Comparison of Human Resource Management and Personnel Management



Human resource management (HRM) is the strategic and coherent approach to the management of an organization's most valued assets - the people working there who individually and collectively contributes to the achievement of the objectives of the business. The terms "human resource management" and "human resources" (HR) have largely replaced the term "personnel management" as a description of the processes involved in managing people in organizations.] In simple words, HRM means employing people, developing their capacities, utilizing, maintaining and compensating their services in tune with the job and organizational requirement.

While Miller (1987) suggests that HRM relates to:

".......those decisions and actions which concern the management of employees at all levels in the business and which are related to the implementation of strategies directed towards creating and sustaining competitive advantage"

Personnel Management - Personnel Management is thus basically an administrative record-keeping function, at the operational level. Personnel Management attempts to maintain fair terms and conditions of employment, while at the same time, efficiently managing personnel activities for individual departments. It is assumed that the outcomes from providing justice and achieving efficiency in the management of personnel activities will result ultimately in achieving organizational success.

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Torrington and Hall (1987) define personnel management as being:

"a series of activities which: first enable working people and their employing organizations to agree about the objectives and nature of their working relationship and, secondly, ensures that the agreement is fulfilled"


While digging for the difference between Human Resources Management and Personnel Management, you are most likely going to get very divergent views, depending on which sphere of experts you question. While some strongly affirm that there is no difference between the two, others will recognize the variance, but will still acknowledge the unmistakable similarities. In lay terms however, there's a general tendency to use the terms interchangeably. When examine critically, there are many differences between them. Some are listed below:

Personnel management can include administrative tasks that are both traditional and routine. It can be described as reactive, providing a response to demands and concerns as they are presented. By contrast, human resources involve ongoing strategies to manage and develop an organization's workforce. It is proactive, as it involves the continuous development of functions and policies for the purposes of improving a company's workforce.

Personnel management is often considered an independent function of an organization. Human resource management, on the other hand, tends to be an integral part of overall company function. Personnel management is typically the sole responsibility of an organization's personnel department. With human resources, all of an organization's managers are often involved in some manner, and a chief goal may be to have managers of various departments develop the skills necessary to handle personnel-related tasks.

As far as motivators are concerned, personnel management typically seeks to motivate employees with such things as compensation, bonuses, rewards, and the simplification of work responsibilities. From the personnel management point of view, employee satisfaction provides the motivation necessary to improve job performance. The opposite is true of human resources. Human resource management holds that improved performance leads to employee satisfaction. With human resources, work groups, effective strategies for meeting challenges, and job creativity are seen as the primary motivators.

Leadership and management role: Personnel management emphasizes much on leadership style which is very transactional. This style of leadership merely sees the leader as a task oriented person. This leader focuses more on procedures that must be followed, punishment form non-performance and non-compliance of rules and regulations and put figures and task accomplishments ahead of human factors such as personal bonding, interpersonal relationship, trust, understanding, tolerance and care.

HRM creates leaders who are transformational. This leadership style encourages business objectives to be shared by both employees and management. Here, leaders focus more on people-oriented and importance on rules, procedures and regulations are eliminated and replaced with; Shared vision, corporate culture and missions, trust and flexibility and HRM needs that integrates business needs.

Nature of relations: The nature of relations can be seen through Relation of power and management: The distribution of power in personnel management is centralized where the top management has full authority in decision-making where even the personnel managers are not even allowed to give ideas or take part in any decision which involves "employees". HRM, on the other hand, sees the decentralization of power where the power between top management is shared with middle and lower management groups. This is known as "empowerment" because employees play an important role together

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With line and HR managers to make collective and mutual decisions, which can benefit both the management and employees themselves. In fact, HRM focuses more on TQM approach as part of a team management with the involvement and participation of management and employees with shared power and authority. The nature of management is focused more on bottom-up approach with employees giving feedback to the top management and then the top management gives support to employees to achieve mutually agreed goals and objectives.

Diagram below summarize(s) the distinguishing factors between HRM and Personnel.

Distinguishing factors - HRM and Personnel Management

Key Aspect



Beliefs and assumptions


Carful delineation of written contract

Aim to go beyond written contract go by the spirit of the contract


Trust on devising clear rules

"can do" attitude impatience with rules

Guide to management action


Business and customer needs, flexibility, commitment


In line with customs and norms

In line with values and mission

Managers' task



Strategic aspects

Key relations

Labour management





Corporate plan



Speed of decisions



Line management




Key managers

P & IR experts

Line managers




Key levers


Personnel procedures

Cultural and structural issues and personnel strategies


Marginal importance

Integrated and key task


Job evaluation

Performance based


Restricted flow /indirect

Increased flow/ direct

Job design

Division of labour

Team work

Conflict handling

Temporary basis

Managing culture and climate

Training & development

Controlled access to courses

Learning organizations


Human resource management is not an "old wine in a new bottle" when compared to traditional personnel management. When a difference between personnel management and human resources is recognized, human resources is described as much broader in scope than personnel management in terms of functions as well as ways of managing Organization. Human resources is said to incorporate and develop personnel management tasks, while seeking to create and develop teams of workers for the benefit of the organization. A primary goal of human resources is to enable employees to work to a maximum level of efficiency.