Personnel management (PM) and Human Resource Management (HRM) although sometimes considered to be the same thing, are very different in their approach of management. In fact, HRM was developed out of a need to improve the framework that had been used for personnel for many years. PM was initially developed in the mid 19th century after the ‘Factory Acts’ of 1840 came in. Employers such as Rowntree and Cadbury appointed welfare officers who would monitor the conditions and lives of employees often in an intrusive manner; for example they suggested their workers drank less alcohol outside of work hours as well as in work. This role developed with the rise of trade unions as they would act as intermediaries for the workers and employers (Henderson, I. 2011).
Personnel management evolved into including more roles after WW2 such as recruitment and selection, when it became apparent that the previous haphazard method of line managers choosing employees was not working. By the 1970s personnel had developed into a specialist management function and included roles such as payroll, conditions of service, training and development and employee exit etc. (Henderson, I. 2011).
HRM came into prominence in the 1980s when it became apparent that PM was just papering over the cracks between employer and their workforce. PM worked on a reactionary basis and tried to cure the problems after they had taken place. HRM has a more strategic view of management. It is proactive; where PM is about the maintenance of personnel and admin systems, HRM is about forecasting, continually monitoring personnel and managing change (IQPC, 2011).
The framework for HRM came from the USA. At a time when trade unions were becoming less popular and organisations were realising their biggest assets were their human resources, HRM was a necessary improvement on the original PM as it concentrated on individuals rather than entire workforces.
In the late 1970s, due to the fast changing world of technology Japan was striding ahead of the USA because of their understanding of the need to train and develop their employees. Lack of training and the reward policy in place at the time meant ‘there was an increasing willingness on the part of employees to disrupt production to achieve higher financial or other rewards despite the damage… [to the]… long-term health of the organisation.’ (Henderson, I. 2011). HRM was born of a need to keep up with the competition and to value each employee and their individual skills (Henderson, I 2011).
There are many differences between PM and HRM. Whereas personnel will deal with employees, payroll and employment laws, (mainly administration roles), HRM is more involved in the organisation, it is concerned with the organisation’s success and managing the workforce. HRM develops personnel management roles and is an integral part of the running of an organisation. PM is almost independent of an organisation (Prabhat, 2011).
In conclusion, because PM is reactive and HRM proactive; HRM can prevent problems before they arise and therefore is a better approach to the management of a workforce. In theory it can eliminate the need for trade unions as it focusses on keeping each employee challenged, trained and properly rewarded for their work.
The role of HR practitioner has developed over the years from a mainly administrative role that involved hiring, firing, employment contracts and payroll into a role that is much more proactive. A HR practitioner today will tread a line between being an employee ‘champion’ and a strategic business partner (Purple Line Consulting, 2013).
HRM can be described as the ‘conscience’ of employers there to ensure that the pursuit of more productive and efficient work does not mean that the human dimension is overlooked. In the early days of PM and the ‘welfare role’ employees were given assistance at work so as to improve their contribution.