’s mainframe computer. He names the company Peterborough Data Processing.
1964: Human Capital published
US economist Gary Becker won the Nobel Prize for his study on the economics of human capital – a term he also created. An advocate of education and training, he recognised it was not equipment that was crucial to business growth but having the knowledge and skills to run the equipment effectively.
1965: Birth of strategic management
Russian-born Igor Ansoff’s book Corporate Strategy was the first to document a theory of strategic planning, and in doing so ignited a lasting preoccupation for the profession: aligning an organisation’s people practices with its corporate strategy.
1966: The Effective Executive published
Legendary management thinker Peter Drucker codified numerous modern work practices and this book is considered by many to be the most influential of his works – telling us all how to be better managers.
1967: The rise of teams
Not strictly a single moment, but by the late 1960s, group behaviour had become the hottest workplace topic as organisations realised that teams could lead to improved organisational effectiveness, greater worker satisfaction and improved productivity.
1968: Motivation gets a theory
Psychologist Frederick Herzberg was the first to recognise that job satisfaction and dissatisfaction stemmed from completely different – not opposing – factors. He originated the term ‘job enrichment’, highlighted the importance of job design and helped shape modern reward thinking. His Harvard Business Review article, How Do You Motivate Employees?, is still its number one seller.
1969: Open University founded
The OU made distance learning credible by demonstrating that high academic standards can be achieved while studying at home or in the workplace. This new confidence in open learning methods has seen them increasingly being used to develop staff. The CIPD has offered distance learning as an alternative to classroom-based study since 1981.
1970: Equal pay Act become law
Eighty-two years after the TUC passed its first resolution in favour of equal pay, Labour’s employment secretary Barbara Castle successfully forced legislation past her male cabinet colleagues that would do more than any other to advance equality for women. Employers were given five years to shape up.
1971: Concept of unfair dismissal aired
Until the introduction of the Industrial Relations Act of 1971, the only real employment right on the statute books was an employee’s right to redundancy pay. The Act paved the way for the introduction of the unfair dismissal law in 1972 and the requirement to follow significant consultation procedures before making redundancies.
1972: US companies start using 360-degree feedback
Devised by ex-Navy man Mark Edwards (TEAM International), this method of appraisal relies on the views of subordinates and peers to help upgrade a manager’s effectiveness and in turn improve team performance. It has since been adopted wholesale by Fortune 500 companies and its take-up in the UK is increasing.
1973: Three-day week imposed
The quadrupling of oil prices and an overtime ban by both power generating workers and the miners forced Prime Minister Edward Heath to put British industry on to a three-day week. This set the tone for a decade where the profession was inexorably linked with industrial relations and its influence was at its lowest.
1974: Industrial peacemaker set-up
The Conciliation and Arbitration Service had been established two years earlier (previously the Ministry of Labour’s industrial relations section) but it was in 1974 that it became an independent entity and Advisory was added to the title. Freed up from involvement in enforcing statutory pay restraints, the body has been instrumental in promoting greater harmony and understanding in the workplace.
1975: Sex discrimination Act passed
More than a decade after the Women’s Liberation Movement urged women to return to the workforce, this Act made it illegal to refuse to give a woman a job because of her sex or discriminate against her in the workplace because of pregnancy.
1976: Commission for Racial Equality established
CRE was set up as part of the 1976 Race Relations Act, which made it unlawful to discriminate against anyone on the grounds of race, colour, nationality, ethnic or national origin, and it has been in the front line of employment race relations ever since.
1977: Saville & Holdsworth Consultancy founded
Set up by Peter Saville and Roger Holdsworth, SHL Group as it is now known became a world leader in the psychometric testing market. The process is used by a significant proportion of companies in their selection, assessment and development of people.
1978: Five per cent pay norm fixed
The Labour Government’s decision to impose a 5 per cent pay norm (inflation was running at 8 per cent) without crucial support from the TUC spelt disaster for UK business. It sparked a dispute that resulted in 20 per cent of the entire British workforce going on strike at a cost of 12 million working days.
