Personnel Management and Human Resource Management

How HRM and Personnel Management Differ – Why It Matters for Your Business

You must need a powerful structure to manage the employees within your organization. Two basic approaches that you can utilize are- Personnel Management(PM) and Human Resource Management(HRM). Do you wonder about what actually is different between HRM vs personnel management?

Fundamentally, personnel management focuses on primary administrative activities, such as employee hiring, wages, training, and harmony. Whereas HRM concentrates to measure the organization’s needs and continuously review and adjust all systems to reach a common goal.

Though many critics think Human Resource Management is just a new title given to Personnel Management. So that the department gets more recognition in the industry. On the contrary, a large number of experts find significant differences between personnel management and human resource management.

Today, we’ll discuss briefly human resource management and personnel management. This is so that you can integrate the right system within your business.

Comparison Chart: HRM vs Personnel Management

Basis For ComparisonPersonnel ManagementHuman Resource Management
MeaningAn 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.
ObjectiveManaging people at workWorking for the growth & development of the workforce
Treatment of manpowerMachines or ToolsResource & Asset
Type of functionRoutine functionStrategic function
Basis of PayJob EvaluationPerformance Evaluation
Management RoleTransactionalTransformational
Labor ManagementCollective Bargaining ContractsIndividual Contracts
Management ActionsProcedureBusiness needs
Decision MakingSlowFast
Job DesignDivision of LaborGroups/Teams
Major FunctionsEmployee hiring, remunerating, training, and harmony.Recruitment & staffing, Equal employment opportunity, HR development, Remuneration, Employee relations, Continuos growth, etc.

Personnel Management Explained

personnel management

Personnel management is an administrative function that focuses on hiring and developing employees to become more resourceful to the company. It defines the right personnel for the right organizational activity.

Furthermore, this is a traditional approach to managing employees. In some organizations, it is considered to be a sub-category of HR that only focuses on administration.

Personnel managers supervise the hiring process and professional development of employees within an organization. They are responsible for recruiting new talent, training new employees, and supporting them as necessary during their careers.

Many companies have personnel managers as part of a larger HR team. But most smaller companies hire their personnel professionals as individual managers to perform all the administrative duties.

Personnel Management Areas of Interest

PM concentrates on particular administrative HR categories. It includes planning, job analyses, paycheck distribution, performance appraisals, and benefit programs.

It also deals with recruitment, screening, new employee orientation, and training. Moreover, besides, personnel managers take care of employee remuneration, dispute resolution, and keeping employees’ data secured.

Importance of Personnel Management:

  • Build a team of professionals
  • Ensure smooth work interactions
  • Minimize conflicts among dependents
  • Optimize the onboarding experience
  • Develop an effective employee retention strategy

Since employees are the most valuable assets of an organization. But wrong recruitment can demolish your company structure. Moreover, PM ensures the recruitment of highly trained professionals. And provides a perfect environment for growing.

Human Resource Management Explained

human resource management

HRM is an organizational function that deals with the acquisition, development, motivation, and maintenance of human resources in a particular way. So, people can give their best to the company. The core objective is to build an employee-centric workplace through systematic management of manpower.

Primarily, it starts with selection, orientation, and training. Making the employees go through performance appraisal techniques admin can analyze their true value. It helps to better evaluate your employees and set the pay scale accurately to avoid exploitation.

Additionally, this process manages the issues related to employees within a company. Such as compensation, growth, safety, benefits, etc. HRM is a complete package of employee management. This also refers to a systematic function of building team spirit and teamwork.

HRM is largely responsible for developing an interactive working environment. So, people can do their tasks with great satisfaction and reach the final goal within the accolated resources.

Human Resource Management Areas of Interest

HRM is a multidisciplinary function. It is involved in strategic planning and decision and synchronizes all human resources functions. Moreover, it deals with procurement of human resources, training & development, and maintenance of the workforce. Also, HRM coordinates all the systems across the company including marketing, production, finance, legal, and others.

