Personnel Management and Human Resource Management are one and the same thing". Discuss.

The idea of HRM is too maximise the efficiency of the work place by treating employees as individuals and not a collective group.  Throughout this process it tries to encourage its employees, both through giving initiatives and by constantly finding new ways of working to keep motivation high.  Such examples are financial incentives and goals within the work place.

PM has more recently developed as a spin off from HRM.   After the Second World War there was an increased need for labour, and specifically personnel specialists, to the point that in 1946 the Institute of PM was created to represent these individuals.  Until 1960 there was little change in employment methods as the Labour government were encouraging to “combine a free democracy with a planned economy”.  However, in 1960 employment laws changed to persuade the expansion of personnel function within employment.  This continued in the 1970’s where further employment laws were passed to encourage sexual equality as well as certain standards within the word place.   These built on the Donovans Commission Report of 1968 which had suggested new personnel functions within management.  By the 1980’s many companies had increased their use of personnel management, significant as regards to dealing with trade union.  This  number can also be represented by the huge increase of members within the IPM, which had gone from 3979 in 1956 to 35,548 in 1989.

PM concentrates more on the policies, processes and procedures in the management of people.  It is a function of management which synchronizes the HR but emphasises on the employee.  PM closely relates to compliance based systems of control, unlike HRM which is linked with commitment.  So where do the two meet and how do they co-exist, or are they simply the same thing?  It is an issue that has been the subject of much debate over the last decade.

Legge identifies that there are three differences between HRM and PM.  Firstly that HRM concentrates on managerial staff, whereas PM focuses on non-managerial staff.  Secondly, HRM is part of line management activity, while PM attempts to influence it.  Lastly, that HRM applies significance  on senior managements culture.  Something that PM has always been very spectacle of, specifically, that of organisational development.

According to many PM’s appear to be inferior to HRM’s.  Legge writes that this could change if they become ‘deviant innovators’, someone who ‘attempts to change this means/ends relationship by gaining acceptance for a different set of criteria for the evaluation of organisational success and his contribution to it’, practically, the innovator should promote important new values in the business.  For Legge’s vision to come into practise there would have to be a culture change within organisations.  Currently the role of personnel managers is such that they rarely if ever initiate an important change within the business, though they can help implement it, for example training of employees.

Freedman during his American survey found that individual innovations  tended to come from the position of line managers, reinforcing the associated decline in PM roles.  PM has been monitored using two models.  The goal model judges effectiveness through targets and performance.  The second model is called the political model and judges the legitimacy of a target over a long period of time.

Similarly to HRM, many believe that people are an essential element that should be invested in, the problem lies in the fact that this asset is undervalued, specifically in regards to training employees.  PM does appear according to some to be the little brother of HRM, they hold less influence then many believe they should, the same people regard their job as a failure.  But this can be stated to be incorrect, PM’s have a role in conjunction with line managers implement policy, not create it.  They efficiently problem solve and introduce new policy, they are the police officers HRM are the MP’s in Whitehall.

Fundamentally there appears to be six differences between the two types of management;

1. HRM is integrated into strategic planning.  Strategic planning became popular during the 1980’s after the Harvard Business Schools two models of integrating strategy and HRM.  Harvard’s work was furthered by Formbrun, who recognized three core elements of Strategic Planning; Mission and Strategy; organisation strategy and HRM.  These had to be achieved for a firm to function effectively.  They stressed that it was vital to align HRM with strategic planning, a view that was supported by Beer.  Beer stressed that within a very changing and modernising world, organisation was more important than ever.  By the 21st century strategic planning is more important than ever, Schuler and Jackson define it as planned human resource developments…to enable an organisation to achieve its goals”.

2. HRM emphasise the importance of psychological contact, an employer and employees moral obligation to each other.  It has no clear definition, Rousseau  calls it “individual beliefs, shape by the organisation, regarding the terms of an exchange agreement between individuals and their organisation”.  In combination with increasing diversity in employment contracts, temporary, part time (with variations), full time and contract work, workers want more and more flexibility.  This flexibility is also craved by organisations, though only in concurrence with commitment.  Unlike a machine, a human can leave, or move to establish a new work relationship with his previous companies rivals.  There is currently an EU funded project being carried out into psychological contact headed by David Guest and in conjunction with Psychological Contracts across Employment Situations (PSYCONES).  PM on the other hand is based that you work for a certain level of pay, it is legally stringent.

3. HRM concentrates on the importance of learning and education.  Though this is still not as apparent in the UK as it probably should be, Germany for example take pride in their quality levels, just look at Mercedes, BMW and VW motors.  As opposed to it being a significant factor in HRM it is over shadowed by cost minimising and high profit margins. The Handy Report commented that Britain had ‘neglected her managerial stock’  giving mangers too little responsibility in ‘education, training and development’ It is a problem that has been so concerning that even the government have stepped in to encourage it.  The companies were taking a voluntarist approach to teaching their staff, though the government encourage such methods, they were never enforced.  The government then stepped in forcing a interventional approach sending agents to put pressure in organisational decisions.  Many people see people as a form of investment.  If the employees perform to their potential better results will occur, showing a greater return in investment, and thus more profit.  This is called the human capital theory.

4. HRM is based on the individual not the collective as PM is.   HRM deals on a person on person basis, the way they are managed and motivated to “achieve individual and organisational goals”.  The employer policies will significantly influence workers decision making.  As HRM is directed towards the individual, these policies have in recent years resulted in a decline in trade union membership, bringing some HRM critics to say that HRM in fact goes against employment management.  If management take a derogatory view of groups such as unions, then the employees with embrace their views, for fear that not doing so would hinder further career prospects.   For example, from personal experience, Manpower are the employer for NTL.  Manpower do not recognise trade unions, resultantly, they hold more authority over their employees.  Which can cause problems when an employee does have a problem or issue they wish to raise against their employer.

5. HRM centres round proactive central strategic management, PM implies passive connotations.  A proactive approach is apparent when a HR manager is vocal in the decision making process, their input is part of the business strategy formulation.  Bamberger and Phillips created a model to conceptualise strategic management, it demonstrates how HR strategy, environmental influences and business strategy all influence decision making equally.  Bratton depicts this process differently, stating how external factors such as technology, government policies, trade unions, markets and EU policies all influence the process.  Considering this, the Bamberger and Phillips model does appear to be too simplistic, a point echoed by Purcell and Ahistrand who criticises the models use of contextual influences as a lack precision and detail.

6. HRM models are mainly performance based.  Quite possibly the most significant difference between to two types of management.  The performance based exists, but statistically has been difficult to show, as most of the research collected such figures as labour turnover and productivity, rather that profitability.  Specifically within a Michigan hard style approach, HRM’s as a collective, ‘head count’.  The stringent managerial style, may maximise profit, but does so at the cost of quality

The two approaches to management do undoubtedly have similarities, though it appears to be too simplistic to call them the same thing. HRM is growing in popularity on a global basis, forcing PM’s into a corner.  PM’s are important to help in implementation, and to advice; however this is increasingly being carried out by HRM.  HRM is a dictatorship that has little room for ever more minority.  

1971 Words

Bibliography

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Guest, (1991)D, Personnel Management: The End of Orthodoxy?, British Journal of Industrial Relations

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