Personnel Management: Definition, Nature, Role, HRM Vs Personnel Management

Definition of Personnel ManagementPersonnel 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 with their relationship within the organization.

Definition of Personnel Management

According to Flippo, “Personnel management is the planning, organizing, compensation, integration, and maintenance of people for the purpose of contributing 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

Nature of Personnel management includes the function of employment, development, and compensation- These functions are performed primarily by the personnel management in consultation with other departments.

  1. 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.
  2. Personnel management exists to advise and assists the line managers in personnel matters. Therefore, the personnel department is a staff department of an organization.
  3. Personnel management lays emphasize on action rather than making lengthy schedules, plans, and work methods. The problems and grievances of people at work can be solved more effectively through rationale personnel policies.
  4. It is based on human orientation. It tries to help the workers to develop their potential fully to the concern.
  5. It also motivates the employees through its effective incentive plans so that the employees provide fullest co-operation.
  6. 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

Personnel manager is the head of the personnel department. He performs both managerial and operative functions of management.

His role can be summarized as:

  1. Personnel manager provides assistance to top management- The top management are the people who decide and frame the primary policies of the concern. All kinds of policies related to personnel or workforce can be framed out effectively by the personnel manager.
  2. He advises the line manager as a staff specialist. Personnel manager acts as a staff advisor and assists the line managers in dealing with various personnel matters.
  3. “As a counselor, the personnel manager attends problems and grievances of employees and guides them. He tries to solve them in the best of his capacity.
  4. Personnel manager acts as a He is a linking pin between management and workers.
  5. He acts as a Since he is in direct contact with the employees, he is required to act as a representative of the organization in committees appointed by the government. He represents the company in training programmer.

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 line managers, whereas 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 placing emphasis on bureaucratic control, often in a reactive sense, i.e., control of manpower 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 issue into line with business issues, with a pronounced problem­seeking 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 the organization.
  • Personnel management focuses on personnel administration, employee welfare, and labor relation. Human resource management focuses on acquisition, development, motivation, and maintenance of human resources in the organization.
  • 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 on the basis of division of labor. Under human resource management, job design function is done on the basis of group work/teamwork.
  • Under personnel management, employees are provided with less training and development opportunities. Under human resource management, employees are provided with more training and development opportunities.
  • In personnel management, decisions are made by the top management as per the rules and regulation of the organization. In human resource management, decisions are made collectively after considering employee’s 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’s participation.
  • Personnel management is concerned with the personnel manager. Human resource management is concerned with all levels of 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 any watertight difference between human resource management and personnel management.

Personnel Management

Human Resource Management

Careful delineation of written contracts (employment contract).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 which is expendable and replaceable.People are treated ass assets to be used for the benefit of an organization, its employees and the society as a whole.
Interests of the organization are uppermost.Mutuality of interests.
Indirect communication.Direct communication.
Job design is 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 roles of the organization.

A widely held perception is that the function is confined to a reactive, fire-fighting and administrative position that it fails to be relevant to the aims of the organization. The usual prescription is that personnel management should remedy this by becoming involved at a strategic level.

There has been a trend towards replacing the term personnel management by HRM and, 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 which 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 locked into a mainly administrative role. 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 evidence of 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 which has been resulting in globalization and a need for competitiveness has been causing management to bring a new focus to bear on how human resources are organized and managed.

The literature review revealed two distinct strands and these were that: 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:-

  1. Stage One – 1900 – 1940s Welfare and Administration.
  2. Stage Two – 1940s- mid-1970s welfare, administration, staffing and training personnel management, and industrial relations;
  3. 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 the establishment of 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 the refining of the personnel management practice in the recruitment and placement of skilled personnel employees.

Behavioral Science added psychological testing and motivational systems, while management science contributed to the performance management program.

Prior to 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 issues of 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 both those that 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 industry, to replace their husbands and brothers who were in the military service.

Financial, social and family pressures began to hinder 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.

Employees were spurred on by government initiatives and they are own post-war in a developing economy. Welfare services for employees were seen by some employers as a means of attracting and maintaining employees and ensuring 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;

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 expansions of personnel activities to include industrial relations considerations.

Although personnel activities expanded, they were largely separated from those concerned with 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 the integration of personnel functions, strategically focused on overall organizational effectiveness.

Unlike previous periods, this stage represents the integration of personnel management and industrial relations into a coordinated and strategic approach to the management of an organization’s employees and this 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.

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