Importance of Human Resource Management:

  • Maintain better industrial relations
  • Develop organizational commitments
  • Help to cope with changing environment
  • Work closely with employee welfare
  • Estimate future demand & act accurately

So, now the key significance of the HR department is to improve the efficiency of the employees by prioritizing the ergonomics. As the HR manager performs such important activities, he/she is very precious to your business enterprise.

Read More: Importance of Human Resource Management in Your Business.

Detailed Comparison Between Personnel Management and Human Resource Management

difference between hrm and personnel management

When we talk about the difference between HRM vs Personnel Management, HRM is considered as much broader in scope than personnel management. Let’s look at the comparison between these two key management functions in brief detail below:

01. Nature of Function

HRM is about managing people within an organization as effectively as possible so they can collectively reach the company goal. So the primary objective of HR is to enable employees to perform at their maximum level of efficiency. On the other hand, PM is an extension of general management.

Furthermore, the working process is traditional and routine. Therefore, it encourages every employee to give their fullest contributions to the purpose of the business.

02. Employee Treatment

HRM focuses on resource-centric activities. So, it generally treats employees as resources or assets. Employees are treated here as economic, social, and psychological men.

It considers that the amount invested in employees brings revenue. Inside PM, employees are treated like other components such as machines, equipment, etc. Moreover, Salaries, bonuses, and rewards are taken as a cost of labor.

03. Reactive and Proactive Function

HRM people are strategic. So, they constantly work towards managing and developing an interactive workforce. HRM is proactive in nature because it consists of continuous monitoring and updating functions. It is not only concerned about the company’s present status but forecasts future necessities and takes required actions.

By contrast, project management is reactive in nature. It responds according to the demands of the organization. PM performs to ensure peaceful measure management relations in the present.

04. Significant Strategies

human aspects of strategy implementation

HRM emphasized flexible contracts. So, the admin can modify the rules and conditions depending upon the business needs. Moreover, it works hard to inspire the employees for their continuous growth.

It helps, therefore, a new employee to become an effective team player. PM differs the situation by imposing strict rules, procedures, and contracts. These factors define the relationship between management and the workforce. For example, collective bargaining and employment contracts.

05. Basic Principles

HRM is based on the principle that job satisfaction and good morale results in better performance. That’s why it supports its employee in every aspect. HR managers take good care of their employees’ mental health as well.

Great HR leaders, for example, updated regular office protocols to cope with the post-pandemic situation. As they always prefer to protect the well-being of their team members and the company as a whole. Conversely, PM works on the base that a contended worker is a productive worker.

06. Dependency factor

PM is an independent function. It’s not integrated with organizational strategies and processes. In this system, the job role is allocated to an individual employee.

The HR department, on the other hand, tends to be an integral part of the overall company function. Here, the job roles are designated among teams so that everybody can work together towards a common goal. 

07. Employee Management

According to PM, an employee should work for the remuneration paid to him. Employees don’t have the right to share their views and take part in decision-making. PM managers only confirm whether the system runs in compliance with the labor laws or not. But they don’t emphasize the morale of employees.

Rather than understanding the situation, they are more concerned about extracting work from an employee. So, as per HRM, employee satisfaction is the highest priority. It considers employees as the most valuable resources for the organization. That’s why the core duty of an HR manager is to provide all essential facilities to an employee for extracting the desired work.

08. Scope for Collaboration

distinguish between hrm and personnel management

PM supports an inverted approach and the scope is very narrow. Inside PM employees are considered to be equipment. This means they are facilitated in a way so they can bring the best results for the company. And once the purpose is served they could be even ejected.

Alternatively, the overall scope of HRM is comparatively wide. Considering an employee as an asset, HRM acts in employees’ best interests ensuring mutual collaboration, sharing responsibility, rewards, etc.

09. Motivation Tools

Personnel management follows traditional methods to motivate its employee through economic rewards. It encourages and inspires skilled employees to provide their maximum potential to the company.

In contrast, HRM is tailored toward development, where people are given opportunities to perform and improve.

