Difference between Personnel Management and Human Resource Management

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resource-management/35222

There are differences of opinion so far as the comparison between personnel management (PM) and
human resource management (HRM) is concerned. A number of people, from students to managers to
academics, mistakenly think that PM and HRM are synonymous concepts. There are some others who
treat the two concepts as different.

Hence, it is important to appreciate the difference between PM and HRM According to Goss, HRM has
three principal distinguishing features as compared to PM. These are: emphasis not just on rule and
contract but beyond them; focus on strategy; and individualization of employee relations.

A discussion on each of these follows:

1. The assumptions underlying PM concepts emphasize clearly defined rules, procedures and contracts.
Adherence to these rules and procedures governs the actions of the management. The relationship
between the work force and the management is governed by collective bargaining as well as
employment contracts.

Especially collective bargaining becomes significant because employees and management see and treat
each other as having divergent interests. Here, pluralism is respected as a social value and the role of
unions in HR is considered legitimate.

On the contrary, HRM emphasizes open-ended contracts, the terms of which are linked to the
exigencies of business; conflict is viewed as something pathological, resulting from negative inter-
personal relations rather than structural contradictions. Management assumes responsibility to
motivate employees and constantly inspires performance based on commonality of goals.

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2. PM does not focus on strategic management. Its main goal is peaceful or good labour- management
relations. Its function is mainly reactive. On the other hand, HRM is a proactive function. It does not
view labour-management relations as an end in themselves. It is not only concerned with the present
organisational needs but anticipates future needs and then acts appropriately. HRM also seeks to
release the inner potential and creativity of people.

3. The edifice of PM is built on the collective agreement between the employees and the management.
Employees get standardized rewards based on job evaluation. But, HRM leads to individualization of
collective relations. Thus, performance- related pay (PRP) is given key strategic emphasis. Pay is linked
with contribution made by an employee to the realisation of organisational goals.

HRM seeks to develop the competencies of the employees so as to derive benefit from this
development for the organisation, and to integrate individual and organisational goals. Skill formation
and developments are recognized as the main hallmarks of HRD. The ultimate aim is to use the full
potential of human resources for serving the needs of the customers and developing organisational
competencies.

Some authors have developed these basic points into detailed differences as shown in Table 1.1.
Table 1.1: Comparing HRM with PM: