Alex is a curious writer and researcher with a background in mathematics and software.
What Does "Human Resources" Really Mean?
Sometime in the 1970s or 1980s, personnel departments began calling themselves "human resources." With this name change came a change in mindset. Soon, employees began to be viewed increasingly as interchangeable commodities—literal human resources.
This embodied a mindset employers adopted when Adam Smith published The Wealth of Nations. Smith would probably have been horrified but not surprised to discover that employers took these ideas and used them to exploit their fellow human beings while ignoring his companion work, The Theory of Moral Sentiments. This mindset has led to increased unemployment, lower productivity and greater inequality.
The Growth of the Personnel Department
The West was in love with machines and moving toward an increasingly industrial society in which new technologies like power looms augmented humans and deskilled workers, thus eroding their bargaining power. Many workers were forced from dignified self-employment into sweatshop wage labour.
Employers, aided by the authorities, replaced the concept of a moral wage, one sufficient to let a worker support themself and their family with dignity, with the market wage, the lowest an employer could get away with paying.
There was a class element as well, with employers regarding themselves as superior in every way to the employed—as lords, not equals. Managers became the equivalent of the dominant male in a troop of chimpanzees.
The struggles of the early 19th century in the United Kingdom and the USA led to moves—resisted, of course, by employers—to improve workers’ welfare. The idea of “industrial welfare” started around 1833 when the factories act stated that factories should have male inspectors.
In 1878, work hours for women and children were limited to 60 (six 10-hour days). The first trade union conference was held in 1868. In 1913, the workers’ welfare association was formed. Later it changed its name to The Chartered Institute of Personnel and Development.
World War I saw a rise in scientific personnel development largely pursued by the military. World War II saw a focus on recruitment, selection, training, morale, motivation and health and safety. All of these changes necessitated a personnel department with trained staff. As employment law became more complex, personnel departments became the negotiator with unions and specialists, ensuring compliance with the law.
The Perversion of Human Resources
In the 19th century, an American plantation owner created ways of assessing slaves as assets or resources that depreciated with time and might be sold in subprime bundles. An auction might mention 15 slaves equivalent to 10 prime hands.
In 1919, the Treaty of Versailles included the notion that humans were not a resource. Unfortunately, this noble notion has been sidelined in the interests of employers. “Human resources” have become tools of management, not worker empowerment. Managers tend to forget that they—like those who report to them—are workers.
“Human resources” was often used in the early 20th century as a metaphor for cherishing human capacity, but by the end of the century, the term reflected a neoliberal mindset that labour was a resource and implicitly a commodity like coal or oil—a resource to be exploited for profit. The bad drove out the good, and this view came to dominate business and spread into the wider culture.
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Neoliberalism, a revival of 19th-century Manchesterism (itself inspired by a misreading of Darwin’s principle of “survival of the fittest”), and the introduction in the 1970s of simulations and games for management training burned the notion of workers as interchangeable objects even further into the managerial id.
The concept of the manager as the dominant male of a troop of simians, with workers treated as subordinates, slithered into management theory. The organisation was seen as a managerial core surrounded by a necessarily flexible workforce. Human resource literature exhorted flexibility and mobility and insisted that the right to manage should not be questioned. Economic efficiency was subordinated to corporate profit, and humans were regarded as a resource or even a problem to be managed, not people with rights.
Human resource professionals adopted the conceptual frame that humans were a resource to be managed. Three axioms of human resource theory, shared by economic theory (neoliberalism in particular) and ingrained in rightwing politics, are responsible for the toxic nature of many workplaces today:
The 3 Axioms of Human Resource Theory
- A firm’s workforce comprises a core and a periphery that must be flexible to meet changing demand.
- Employment is not a social responsibility because individuals are responsible for investing in their own development and welfare.
- Workers may be entitled to consultation, but unions and workers must not question the right to manage.
Following these principles, particularly the devotion to the idea of a flexible workforce, has led to:
- a growing precariat, forced into zero-hours contracts and often scared to insist on such rights as they have left, in order to let firms evade labour rights,
- the abandonment of a commitment to full employment, and
- hostile policies towards trade unions and workers’ voices that hark back.
The same firms that praise zero-hours contracts vilify and deprecate the use of freelancers and contractors, who represent truly flexible labour, since employers are as keen on power as on profit and dislike working with someone who is their own boss.
McGaughey shows that treating humans in this way has resulted in lower productivity, higher unemployment (an inefficient economy), greater inequality and damage to the physical and mental health of workers. Yet, there is no political will to change this.
The premises of modern management theory are rooted in a mindset that was fertilised by human greed and megalomania and seeded on American plantations. This mindset misused Adam Smith as fertiliser, and, like the Holocaust, was built on othering workers. This lets the robber barons and their successors fatten their wallets and justify their prejudices and their hatred and fear of the poor.
Modern HR theory is responsible for many of the ills that beset contemporary society. It is not clear whether these tenets contributed to or were created by a neoliberal agenda. The central evil of HR theory is the idea that humans are a resource. This must change.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
Mel Carriere from Snowbound and down in Northern Colorado on August 08, 2021:
This is a very well thought out and articulated article. You point out how a philosophy can dominate human behavior. Conservatism and neo-liberalism are just two sides of the same dirty coin. Great work.