a) Define and explain the terms HRM and PM (5)

b) With reference to practical examples. Outline and explain the difference

between HRM and PM (20) due date 4th April 2016.
Personnel Management is a part of management that deals with the
recruitment, hiring, staffing, development and compensation of the workforce
and their relation with the organization in order to achieve the organizational
objectives. The main functions of the personnel management are divided into
two categories:
Operative Functions: The activities that are concerned with procurement,
development, compensation, job evaluation, employee welfare,
utilization, maintenance and collective bargaining.
Managerial Function: Planning, Organizing, Directing, Motivation, Control and
Coordination are the basic managerial activities performed by Personnel
Management.
From the last two decades, as the development in technology has taken place
and the humans are replaced by machines. Similarly, this branch of
management has also been superseded by Human Resource Management.
Human Resource Management is that specialized and organized branch of
management which is concerned with the acquisition,
maintenance, development, utilization and coordination of people at work, in
such a manner that they will give their best to the enterprise. It refers to a
systematic function of planning for the human resource needs and demands,
selection, training, compensation and performance appraisal, to meet those
requirements. Human Resource Management is a continuous process of
ensuring the availability of eligible and willing workforce i.e. putting the right
man at the right job. In a nutshell, it is an art of utilizing the human resources
of an organization, in the most efficient and effective way. HRM covers a
broad spectrum of activities which includes: Employment, Recruitment and
Selection, Training and Development, Employee Services, Salary and Wages,
Industrial Relations, Health and safety, Education, Working conditions,
Appraisal and Assessment. The differences are as follows;
Decision making. In PM the decision is relatively slow due to the
organizational structure. Decision are often made by top managers as such
they take time for them to be fully implemented. On the other hand decisions
using the HRM are fast due to a degree of autonomy on the low level
management: In personnel management, decisions are made by the top
management as per the rules and regulations of the organization. In human
resources management, decisions are made collectively after considering
employees participation, authority, decentralization, competitive
environment. For example when an important decision is made in Pm it may
require time for the top management to decide, like if the Coca Cola company
decides to introduce a new drink, it requires strategic thinking thereby top

management would take time in researching thereby result in slow decision

making. In HRM decisions are made by low level management so it results in
those decisions be made fast.
HUMAN RESOURCES
PERSONNEL MANAGEMENT
MANAGEMENT
APPROACH
Traditional
Modern
TREATMENT
OF POWER

