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Comparison between HRM and Personnel Management

The term “human resource management” has come into popular usage in recent years. It is widely accepted in the workplace, and sums up the current state of play with regard to the management of people with the current emphasis on links to business strategy and on the fact that human resources are as important as any other resource and need to be managed carefully. One of the main underlying themes in the philosophy of HRM is that human resource needs must be taken into account in getting everyone to meet organisational objectives, and that this will be to the advantage of everyone concerned. Hence people are important whether they are full- or part- time employees, permanent or temporary, or contract workers who are actually employed by another company. Increasingly, all the people who contribute in some way to the work of the organisation will expect and demand some influence, and personnel management techniques in appraisal, training and job evaluation can be applied only with the consent and support of employees.

Many of the traditional aspects of people management are now increasingly devolved to line managers, so that in many modern organisations the human resource department exists to initiate such involvement and discussion of human resource issues and to define policies and strategies so that everyone can contribute to the organisation’s overall effectiveness.

Human resource management versus personnel management

You will have noticed that so far we have referred to both human resource management and personnel management. Many books and articles have been written about the differences and similarities between these terms, and many erudite arguments have been made. We do not intend to discuss these in detail, but at this stage we need to clarify our use of the two terms and our views on the extent of the similarities and differences.

We have shown that both terms can be applied to a wide range of activities. Any difference must therefore be in the approach adopted, rather than in the actual activities that are undertaken. We have identified the following trends in the way the terms are used:
- the personnel approach tends to be tactical in its approach to activities; the focus of human resource management approach is more strategic
- the personnel approach tends to be short-term and responsive to others’ demands; the HRM approach is to think of the long term and initiate policies on major new initiatives
- the personnel approach tends to be a rather piecemeal way of tackling issues; the HRM approach to the same issues is to place them within a clearly defined, integrated framework which has been worked out to benefit the organisation and to which the HRM manager and other staff have contributed
- personnel management tends to rely on traditional forms of communication; HRM tends to use a variety of communication channels
- personnel management tends to operate in organisations where there are traditional ways of working and where there is not much involvement of the workforce in decision making; human resource management emphasises the importance of the involvement of everyone in teams or in quality circles

- personnel management tends to work in traditionally unionised organisations; human resource management tends to encourage single status agreements and de-emphasises the role of trade unions
- personnel management tends to use traditional pay systems; human resource management emphasises the need to manage performance and motivate people by the use of various payment systems which are integrated with the organisations’ objectives
- the personnel management approach tends to reflect the status quo and resist change; human resource management tends to encourage change and increased flexibility in ways of working
- the personnel management approach tends to operate from a pluralistic point of view where different points of view are tolerated; the human resource management approach tends to operate from a unitary perspective emphasising the need for everyone in the organisation to work towards a common goal, so unions are not encouraged since they are not seen to be necessary
- personnel management’s focus is therefore on getting the same conditions for groups; human resource managers focus on individual contracts, payment and reward systems
- personnel managers may sometimes need to help individuals with their problems; human resource managers feel individuals should be prepared to take responsibility for their own decisions and actions
- personnel management is concerned with the needs of the workforce and with ensuring a supply of employees who are happy and work well; human resource management is concerned with the demand for labour from management and has more emphasis on planning, monitoring and control to ensure the right number of people (not necessarily employees), with the right skills in the right place at the right time
- personnel managers want a system that is fair for all and are keen to have rules and procedures to encourage this; human resource managers tend to say that people have a right to proper treatment at work and efficient management will achieve this
- personnel management is a special activity because of the difficulties of working with people; human resource management says that managing people is much the same as managing any other resource
- personnel management tends to specialise in most of the activities mentioned earlier; human resource management tends to devolve many of these activities to line managers, concentrating instead on developing policies, planning, monitoring and evaluating.

There is obviously much to admire in the human resource management approach to the management of people, especially the emphasis on strategy, the links with values and mission, teamwork and the integration of all the activities into a framework which integrates these. However, some who call themselves personnel managers have also stressed the importance of acting strategically. One of the elements that is often pointed out as making the difference is the level of involvement of the function in the strategic decision-making of a company. One way of testing this is to ask whether the head of the function carries the title of Director and whether he or she attends board level meetings.

