Many students of management and laypeople often hear the term HRM or
Human Resource Management and wonder about the difference between HRM
and the traditional term Personnel Management. In earlier times, the
Personnel Manager of a factory or firm was the person in charge of
ensuring employee welfare and interceding between the management and the
employees. In recent times, the term has been replaced with HR manager.
This article looks at the differences in usage and scope of functions
as well as the underlying theory behind these nomenclatures. In the
section on introducing HRM, we briefly looked at the main differences.
We shall look into them in more detail here.
Personnel Management
Traditionally the term personnel management was used to refer to the
set of activities concerning the workforce which included staffing,
payroll, contractual obligations and other administrative tasks. In this
respect, personnel management encompasses the range of activities that
are to do with managing the workforce rather than resources. Personnel
Management is more administrative in nature and the Personnel Manager’s
main job is to ensure that the needs of the workforce as they pertain to
their immediate concerns are taken care of. Further, personnel managers
typically played the role of mediators between the management and the
employees and hence there was always the feeling that personnel
management was not in tune with the objectives of the management.
Human Resource Management
With the advent of resource centric organizations in recent decades,
it has become imperative to put “people first” as well as secure
management objectives of maximizing the ROI (Return on Investment) on
the resources. This has led to the development of the modern HRM
function which is primarily concerned with ensuring the fulfillment of
management objectives and at the same time ensuring that the needs of
the resources are taken care of. In this way, HRM differs from personnel
management not only in its broader scope but also in the way in which
its mission is defined. HRM goes beyond the administrative tasks of
personnel management and encompasses a broad vision of how management
would like the resources to contribute to the success of the
organization.
Personnel Management and HRM: A Paradigm Shift ?
Cynics might point to the fact that whatever term we use, it is
finally “about managing people”. The answer to this would be that the
way in which people are managed says a lot about the approach that the
firm is taking. For instance, traditional manufacturing units had
personnel managers whereas the services firms have HR managers. While it
is tempting to view Personnel Management as archaic and HRM as modern,
we have to recognize the fact that each serves or served the purpose for
which they were instituted. Personnel Management was effective in the
“smokestack” era and HRM is effective in the 21st century and this
definitely reflects a paradigm shift in the practice of managing people.
Conclusion
It is clear from the above paragraphs that HRM denotes a shift in
focus and strategy and is in tune with the needs of the modern
organization. HRM concentrates on the planning, monitoring and control
aspects of resources whereas Personnel Management was largely about
mediating between the management and employees. Many experts view
Personnel Management as being workforce centered whereas HRM is resource
centered. In conclusion, the differences between these two terms have
to be viewed through the prism of people management through the times
and in context of the industry that is being studied.
