Evolution of HRM: Then and Now

Rolling Plans Pvt. Ltd. May 26, 2021 16974 0

Human Resource Management (HRM) is an extensive approach that focuses on company culture, recruitment, managing employees, increasing their performances, and so on. 


HRM has significantly evolved over the decades. From working conditions not being up to the standard to employees being fully prioritized in the workplace, HRM has come a long way through the route of evolution. 


There used to be times when HRM was nonexistent in companies and organizations. But the times we are in now are different. Let’s take a quick stroll down the history lane of HRM to see how unlikely things were then. 


History of HRM


During the pre-1900s era, the workers had it tough. They had to deal with difficult work and working arrangements were even tougher. Workers were treated as puppets in those times.


It was only between 1890 and 1920 the notion of a relationship between the welfare of workers and their productivity became apparent. Business leaders, assisted by scholars and politicians, welcomed to attain outcomes, “Industrial Betterment and Scientific Management as Social Control” and began plans to balance the labour force and inspire worker loyalty. 


With time, the workplace started recognizing its workers as people with psychological and emotional needs. Personnel departments started collaborating with labour unions to establish fair compensation packages for the efforts of the employees. 


Eventually, more laws were being passed that would oblige HRM to concentrate on policies. And HRM would pay attention to varieties of employees’ needs and focus on recognising their motivational factors. 


Now, decades later, HR has completely shifted on its axis by moving the focus towards worker-centric function. HRM now can comprehend or at least makes an effort to understand what drives a workforce. HRM these days have responsibilities beyond the administrative department as well. 


History of HRM in Nepal


Foreign joint venture companies, banks and development collaborators brought along the idea of HRM in Nepal in the 1980s. Institutions started organized operations of recruitment and grievance handling activities to guarantee an effective work environment.

Nepali businesses learnt to embrace the HR management practices from foreign organisations and mostly the INGOs working in Nepal through their successful employee management. Administration departments in Nepali organisations would supervise employee management until the 90s.

In the meantime, Nepal Rastra Bank (NRB) also made it compulsory for all commercial banks to have an independent HR department. It wasn’t till 2000 HR department exist in the form of a distinct body in Nepali institutions,

During the mid and late 2000s, HR companies took upon the role of recruitment service providers and afterwards embarked on areas such as employee training and development. 

There used to be only around 55 organisations in Nepal practising HRM a decade ago and now there are more than 500 organisations with separate HR departments and around 1,300 HR professionals are active in the country.


Aspects of HRM: Then and Now


HRM is a broad field and it comprises various aspects and all those aspects have been constantly changing with time, technology and many other essential factors.


These aspects have evolved and have actively played crucial roles in the evolution of HRM.


HR Research



HR focus was solely used to be on calculating if the employees are paid the correct amount and how much salary they should get. While this thing still occurs in the HR functions, the HR specialist would only concentrate on particular areas in HRM.


Due to technological progress and globalisation, HRM in today’s world is stepping towards transformation. HR professionals can conduct various types of research and assess the payroll of employees because of dependable HR software or payroll tools. HR professionals now can research things such as corporate governance, the economy of a nation and the world and more. 





The Internet did not use to exist and companies looking to hire new candidates would print out their job postings in newspapers and magazines. Companies had limited reach and chances of less qualified people getting hired were more. Networking with other professionals and scheduling job interviews were difficult. Technical skills were given more priority then. 


The technological advancements have made it super easy to network and connect with like-minded professionals and even conduct job interviews. There is software for scheduling interviews and companies can easily promote their brand through various mediums. And now while acquiring talents hiring managers also prioritize candidates with soft skills. The recruitment process has changed in so many ways for the better since then. 


Performance evaluation



Companies depended on annual reviews to a great degree to evaluate employee’s performance and give feedback. Employers would also opt for an extreme method of creating conflict against one another of their employees. And, employees who had their performance evaluated with the lowest ratings would often look for opportunities somewhere else. 


Companies are acquiring more casual and adaptable method. Employees now get performance evaluation without harsh criticism. Their impact within the company gets reviewed and employers provide expected outcomes in the future and how everyone can work together to attain the company’s goals. Employees are given space to make mistakes, learn and grow. Workers feel more confident after having conversations about their performance with their managers. 


HR Technology

Data were saved in spreadsheets in the HR system and procedures were written on paper. One can only imagine how time-consuming those tasks would be. And on top of taking too much time, it would also require a larger workforce due to the lack of technology. 



There is cloud-based HR technology to process data in the HR system. HR software and payroll tools can be found instantly online that suits your business requirements. Modern HR technology consumes little to no paper, saves time and isn’t labour-intensive at all. 


HR functions



The HR function was mostly limited to work out the salary and benefits of the employees and making sure that their wages are paid on time. In those days, even the employers looking for candidates to hire for HRM would seek the knowledge of such functions only. 


The HR function goes beyond payroll and managerial activities. The function of HR in present days is to focus on linking and arranging the HRM with business goals, plans and purpose. Nowadays HR professionals need to have an understanding of the business situation to plan an ideal HR vision and become skilled in making organizational changes. 





HR was referred to as personnel management and it was practical and mostly focused on proceedings. Eventually, the notions alike human capital management and HR arose with predominantly tactical roles. 


