Differences between Human Resource Management and Personnel Management - Essay Example

d HUMAN RESOURCE MANAGEMENT AND PERSONNEL MANAGEMENT INTRODUCTION Gone are the days when the workforce ofan organization was considered as just another function. The changing times have emphasized on the importance of the human ‘resource’ as one of the key drivers of organizational success. The word resource reflects the value of an asset that is attributed to the employees in today’s world. Organizations strive to attract the best skills and expertise from the pool of candidates, hires them and train them to meet the needs of the firm. The function does not end here. The growing and changing needs of the firm require that the employee training and motivation practices be made part of a continuous process so that it is ensured that the employees give their productive best at work and remain loyal to the organization. The competitive business environment of today has its implications on increased rivalry amongst firms. Many organizations aim at attracting employees from their rival companies in attempts to obtain their competitive advantage and using it to strengthen their human resources. This makes it imperative that organizations make their HR strategies and practices strong enough to keep employees motivated and retained to the 78organization. The complexity of the function has given birth to many derivatives of the HR functions that are used alternatively, mounting the ambiguity levels regarding the difference and similarities between them. One such term is ‘personnel management’ which even though is quite different in concept, is used interchangeably with ‘Human resource Management’(Boxall and Purcell). The aim of this paper is to shed light on the two concepts and highlight the different aspects that make them similar and different. The functional construct of the two will highlight how Personnel management is a narrow concept that is part of Human resource Management and not the whole function itself. HUMAN RESOURCE MANAGEMENT Human resource Management, a recent phenomenon of the business world, implies that the human resource or employees are assets that need to be managed effectively in order to generate optimum productivity level, creativity and retain them to continuously benefit the organization. It involves the management of people and the relationship between the organization and its employees. The human capital refers to the development of employees by instilling in them certain set of skills and knowledge in a way that they are productive for the organization(Bowen and Ostroff). It involves determining the appropriate number of employees per department and ensuring that the company is adequately staffed. Development of job designs, job analysis, determining selection criteria for recruitment and conducting training and education programs to keep employees up to date with the latest skills in their fields is a part of HRM. Ensuring that employee organization relations are positive and that employment and labor laws are followed explicitly are also the responsibility of the HRM department. The human resources are a valuable asset of an organization and it is imperative that they are provided with an ideal environment and opportunities to utilize and exhibit their skills. Continuous change in the professional world makes employee development a must. Human resource management ensures the establishment of an organization-wide strong human resource system that can potentially translate into its competitive advantage. PERSONNEL MANAGEMENT This type of management function deals with providing employees with equitable terms of employment at an operational level. The aim of these functions is to establish just system of employment that improves workplace efficiency and ultimately fulfilling organizational objectives. Therefore, personnel management is relatively workforce driven and is associated with communicating organizational objectives, justifying them to the employees and finding means through which an employee-organization balance can be maintained(Cappelli). Personnel management functions involve activities like hiring new employees according to the needs of the organization, developing the skills of current employees through training and appraisals and ensuring that the work environment is safe and within occupational health standards. Development of compensation systems that adequately compensate employees according to their expertise and efforts also come under the personnel management function. Checkingfor compliance with labor laws and ensuring that the organizational standards are met are also a part of this function, in this way it connects with the strategic organizational goals of running a lawful business and operations. Most significantly, personnel management helps improve the relationships between the employees and the organization by listening to employee concerns and satisfying them by finding amid-way that acts asreconciliation between the goals of the organization and the needs of the employees. DIFFERENCES BETWEEN HRM AND PERSONNEL MANAGEMENT Highlighting the unique attributes of the two concepts of personnel management and human resource management was aimed at reaching to a conclusive pattern of difference in scope of the two. The main difference, hence, between the two is that Human resource management is a more modern and broader approach that integrates organizational goals with the personnel management objectives, leading to the development of strategies that are employee-driven and applicable on the scale of the whole organization. Personnel management, on the other hand, refers to a traditional means of ensuring that the best people are hired for the available jobs, are compensated equitably, etc. thus, it is not wrong to say that personnel management is a part of human resource management which is a wider and more strategic level of employee management. Where personnel management functions would include recruitment, job design, payrolls, appraisals etc., human resource management is more concerned with developmental activities of the employees on a broader scale such as development of an organizational culture, motivation strategies, communication strategies, leadership etc. The following are three major differences between the two concepts(Wistorm): Approach: Personnel management tends to stick by the traditional practices like those of establishing rules and contracts and checking compliance. The human resource management function on the other hand takes onto consideration the values and organizational philosophy and focuses on the design of the contracts, what it reflect etc. human resource management is more flexible as it acts as a driver of the personnel management functions. The core human resource strategies are assisted by the personnel management functions. For example, if the core human resource goal is to keep employees motivated and driven, they would focus on building a work environment that is conducive to learning and creativity. It will also advise managers to ensure that their teams are motivated and constantly challenged. On the personnel management level, motivation would likely be achieved from designing attractive compensation packages and rewards etc. thus, Human resource management is focused upon the whole organization’s employees and personnel management involves short term and traditional means to achieving the HR goals. Nature: Human resource management function is more proactive in nature as compared to the reactive nature of personnel management function. Personnel management tends to detach itself from the organizational goals and focuses upon taking active actions against corporate goals that hamper personnel management ones. Human resource management aims at aligning the employees with the achievement of corporate goals and objectives through effective strategies. Where HRM is focused upon getting the