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Human Resource Management (HRM)

We often hear the term Human Resource Management, Employee Relationsand Personnel Management used in the popular press as w Industry experts. Whenever we hear these terms, we conjure images of efficient managers busily going about their work in glitzy offices article, we look at the question “what is HRM ?” by giving a broad overview of the topic and introducing the readers to the p ractice of HR contemporary organizations. Though as with all popular perceptions, the above imagery has some validity, the fact remains that there is to the field of HRM and despite popular depictions of the same, the “art and science” of HRM is indeed complex. We have chosen the te science” as HRM is both the art of managing people by recourse to creative and innovative approaches; it is a science as well because precision and rigorous application of theory that is required.

As outlined above, the process of defining HRM leads us to two different definitions. The first definition of HRM is that it is the proce managing people in organizations in a structured and thorough manner. This covers the fields of staffing (hiring people), retention pay and perks setting and management, performance management, change management and taking care of exits from the company to round off the activities. This traditional definition of HRM which leads some experts to define it as a modern version of the Personnel Management function that was earlier.

The second definition of HRM encompasses the management of people in organizations from a macro perspective i.e. managing people in the form of a collective relationship between management and employees. This approach focuses on the objectives and outcomes of the HRM function. What this means is that the HR function in contemporary organizations is concerned with the notions of people enabling, people development and a focus on making the “employment relationship” fulfilling for both the management and employees. These definitions emphasize the difference between Personnel Management as defined in the second paragraph and human resource management as described in the third paragraph. To put it in one sentence, personnel management is essentially “workforce” centered whereas human resource management is “resource” centered. The key difference is HRM in recent times is about fulfilling management objectives of providing and deploying people and a greater emphasis on planning, monitoring and control. Whatever the definition we use the answer to the question as to “what is HRM?” is that it is all about people in organizations. No wonder that some MNC’s (Multinationals) call the HR managers as People Managers, People Enablers and the practice as people management. In the 21st century organizations, the HR manager or the people manager is no longer seen as someone who takes care of the activities described in the traditional way. In fact, most organizations have different departments dealing with Staffing, Payroll, and Retention etc. Instead, the HR manager is responsible for managing employee expectations vis-à-vis the

management objectives and reconciling both to ensure employee fulfillment and realization of management objectives. In conclusion, this article has briefly touched upon the topic of HRM and served as an introduction to HRM. We shall touch upon the other topics that this field covers in other articles.

Question: What Is Human Resource Management? Answer: Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. HRM can also be performed by line managers. HRM is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training. HRM is also a strategic and comprehensive approach to managing people and the workplace culture and environment. Effective HRM enables employees to contribute effectively and productively to the overall company direction and the accomplishment of the organization's goals and objectives. HRM is moving away from traditional personnel, administration, and transactional roles, which are increasingly outsourced. HRM is now expected to add value to the strategic utilization of employees and that employee programs impact the business in measurable ways. The new role of HRM involves strategic direction and HRM metrics and measurements to demonstrate value.

1. Theory X and Theory Y in Human Resource Management from

2. Theory X and Theory Y have been propounded by Douglas McGregor who was an American social psychologist. He presented his theory in his 1960 book, ‘The Human Side of Enterprise’. Theory X and Theory

3. The Theories X – Y are used extensively in management and motivation. The theory has been used by management to formulate and develop motivation and positive management styles, strategies and techniques. It remains central to the organizational development and in improving organizational culture.Theory X and Theory

4. Theory X assumes autocratic management. The theory says that managers under Theory X assume that most people are naturally lazy and need to be controlled and supervised. They think that people need to be motivated all the time. One of the notions that Theory X managers have toward their people is that they are not very smart and they need good encouragement to do good work. Theory

5. Some of the most noticeable characteristics of Theory X managers are autocratic behavior. The managers are results-driven. They are concerned with the completion of a given task. They issue deadlines for the completion of work.Characteristics of Theory X

6. The managers lack tolerance. They are very intolerant in nature. Most of the theory X managers distances themselves from workers. They do not have much of an attachment to with their employees.Characteristics of Theory X

7. Theory X managers issue threats and warnings to make people follow their instructions.They do not participate in the process of team building. They are unconcerned about the welfare or morale of the employees.Characteristics of Theory X

8. They are one-way communicators and poor listeners. They withhold rewards and suppress pay and remuneration levels.Characteristics of Theory X

9. They are poor at delegating responsibilities and think giving orders is delegating responsibility.They hold on to responsibility but shift accountability to subordinates.Characteristics of Theory X

10. Conversely, Theory Y assumes democratic management. The theory says that managers under Theory Y assume that most people like to work. The managers assume that they have self-control. They assume that people can motivate themselves and want to do a good job. One of the important notions that Theory Y managers have about their people is that they are smart.Theory

11. Some of the characteristics of Theory Y managers can be seen. Theory Y managers are quite opposite to that of Theory X.Even Theory Y managers are results-oriented, after all, but they are also concerned with not just the completion of work, but they assist their subordinates in doing things.Characteristics of Theory Y

