Personnel management vs. human resource management - Essay Example

?Running Head: work Personnel Management vs. Human Resource Management of the of the of the [Course] Introduction Any new initiative in a business scenario first starts at operational level but with continued success and evident results; it turns strategic in its scope, implications and implementations. One such management function is personnel management or talent management which started decades back as a mere administrative tool to control operational activities of workforce. Such activities included pay roll definitions, compensations, monetary benefits, laws and regulations and other workforce compliance issues. However, with the change in mindset of businessmen and policy makers and with the consideration of workforce as human assets for an organization, personnel management turned strategic with incorporation of other ‘soft’ factors like performance, motivation, quality, behavior patterns, non-monetary benefits (Ivo 2006) and above all, linkage between organizational objectives and human resource objectives. With such a tectonic shift, personnel management is now considered an entirely different entity from human resources management. Though scholars are of the view that since HRM has evolved from personnel management, the differences are only philosophical in nature, but the varieties of differences and their effects on various business functions and levels make the two non-interchangeable in modern scenario. Definition of Personnel Management Personnel in layman terms mean ‘staff of an organization’. As such, personnel management used to be more of an administrative function meant for record keeping functions related to ‘hard’ dimensions of people management- hiring, recruitment, compensation and related activities of workforce (Ivo 2006). Being an operational level function, it does not include any sort of alignment with corporate objectives and was limited to the adherence of employment laws, managing output from staff in quantitative terms and handling work related issues. It thus remained an independent department in an organization and is more focused on quantity of human output achieved (IQPC 2006). Definition of Human Resource Management Human resource management takes a more strategic inclination because it involves careful linkages with corporate objectives. The philosophy ingrained behind HRM is that humans are the assets of an organization just like information and other. As such, pre-planned strategies have to be chalked out to properly manage the employees at work. It thus takes into account all internal or external factors that have a bearing on the performance levels of employees namely culture of organization, structure, value system, dependency on other departments and cross-functional teams, psychological traits of employees, peer and social group, etc. It is thus an inter-related strategic function focused primarily on quality of human output achieved (IQPC 2006). Evolution of HRM from Personnel Management As mentioned before, HRM has evolved from personnel management through successive stages. Initially, personnel management was just rephrased as human resources management with no major difference in understanding or practice. With increased impetus on enhanced performance demands, coherent people structure and need for a central workforce policy, personnel management was re-conceptualized and named as human resources management with specific attention on four major employee areas- work systems, reward systems, employee influence and human resource flow (Poole 1999:98). However, with shifting focus from cost minimization to utility maximization, personnel management was made distinctive from human resources management as strategy crept into the latter. Thus, while personnel management regards people as workforce and treats matters on superficial levels reactively, human resources management adopts a proactive approach and considers people as assets and primary resource of an organization. Similarities between the two It is not that no similarities are present between the two disciplines. However, the similarities are very general in nature and usually get undermined by the diversity of differences. Both HRM and personnel management aims at putting the right people on the right job. The pathway for both starts from recruiting and hiring and proceed through remuneration plans to finally performance management. Secondly, both disciplines are very specialist in their approach with employees kept at the focal point (Koster 2002:7). However, what differentiates the two is their level of penetration in the strategic disposition of the organization and their long term implications on both the functioning of the organization and the employees. Differences between the two There are stark differences between HRM and personnel management divided in categories. Such differences highlight how intensified and strategic the evolution of HRM had been. Those stereotype differences are discussed as below (Kandula 2003:41): Differences pertaining to assumptions and beliefs Personnel management functions as per written contracts and abides by them. It is procedure driven, pluralist in approach and is limited to the extent of monitoring people behavior according to the pre-defined standards and practices. Personnel management does not strive to go beyond the laid down rules and sticks to the formatted policies. On the contrary, HRM takes a more of unitarist approach with each and every employee as an individual resource for the organization. It aims at nurturing the behavior, qualities and strengths of an individual by means of cooperative workforce environment, coordinated activities, supportive work groups and a value based system at work. It does not work on laid down procedures, rather works on need basis and proactive identification of demands of employees. It always strives on bettering the performance of its employees and adopts a ‘can-do’ outlook. For this purpose, it can also forego previous rules or policies if new techniques lead to better efficiency or productivity of employees. Differences pertaining to strategic