A few decades ago, employee administration meant processing payroll, maintaining records and filling vacancies. Today, that role has evolved: HR teams design engagement programmes, map career paths, run wellbeing initiatives and use data to shape workforce strategy. This shift, from treating employees as interchangeable labour to recognising them as strategic assets, captures the core difference between personnel management and human resource management.
Let's further understand the difference between HR and personnel management.
Key objectives of personnel management
The primary goal of personnel management is to organise and manage employees as a functional part of the business. It involves recruiting employees, assigning tasks, developing staff and managing staff salaries to achieve the company's key objectives.
Personnel management works based on two fundamental functions, which include:
- Managerial function: This approach involves coordinating employees in their recruitment, direction, planning and control.
- Operative function: Here, multiple activities are involved, including motivation, compensation, employee welfare, development and growth.
Key objectives of HRM
Human resource management is a branch of management that deals with the maintenance, utilisation, acquisition and coordination of employees to get the best output from them.
HRM is concerned with systematic planning to meet human resource needs, including recruitment, selection, training, salaries and performance appraisal, to fulfil the needs of a company.
In addition, human resource management is a continuous function, making sure that qualified candidates are available for the job. This approach works through an open policy to allow employees to seek support, teamwork and personal development.
HRM differs slightly from personnel management in that it considers employees as an asset of the company, rather than just an interchangeable commodity.
Role of technology in HRM
The integration of technology in HRM helps streamline processes and boost productivity. The following are the benefits of employing technology in HRM:
- Streamlining recruitment and hiring processes: Companies can leverage technology to simplify and speed up the recruitment process. Advanced software programmes and digital tools help in multiple tasks, including job posting, application and candidate assessment, all in one place.
- Enhancing the onboarding and training process: With the help of software, the onboarding and training process streamlines. It not only benefits the staff but also the organisation as a whole. This encourages continuous learning, adaptability and innovation.
- Automating administrative HR tasks: Technology has automated HR admin tasks. By employing technology, repetitive and tedious tasks such as data entry and payroll processing can be completed quickly, saving time and reducing errors.
- Improving communication and collaboration: With the technology integration in HRM, communication and collaboration have improved significantly. Enhanced collaboration tools, such as cloud-based platforms, enable employees to work together on projects virtually without any hurdles.
Importance of employee relations and motivation
Employees are an asset to an organisation and it is crucial to maintain a healthy relationship between employers and their employees. It is the HRM department's duty to work toward developing and managing employee relations. HR professionals can do this by acting as a liaison contact between the employer and employee.
These points show the importance of employee relations in an organisation:
- Improved employee engagement: In any organisation, employee engagement plays a vital role. If employees keep engaged and provide continuous contributions, it will help the company achieve its goals. For this, employers need to create a safe workplace environment where employees' ideas and suggestions are welcomed and valued.
- Increased motivation: Healthy workplace relations can help motivate employees and contribute effectively. If employers provide employees with deserved recognition and appreciation, it motivates them to continually perform better and keep improving.
How HRM contributes to organisational growth
Human resource management plays a vital role in organisational growth by aligning people, processes and culture with the company’s goals. Here is the list of areas where HRM's contribution significantly impacts the growth of the business:
- Recruitment process: HRM is responsible for hiring, training and developing employees. If the right candidate is brought into the company who fits the job requirements, companies can achieve their goals.
- Payroll processing: Human resource management constructs a payroll structure that companies use to give salaries to their employees. They set the amount to find the right candidate for the job. The more competitive the pay, the better talent can be hired, ultimately contributing to improving organisational performance.
The impact of HR policies on employee well-being
Here are how HR policies impact employee well-being:
- Work-life balance: HR policies focus on promoting work-life balance, including flexible work arrangements, parental leave and paid time off. Also, the option of working remotely and flexible hours provides employees relief from travel and following strict office schedules, allowing time for personal and family needs.
- Supportive work environment: A key aspect of HR function is to provide a supportive working environment. HR policies that include open communication and recognition programmes create a healthy work environment.
- Professional development: HR policies that provide training and development programmes, tuition reimbursement and clear pathways for career advancement play a crucial role in empowering employees. These policies allow staff to acquire new skills and knowledge that can lead to job satisfaction.
Insurance and employee benefits in HRM
In HRM, insurance and employee benefits are crucial for protecting employee well-being and offering competitive compensation. Here are the types of insurance:
- Health insurance: It usually covers medical expenses, including hospitalisation, doctor visits and prescriptions.
- Life insurance: This includes a death benefit paid to the employee’s beneficiaries in the event of the employee's passing away.
- Workmen compensation policy: It protects employers against financial liability if an employee suffers injury, disability or death due to work-related accidents.
Conclusion
While both personnel management and human resource management deal with managing people, their approaches and purposes differ greatly. Personnel management follows a traditional, reactive style, focusing mainly on administration and compliance. In contrast, HRM adopts a proactive, strategic and people-centric approach that aligns employee growth with organisational goals. Understanding the distinction between the two helps businesses build stronger workforce strategies, boost productivity and drive long-term success.
FAQs
2. What is the difference between personnel management and human resource management?
While personal management focuses on administrative tasks and employee welfare, HRM works on strategic planning, employee development and aligning HR practices with the company’s goals.
2. Does personnel management deal solely with employee administration?
Personnel management includes administrative tasks like payroll, benefits and compliance, but it also includes employee relations, performance and training.
3. Between personnel management and HRM, which approach is better for modern organisations?
HRM is generally considered better because it aligns people practices with organisational strategy and fosters innovation. While personnel management may still work for small or traditional companies but it lacks the strategic impact of HRM.
4. Why did companies shifted from personnel management to HRM?
Organisations moved to HRM to improve productivity through strategic workforce planning and employee development. It offers a more integrated approach, interconnecting people, performance, and organisation goals.
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