Abstract
It is clear from the literature that HRM represents 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 mainly about refereeing between the management and employees. Many scholars view Personnel Management as being workforce whereas HRM is resource. The differences between these two terms have to be viewed from many perspectives through the times and in context of the industry that is being studied.
Keywords: Human resource management, Personnel management, SHRM
The article brings out a proposed strategy map and respective key performance indicators (KPIs) in human resources (HR). The article provides an overview of how HR activities are supported in order to reach the partial goals of HR as defined in the strategic map. Overall the aim of the paper is to show the possibilities of using the modern Balanced Scorecard method in human capital.
Introduction
Many researchers have been arguing recently the difficulty of distinguishing clear differences between Personnel management and Human resource management. Some authors believe that the difference is just a change of label as Torrington (1989cited in Koster 2007) said and there is no different in the content of Human resource management. On the other hand, there are researchers such as Guest (1987 cited in Armstrong, 1999) who argued that Human resource management is differentiated from traditional Personnel management.
However, HRM is concerned with performing the same functional activities traditionally carried out by personnel function, but HRM approach performs these functions in a qualitatively distinct way when compared with personnel management (Story, 1989). In this article, the differences between Human resource management and Traditional personnel management are analyzed with regard to using academic articles related to theoretical approach. According to Story (1989) Human resource management is a completely different philosophy and an approach contrast to Personnel management. In his view, HRM provides a completely new form of managing personnel and can therefore be regarded as departure from the orthodoxy (Story, 1989 cited in Koster, 2007) of traditional personnel management.
Definitions of Human resource management and Personnel management According to Armstrong (1999.Page,4)”Human resource management is a strategic and coherent approach to the management of an organizations most valued assets-the people working there who individually and collectively contribute to the achievement of its goals”.Other researchers such as Story (1995 cited in Armstrong,1999 p 4) defined HRM in a different way.
He said “Human resource management is a distinctive approach to employment management which seeks to obtain competitive advantage through the strategic development of a highly committed and skilled work force, using on array of culture, structure and personnel technique.” The Institute of Personnel Management states “Personnel Management is that part of management concerned with people at work and with their relationships within a firm. Its aim is to bring together and develop into an effective organization the men and women who make up an enterprise and, having regard for the well-being of the individual and of working groups, to enable them to make their best contribution to its success” (Rea, 1972, p38). When considering the definition of Human resource management and Personnel management, there are many differences on the perspectives of researchers.Legge (1989) reviewed the definition of a variety of writers. She could come to conclude that there is three features which seems to distinguish HRM and personnel management (Guest, 1990). These three differences will be analyzed below: First of all, many statements about personnel management had been written by researchers, when placed in the background of the texts from which they are derived, seem to see it as a management activity, which is largely aimed at non-managers (Story, 1989).
Apart from management development, Personnel management appears to be something performed on assistants by managers rather than something that the latter experience themselves-other than as a set of rules and measures that may constrain their freedom in managing their subordinates as they think fit(Storey and Legge, 1989). On the other side, Human resource management is not just highlighting the importance of employee development; also it focuses on a particularly development of ‘the management team’. As result, it can be concluded that Personnel management is an activity aimed mainly at non-managers while HRM is less clearly focused but is surely concerned more with managerial staff (Guest, 1990 and Legged, 1989).This shift of importance appears related to two other differences which it will be analyzed below: A Comparison of Personnel Management and HRM Based on the recent research and debates about HRM and Personnel management by (Bylton and Turnbull, 1992; Salamn, 1992, Storey, 1989, 1995, Towers, 1993) and more researchers such as Legge, Sission and Guest state that the conclusion of difference came to a total of 27 which are in below (Storey,1995). Comparative Models of Personnel management and HRM As part of these debates, several researchers attempt to describe in which ways HRM differed from Personnel management: Guest’s (1987) comparison between stereotypes of personnel management and Human resource management; and storey’s 27 points of difference (Table above) and Beer and Spector’s (1985) identify a number of common themes as it is described more in the following table (Beardwell and Calydon, 2004). The comparative models below show that HRM is as proactive, nurturing and organic instinctively seem more positive and attractive than terms applied to personnel management such as, reactive, monitoring and bureaucratic (Beardwell and Claydon, 2004). In addition, there are many evidences in the table from different perspectives that the difference between HR and PM is enormous.
Most of the differences are related to soft (the involvement of senior managers in the certain of organizational culture and value) and hard approach (focus on organizational need and profit at line bottom), strategy integration (integration HRM strategy with business strategy) and long-term investment on people (physiological contract, training and educating employee). Human Resource Strategy Map During creating the strategy map and implementation of the KPIs, it is necessary to take into consideration the differences of each organization (e.g. organization structure, way of leading human capital,). The CEO and other “C level” executives should take into account this fact from each perspective i.e.
to develop feasible and effective method for improving the performance of the organization on HR level. Strategy map comprises essential part of HR scorecard. Employees should always resolve problems quickly, efficiently and at the heart of customer service process. Further, top management should realize in which phase the organization is situated, it means in the beginning, in the expansion or in the depression.
This is very necessary to consider due to the cost perspective. Creating the strategy map should also respect the external and internal HR factors influencing the organization performance. Another important fact linked to the strategy map is that executives should take into account the size achievement of the organization. After research and consultations with HR leaders, goals of the organization are defined as follows: Preferred Employer i.e. be the employer of the 1st choice Cost optimization Profitability increase Customer orientation Conclusion To conclude, personnel management focus on operational level.
As result, emphasizing technical skills and day to day as recruitment and selection, training, salary administration and employee relations, while, HRM was portrayed as being proactive-looking at people in economic terms as either assets or cost to be actively managed.HRM was seen to be strategic, tying people management to business objectives. It was an attempt to manage people in the long-term interests of the business (Price, 2004).HRM is an integrated approach that provided a logical programme to link all aspect of people management. HRM focus on people management as a consistent view in which people treated as Valuable asset. A firm’s reward systems, performance measures, promotion and learning opportunities were used to maximize the utilization of its resources.
