Human Resource Management versus Personnel Management

Content

1. Introduction

2. Personnel Management versus Human Resource Management
2.1 ‘Soft’ and ‘Hard’ Models of HRM
2.2 Theory and Philosophy
2.2.1 Similarities
2.2.2 Differences
2.3 Practical Implementation

3. Is HRM manipulative and exploitative?

4. Conclusion

1. Introduction

When the flexible concept of HRM emerged in the 1980s, in the times of Thatcherism and Reaganomics, it “could not help but look more desirable than personnel management” (Hope-Hailey et al 1997: 5). The attractiveness of the theory of managing personnel led to a proliferation of HRM language. Nonetheless, it remains to be seen if there is more to HRM than only a new and shining rhetoric.

A number of authors stress the difficulties of identifying clear differences between personnel management and HRM, and maintain that the most obvious change is a “re-labelling process” (Legge 1989: 20). Torrington (1989: 64) agrees that “a change of label” is obvious, though one cannot be sure that the content of differentiates to any extent. However, the new terminology may at least rid personnel management from its unfavourable welfare image and other “negative connotations” (Sisson 1990: 1) and thus, save the ailing function of managing personnel from marginalisation.^[1] Accordingly, some HR academics maintain that new labels on old bottles may have their uses, even if it is only for marketing purposes (Armstrong 1987: 35; Guest 1989: 48). Furthermore, a valuable contribution of HRM is to direct the attention to regarding people as the key resource of organisations and lending the management of personnel increased importance (Armstrong 1987: 31).

In this essay, the similarities and differences between personnel and HR management are analysed with regard to their theoretical approaches as well as their practical implementation. Before sketching the similarities and differences in some detail, two different models of HRM, the ‘soft’ and the ‘hard’ approach, will be introduced.

Finally, the question will be examined if HRM models are manipulative and exploitative, and a conclusion will summarise the results briefly.

2. Personnel Management versus Human Resource Management

The view that there are more similarities than differences between personnel and HR management is shared by a number of authors. Legge, for instance, is tempted to say that there are “not a lot” (1989: 27) differences between the two approaches, but nevertheless manages to detect some diverging aspects. These however cannot be qualified as substantial differences, but are rather a matter of emphasis and meaning (Legge 1995: 74). Torrington regards personnel management as a continuing process of evolution and growth, in which more and more fields of expertise are acquired and assimilated. Within this evolutionary process HRM is only adding “a further dimension to a multi-faceted role” (1989: 66), and is not at all a revolutionary concept. However, the effect of HRM should not be underestimated. Armstrong (1987: 34) maintains that although the procedures and techniques strongly resemble those of personnel management, the strategic and philosophical context of HRM makes them appear more purposeful, relevant, and consequently, more effective.

On the other side, authors like Storey regard HRM as a “radically different philosophy and approach to the management of people at work” (1989: 4). In this view, HRM provides a completely new form of managing personnel and can therefore be regarded as a “departure from [the] orthodoxy” (Storey 1989: 8) of traditional personnel management.

As the concept of HRM is not homogeneous but comprises different theoretical and philosophical approaches, the two main versions of HRM, namely the ‘soft’ and the ‘hard’ model, will be sketched in the following.

2.1 ‘Soft’ and ‘Hard’ Models of HRM

Truss (1999: 40) states that ‘soft’ and ‘hard’ models of HRM are “diametrically opposed along a number of dimensions.” At the same time other authors, like Armstrong (2000: 8), qualify that the two models cannot be distinguished precisely. This seems to be true for at least some theoretical dimensions such as strategic integration. It is obviously true for the practical implementation of HRM models as in most organisations a mixture of ‘soft’ and ‘hard’ HRM elements can be found (Truss 1999: 56-57). However, many authors concede that both, ‘soft’ and ‘hard’ conceptualisations of HRM, “are plagued with inconsistencies and ambiguities.” (Truss 1999: 45)

In ‘hard’ HRM models people in organisations are a business resource and economic factor among others (Guest 1989: 48; Legge 1995: 66). They are regarded as human capital in which the organisation invests, and from which the organisation expects return on its investment to achieve competitive advantage. Employees are seen as a resource to be utilized and, at the same time, as a cost to be minimised. The emphasis on ‘hard’ models is on “quantitative, calculative and business-strategic aspects of managing the headcounts resource.” (Storey 1989: 8) ‘Hard’ models are strongly focused on the strategic integration of HRM with business goals (Legge 1995: 66). They highlight management interests and regard employees as a means to achieve organisational objectives. Therefore, people are strictly directed and controlled through quantitative performance management and HR databases.

Whereas ‘hard’ models emphasise the strategic and quantifying management aspect of HRM, ‘soft’ models stress the human resource aspect (Legge 1989: 26, Guest 1989: 48), or, as Truss (1999: 41) puts it more concisely, in ‘hard’ models the term ‘resource’ is underlined, while in ‘soft’ models it is the term ‘human’.

In ‘soft’ HRM employees are “valued assets” and a “source of competitive advantage.” (Legge 1995: 66) They are regarded as capable and worthy of development, and experience considerable job autonomy and a high level of trust from management (Truss 1999: 42). A unitary philosophy and the assumption of mutuality which presupposes that the interests of management and employees coincide underscores ‘soft’ HRM models (Torrington 1989: 61).

Organisational culture and its promotion by management is highlighted. Direct and individual communication, employee involvement, motivation, and identification with missions and goals are regarded as crucial for organisational success. The commitment of employees is strongly desired as a precondition for increased effort and performance. At the same time, commitment is expected to facilitate self-regulated behaviour and, thus replace direct forms of supervision, pressure and control as they are typical for ‘hard’ HRM models and conventional personnel management (Truss 1999: 41; Guest 1991: 152).

2.2 Theory and Philosophy

Basic aspects of the philosophies underlying ‘soft’ and ‘hard’ HRM approaches differ considerably and, at least partly, contradict each other.^[2] Outlining the similarities and differences between personnel and HRM in the following, the focus is not on the dichotomy between ‘soft’ and ‘hard’ models, but in regarding HRM in its entirety. Nevertheless, single aspects of the one or the other approach can be clearly recognised.

2.2.1 Similarities

One basic similarity between personnel management and HRM is that both regard putting the right people on the right jobs as one of the overall goals of managing people at the workplace (Legge 1989: 26). Furthermore, both approaches share the same fields of activity (Armstrong 2001: 18), from recruitment and selection to remuneration and performance management.

Analysing and comparing definitions of both personnel and HR management, Legge finds that “there are clear similarities between the two.” (1989: 26) In both models the strategies for managing personnel are derived from the business strategy and integrated with organisational goals. Especially the strongly strategic orientation of ‘hard’ HRM models is, according to Guest (1989: 48), very close to the concept of personnel management, so that he comes to the conclusion that there is little or no difference between these two approaches.

A further similarity between personnel and HR management found by Legge (1989: 26) is that in both concepts the management and development of personnel is not only a specialist function but also lies in the responsibility of line management. However, regarding this aspect as well as the strategic elements within the models several authors maintain that, as mentioned above, in spite of substantial similarities there are clear differences in emphasis and meaning.

2.2.2 Differences

The outstanding strategic character of HRM is claimed to be one of the differences in emphasis between personnel and HR management. While conventional personnel management is criticised for its only loose link with business objectives, the formulation of HRM policies should explicitly take place at a strategic level within the organisation (Storey 1989: 6). This implies that the integration of HRM strategy with business strategy is not a pure specialist task within the HR department, but should be driven by senior management – in the best case at board level.

Similarly, there is more emphasis in HRM approaches on the importance of line managers. HRM models clearly highlight the line management’s responsibility for the management and development of the human resources, especially with regard to their contribution to bottom line results (Legge 1989: 27; Keenoy 1990: 8). This goes together with the generally more strategic and “demand-driven” (Torrington 1989: 61) approach of (‘hard’) HRM, which focuses on organisational needs and, finally, profit at the bottom line.

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^[1] Keenoy (1990: 8) stresses another aspect: he sees personnel management caught in ambiguity as it is torn by managing the tension between organisational demands and needs of employees. The clear strategic orientation of HRM provides an “escape route from ambiguity”, because it has “sharply refocused the attention on the organisational loyalties of the personnel function.” Thus, its full organisational legitimacy may be regained.

^[2] Nevertheless authors like Guest (1989) try to integrate the two approaches into one theory of HRM.