Difference Between Human Resource Management and Personnel Management

HRM and PM are commonly used terms by many to highlight various facets of managing people in organizations. However, majority is not aware of the underlying differences. The term ‘HR manager’ is often used in synonymous to ‘personnel manager’ in many job vacancy advertisements. This article will focus only on the scope and nature of HRM and PM, which highlights the key differences. Therefore, emphasize will not be given on the functions of HRM and PM.

What is Personnel Management?

PM is concerned with obtaining, organizing and motivating the human resources required by the enterprise (Armstrong, 1977). Consequently, PM was traditionally used to depict the ‘paper-work’, routine set of activities of employing people (e.g., staffing, payroll, labour laws). A personnel manager was responsible for ensuring employee welfare, and acted as a mediator between the management and employees. Hence, the premise of PM is on administration of employees, but lacks a holistic approach of managing workforce.

What is Human Resource Management?

According to Michael Armstrong’s latest edition of his book ‘A Handbook of Human Resource Management Practice’, which is widely recognized by many leading HR academics, HRM is a strategic, integrated and coherent approach to the employment, development and well-being of the people working in organizations (Armstrong, 2009). HRM evolved from PM, due to the advent of resource based organization that gave importance to treat employees as valuable resources and not as costs. Hence, as defined by Dave Ulrich who is a world renowned HR guru, an HR manager would also need to play additional three roles: ‘Strategic Partner’, ‘Employee Advocate’, and ‘Employee Champion’, in addition to performing the duties of a personnel manager as an ‘Administrative Expert’.

What is the difference between Human Resource Management and Personnel Management?

Debates about the differences between HRM and PM went on for some time, and some academics had even denied that there were any major differences (Armstrong, 2006). The following are some of key similarities on which these academics based their debates:

• Both recognize that one of their most important functions is matching people to organizations’ changing needs.

• Both flows from business strategy.

• Both recognize that line managers are responsible for managing people.

• Both use similar techniques for selection, performance management, training, and reward management.

Nevertheless, there are many researches that prove the differences between the two. PM treats employees as a cost and is independent from an organization. So, PM is viewed as traditional and reactive, which focus on administration of employees. On the contrary, HRM treats employees as a valuable asset. It is an integral part of an organization, which is strongly linked with other functions of an organization (e.g., finance, marketing, production, information technology, etc.). So, HRM is viewed as proactive, anticipating and continuously improving to build a dynamic team. Therefore, the scope of PM is narrow when comparing to the broad scope of HRM that possesses a holistic, strategic approach to manage employees.