Difference between HRM and Personnel Management

The main difference between Personnel Management and HRM is that personnel management is administrative and is mainly concerned with employees and how they can adapt to the organisation. In contrast, HRM is a modern approach integrated with strategic management that centres around the efficiency of human resources including employees and HR operations in the organisation.

The Difference Between HRM and Personnel Management is: –

Here are the critical differences between personnel management and HRM.

Parameters	Personnel Management	HRM
Function	Administrative tasks and maintain relationships with employees	Strategic tasks concerned with optimising human resources and employees
Approach	Employee productivity results in job satisfaction; traditional	Employees are the main assets; modern
Objective	Meeting organisational policies	Utilisation of employee’s competencies
Orientation	Making employees adopt company rules	Developing the competency of each employee
Pay based on	Job evaluation	Performance evaluation

Difference Between Personnel Management and HRM

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Difference Between HRM and PM

Table of Contents

Personnel Management – Definition and Approach

Personnel management is about hiring the right employees and maintaining a healthy workforce in an organisation. But a lot happens behind the scenes.

In the book, Principles of Personnel Management (1984), the author, Edwin B Flippo offers this definition.

“Personnel Management is the planning, organising, directing, and controlling of the procurement, development, compensation, integration and maintenance and separation of personnel to the end that individual, organisational and societal objectives are accomplished.”

Functions of Personnel Management

According to Flippo, the personnel manager requires a background in psychology, sociology, economics, philosophy, and management.

There are two main functions of personnel management

Managerial – The personnel manager fulfils the essential functions of management. As defined by Luther Gullick and Lyndall Urwick, these functions are clubbed under the acronym, POSDCORB. POSDCORB stands for Planning, Organizing, Staffing, Directing, Coordinating, Reporting, and Budgeting.

Operative – These functions are related to maintaining a healthy workforce and are done routinely. The operational activities include procurement, training and development, maintenance of health and safety, etc.

Approach in Personnel Management

Personnel management is more traditional in that it replaced the concept of labour management in the 1940s. The approach to personnel management is more or less based on the Hawthorne research project of the 1920s, which concluded that employee productivity was directly related to job satisfaction.

HRM – Definition and Approach

HR management deals with optimising the human resources in the organisation. That means it is concerned with managing HR operations along with the workforce to meet organisational goals.

In Armstrong’s Handbook of Human Resource Management Practice, HRM is defined as

“HRM is the managerial utilisation of the efforts, knowledge, capabilities and committed behaviours which people contribute to an authoritatively co-ordinated human enterprise as part of an employment exchange (or more temporary contractual arrangement) to carry out work tasks in a way which enables the enterprise to continue into the future.”

Goals of HRM

Supporting the company objectives by executing human resource strategies that are part of the business strategy
Cultivating a high-performance culture
Ensuring the company has a skilled and talented workforce
Creating trust among senior management and employees
Encouraging an ethical approach to managing employees

Approach in HRM

HRM can be considered as a modified version of personnel management. According to Armstrong, in HRM practice, ‘the key resource is people.’ HRM is also considered more ‘holistic’ in that employees in the organisation are considered as ‘assets’ and not as ‘variable costs.’

Comparison: HRM vs Personnel Management

Basis For Comparison	Personnel Management	Human Resource Management
Meaning	An aspect of management that is concerned with employees at work and their relationships within the company.	An essential branch of management that deals with making the optimum usage of organizational human resources to achieve the organizational goals.
Objective	Managing people at work	Working for the growth & development of the workforce
Approach	Traditional	Modern
Treatment of manpower	Machines or Tools	Resource & Asset
Type of function	Routine function	Strategic function
Basis of Pay	Job Evaluation	Performance Evaluation
Management Role	Transactional	Transformational
Communication	Indirect	Direct
Labor Management	Collective Bargaining Contracts	Individual Contracts
Initiatives	Piecemeal	Integrated
Management Actions	Procedure	Business needs
Decision Making	Slow	Fast
Job Design	Division of Labor	Groups/Teams
Major Functions	Employee hiring, remunerating, training, and harmony.	Recruitment & staffing, Equal employment opportunity, HR development, Remuneration, Employee relations, Continuos growth, etc.

Comparison: HRM vs Personnel Management