The Difference Between Personnel Management and Human Resource Management

When differentiating the basic responsibilities of the human resource department and the personnel department, it’s easy to get confused, since human resource management is commonly referred to as the modern version of personnel management.¹ The main duties these two management groups have in common are: hiring, managing employees, employee orientation, and handling compensation and benefits.² The defining difference between human resource management and personnel management lies in the way in which they manage employees and any situations that may arise in relation to them. Each department approaches employee engagement with methodologies that have varying strengths and weaknesses.

Understanding personnel management and human resource management

Human resource management and personnel management may share similar responsibilities, but the ways in which they operate differ. Each method has merit and can function effectively, depending on the people management requirements within an organisation. Personnel management tends to follow a rule-based system, offering standard benefits and training, and rewarding employees annually provided that their performance is satisfactory. It approaches problems reactively, preferring to stick to a professional guideline. Human resource management chooses to honour their employees with attractive benefits options and thorough onboarding, providing perks such as flexible schedules and company culture. It thrives on proactivity: any circumstance that could result in a dispute is prevented through proper training, communication and management.³

Similarities between personnel management and human resource management

Hiring

Both the human resource management team and the personnel management team are responsible for hiring new employees from either within the company, or externally.⁴ If hiring externally, both management teams will go through the steps of reviewing CVs, taking note of the applicant’s technical skills and work ethic, collaborating with other departments if necessary.⁵ When hiring internally, the management team can take a variety of approaches. Depending on the department, this may include posting the job vacancy for all employees to see, asking managers to nominate high-performing individuals, selecting individuals from a knowledge, skills and abilities (KSA) database, or making use of succession planning, in which employees are prepped for promotional roles.⁶

Employee orientation

Once an employee has been hired, both the human resource management team and the personnel management team are expected to introduce the employee to the company. This would typically involve registering their pay with the tax office, social security office and applicable insurance company.⁷

Managing employees

The human management team and the personnel management team are responsible for handling any conflicting situations that may arise in the office.⁸ Both management teams are in charge of sharing any information that pertains to employee safety or overall business operations, such as mergers or an acquisition.⁹

Compensation and benefits

Creating the right benefits for employees is a crucial step in ensuring their satisfaction in the company. Human resource management and personnel management ensures that employees are set up with the right compensation and benefits. The two management teams are often responsible for administering and running payroll, and calculating and paying any applicable bonuses. Benefit schemes, usually in the form of private medical insurance and pensions, are administered by both the human resource and the personnel management team.¹⁰

Differences between personnel management and human resource management

Hiring

Hiring within personnel management usually involves hiring across a variety of organisations. This can be done by either a group of people, or one person.¹¹ Candidates are judged by how well their CV matches a rigorous checkbox list, regardless of the individual’s talents and personality.¹² The human resource management method prefers to hire employees by partnering with the company hiring manager – a relatively new role in human resource management – who understands the specific needs of the company or organisation.¹³ This process ensures that the employee hired not only possesses the skills needed to perform adequately, but also fits the culture of the organisation.¹⁴

Employee orientation

The key objective of the orientation process for the personnel management team is to review and sign required paperwork with the employee upon them joining an organisation. This paperwork follows a traditional framework and includes an employee handbook that documents all intended employment policies and procedures.¹⁵

Alternatively, the human resource management team takes a more nurturing approach to employee orientation. New employees are welcomed into the organisation with sufficient training and are, on occasion, offered opportunities such as formal mentoring programmes and meet-and-greets with other employees.¹⁶

Managing employees

When managing employees, personnel management protocol tends to take on a particularly traditional approach, one that has been in use for many years, favouring structure and rhythm. This traditional structure requires that employees follow the company code of conduct rigorously.¹⁷ This method is implemented from the moment they are hired through to, and including, when they are transferred, promoted or leave the company.¹⁸ Employees are required to educate themselves on these processes and codes of conduct through the employee handbook given to them in their first week of work.¹⁹

In a more progressive approach, human resource management relies on relationships to ensure a steady work flow with thriving productivity. The team is there to help ensure healthy communication between managers and employees.²⁰ In the interest of optimising employee output, human resource management supports the line manager in ensuring that the strengths of each employee are recognised and utilised.²¹

Compensation and benefits

Personnel management tends to follow company policy without question. Employee benefits are often limited by preventing promotions above one salary grade and restricting annual increases within a compensation system.²² This is done to ensure consistency and encourage employee motivation through a scheduled pay grade range, which allows the employee to move up in pay grade at a consistent pace – usually one pay step up per year of service.

While consistency is also key within human resource management, this approach focuses on employee development rather than company policy. Human resource management understands the value of an employee who is recognised for their performance, whether that be in the form of a pay raise or even an impressive benefits package.²³

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Thorough employee management is essential for any company. Human resource management is far more proactive than personnel management. Personnel management focuses on the maintenance of all personnel and administrative systems, whereas human resource management has a more strategic approach, forecasting the organisation’s needs and continuously monitoring and adjusting all systems.