10. Role of Line Management

An organization’s personnel department is known as a staff department. It gives guidance and support to line managers on personnel issues. Instead of making plans, long timetables, and setting strategies, personnel management focuses on action.

On the other hand, HRM oversees and manages employees to fulfill business goals. Moreover, it builds a connection between the management and the staff. This system also provides instruction, inspiration, and feedback to the employees on a day-to-day basis.

WP Project Manager

FAQs for HRM vs Personnel Management

Let’s go through the question people usually ask regarding HRM vs personnel management-

1. What are the similarities between personnel management and HRM?

One significant similarity between personnel management and HRM is that both work in order to recruit the right people for the right job considering organizational objectives. Plus, both approaches use the same functions from recruitment and selection to remuneration and performance management.

2. How do distinguish between personnel management and HRM?

Personnel management deals with the maintenance of all personnel and administrative systems. And HRM meets the ever-changing needs of employees needs that keep on arising in an organization.

3. What are the advantages of personnel management?

  • Induct new hires effectively into the business
  • Motivate employees to perform their tasks
  • Train employees to keep them updated
  • Develops a competent workforce
  • Strictly follow employee contract or handbook

4. What are the types of personnel management?

There are three types of personnel management-

  • Strategic personnel management: Deals with current and future staffing needs.
  • Tactical personnel management: Deals with planning and development of the company’s staffing resources
  • Operational personnel management: Deals with the processes relating to staff influx including recruitment, selection, onboarding, growth, etc.

5. Is HRM better than personnel management? Why?

is hrm and personnel management the same

Yes. HRM is the extended version of personal management. With technological advancement and business evolvement, people’s needs also changed a lot. The traditional approach might not work present time to bring the most from your employees.

HRM has introduced many new working functions to manage people effectively. It aims to create an interactive workplace where people can work by sharing a personal bond. HRM also takes care of the individual needs of every employee by nurturing their potential and giving essential scope for growth. All together it works for achieving company goals within the allocated budget, time, and resources.

Read More: A Complete Guide to Integration Function of HRM & How It Works

6. What are the 5 main areas of HR?

An effective HR department builds a strong organizational structure to manage people and nurture them usefully. So, they can actively participate to meet business needs. HR managers perform many duties to carry out their responsibilities. But the 5 main areas of HR are-

  • Recruitment and onboarding
  • Training and development
  • Compensation and Benefits
  • Employee engagement and satisfaction
  • Workplace Safety

Read more to know about- Crucial HR Manager Roles And Responsibilities In A Growing Company

7. What are the 5 functions of human resource management?

Regardless of the size of the industry or the company, HRM plays an important role in the success of the business and its people. Below are five of the major functions of hrm-

  • Proper selection with ongoing training and development
  • Maintaining the relationship between employee and employer
  • Establishing a rewarding company culture
  • Taking disciplinary action if requires
  • Maintaining good working conditions

Read more about- The Essential Role of A Human Resource Manager in Modern Businesses

HRM vs Personnel Management: Final Words

Personnel management is a traditional way of managing employees whereas HRM is comparatively a new approach and more strategic.

Having some similarities, these two employee management approaches have some significant distances. If you focus on the objective of HRM; it strengthens employee bonding in an organization by implementing strategies of self-motivation. On the other hand personal management focuses on developing an organizational structure where an employee is bound to work according to the company specifications. And it can also be at the cost of an employee’s welfare.

Previously, companies mainly aimed at increasing company sales. But HRM changes the thoughts and focuses on increasing the productivity of employees. Gradually, it increases the overall production of the organization with growing profit margins. And experts find this approach more effective and steady for business growth.

This is the reason, business owners are now more concerned about employee welfare. They believe a happy employee is far more productive than an unhappy employee. Inside HRM, all these factors are considered and closely working for increasing employee satisfaction rate.

In a nutshell, we can say that both HRM and PM work with employee management within a company. But their working functions and focus points are different. In order to survive today’s competitive business world, you must have a strong HR department to manage your employees. You can also integrate an automated system like WP HRM to mitigate the extra hassle.


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