Difference Between HRM And Personnel Management

, , Leave a comment

“Take our 20 best people away, and I will tell you that Microsoft would become an unimportant company”

                                                               –     Bill Gates, CEO of Microsoft in Fortune, November 25th, 1996

Employees or Human Resources form the most integral part of any organization, irrespective of it size. Successful businesses have proven over time that a talented and dedicated workforce can achieve miracles, catapulting a seemingly insignificant organization into dizzying heights. This, through the last century, has made the employers re-look at the way in which they handle and empower their employees. Personnel Management and Human Resource Management now form two critical functions of any organization which deals with the “Employee” aspect of any organization.

The seeds of Personnel Management were sown during the industrial revolution in the early eighteen hundred century. Initially what this function did was handle the recruitment and wages related facets for the employer or the factories, the chief employment providers at that point in time. This was just a rudimentary form of workforce management. With government intervention at that time to bring focus on the basic rights of the workers, statutory guidelines were laid down for factories to follow. The personnel management team then became enforcers of these statutory compliances and limited themselves to the following activities: Personnel Administration, Employee Welfare and Labor Relations. This team did not have any involvement in strategic decisions of the company and largely remained an administrative function. Their approach remained as one of viewing human resources as an inputs factor within the organization, which was to be managed, as per laid down regulations, to achieve the output desired by the management. They often acted as negotiators or middlemen in case of any strife or dispute between the management and the employees. The personnel management team looked at job allocation on a very individual level, assigning work on division of labor basis and not a team work. This team took care of appraisals and related increase in compensation basis the employee’s performance.

This form of human resource management remained in vogue through large part of the twentieth century.

The approach of the New Millennium brought about a wave of change in the way in which the businesses were being run. The pressure on the “bottom line” increased manifold with the phenomenal increase in competition. Employers were forced to look at non-traditional means of increasing the organization’s profitability. This brought intense focus back on the primary resources of the organization – The Employees, who were now beginning to take the shape of “assets” instead of mere “resources”.

What manifested was that Human Resource Management became the most critical function of an organization from being a mere administrative unit. The focus now shifted to aligning the individual’s goals with the organization’s goal, with a common objective of an all-inclusive growth.

From Management of the workforce the team’s responsibility transitioned to the development of the work force. This brought in the whole angle of creating an environment conducive to increased productivity. Thus innovation and creativity became the buzz word and brought in evolved training and development approaches. Change in compensation became a direct factor of the overall organizations profitability. This shifted the focus from individual performances and slowly the team performances and work group performances assumed importance.

Hence, the act of creating winning teams became an important function of the human resource development team. The retention of these organizational assets also became a key function of this team as “poaching” of these assets became a strategy for competitors.

Thus the Human Resource Management and Development team now not only hired talent and managed talent but also saw to it that it kept this very “talent” motivated and completely aligned towards an organization’s objectives.

 

Leave a Reply