Significant differences exist between human resource management (HRM) and personnel management (PM). Personnel management is a traditional approach but human resource management a modern approach.
1. Numerous remarks on the subject of Personnel Management seem to visualize it as a management activity, which is mainly targeted at non-managers. Personnel management seems to be something performed on subordinates by managers instead of something which the latter experience them. It looks to be just a collection of rules and procedures which could even restrict their freedom in supervising their subordinates as they think fit. On the contrary, Human Resource Management HRM not just emphasizes the need for employee development, but concentrates specifically on continuing development of the management team.
2. Although both Personnel Management and HRM emphasize the role of line management, the focus differs. In the Personnel Management models, line management role is an expression of the view that every manager manages people, so all managers in a way perform Personnel Management. Additionally, it carries the recognition that the majority of specialized personnel work still has to be carried out within line management’s departments where the staff is physically based. In the HRM models, HRM is vested in line management as business manager’s responsible for coordinating and directing all resources in the business unit looking for bottom-line results. Not only does the bottom-line seem to be specified more precisely than in the Personnel Management models, with a great deal of focus on quality of services or products, but a clear relationship is drawn between the accomplishment of these results and the line’s proper and positive utilisation of the human resources in the business unit. Personnel policies are certainly not passively integrated with business strategy but they are an essential component of strategy in the sense that they underline and aid the search for an ideal strategy.
3. Most Human Resource Management HRM models focus on the management of the organisation’s culture as the core activity for senior management. Even though the OD models of the ‘70s proclaimed same messages, they were not entirely bundled with normative Personnel Management models of this period. OD was always viewed as standing marginally apart from mainstream Personnel Management and actually was kept separate in a formal institutional sense with independent OD consultants, not necessarily with a background in or based within the personnel department.
4. Pay policy in personnel management is simply determined by skills and knowledge needed for a particular job only. Pay policies in Human Resource Management HRM are intended to encourage continuous job performance and improvement that is connected to value-added incentives like gain sharing schemes, group profit sharing and individual incentive plans.
5. The personnel management model has a tendency to attach a great deal significance to norms, customs and established practices, in contrast the human resource model attaches importance to values and mission.