1979: Margaret Thatcher enters office
Britain’s industrial landscape was to undergo a radical transformation under 20 years of Conservative rule. The nation’s first woman Prime Minister trail-blazed a wave of business privatisations and was responsible for eight employment-related acts which seriously curtailed trade union power – shutting them out of policy-making.
1980: Motorola establishesfirst corporate university
Motorola’s decision to set up the Motorola Training and Education Center (later to become Motorola University) attracted immense interest. The HR-led initiative was intended as a “catalyst for change” where every employee must complete at least 40 hours of training a year. Now a worldwide facility, it has spawned hundreds of imitators.
1980: Xerox pioneers benchmarking
Xerox’s first formal benchmarking exercise began in response to losing significant market share to Japanese copier rivals. As a result it successfully bridged the competition gap. Today, it is estimated that 40 per cent of companies use benchmarking to measure human capital performance.
1981: Transfer of undertakings laws
While the intent of the Transfer of Undertakings (Protection of Employment) legislation was noble (to safeguard employees’ rights), the complexity of applying them proved to be an HR minefield. Not only has it changed the face of mergers & acquisitions forever, it created an entire offshoot industry of consultants and lawyers specialising in it.
1982: Personal computer sales take off
Few inventions have so radically impacted HR like the personal computer. By 1982, IBM was shipping 400,000 – 10 times more than the previous year – and the shift to the organisation desktop had begun. Today it is used for every HR process from payroll through to recruitment and performance appraisal. PCs can now also be found in our laps and palms, allowing us to work from virtually anywhere.
1983: Empowerment breakthrough
Although Mary Parker Follet suggested “responsibility is the great developer of men” in the 1920s, it was Rosabeth Moss Kanter’s two key works – Men & Women of the Corporation (1977) and The Change Masters (1983) that moved HR’s favourite catchphrase up the corporate agenda. (“People are our greatest asset,” was a mere breath away).
1984: Jack Welch voted toughest boss in US
The rise of the chief executive as celebrity cult that prevailed in the 1990s can be traced to one man – Jack Welch, CEO of General Electric. Charismatic and driven, he transformed GE into an agile, dynamic organisation through HR initiatives like differentiation and the “boundaryless sharing of ideas” used to breakdown corporate hierarchies. His ideas continue to be assimilated by the most powerful companies.
1985: People Express Airlines take off
Revolutionary HR practices transformed the 1981 start-up to a £1bn turnover company in less than five years. Harvard professor D Quinn Mills described the low-cost airline as “the most interesting company in America today” and as “the most comprehensive and self-conscious effort to fit a business to the capabilities and attitudes of today’s workforce.” It also set the HR blueprint for today’s low-cost airlines.
1986: ‘Nissan factor’ hits the North East
The first Japanese car plant to set up in the UK set new standards for recruitment. Its gruelling six-stage recruitment process took seven hours to complete and few would make the grade. Motivation and self-improvement is at the centre of Nissan psychology and this, combined with no clocking-on or loss of earnings for lateness, and paid sick leave, saw absenteeism levels run at 2 per cent compared to 10 per cent for British car rivals.
1987: Interim management comes of age
When electrical engineering firm Babcock had to be radically restructured following a takeover by FKI Electricals, 40 management consultants were hired on short-term contracts to implement the plan. The deal, worth £1m to P-E Inbucon, kick-started a UK industry estimated to be worth 400m pounds today.
1998: Curnow elected president of Institute of Personnel Management
The appointment of Curnow, chairman of recruitment group MSL International, did much to shift HR management away from welfare and hire-and-fire to having a strategic boardroom agenda and influencing business decisions.
1989: Worldwide web
Without the development of Tim Berners-Lee’s user-friendly interface we wouldn’t have e-mail, web-enabled HR, corporate intranets, e-learning, job sites or online recruitment.
1990: Re-engineering revolution
One of management’s most successful but destructive fads began as a 1990 article in the Harvard Business Review: Don’t Automate – Obliterate! Michael Hammer’s ideas were later expanded into the two million-selling Re-engineering the Corporation (1993), co-written with James Champy. One year later, 68 per cent of UK companies and 78 per cent of Fortune 500 were engaged in an activity synonymous with downsizing and millions of job losses.