Machine or Tools

Asset

TYPE OF
FUNCTION

Routine Function

Strategic Function

BASIS OF PAY

Job Evaluation

Performance Evaluation

MANAGEMEN
T ROLE

Transactional

Transformational

COMMUNICAT
ION

Indirect

Direct

Collective Bargaining

Individual Contracts

Piece meal

Integrated

Procedure

Business needs

MANAGEMEN
T ACTIONS

Slow

Fast

DECISION
MAKING

Division of Labour

Groups/ Teams

Individualists/ Plurarist

Unitarist

Long pay scales

Reward Contribution

Unionized /Pluralist
environment

Unitarist environment

Virtually non existent

Continuous Development

LABOUR
MANAGEMEN
T
INITIATIVES

JOB DESIGN
NATURE OF
RELATIONS
RENUMERATI
ONS
EMPLOYEE
RELATIONS
PERSPECTIVE
TRAINING
AND
DEVELOPMEN
T

Approach: The Personnel Management uses the traditional approach and the
Human Resources Management uses the modern approach, For example,
Personnel Management treats workers as tools or machines whereas Human
Resource Management treats people as an important asset of the
organization. The Personnel Management traditional approach was usually
expected to work on a short time-scale fire-fighting (that is, dealing with
immediate problems such as local industrial relations issues, or urgent staff
shortages) rather than taking a long-term, strategic view of people
management issues. The implications for this longer-term perspective for all
HR issues, and the necessity for an articulated strategy for HRM, which
should not only be coherent in itself but should be informed by, and support,
the business strategy of the organization. In modern HRM, humans are seen
as central and the main thing is to deal with the staff as people. In traditional
personnel management it was more about dealing with figures, logistics and
practical matter. The personnel approach concerns itself with establishing
rules and procedures and contracts, and strives to monitor and enforce
compliance to such regulations with careful delineation of written contract.
HRM approach remains impatient with rules based on business needs and
exigencies, and aim to go by the spirit of contract rather than the letter of the
contract. For example, the illustration of this difference lies in the treatment
of employee motivation. The personnel management approach holds
employee satisfaction as the key to keeping employees motivated, and
institutes compensation, bonuses, rewards and work simplification initiatives
as motivators. The HRM philosophy holds improved performance as the driver
of employee satisfaction, and devises strategies such as work challenges,
team work, and creativity to improve motivation.
Job design: the compliance sought in Taylorist organizational culture is
reflected in the low degree of autonomy workers typically have in such a
context. The PM model was where jobs tended to be designed under
scientific management principles. The search for greater commitment in the
HRM approach implies that employees should be allowed and encouraged to
use self-control in matters of work and organizational discipline, rather than
be driven by a system of compliance and direction imposed upon them by
management. Team working and similar initiatives would be much more
common under HRM than PM. Under personnel management, job design is
done on the basis of division of labour. Under human resource management,
job design function is done on the basis of group work/team work. For
example in the scientific management where division of labour was
encouraged to save time and allow for the repetition of tasks in order for a
worker to become skilled and efficient. However, in the long run it would
result in boredom as a worker repeats tasks over and over again. On the
other hand, team work was encouraged to ensure high levels of productivity,
for example, in the construction of a building. There is no way one person
would do everything by himself but it would require teamwork where one is
responsible for layering bricks, drawing a plan and installing air vents and
among others. Another example would be of a manufacturing company which

encourages team work that is throughout the whole process from inputs,
processing to outputs of a product.
Remuneration: PM is usually associated with traditional approaches to
remuneration, long pay scales characterizing the hierarchical organizational
structure mentioned above, reflecting length of service rather than current
contribution. Pay structures are usually agreed via collective bargaining, at
least for non-managerial employees. The HRM approach to remuneration is
more focused on rewarding contribution and is likely to be individually or
team-based. This implies both the use of performance management and
appraisal and the setting of base rates from the market rather than by means
of collective agreements.
Training and development: when employees are viewed mainly as a cost
(which should be minimized), commitment to training is usually negligible,
employers fearing that employees will be poached by free-loading
competitors who do no training themselves, and this would be the typical
position in the PM paradigm. An exception was often made, however, in
industries with collective agreements on apprentice training. Except for large
PM organizations, management training and development would be virtually
non-existent. For example, when two UK academics, Iain Mangham and Mick
Silver, surveyed management development in the mid-1980s, they reported a
surprisingly high proportion of firms which seemed to do no management
training at all, on the grounds that, as one respondent put it, We only employ
managers who can do the job (Mangham and Silver, 1986).In HRM there is a
culture of continuous development of all core employees who are seen as the
originators and possessors of the organizations strategic competencies
necessary for sustainable competitive advantage. Senior managers are not
exempt, the directors and CEO receiving executive development. This
commitment would not be expected in the peripheral shells surrounding the
core.
Employee relations perspective the dominant managerial perspective
within the organization: personnel management typically operates in a
unionized, pluralistic environment. This can be contrasted with the HRM
model in which the employment relationship is much more individualized
than when dealing with the workforce collectively. This is reflected in, for
example, the absence of trade unions and the introduction of performancerelated rewards systems. The unitarist nature of HRM would seem to
discourage the formation of a pluralist organizational culture, but in practice
there have been examples where HRM has been successfully adopted within
a previously pluralist culture while maintaining the pluralist style of collective
bargaining in employee relations. See for example Tayebs account of the
Scottish division of the American firm NCR (Tayeb, 1998). But see also the
empirical evidence from the Workplace Industrial/ Employment Relations
Surveys in the UK (referred to below in this chapter) on the long-term decline
of trade unionism in the UK