Even if this is taken as an essential difference between HRM and personnel management, it is clear that only a limited number of managers can actually be operating at the strategic level. Most practitioners must be operating at lower levels, contributing their ideas to the formulation of strategy, but in the main implementing the decisions made at the strategic level. These include: Director, Manager, Officer, Administrator. Most directors and many managers, whether they call themselves personnel or human resource mangers, will be able to operate at a strategic level, but most officers or administrators, and line managers performing personnel functions, are unlikely to do so.

In other words, although involvement at the strategic level may be a key distinction between personnel management and HRM, it is still important to examine the functions as they are performed by managers throughout the organisation. We have proceeded from the premise that managers involved in HRM and personnel perform similar functions, such as those listed earlier. The difference between personnel and HRM lies in the overall philosophy that guides them in deciding how to handle these functions.

Levels of involvement in the HRM
Activity 1.2
Consider the following thumbnail sketches of two people’s jobs. Which job do you feel reflects the human resource management approach, and which reflects the personnel management approach?

Susan works in a knitwear manufacturing company and much of her time is taken up in recruitment, training and development. She has an assistant who helps in these areas and who does much of the actual interviewing along with the line managers for the appropriate sections. Susan is also involved in disciplinary situations. The line manager in the section issues the first warning, but later disciplinary action is handled by Susan in the presence of the line manager and, of course, the shop steward. Susan spends time negotiating with the trade union on a range of issues, but also likes to find time to go around the factory each day to get to know the staff and their problems. She gathers information about absenteeism from the mangers on her daily rounds, and this gives both them and their staff a chance to approach her with any problems. Both she and her assistant often spend time helping individuals who come to see them with problems.

Paul works in a building society and has a small department of staff who work with him. The building society is concerned to provide the best possible service for its customers, and this is stated in its mission statement. Paul’s boss is a Director and is concerned with strategic issues of employing people. Paul has clear objectives which he and his department work towards, and one of these is to reduce the levels of absenteeism by 5% in the next six months. They are also involved in new ways of getting employees to work more efficiently and effectively, and Paul spends a great deal of his time reviewing policies and procedures and getting his staff to work with members of the workforce in the design of these. He is particularly interested in providing more effective ways of communicating with the workforce, and at present his department communicates with employees through weekly newsletters and the internal e-mail system on computers. Paul tends to rarely leave his office and most of his contacts are with other mangers in other specialisms. His personal computer provides information about daily absenteeism levels, levels of labour turnover and other staff statistics. His department will provide advice to line mangers and will coordinate recruitment campaigns and advertising, but in general the line mangers are encouraged to take responsibility for their own team from recruitment through to dismissal. There is no recognised trade union, but team working is strongly encouraged.

Discussion of Activity 1.2

These two thumbnail sketches provide rather stereotyped views, with Susan operating in a manner more typical of the personnel management approach and Paul in a way more typical of human resource management, but this may not be reflected in their job titles.

You will note that in suggesting how one might try to judge whether a given company is pursuing an HRM approach or a personnel management approach, we talked about involvement in strategic decision-making: we did suggest asking whether HRM or personnel management is used in the relevant job titles. There does not seem to be any proven relationship between the chosen nomenclature within companies and their approach to the management of people. In Activity 1.2, we said both Susan and Paul may have the title of either Human Resource Manager or Personnel Manager. Even the Institute of Personnel and Development can be cited as an example of the lack of clarity that exists in the use of these terms. The IPD uses the words “personnel” and “personnel management” in its name and in the name of its monthly journal (People Management: the Magazine for Professionals in Personnel Training and Development), and has distanced itself to some extent from the debate and from the term “human resource management”, which had been incorporated into the name of one of its journals prior to 1995 (Personnel Management: the Journal for Human Resource Managers).

Pause for Thought 1.2

Which approach – human resource management or personnel management – do you personally feel more at ease with?

Often the distinctions are not at all clearcut: titles, as we have seen, do not necessarily provide clues, and in many organisations elements of the HRM approach and the personnel approach will co-exist side by side.

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