outlook What actually differentiates the two disciplines is the strategic outlook of both. Personnel management considers its activities as merely labour management ones. Its major objective is to gain transient benefits and solution to the problems arising in daily routine. The decision making process is slow when we talk of personnel management because it takes a piecemeal approach to tackle issues. Corporate or organizational does not link to its disposition and hence, its plans remain subsidiary and independent of corporate objectives. HRM completely differs in its strategic outlook from that of personnel management as it considers human resources as one of the methods to gain competitive advantage over rivals. It regards employees and staff as a second category of customers. Just like an organization bears responsibility towards its end users, employees and staff are the internal customers for an organization because they provide their services, talent and expertise to the organization which adds value to the functioning of business. HRM practices, policies and strategies are also integrated and inter-related with other functions and departments of organization because it is the human resource of an organization which handles and manages the other resources namely finances, machinery and equipment, information and systems and others. Thus, HRM is the driving force behind all other resources and departments. This is what makes it central to the corporate plans and objectives. Because of such comprehensiveness, flexibility and integrity, decision making in HRM is also faster and better. Differences pertaining to line management Another major category of differences between the two is the kind of management practices and style adopted by the two disciplines. Managing people involve factors like leadership, communication, conflict handling, negotiation, facilitation and others. In the case of personnel management, it is restricted to following the contractual bindings of the company with that of employees and other industrial parties. As such, managers in personnel management adopt an arm’s length style of leadership and are specialized only in industrial relations handling. They work on standardization principles and try to mould every situation and scenario which meets the standards. As such, the communication between managers and employees in this discipline remains of a very formal and indirect nature with more attention on parity issues. The scenario is completely changed when HRM enters into picture. Managers in HRM are concerned with every aspect of management and thus exercise transformational leadership whereby they motivate, encourage and facilitate their subordinates and employees to work to their best efficiency level. Two-way communication channel is an important characteristic of this discipline intact of transparency and direct style. Differences pertaining to key activities Because of strategic focus, everything under HRM is based on symbiotic relationship where both organization and employees tend to benefit from each other. When employees contribute their knowledge, skill set, expertise, talent and emotions to the organizational goals, organizations also return the favour back in terms of better and healthy work conditions, learning culture, opportunities for development- both personal and professional, cash and kind benefits and nurturing an organizational culture where employees feel like working at home. Grievance handling under HRM makes sure to achieve long term settlements and even structural and organizational settings are modified to promote teamwork and learning within organization. Personnel management remains distant from such implications and views entire workforce management function as one which is short-term oriented and guided by personnel driven issues. Roles, responsibilities, division of labour, separate negotiations, restricted communication, temporary settlement of conflicts and provision of training and development only on demand are some other highlights which pull it apart from HRM. It aims at controlling the output and other dimensions through external checks. HRM on the other hand strives to develop such traits in employees that enable them to exercise self-control and remain committed to the organization, not because of the fear of rules or compliance, but because of the work environment and opportunities to advance. This is what builds in the factor of trust between management and employees in HRM discipline in the long run which lacks in personnel management. Conclusion After analyzing the similarities and differences between personnel management and human resources management, it is pretty much obvious that differences outweigh the similarities. Similarities between the two are of very general nature which cannot serve as the basis for any academic analysis or discussion. It is the differing side which actually initiates the development of an opinion regarding how personnel management and human resources management and related. In modern context when globalization is taking the world by storm and responsibility of sustained competitive edge stays on people, these gaps between personnel management and human resources management will be widened. While personnel management limits itself to the maintenance of personnel needs and functions, HRM determines organizational demands and forecasts the human resources accordingly. Thus, HRM in long run is also a capacity builder and change facilitator. References Ivo, A.M. (2006). Best perspectives to human resource management. African Centre for Community and Development [online] available from [accessed 27 February 2011] IQPC. (2006). Human resource development vs. traditional personnel management: what’s the difference? [online] available from [accessed 27 February 2011] Kandula, S.R. (2003). Human resource management in practice: with 300 models, techniques and tools. New Delhi: Prentice-Hall. Koster, M. (2002). Human Resource Management versus Personnel Management. Germany: GRIN. Poole, M. (1999). Human resource management: critical perspectives on business and management. New York: Routledge. Read More