HR heads need to be articulate in running the data interpretation and utilizing HR tools. They must be able to comprehend numbers for resolving several business issues. They need to have advisory skills and other important soft skills like effective relationship building, communication and more to carry out the day to day HR functions. 


Employee turnover



Employee turnover would cost more to the organisation. There weren’t social media for instant advertisements. Companies had to place advertisements on paper and wait for weeks for candidates to apply. The manpower was limited in those times. HR wasn’t precisely aware of what caused the staff turnover and most likely suffered the negative impacts of it.


Employee turnover is very much alive now as well. Especially in countries like Nepal, due to the foreign job employment opportunities, the employee turnover rate has been increasing. Besides, the entrepreneurship idea is growing on many Nepali people thus they start their business ventures which have also contributed to employee turnover in the current scenario. 


Employee retention



A company’s ability to retain its employee is directly related to what payroll, benefit and perks they are provided with and they weren’t satisfactory. HRM wasn’t able to differentiate who would stay among the employees during the hiring process. Furthermore, they couldn’t provide the right benefits to the ones willing to keep on working for the company. 

Companies can retain or at least try retaining their employees with different strategies such as by increasing salaries and benefits, training and development, awards and refreshment and recreational activities. Overall, they have opted for employee engagement techniques. Besides employee retention, employee engagement activities have also helped increase their productivity level. Likewise, remote work culture has also helped in employee retention for the different organizations. 


Online presence



Even just a decade ago social media was totally new and business leaders and HR hadn’t settled in the world of the internet just yet. Social networking sites such as Facebook and Twitter were thought to be major distractions that would reduce employees’ productivity. Employers would use technology to block sites that were popular among the workers and also monitor employees’ emails. 



Employers comparatively have a lesser controlling attitude now. This is why fewer organisations are blocking access to some sites for their employees. Whilst, social media can still be a distraction, employers now have the understanding that attempting to determine employees’ online lives likely will have the opposite of the desired effect. People use social media to connect, find information and get entertained and if there exists some sort of restriction for such activities then it can be suffocating too. 





There were very few benefits and perks for the employees back then. Health and retirement programs were some of the common ones. The benefits were very limited and unfortunately, employees weren’t provided with benefits like they are now. 


Employees have benefits that suit their individuality now. The work environment is flexible. Organizations have revised their perks to get the attention of talented candidates in today’s world of competition. Employees are provided with valuable training in so many companies. Holiday benefits, insurance and paid leaves are some of the benefits that employees have now. On top of that, some perks come with being staff of the organisation and many more. 


The present context of HRM


Long established companies in Nepal have grasped the essence of human resource management for accomplishing the goals of corporates. They have also successfully adopted their version of effective international HRM practices. 

But the majority of the companies do not seem to care about employee motivation and mostly pay their attention to sales and marketing only. Companies and employers still are least concerned about developing HR practices to create an employee-friendly work environment to further guarantee employee satisfaction.

And as a result, such companies are expectedly facing high employee turnover. Now some organisations have adopted HRM strategies and in return, employees have benefitted so much from them. Thus this lets the employees have the option to choose a workplace where they can do well. 

Suffice to say awareness regarding HRM among organizations and the general public is on the rise. People have started to realise the importance of human resource management and most importantly, people as the most necessary resource in any company. This had led organisations to focus on the qualities of human capital. 


Similarly, in the present context, organizations have understood that no resources like money or technology can outpass the resource that is human capital. Therefore, companies are always on the hunt for a competent and reliable workforce. 


Future of HRM


By the look at how HRM has evolved over the years, it is quite obvious that there are going to be significant changes and improvement in the field of HRM in the future. HRM will implement recruitment plans that will make applicants experience better. Similarly, HRM likely will redesign performance management practices and create employee retention policies. 


Moreover, automation will be incorporated even more in the HR field. Different HR tools and technology will help complete the day to day activities efficiently. HR professionals and organisations will be able to network successfully. On the contrary, due to digitalisation, it is believed that the human element might get lost.


But the good news is that employees won’t hesitate to talk about pays, raise and benefits. The rewards for workers will be personalised and total transparency will be brought. Also, employees will often get the chance to discuss their performance with their managers and get feedback. This means that the appraisal system will get better over time. 


Social media and cognitive tests will be utilised for the recruitment process. HR will lean towards using the predictive tool models to hire, train and retain suitable candidates. The data analytics will help recognise the employees that are possibly going to leave. HRM can adopt effective strategies to make them stay in the organisation which will also improve employee satisfaction.


AI and technological advancements are guaranteed to bring groundbreaking changes. While many fear that technology will replace humans, experts predict that technology will simply enhance the work experience. So the future of HRM includes a lot of automation, excellent employee experience and endless possibilities. 


The evolution of HRM has been revolutionary. Where it is now it consists of dramatic changes compared to where it was then. 


What’s interesting here is that there is so much to look forward to HRM in the future because chances are that it won’t be the same as it is today. Evolution is constant. 

​​​​Team Rolling Blogs
Head/Editor : Pravash Rai
Team Leader : Roshan Kalauni
Writers : Lachana Shakya, Birat Bijay Ojha & Shikshya Subedi
Designs : Beena Koju

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