Difference between Personnel Management and HRM

Human Resource Management (HRM) as well as Personnel Management (PM) are two approaches to managing employees within an organization. While both focus on employee management, they differ in philosophies, functions, and approaches.

A) Personnel Management

▶ The traditional method of managing employees is personnel management, which focuses primarily on administrative tasks, compliance with labor laws, and ensuring the wellbeing of employees at work.

▶ As well as hiring, training, compensating, and maintaining employment records, it focuses on transactional aspects of employee management.

▶ Labor laws and regulations began to shape the employment relationship during the early 20th century, which led to the emergence of human resource management.

The key characteristics of personnel management are as follows:

Administrative Focus:

▶ The primary responsibility of personnel management is the administration of employment, such as managing payroll and employee benefits, maintaining records related to employees, and ensuring compliance with labor laws.

Reactive Approach:

▶ The reactive approach, also called a problem-solving approach, is usually used in personnel management to address employee concerns and issues, resolve problems, and handle grievances.

Employee Welfare:

▶ Personnel management places a high priority on employee welfare and satisfaction. It does so by promoting a safe and rewarding work environment, fair compensation and employee assistance programs.

Employee-organization relationship:

▶ Employees and organizations have a transactional relationship, primarily centered on the exchange of work for payment.

▶ Maintaining this employment relationship and ensuring compliance with labor laws and regulations is the responsibility of personnel management.

Limited Strategic Focus:

▶ The personnel department has a limited strategic focus, focusing more on day-to-day operational tasks than long-term strategic planning. It has little influence over strategic decisions within the organization.

Limited Employee Development:

▶ Personnel management provides employees with training and development opportunities, but these opportunities are often limited to developing skills for immediate job duties rather than for long-term career progression.

B) Human Resource Management (HRM)

▶ Human Resource Management (HRM) is a modern and strategic approach to managing employees within an organization. Employee development, engagement, and alignment with the organization’s strategic goals are emphasized as valuable assets.

▶ In HRM, employees are regarded as partners in achieving organizational success and HR practices are aligned with the overall business objectives, talent management, and employee engagement are the major focus.

The following are the key characteristics of HRM:

Strategic Focus:

▶ An HRM department takes a strategic approach, ensuring that HR policies and practices are aligned with the organization’s overall strategic goals.

▶ It is responsible for formulating and implementing HR policies and strategies that contribute to the achievement of organizational goals.

Proactive Approach:

▶ Human Resource Management follows a proactive approach to identify and respond to employee needs and concerns before they become major problems.

▶ In this way, it prevents problems and creates a productive work environment that promotes employee engagement.

Talent Management:

▶ Human Resource Management involves hiring, developing, retaining, and promoting talent within an organization.

▶ This process includes talent acquisition, talent development, performance management, and succession planning.

Employee Engagement:

▶ Human Resources Management focuses heavily on employee engagement and commitment.

▶ It strives to create a positive work culture, provide open communication, recognize employee contributions, and give employees opportunities for growth and development.

Strategic Employee Development:

▶ Human Resources Management invests in employee development by providing opportunities for continuous learning, skill development, and career advancement to employees.

▶ For current and future organizational needs to be met, it emphasizes the development of employees’ skills, competencies, and capabilities.

Business Partner Role:

▶ HRM collaborates with other functional areas within the organization to serve as a strategic business partner.

▶ Providing support for business objectives through strategic decision-making, organizational design, change management, and fostering a culture that supports these activities.

Holistic Approach:

▶ A holistic approach to management is taken by HRM, which takes into account employees’ overall well-being, their work-life balance, and their personal growth.

▶ Creating a productive and positive work environment requires work-life integration, diversity, and inclusion.

Compliance and Ethics:

▶ HRM is responsible for ensuring compliance with employment laws and regulations, encouraging ethical behavior, and ensuring a fair and equitable work environment for all employees.

▶ It also ensures that HR practices are in line with legal obligations and ethical standards.

Differences between Personnel Management and HRM

Some of the differences between Personnel Management and HRM are as follows:

Philosophical Approach:

Personnel Management:

▶ In personnel management, records are maintained, labor laws are adhered to, and employee welfare is ensured. Personnel management takes an administrative and reactive approach.

HRM:

▶ In human resources management, HR practices are aligned with organizational goals, talent is managed, and employee engagement and development is emphasized.

Focus:

Personnel Management:

▶ Employee management involves maintaining employee records, processing payroll, and handling employee benefits, and it primarily focuses on administrative tasks and compliance.

HRM:

▶ In Human Resources Management, talent management, employee engagement, and development are emphasized to drive organizational success. HRM is a strategic approach that aligns HR practices with organizational goals.

Relationship with Employees:

Personnel Management:

▶ In Personnel Management, the relationship between employee and employer is viewed as transactional. The focus is on ensuring compliance with labor laws and maintaining employee welfare.

HRM:

▶ In human resources management, employees are seen as valuable assets and partners in the organization’s success. It emphasizes employee engagement, development, and aligning employees’ goals with those of the organization.

Role in Strategic Decision-Making:

Personnel Management:

▶ In general, personnel management does not have a significant role in strategic decision-making within an organization. It concentrates more on day-to-day operations and administrative tasks.

HRM:

▶ Managing human resources means ensuring that HR practices are aligned with the goals of the organization. HRM actively contributes to strategic decision-making, organizational design, and change management.

Approach to Employee Development:

Personnel Management:

▶ Training and development opportunities provided by personnel management may be limited, often focusing on immediate job requirements.

HRM:

▶ The Human Resources department provides employees with opportunities for continuous learning, skill enhancement, and career progression in support of their growth and development.

Time Horizon:

Personnel Management:

▶ An organization’s personnel management focuses on handling day-to-day administrative tasks and dealing with employee needs within a short-term time frame.

HRM:

▶ Human resource management is the practice of aligning HR practices with long-term organizational goals and anticipating future employee needs in order to ensure a long-lasting company.

Perception of Employees:

Personnel Management:

▶ Employees are seen as costs which have to be managed by personnel management. The principal focus is on making sure that employee welfare and compliance are maintained.

HRM:

▶ A human resource management system views employees as valuable assets and competitive advantages and focuses on ensuring they are engaged and developed to help the company succeed.

▶ In summary, while both personnel management and HRM involve managing employees within an organization, the approaches, philosophies, and functions differ significantly.

▶ A reactive approach to personnel management emphasizes administrative tasks, compliance, and employee welfare.

▶ In HRM, talent management, employee engagement, and development are emphasized as strategic and proactive approaches, aligned with business objectives.

▶ In order to effectively manage and maximize the potential of their human resources, organizations must understand the differences between these two approaches.

References

• Difference between Cost Audit and Management Audit – 5 Major Differences | Auditing

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Bijisha Prasain

(BBA Graduate, Apex College)

I am Bijisha, an enthusiast with a profound eagerness for learning. I hold a Bachelor’s degree in Business Administration(BBA) from Apex College. I am constantly driven by a relentless curiosity and a genuine desire to expand my knowledge horizons.

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