Best Practice

Understanding the difference between personnel management and human resource management

How is it that we have modern management roles with titles such as ‘Director of Personnel’ or ‘Chief Human Resources Officer’? And why have we come to use such distinct terms as HR & Personnel Management, in the same breath? It’s all about, scope, scale and a little bit of manufacturing history.

Back in the day, when companies were first showing signs of developing modern manufacturing processes, hiring and firing of staff was a fairly crude affair. There were few specialist employees with expertise in how to find the best people (usually male) to hire.

Ten a penny

It’s fair to say that the level of sophistication required of the workforce was also more basic. People were being hired for their manual labor and given on-the-job training from their peers. As the website WhatIsHumanResource summarises, Personnel Administration “largely concerned the technical aspects of hiring, evaluating, training, and compensating employees and was very much a “staff” function in most organizations. The field did not normally focus on the relationship of disparate employment practices on overall organizational performance or on the systematic relationships among such practices.”

WWI & Women’s Arrival on the workforce

But this picture very rapidly evolved with the turn of the 20th century and the impending arrival of the First World War. With men leaving jobs en masse, there was an influx of women into the workforce. This sudden wholesale “introduction of a new workforce needed careful management, unlike the drip-drip of recruitment and dismissal that typified the existing means of staff management“. Personnel Management had truly arrived with a bang. 

Job specialization began to appear on shop floors producing huge quantities of goods. From this emerged a hierarchy of tasks, roles, and necessary management to cope with a form of production never previously seen in society. 

Time transforms workers into assets

Not only did industrialization lead to mass consumer goods at prices which made them affordable to a much bigger customer base than ever before, it also created a need for increasingly sophisticated ways to manage expanding numbers of specialist employees that in turn were requiring more training. Workers thus gained greater value as assets to the business. Who wants to fire a worker who’s had time and effort put into their training, only to start all over again with a new recruit? 

Bringing precision to Personnel Management

With the evolving sophistication of working practices, it became clear that management, which had been doing the hiring and firing on an ad hoc basis, had to specialize. This is when the need to manage workers came to the fore. In the 1880s Taylorism or Scientific Management had a huge influence in thinking, seeking to make production practices more efficient. 

Yet this did not place employees as the most important part of the enterprise. Arguably in answer to the limits of this new industrial management practice (“The Principles of Scientific Management” was published by Taylor in 1909), issues of personnel management came to the fore. The newly minted principles of Personnel Management were cut from the same management cloth, with an emphasis on employing staff, dealing with redundancies and maximizing the efficiency of workplace practices

Through the course of the early 1800s and into the 20th-century, society witnessed a move from artisanal production of handcrafted one-of-a-kind objects to highly sophisticated machined goods produced at volumes and speeds previously unheard of. By 1913 the Chartered Institute of Personnel and Development came into being in the United Kingdom as a direct effort by leaders of industry to address the issues caused by the momentous changes taking place. Personnel Management had earned its stripes.

From Personnel Management to Human Resources

So what do we mean when we refer to ‘Personnel Management’? Broadly it is about the hiring and immediate welfare and conditions of the workforce. In the early part of the 20th century, it was a discipline which progressively established practices and methods for better managing staff. 

It’s why Personnel Management is the direct antecedent of modern-day Human Resource Management. In a nutshell, the difference lies in the scale and scope of ambition represented by these terms.

Managing employees, their compensation, complaint, and disciplinary procedures, and any number of other operational matters surrounding staff an organizational resource remains an active and critical part of any contemporary business. Yet, it has been subsumed into the wider strategic role that’s represented by the term Human Resources. 

HR takes a much more holistic approach to the role that staff play in the long-term success of an organization in achieving its strategic objectives. It was a paradigm shift in thinking. In this new HR world view, the workforce was seen as a valuable asset which needed to be nurtured to maximize its long term contribution to the organization’s success.

Thus Personnel Management and HR are at once synonymous yet different. One focuses on the practical delivery of staff and productivity over the short, whilst the other takes a much broader and long term perspective. They are, ultimately, two sides of the same coin.

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