Differences between Personnel Management and Human Resource Management Approaches

People play a crucial role in achieving a company’s organizational objectives. They not only allocate physical resources to productive business activities, but also perform specific tasks to deliver value for the consumer. Thus, human resources should be managed effectively to be motivated and committed to their job as well the organization’s objectives. Two prominent approaches used to manage people in an organization are: people management and human resource management.

Human Resource Management and Personnel Management are both disciplines involved in managing people. However, the management approaches of the two contexts are different. Here are some of the differences between human resource management and personnel management.

Strategic Role versus Employee Welfare

Human Resource Management is a functional aspect of business firms and organisations that plans and controls various human resource activities and aligns them with the overall strategic management of the organization. On the other hand, Personnel Management is only involved in employee’s selection and taking care of their welfare. Human Resource Management recognizes that people play a crucial role in the strategic management of the organization and its main business activities.

Unlike in the era of personnel management, Human Resource Management ensures that the workers or employees of the organization develop clear intelligence, skills and high-performance work culture as a priority of the organization’s management.

According to Human resource management, human resources are crucial strategic assets as compared to personnel management which did not use people as strategic resources for the organization, but only workers who contributed to the production of goods and services.

HRM today manages people as much as it does other resources; and considers them as the most valuable resources for the company. Human Resource Management views human resources as the main source of intangible assets that are important for the company’s strategic management. Such intangible assets include knowledge and intellectual capital which are difficult to be imitated by competitors.

Human resource management goes far beyond managing people and manages all other activities that lead to improvement of workforce performance and effectiveness. Furthermore, Human Resources Management guides employees to attain organizational goals through workforce commitment and engagement.

This is opposed to the traditional personnel management whereby people are managed to promote their welfare and achieve good working conditions for increased profitability. In this case, it can be noted that personnel management did not align management of people towards attainment of overall the strategic objectives of the company as does today’s HRM.

The human resource management process involves five functions: planning, staffing, controlling, organizing and coordinating. In each of these functions, HRM should link people’s performance with overall corporate strategy. HRM is a strategic process that does not only focus on the working conditions of people as it was the case in personnel management, but also involves a focus on culture and behaviour of the overall organization. It entails how to develop high-performance culture through appropriate leadership styles.

Generally, human resource management involves managing intangible assets, managing strategic change, and managing innovation. Therefore, the role of HRM has broadened in modern organizations to include strategic role.

Reactive versus Proactive Functions

Personnel management performs reactive/welfare function while Human Resource Management performs pro-active function. Traditionally, people management operated as a separate and specialist function. HRM today is broader and strategic.

Another difference between the two approaches is that personnel management involves acquisition, retention and development of human resources while Human Resource Management involves motivation of workforce, effective recruiting and selecting of employees, reward provision, administration of payrolls for employees and their termination.

In addition, HRM also performs other functions that are linked with performance management such as planning, monitoring, recording, and training and development. This ensures that the company achieves its primary objectives.

Modern human resource management practices that are aimed at achieving organization’s corporate strategy include: stressing central role of people, viewing HRM as a strategy, encouraging teamwork, focusing and valuing each individual, enhancing senior management’s responsibility, matching people and jobs, offering performance-based rewards, and enhancing mutually-supportive integration.

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