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People and their skills are the organizational assets that competitors are inimitable. As the result, human resource management and its practices involved with all managers of the company to make them accepted the importance of people development as the one of major strategy. People management styles have been adapted all the time to survive in the business environment. This paper will explain in the nature of employment relations under the personnel management (PM) and human resource management (HRM), and discuss on the differences between personnel and human resource management of employee relations.
The personnel management becomes a trend by the 20th century. Kane (1996) noted that personnel management keep on the side of management in employee relations and find out the improvement in the area of recruitment, training and development, and wages. However, the personnel function is often related to the low level of the management hierarchy as administrators or clerks. Drucker (1954) added that personnel is like as 'partly a file clerk's job, partly a housekeeping job, partly a social worker's job and partly fire-fighting'. Townley, (1994) cited by Kane (1996) added that a textbook of British personnel management listed that there are six main functions of personnel management such as employment, pay systems, employee relations and training. Employment relations are one of the major areas, nevertheless; the personnel department has focused on tactical administration instead of participating with employment policy and strategic business. The employment applications are typically the limited technique, such as the selection tests and the relationship between employee work hours and employee exhaustion. The practices of employment relations are examined by the trade unions which help to monitor on some employees who try to take advantage from their employees and guide on the employment relationship about the agreeable behaviour between employers and their employees (Pinnington, Macklin & Campbell, 2007). The role of personnel management staffs is a key focus in the policies of development. The welfare is used for motivation and commitment. Additionally, the techniques of employee selection, evaluation and training are created to match between skills and job demands through job analysis.
By the 20th century, the importance of HRM in many medium-sized and large companies have grown dramatically with several reasons such as changing in demographic factor that show that the education level of people increases affects to employment relations which is the way people were employed, terminated, and managed. Moreover the business environment expands to the international competition, companies need to focus on employees' values which need the professional HRM to connect organizational structures with a new generation employees that have different attitudes of authority. Thus, the HRM concept starts with the new thinking of people management which faces on the increasing severe competition of the global economy. Ocshi (1982) discussed that it is from the Japanese company studies, Japanese employees focus on the management of people in the workforce productivity and innovation that identify the company culture which allows employees to create their success. As the result, the company culture becomes one of the key of success in business competition. Guest (1987) added that one key of company success is the integration of the company strategy, people commitment, quality and flexibility together. And the key of HRM is to taking employee commitment. HRM is an idea to treat employee as company assets and any activities of HR function must serve the company objective first (Kaufman, 2007). This means that HRM is very important. Not only HR managers but also line managers are involved to engage the employee commitment. Therefore, leadership is the key of effective HRM. Some suggestions indicate HR as a strategic business partner which related to the low level of administrative part and the high level of company strategic part to survival in the global economy.
The term of differences between personnel management and human resources can be identified as that personnel management is naturally administrative including payroll, following employment law, and coping with administrative tasks. On the other side, human resource management is about managing a workforce as the key that affect to the company success. Human resource management is explained that its scope of tasks is broader than personnel management. Personnel management handles with the routine administrative tasks which is lack of commitment from the executive management (Kaufman, 2007). While human resource management relate directly to company strategies to create and develop teams of employees for the company benefits. A basic objective of human resource management is the maximum level of employees' efficiency. Personnel management is typically perceived as an independent function which is responsible for the personnel department of company. On one hand, human resource management is an integral function of the company goal that there are sometimes some personnel tasks related to line managers of other departments. In the area of motivated concern, personnel management traditionally motivates employees with higher compensation, incentives, bonuses, and rewards. From its view, the satisfaction of employees tends to motivate the improvement of performance while human resource management improves the performance to make the satisfaction of employees. The meeting between the effective strategies and job creativity is its basic motivators of employees. In addition, the today trend is the strategic part of human resource management which is called strategic human resource management (SHRM). Wright and McMahan (1992: 298) stated that it is 'the pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals.' Kane (1996) added that in the global economy, it's necessary to link company strategies to HRM policies and practices to help achieve the strategies.
It is a fact that all company needs effective people as the human resource of the company. With the deficiency of this resource, company may not achieve the strategic objectives and goals. The consideration of style of people management is a necessary challenge for employment relations of the company in order to attract, develop and retains people better than competitors. There are the differences between personnel management and human resource management that is concerned such as human resource management doesn't obviously involve to the part of the human resource manager. Line managers are a significant role in human resource management as the main supporters of people management. Human resource management is clearly a part of business strategy, the human resource manager is a part of the executive strategic team in the company and human resource management is a critical role to implement of business success which is different from the personnel manager.