organizational goals and objectives fulfilled, personnel management is genuinely concerned with ensuring that the employees are satisfied, adequately compensated etc. Application: Personnel management acts as a liaison between the views of the employees and management’s interest by carrying out integrated activities that call for dual benefits to both parties for example trade union decisions and bargaining. Human resource management, on the other hand, emphasizes on how employees can fulfill the customer-oriented strategies of the company. It is aimed at providing employees with the support and facilitation that promotes productivity at the workplace. Thus, personnel management tends to have little to do with the middle managers or the organizational goals and philosophy. Human resource function prioritizes the organization’s purpose and integrates it with the interests of the employees so that they perform well at their jobs. PERSONNEL MANAGEMENT AND HUMAN RESOURCE MANAGEMENT FUNCTIONS The above explanation regarding the difference between the two concepts clarify that the human resource function is more of an overall organization HR function and personnel management is concerned with employee-organization relationship management through the formulation of policies that fulfill employee needs and the organizational requirements. For the purpose of this study we will analyze two general functions from both the management types to explain how they fall into either due to their scope. HUMAN RESOURCE FUNCTION- WORKPLACE DIVERSITY Diversity refers to variety. Workplace diversity refers to the practice of hiring employees from various contrasting backgrounds so that they can benefit from having diverse mindsets and are considered a fair and unbiased organization(Cox). The tolerance for change amongst the employees also increases as a result of having colleagues that consist of a variety of backgrounds. Globalization implies that organizations hire people from diverse backgrounds so that they are seen as truly global. Operating in multiple countries also gives organizations the advantage of having diverse employees who are in a better position of understanding the cultures and needs of various countries, giving the organizations a competitive edge. Many organizations today strive to have diverse people at their leadership levels so that the influence can trickle down and they can be seen as a diverse and open-minded organization. Most importantly diverse workforce in terms of gender, ethnic background, religion etc. protects the businesses from law suits that may result from biasness and discrimination. Workplace discrimination can tarnish an organization’s image and can affect the attitudes of the existing employees as well. Supporting the dualearning families of today by providing facilities like paternity leaves, day care centers on job facility etc., is also seen as a positive step towards diversified workforce. Since ensuring diverse workforce is an organization-wide function, it is a part of strategic level human resource management PERSONNEL MANAGEMENT FUNCTION- PAYMENT AND REWARDS Payment and rewards, both monetary and non-monetary play a significant role in motivating employee. By having an attractive compensation system in place, organization can ensure that they are not exploiting their employees and having satisfied workforce will ultimately help them achieve high productivity levels(Tsui et al.). Adequate compensation packages and reward systems ensure that employees are correctly paid for their efforts and work. Underpaid employees tend to feel demotivated which affects their productivity at work. It also gives the organization a negative name in the job market, making it unattractive for the prospective applicants and driving out the chances of hiring the best skills for the company. Compensation and payroll also plays a key role in giving the companies a competitive edge over the competitors and incentivizing the best employees in the market to pursue jobs in an organization. The strategic decision making level of the organization determines the pay ranges that can be allocated to certain levels of employees. The personnel management functions takes it upon itself to determine how much to pay whom within the pre-determined range.Since the departmental levels exhibit a better understanding of the kind of skills that could best serve their needs, giving them the discretion of designing their pay scales and reward systems tends tofulfill the function better. CONCLUSION The discussion above shows that personnel management is rigid in its function and follows a set pattern to activities that can and cannot be done. Human resources management is a far more flexible area of an organization that can act as a driver of success through effective integration oforganizational goals with the interests of the employees. By offering an environment that is conducive to career development, innovation and learning, the employees are in a better position to be internally motivated to grow as a professional and give their best to their work. Personnel management involves a narrow set of functions that is aimed at ensuring that fair employment is conducted in an organization. Personnel management is an operation-oriented approach that is associated with the short term operational needs of the business. Human resource management is a resource-oriented approach that I focused upon making the best use of available human resource to fulfill organizational objectives. The former is prevalent on a relatively smaller level like departments and the latter is a strategic move at the top level.The growing importance of human resources in an organization requires collaboration of the human resource and personnel management functions so that one can set general guidelines at the corporate level to be followed at the lower levels. Giving the managerial level employees the power to make use of the available resources and funds to ensure that the employees are correctly compensated and motivated is likely to influence them to devise strategies that can help in the achievement of the organizational goals as well, apart from just the departmental ones. Human resource management plays a major role in guiding and supporting the personnel management functions because the organization wide strategies act as drivers of the personnel level decision making as well. The importance of one kind of management over the other is an endless debate however the truth lies in the fact that they both are important in their own stance. Organizational uniformity and HR practices like training, establishing diversity etc. need to be enforced at a larger scale and then be followed on every level through personnel management. Co-ordination between the two will also lead to the effectiveness of the personnel management function that is aimed at bridging the gap between the employees and the organization. Through effective communication, a bottom up approach can be used to formulate human resource management strategies for the whole organization. REFERENCES Bowen, David E, and Cheri Ostroff. Understanding HRM--Firm Performance Linkages: The Role Of The “Strength” Of The HRM System. Academy of management review 29.2 (2004): 203--221. Print. Boxall, Peter, and John Purcell. Strategy And Human Resource Management. Industrial \& Labor Relations Review 57.1 (2003): 84. Print. Cappelli, Peter. The New Deal At Work. 1st ed. Boston: Harvard Business School Press, 1999. Print. Cox, Taylor.Cultural Diversity In Organizations. 1st ed. San Francisco, Calif.: Berrett-Koehler, 1993. Print. Tsui, Anne S et al. Alternative Approaches To The Employee-Organization Relationship: Does Investment In Employees Pay Off?.Academy of Management journal 40.5 (1997): 1089--1121. Print. Wistorm, Elizabeth. Personnel Management Vs. Human Resource Management: Whats The Difference?.Brighthub Project Management.N. p., 2013.Web. 25 Jul. 2014. Read More