12. Theory Y managers are very tolerant in nature. They tolerant mistakes and try to rectify them by explaining what should not be done and what needs to be done.Theory Y managers do not distance out from their employees. They think it is all one team including oneself and move along providing motivation and encouragement to the team.Characteristics of Theory Y

13. They do not threat employees for non-compliance. Instead, they explain them about the norms and compliance issues and make them realize that instructions are for the betterment of work.Characteristics of Theory Y

14. They actively participate in the team building process and make sure that every employee in the team is more than a better performer.They are very much concerned about the welfare and morale of employees. They try to know the grievances of their employees, if any and try to solve them, if possible.Characteristics of Theory Y

15. They are good communicators and good listeners and take suggestions and constructive criticism seriously.They do not withhold any rewards and compensations to threat the employees. They also praise their employees for their good work.Characteristics of Theory Y

16. They are very good at delegating responsibilities. They not only give orders but also give directions and suggestions to complete the work.They hold on to responsibility and also accountability to themselves.Characteristics of Theory Y

17. These are the fundamental differences in the views of Theory X and Theory Y. The theories are used extensively in the management school of thought for the betterment of work, productivity and organizational culture in the long run.Characteristics of Theory Y

Difference between Personnel Management & HRM

Many students of management and laypeople often hear the term HRM or Human Resource Management and wonder about the difference between HRM and the traditional term Personnel Management. In earlier times, the Personnel Manager of a factory or firm was the person in charge of ensuring employee welfare and interceding between the management and the employees. In recent times, the term has been replaced with HR manager. This article looks at the differences in usage and scope of functions as well as the underlying theory behind these nomenclatures. In the section on introducing HRM, we briefly looked at the main differences. We shall look into them in more detail here.

Personnel Management
Traditionally the term personnel management was used to refer to the set of activities concerning the workforce which included staffing, payroll, contractual obligations and other administrative tasks. In this respect, personnel management encompasses the range of activities that are to do with managing the workforce rather than resources. Personnel Management is more administrative in nature and the Personnel Manager’s main job is to ensure that the needs of the workforce as they pertain to their immediate concerns are taken care of. Further, personnel managers typically played the role of mediators between the management and the employees and hence there was always the feeling that personnel management was not in tune with the objectives of the management.

Human Resource Management
With the advent of resource centric organizations in recent decades, it has become imperative to put “people first” as well as secure management objectives of maximizing the ROI (Return on Investment) on the resources. This has led to the development of the modern HRM function which is primarily concerned with ensuring the fulfillment of management objectives and at the same time ensuring that the needs of the resources are taken care of. In this way, HRM differs from personnel management not only in its broader scope but also in the way in which its mission is defined. HRM goes beyond the administrative tasks of personnel management and encompasses a broad vision of how management would like the resources to contribute to the success of the organization.

Personnel Management and HRM: A Paradigm Shift ?
Cynics might point to the fact that whatever term we use, it is finally “about managing people”. The answ er to this would be that the way in which people are managed says a lot about the approach that the firm is taking. For instance, traditional manufacturing units had personnel managers whereas the services firms have HR managers. While it is tempting to view Personnel Management as archaic and HRM as modern, we have to recognize the fact that each serves or served the purpose for which they were instituted. Personnel Management was effective in the “smokestack” era and HRM is effective in the 21st century a nd this definitely reflects a paradigm shift in the practice of managing people.

It is clear from the above paragraphs that HRM denotes a shift in focus and strategy and is in tune with the needs of the modern organization. HRM concentrates on the planning, monitoring and control aspects of resources whereas Personnel Management was largely about mediating between the management and employees. Many experts view Personnel Management as being workforce centered whereas HRM is resource centered. In conclusion, the differences between these two terms have to be viewed through the prism of people management through the times and in context of the industry that is being studied.

Personnel Management vs. Human Resource Management: What's the Difference?
written by: N Nayab • edited by: Elizabeth Wistrom • updated: 6/29/2010
The major difference between personnel management vs human resource management is that personnel management is the traditional approach and human resource management the modern approach toward managing people in an enterprise.

Comparing personnel management vs human resource management, personnel management is a predominantly administrative record-keeping function that aims to establish and maintain equitable terms and conditions of employment, whereas human resource management integrates the traditional personnel management functions to corporate goals and strategies, and performs additional people centered organizational developmental activities. Significant difference exists between personnel management and human resource management in terms of scope, approach, and application. Image Credit: roventine

Differences in Scope
Human Resource Management is broader in scope than Personnel Management.

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The scope of personnel management include functional activities such as manpower planning, recruitment, job analysis, job evaluation, payroll administration, performance appraisals, labor law compliance, training administration, and related tasks. Human resources management includes all these activities plus organizational developmental activities such as leadership, motivation, developing organizational culture, communication of shared values, and the like. The human resource management approach remains integrated to the company’s core strategy and vision, and seek to optimize the use of human resource for the fulfillment of organizational goals. This strategic and philosophical context of human resource management makes it more purposeful, relevant, and more effective compared to the personnel management approach.

