PERSONNEL MANAGEMENT

Vs

HUMAN RESOURCE MANAGEMENT

Torrington and Hall in their book “Personnel Management: A New

Approach” points out that

There are "substantive differences" between HRM and Personnel Management.

Personnel Management is directed at the organisation's employees: finding and training them,

arranging for them to be paid,

explaining management's actions,

satisfying employees' needs,

dealing with their problems and seeking to modify management action that

could produce unwelcome employee response.

HRM, by contrast, is allegedly: "directed mainly at management needs for human resources (not necessarily employees) to be provided and deployed.

There is greater emphasis on planning, monitoring and control,

rather than on

problem solving and mediation.

To add to the differences mentioned earlier, Torrington

and Hall along with their other comments contrasting

HRM and personnel management, seems to reveal their

view that HRM is an approach which puts the emphasis

on the "resource management" element, with overtones of

the dispassionate acquisition, deployment and disposal of

resources and an abandonment of the "caring" and

empathetic elements in some traditional personnel

practice.

Karen Legge, a critic of HRM also admitted that there are

differences in terms of emphasis, which distinguish HRM from

traditional personnel management. In her critical analysis of HRM,

she pointed out that:

1 "Personnel management is aimed largely at non-managers, whereas

HRM treats management development and the management team

as equally if not more important;

2 Personnel management views line managers as

implementing personnel policy for the employees

under their control, whereas HRM views line

managers as directing and co-ordinating a whole

range of resources in order to achieve "bottom-line"

objectives

3 HRM highlights senior management's corporate

responsibility for managing organisational culture and

giving a sense of direction and leadership within the

organisation, whereas personnel management has

tended to see this as an activity for a separate

department such as organisational development.

Writers like Legge, Keenoy and Fowler argue that

HRM is basically "improved personnel management".

On the other hand, authors like Storey, Armstrong,

Guest and a few others propose that HRM is indeed a

distinctively different and new approach to managing

people.

ALTHOUGH both human resource management (HRM) and

personnel management focus on people management, if we

examine critically, there are many differences between them.

However, to find substantive and clear differences between

HRM and personnel management is not a simple task because

both are referring to "people". Nevertheless, debates and

articles in the management literature regarding the differences

have clearly been proven.

There are five differences that can be debated

between them which are:

Nature of relations;

Leadership and management role;

Contract of employment;

Pay policies and job designs; and

Communication and negotiation.

Nature of relations

The nature of relations can be seen through two different

perspective views which are Pluralist and Unitarist. There is a

clear distinct difference between both because in personnel

management, the focus is more on individualistic (Parag

Diwan, 1998) where individual interest is more than group

interest.

The relationship between management and employees are merely on contractual basis where one hires and the others perform. Whereas, HRM focuses more on Unitarist where the word "uni" refers to one and together. Here, HRM through a shared vision between management and staff create a corporate vision and mission which are linked to business goals and the fulfilment of mutual interest where the organisation's needs are satisfied by employees and employees' needs are well-taken care by the organisation. Motorola and Seagate are good examples of organisations that belief in this Unitarist approach which also focuses in team management and sees employees as partners in an organisation.

Leadership and management role

Personnel management emphasises 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 only 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.

The above have then created as what we call now MBO

(management by objectives) which is based on HRM strategy that

focuses in transformational leadership, style which encourages

"participative management".

This according to John Storey is an "ideal type" if the new HRM

model which HR practices are no more involving only HR

managers, but also the line managers.

Here, the HR managers and the line managers are equally important

in directing and co-ordinating people resources in order to achieve

"bottom-line" objectives.

Contract of employment

In personnel management, employees contract of employment is clearly

written and employees must observe strictly the agreed employment

contract.

The contract is so rigid that there is no room for changes and

modifications.

There is no compromise in written contracts that stipulates rules,

regulations, job and obligations.

HRM, on the other hand, does not focus on one-time life-long contract

where working hours and other terms and conditions of employment are

seen as less rigid. Here, it goes beyond the normal contract that takes place

between organisations and employees.

The new "flexible approach" encourages employees to choose

various ways to keep contributing their skills and knowledge to the

organisation.

HRM, with its new approach, has created flexi-working hours,

work from home policies and not forgetting the creation on "open

contract" system that is currently practised by some multinational

companies such as Motorola, Siemens and GEC.