1991: Mirror tycoon mysteriously drowns
Maxwell’s death led to the discovery that he had plundered newspaper workers’ pension funds to cover his debts. As a result, minimum funding requirements legislation was introduced, forcing companies to prove their pension funds were protected for the future.
1992: Toyota‘s ‘total production system’
As if to prove that Nissan wasn’t a one-off, Toyota upped the recruitment ante for its first plant in Burnaston, Derbyshire. Its extensive recruitment process saw employees undergo 16 hours of rigorous assessment, and out of 20,000 applicants only 400 were appointed. The CIPD predicted these practices would spread across industry.
1993: Balanced scorecard
The Balanced Scorecard performance measurement tool was the outcome of a year-long research project by IT expert David Norton and Harvard Business School professor Robert Kaplan. Criticised for having too little emphasis on the human element – it led to the development of an HR-specific version courtesy of Brian Becker, Mark Huselid and Dave Ulrich.
1994: Institute of Personnel and Development
Merger of the Institute of Personnel Management and the Institute of Training and Development creates the largest professional body in Europe covering the development and management of people. Ten years later, 38,000 personnel professionals acquire chartered status.
1995: HR gains cult status
Scott Adams, creator of the phenomenally successful Dilbert cartoon strip, introduces Catbert, the evil HR director. Adams said he expected to be “flamed” by HR but the cat was instantly adopted as a mascot. After appearing for just two days people were demanding: “Give us more Catbert.” Launched in 1989, Dilbert became a true international hit between 1995 and 1998.
1996: Disability discrimination Act
Jettisoning the previous system of voluntary and self-regulatory measures was to have a significant impact on employers. In the subsequent four years, nearly 9,000 cases of disability discrimination were lodged with employment tribunals compared with just three prosecutions in the previous 30 years.
1997: HR Champions published
There’s been a few, but this must figure as HR’s ultimate call to action. Leading academic Dave Ulrich asserts that the function needs to adopt new competencies and redefine roles or risk being “automated, outsourced and streamlined”.
1998: Minimum wage introduced
Hailed as “one of the great achievements” of the New Labour Government, five years on the TUC reckons it has helped more than a million people.
1999: Record race discrimination payout
The payment to Sam Yeboah for the racial harassment he endured while working as chief personnel officer of Hackney Borough Council changed the compensation landscape forever. The previous highest individual award had been £1,000 and it inspired an army of complainants to have a go at winning the jackpot.
2000: Oil giant boldly outsources HR
Until BP Amoco farmed out its entire HR processing function to Exult (in a landmark deal signed the year before) the profession had only ever risked outsourcing certain specific functions. Although not initially successful, it did inspire a wave of companies to follow suit and the BPO market has since gained substantial momentum.
2001: Enron collapse leads to the rise of the whistleblower
When Sherron Watkins blew the whistle on the Texan energy giant’s fraudulent accounting in 2001, not only did it expose HR’s failure to put safeguards in place but it signalled a new era of snitching on the boss. The following year, three whistleblowers from Enron, Worldcom and the FBI graced the front of Time magazine’s People of the Year issue.
2002: New employment Act lands with a thud
Patricia Hewitt’s child-friendly Act includes flexible working provision which means that nearly four million workers with children under six and disabled children up to 18 can ask to change their working arrangements. The government anticipates 500,000 requests annually.
2003: Information Commission publishes three parts of data protection rules
Since the first of the four-part code was published in 2001, the Data Protection Act 1988 is the employment law issue that has challenged HR the most over the past two years, according to research. The three parts of the code cover recruitment and selection, employment records and monitoring at work.
2004: Record fine for health and safety offences
Retail powerhouse B&Q was fined 550,000 pounds after a shopper was crushed to death by a forklift truck in one of its stores. The company had been warned six times that drivers were flouting health and safety laws by working alone.