Personnel management can be defined as obtaining, using, and maintaining a satisfied workforce. It is a significant part of management concerned with employees at work and their relationships within the organization.
Definition of Personnel Management
According to Flippo, “Personnel management is the planning, organizing, compensation, integration, and maintenance of people to contribute to organizational, individual, and societal goals.”
According to Brech, “Personnel Management is that part which is primarily concerned with human resource of an organization.”
Nature of Personnel Management
Personnel management’s nature includes employment, development, and compensation.
These functions are performed primarily by the personnel management in consultation with other departments.
- Personnel management is an extension of general management. It is concerned with promoting and stimulating a competent workforce to make their fullest contribution to the concern.
- Personnel management exists to advise and assists the line managers in personnel matters. Therefore, the personnel department is a staff department of an organization.
- Personnel management emphasizes action rather than making lengthy schedules, plans, and work methods. The problems and grievances of people at work can be solved more effectively through rational personnel policies.
- It is based on human orientation. It tries to help the workers fully develop their potential to the concern.
- It also motivates the employees through its effective incentive plans so that the employees provide the fullest co-operation.
- Personnel management deals with human resources of a concern. In the context of human resources, it manages both individuals as well as blue-collar workers.
Role of Personnel Management
The personnel manager is the head of the personnel department. He performs both managerial and operative functions of management.
His role can be summarized as:
- Personnel manager assists in top management- The top management is the people who decide and frame the primary policies of the concern. All kinds of policies related to personnel or workforce can be framed effectively by the personnel manager.
- He advises the line manager as a staff specialist. The personnel manager acts as a staff advisor and assists the line managers in dealing with various personnel matters.
- “As a counselor, the personnel manager attends to problems and grievances of employees and guides them. He tries to solve them to the best of his capacity.
- The personnel manager acts as a He is a linking pin between management and workers.
- He acts in direct contact with the employees and is required to act as a representative of the organization on committees appointed by the government. He represents the company in training programmers.
Difference between personnel management and human resource management.
There are some points of dissimilarities between Personnel Management (PM) and Human Resource Management (HRM), although, on some key issues, PM and HRM are identical.
Traditional Personnel Management tends to be narrow, striving to attend to line managers. In contrast, HRM is integrated into the role of line managers with a strong proactive position and a bias towards business.
The PM has a history of emphasizing bureaucratic control, often in a reactive sense, i.e., control of staffing and personnel systems.
Some would argue that PM represented a highly compartmentalized system.
By contrast, HRM makes a determined effort to be a more integral mechanism in bringing people issues into line with business issues, with a pronounced problem-Âseeking and problem-solving orientation and a determination to build collaborative organizational systems.
The role of top management in setting the agenda for change and development is very much in evidence in HRM.
From the above discussion, we can make the major differences between traditional personnel management and modern HRM.
Human resource management is a new version of personnel management. There is no watertight difference between human resource management and personnel management. However, there are some differences in the following matters :
- Personnel management is a traditional approach to managing people in the organization. Human resource management is a modern approach to managing people in an organization.
- Personnel management focuses on personnel administration, employee welfare, and labor relation. Human resource management focuses on the organization’s acquisition, development, motivation, and maintenance of human resources.
- Personnel management assumes people as input for achieving the desired output. Human resource management assumes people as an important and valuable resource for achieving the desired output.
- Under personnel management, personnel function is undertaken for employee satisfaction. Under human resource management, the administrative function is undertaken for goal achievement.
- Under personnel management, job design is done based on the division of labor. Under human resource management, the job design function is based on group work/teamwork under human resource management.
- Under personnel management, employees are provided with fewer training and development opportunities. Under human resource management, employees have more training and development opportunities.
- In personnel management, decisions are made by the top management as per the rules and regulations of the organization. Human resource management makes decisions collectively after considering employee participation, authority, decentralization, competitive environment, etc.
- Personnel management focuses on increased production and satisfied employees. Human resource management focuses on effectiveness, culture, productivity, and employee participation.
- Personnel management is concerned with the personnel manager. Human resource management is concerned with all managers from top to bottom.
- Personnel management is a routine function. Human resource management is a strategic function.
Human resource management is a new version of personnel management. There is no watertight difference between human resource management and personnel management.
| Personnel Management | Human Resource Management |
|---|---|
| Careful delineation of written contracts (employment contracts). | Aim to beyond contract (employment contract). |
| Pay after job evaluation (fixed grades). | Performance-related pay system. |
| Collective bargaining is a means of labor management. | Individual contracts are the basis for labor management. |
| Labor is treated as a tool that is expendable and replaceable. | People are treated as assets to be used to benefit an organization, its employees, and society as a whole. |
| The interests of the organization are uppermost. | Mutuality of interests. |
| Indirect communication. | Direct communication. |
| Job design is a division of labor-oriented. | Job design is teamwork-oriented. |
From Personnel Management to Strategic Human Resource Management
In recent years a significant amount of literature on personnel management has been critical of the organization’s roles.