Difference in Approach

The personnel management approach tends to attach much importance to norms, customs and established practices, whereas the human resource approach gives importance to values and mission. The personnel management approach also concerns itself with establishing rules, policies, procedures, and contracts, and strives to monitor and enforce compliance to such regulations, with careful delineation of written contract. The human resource management approach remains impatient with rules and regulations, and tends to relax them based on business needs and exigencies, and aim to go by the spirit of the contract rather than the letter of the contract. An illustration of this difference in approach lies in the treatment of employee motivation. The personnel management approach holds employee satisfaction as the key to keeping employees motivated, and institute compensation, bonuses, rewards, and work simplification initiatives as possible motivators. The human resource philosophy hold improved performance as the driver of employee satisfaction, and devise strategies such as work challenges, team work, and creativity to improve motivation.

Difference in Nature
Another dimension of the difference is approach between human resources vs personnel management is the proactive nature of human resource management compared to the reactive nature of personnel management. Personnel management remains aloof from core organizational activities, functions independently, and takes a reactive approach to changes in corporate goals or strategy. Human resource management remains integrated with corporate strategy and takes a proactive approach to align the workforce toward achievement of corporate goals. For instance, while the personnel management approach concerns itself with a reactive performance appraisal process, human resource management approach has a more comprehensive and proactive performance management system that aims to correct performance rather than make a report card of past performance.

Difference in Application
Personnel management is an independent staff function of an organization, with little involvement from line managers, and no linkage to the organizations core process. Human resource management on the other hand remains integrated with the organizations core strategy and functions. Although a distinct human resource department carries out much of the human resource management tasks, human resource initiatives involve the line management and operations staff heavily. Personnel management also strives to reconcile the aspirations and views of the workforce with management interest by institutional means such as collective bargaining, trade union based negotiations and the like. This leads to fixation of work conditions applicable for all, and not necessarily aligned to overall corporate goals. Human Resource Management gives greater thrust on dealing with each employee independently and gives more importance to customer-focused developmental activities and facilitating individual employees rather than bargaining or negotiating with trade unions. Finally, in our discussion of personnel management vs human resource management, we find that personnel management lays down rigid job description with many grades and a fixed promotion policy - usually based on seniority and performance appraisal ratings. Human resource management on the other hand has relatively fewer grades and ranks, with broadly defined job responsibilities providing much scope for applying creativity and initiative, and plenty of career paths, with skills, talent and commitment the key drivers of career advancement.


1. 2. 3.

Armstrong, Michael (2006). A Handbook of Human Resource Management Practice (10th ed.). London: Kogan Page. ISBN 0-7494-4631-5 Legge, Karen (2004). Human Resource Management: Rhetorics and Realities (Anniversary ed.). Basingstoke: Palgrave Macmillan. ISBN 1-403-93600-5. Tripathi. P. C. (2002). Human Resources Development, Sultan Chand & Sons

Is There a Difference Between Human Resources and Personnel Management?
Some experts assert that there is no difference between human resources and personnelmanagement. They state that the two terms can be used interchangeably, with no difference in meaning. In fact, the terms are often used interchangeably in help-wanted ads and job descriptions. For those who recognize a difference between them, the distinction can often be described as philosophical. Personnel management is more administrative in nature, dealing withpayroll, complying with employment law, and handling related tasks. Human resources, on the other hand, is responsible for managing a workforce as one of the primary resources that contributes to the success of an organization. When a difference between the two is recognized, human resources is usually described as being broader in scope. It is said to incorporate and develop personnel management tasks, while seeking to create and develop teams of workers for the benefit of the organization. A primary goal of human resources is to enable employees to work to a maximum level of efficiency. Personnel management can include administrative tasks that are both traditional and routine. It can be described as reactive, providing a response to demands and concerns as they are presented. By contrast, human resources involves ongoing strategies to manage and develop an organization's workforce. It is proactive, as it involves the continuous development of functions and policies for the purposes of improving a company’s workforce. Human resource management tends to be an integral part of overall company function, whilepersonnel management is often considered an independent function of an organization. It is typically the sole responsibility of an organization’s personnel department. With humanresources, all of an organization’s managers are often involved in some manner, and a chief goal may be to have managers of various departments develop the skills necessary to handlepersonnel-related tasks. As far as motivators are concerned, personnel management typically seeks to motivate employees with such things as compensation, bonuses, rewards, and the simplification of work responsibilities. From this point of view, employee satisfaction provides the motivation necessary to improve job performance. The opposite is true of human resources. Humanresource management holds that improved performance leads to employee satisfaction. With human resources, work groups, effective strategies for meeting challenges, and job creativity are seen as the primary motivators.

When looking for a job in these fields, it is important to realize that many companies use the terms interchangeably. Someone who is offered a job as a personnel manager may be required to perform the same duties as a human resource manager, and vice versa. In some companies, a distinction is made, but the difference is very subtle.

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