Nature of relations: the nature of relations can be seen through two

different perspectives views which are pluralist and unitarist. There is a clear
distinct difference between both because in PM the focus is more on
individualist 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 another. Here the HRM through a
shared vision between management and staff create a corporate vision and
mission which are linked to the business goals and the fulfillment of mutual
interest where the organizations needs are satisfied by employees needs are
well- taken care off by the organization. Motorola and Seagate are good
examples of organizations that believe in this unitarist approach which also
focuses in team management and sees employees as parties in the
organization.
Treatment of manpower: In PM employees are used as tools and
machines. For example, during the industrial revolution under Taylor the
father of mass production workers were viewed as machines and tools rather
than people. Mostly, people in the industrial area did not care about the wellbeing of workers but sought better ways of increasing production. In HRM it
regards people as assets, this implies that they view workers as individuals
who are important in the work place. For example most organizations of
today are looking for better ways of rewarding the worker that is through
fringe benefits, holiday vouchers and training on the workplace thus showing
them that they are valuable assets in the organization.
Labour Management: In PM, the negotiations are based on collective
bargaining with the union leader. Conversely, in HRM, there is no need for
collective bargaining as individual contracts exist with each employee. For
example people in the PM are used to negotiating together with a union
leader. That is to say negotiations will always take place with a union leader
around. Conversely, in HRM employees can rely on individual contracts rather
than collective bargaining.
Communication- In PM the communication is Indirect for example, workers
do not directly communicate with the directors but they have to first consult
managers. In HRM the communication is direct such that workers can directly
go to the director without following any relative channel of communication.
Basis of pay-PM uses job evaluation whilst HRM uses performance evaluation.
In PM basically job evaluation is a systematic way of determining the value or
worth of a job in relation to other jobs in an organization. HRM performance
evaluation is when supervisors regularly rate employees on criteria such as
personality traits, degree of responsibility, enthusiasm, initiative, human
relations skills, appearance, specific job related skills and overall level of
performance. An example of job evaluation in PM is where a manager

allocates the worth of a job in terms of other jobs so that he can allocate the
relevant pay structure. For instance ranking two jobs that is finance director
and marketing director. Obviously the finance directors job will be more
challenging than the latter so, on the pay structure the finance director will
eventually earn more than their other counter- part. In HRM for example, A
human resources manager can be evaluated based on the way he looks, his
degree of responsibility that is to say if he performed his tasks like
recruitment, selection, training as he is required in the organization. Also, if
he relates well with other departments such as the marketing, finance,
production among others. All of these will contribute to his overall
performance evaluation.
Initiatives-In personnel management it involves the piece meal initiatives,
which performs the functions of (recruitment, placement, compensation,
performance appraisals) without any linkage with business strategy.
Therefore, the above definition indicates that Personnel Management follows
a technical-piecemeal approach that concentrates on the day-to-day
operations of the business, for example working conditions and pay. The
piecemeal approach includes efficient procedures for discipline; belief in
equitable and reward systems; dismissal; redundancy; the administration of
the roles and jobs individuals carry out; and clear and operable rules in place,
which implies that the organization/individual relationship is very technical.
This approach emphasizes the cost-maximization culture within the Personnel
Management philosophy, where the individual is the cost and this has to be
controlled. On the other hand HRM is the integration of HRM into strategic
management and the pre-occupation of HRM with utilizing the human
resource to achieve strategic management objectives. The problem of
integrating HRM with business strategy arises, for example, in a diversified
enterprise with different products and markets. In such cases there is the
difficulty of matching HRM policies with strategies which could vary among
different business activities, each of which may call for different HRM policies.

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