A widely held perception is that the function is confined to a reactive, fire-fighting, and administrative position that fails to be relevant to the organization’s aims.
The usual prescription is that personnel management should remedy this by becoming involved strategically.
There has been a trend towards replacing the term personnel management with HRM.
As a separate occurrence, the term HRM is also, primarily in the UK, been given a different meaning associated with specific management activities and values that have been gaining attention.
There is also the emergence of a concept of strategic human resource management (SHRM).
There are also signs that the personnel management role is being eroded as responsibility for certain activities formerly delegated to it are being returned to line management in a redefinition of management’s responsibilities for managing people.
The personnel management function lacks strategic relevance because it is mainly locked into administrative roles.
There is a potential conflict in its relationship with line managers because human resource management is a dimension of all managerial roles.
Recent research findings suggest a shift in responsibilities for many aspects of personnel management away from the function and towards line management.
There are reports that a rapidly changing environment for business resulting in globalization and a need for competitiveness has been causing management to bring a new focus on how human resources are organized and managed.
The literature review revealed two distinct strands, and these were: There was:
- quite widespread use of the term “human resource management,” frequently referred to by the abbreviation (HRM); and
- the emergence of the term strategic human resource management.
Stages of Development from Personnel Management to HRM and SHRM
Wayne Cascio (1989) divides the development from Personnel Management to HRM and SHRM into three (3) distinct phases:-
- Stage One – 1900 – 1940s Welfare and Administration.
- Stage Two – 1940s- mid-1970s welfare, administration, staffing and training personnel management, and industrial relations;
- Stage Three – mid — 1970s – 1990s HRM and SHRM.
Major features of each developmental stage are discussed below:
Stage One: Welfare and administration (1900-1940s)
Personnel functions were performed by supervisors, line managers, and early specialists (e.g., recruitment officers, trainers, welfare officers) long before establishing a national association representing a “profession” of personnel or Human resource management.
Scientific Management of J. Taylor (1856-1915), through job design, structured reward systems, and “scientific” selection techniques, helped refine the personnel management practice in recruiting and placement of skilled employees.
Behavioral Science added psychological testing and motivational systems, while management science contributed to the performance management program.
Before the Second World War in 1945, personnel management functions were largely fragmented and often conducted by line managers as part of their overall management responsibilities.
During this period, society was generally stable, though disrupted by the First World War and the Great Depression. Unemployment was low until the 1930s when labor became readily available for employers.
Trade unions were active, largely focusing on pay and working conditions.
Personnel functions were mainly restricted to administrative areas (e.g., wages/salary records, minor disciplinary procedures, and employee welfare activities).
Stage Two: Welfare, administration, staffing, and training (1940s-mid 1970s)
The Second World War referred to above had significant repercussions on those who stayed behind, particularly in business and the labor market.
During the Second World War, not only was there a scarcity of labor in essential industries such as munitions and food, but there was also a corresponding increase in problems and performance of existing employees.
Many more women had become involved in all areas of the industry to replace their husbands and brothers in the military service.
Financial, social, and family pressures began to hinder the productivity and output of such employees, and they became increasingly harder to recruit.
When the war ended, returning soldiers flooded the labor market, often with inadequate work skills.
Government initiatives spurred on employees, and they are own post-war in a developing economy. Some employers saw welfare services for employees to attract and maintain employees and ensure their continued productivity.
Training courses were launched to equip practitioners with the necessary skills.
Many more organizations began to employ specialists to conduct recruitment, training, and welfare activities, removing these functions from line managers.
This stage is characterized by the expansion of necessary personnel functions for the post-war economy, a gradual move from specialist to more general approaches, and the adoption of theories, including scientific management, behavioral science, and human relations.
This period marked the resurgence of unionism. Unions focused on pay and work conditions issues, forcing further personnel activities to include industrial relations considerations.
Although personnel activities expanded, they were largely separated from industrial relations, and professional philosophy did not exist.
Stage Three: Human Resources Management and Strategic Human Resources Management (the mid-1970s – 1990s)
This period was characterized by fierce competition in the world labor markets. The influences of the “Excellence” theory referred to earlier were beginning to affect the management of employees.
Personnel management transformed into human resource management in the 1970s, representing a change towards integrating personnel functions strategically focused on organizational effectiveness.
Unlike previous periods, this stage represents the integration of personnel management and industrial relations into a coordinated and strategic approach to managing an organization’s employees, which led to the development of Strategic Human Resource Management (SHRM).
SHRM can be perceived as a “macro” perspective (e.g., strategies and policies), whereas Human Resources Management represents more of a micro approach.