HRM today gives employees the opportunity and freedom to select

any type of working system that can suit them and at the same

time benefit the organisation as well. Drucker (1996) calls this

approach a "win-win" approach.

Pay policies and job design

Pay policies in personnel management is merely based on skills and knowledge required for the perspective jobs only. The value is based on the ability to perform the task and duties as per the employment contract requirement only.

It does not encourage value-added incentives to be paid out. This is also because the job design is very functional, where the functions are more departmentalised in which each job falls into one functional department.

This is merely known as division on labour based on job needs and skill possessions and requirement.

HRM, on the contrary, encourages organisations to look beyond pay for functional duties. Here, the pay is designed to encourage continuous job performance and improvement (Kaizen) which is linked to value-added incentives such as gain sharing schemes, group profit sharing and individual incentive plans.

The job design is no more functional based but teamwork and cyclical based. HRM creates a new approach towards job design such as job rotation which is inter and intra-departmental based and job enlargement which encourages one potential and capable individual to take on more tasks to add value to his/her job and in return enjoy added incentives and benefits.

Communication and negotiation

Personnel management restricts communication between line managers, employees and top management. The communication process is very indirect and it is always difficult for the employees to channel problems, grievances or ideas to the management because there are too many layers of communication that can slow down the speed of any decision.

HRM gives employees direct communication with the management. Problems or grievances can be solved immediately through open-door policy where one need not make an appointment to see the head of department or even the chief executive officer (CEO).

Motorola is one exceptional case of how HRM promotes

open-door policy where employees can even walk in straight

to the managers room anytime to discuss any problem

pertaining to job or personal. In fact every employee have

direct e-mail access to the Motorola CEO in the US.

In personnel management, the negotiation process in any

terms and conditions are often made through the union as a

third party who plays the role of a mediator between

employees and management.

This often creates mistrust, abuse of power, misunderstanding and conflicts if both parties do not agree to compromise. HRM believes that if they can fulfil employee needs, then third party involvement (the union) can be eliminated because HRM focuses on how to get closer with the employees.

HRM also believes that negotiation of any terms and condition of employment can be made directly through the process of collective discussions and participation.

Employee Suggestion Scheme (ESS) is a success story of HRM. Minolta is one of the companies that applies the ESS that sets or changes any HR policies through mutual agreement.

HRM wants to focus on a non-unionist environment as one of

the four pillars for effective people development (Sissons,

1990). Employee training and development: Personnel

management sees training and development of employees as

part of a fulfilment of job changes and requirements.

Training programmes are designed to meet performance

requirement. There is no room for creating and innovative

development.

It merely focuses on IQ development rather than EQ needs.

Personnel managers play the role of training officers who will

identify, select and implement training programmes not

knowing what are the line managers' requirements and

expectations and the employees' strength and weakness.

HRM focuses more on learning organisations that can learn,

unlearn and relearn (Senge, 1984) to meet and adapt to

business and technological plus job changes.

Employee training and development is more linked to internal

career growth and long-term HR planning where the line

managers together with HR managers and employees will

suggest the best possible training and development programmes

that can be selected and implemented to fulfil the organisational

needs and objectives.

This is normally done through the formation of career and

training committee which compromises of line managers and

HR managers who work together to create a learning

organisation.

Conclusions

There is no doubt that HRM do differ from personnel management because

the former is more focused on production based economy (p-economy)

whereas the latter focuses more on knowledge based economy (k-

economy).

Many writers such as Michael Armstrong and Fowler challenge and argue

that HRM is nothing new because the approach and strategies are still as in

personnel management. In my opinion, although HRM can be stated as the

reflection of the same picture, the models of people management is clearly

different.

Personnel management is very much on the classical way of managing people,

using functional model, but HRM is seen as scientific management (F.W. Taylor)

which uses wholistic model. This is because the work environment in the past is

very much different now; employees are becoming highly literate and independent.

Industrialisation has also reached the level of maturity where one needs to depend

on the other to achieve results.

Overall, HRM helps encourages innovation, teamwork and total quality that

encourage the willingness to keep moving in the pursuit to reach excellence.

"It is easy to manage money, machines or any other organisational assets but it is

difficult to manage people because they respond to you either negatively or

positively".