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Existing literature presents different definitions of Human Resource Management from different authors, management thinkers, and various institutions. However, all these definitions boil down to the same theme which is “Human Resource Management (HRM) is a systematic way of managing people working in an organization and resources to meet both the employees and the organization’s goals.” Literature also asserts the presence of confusion between the terms “Human Resource Management” and “Personnel Management”. Some claim that the two are entirely different things while some say it is just the same; some also claim that Human Resource Management is the modern version of Personnel Management.
In this paper, I will try to comprehensively discuss Human Resource Management and Personnel Management, their similarities and differences as well as their views on the organization itself, the people working for it, and different management strategies.
Historical Background: Personnel & Human Resource Management
Back in the early days, the head of household assigns tasks to every member based on what they are good and while the term does not exist yet by that time, it is believed to be the origin of talent management which simply means “putting the right people in the right roles.” This has proven to be very effective as it helped people to sustain the needs of their households. The same practice also aids in household production wherein households create products they can sell or exchange with other products from different households (Cottage Industry).
The Industrial Revolution (the 1800s) caused a massive shift from household production to large-scale production in factories. The shift required a large workforce which is mostly composed of people who has no prior experience working for someone else. For this reason, industrialists believed that the workforce needs strict supervision to function well and meet production goals. To do this, industrialists appointed supervisors who have an unquestioned authority to hire, fire, discipline, assign work, and motivate workers. Motivation techniques usually come in the form of cajoling or threats of getting fired and replaced.
In the early 1900s, the increasing production demands significantly increased workforce size necessitating the need for a dedicated department in an organization to manage employees. It is believed to have paved for the creation of Personnel Management which is primarily responsible and handling administrative tasks related to employees such as hiring, firing, and handling compensation of employees.
Literature asserts that ideas and practices on managing employees evolved with time. From the early idea of absolute superiority and divine rights of masters over their conscripts to the management of employees in a hierarchical authoritarian way during the Industrial Revolution which is deeply rooted in a set of assumptions that owners have particular qualities that gave them their place in society which workers do not have therefore they needed to be strictly managed. Later on, the idea of Taylorism came which viewed workers are viewed as motivated by money and willing to work to get it but they want to do it in the most efficient way. This led to breaking down complex jobs into smaller repetitive jobs that can be done by any unskilled worker and the one who determines how to break down a job and who and what to work on is the manager. The most recent idea is Psychology and Human Relations wherein humans are viewed to have different psychological needs, skills and abilities and it is important to have engaging human relations in the workplace (Budd, 2016).
These evolutions of ideas and practices in managing the people working in an organization ultimately paved the way for what we now know as Human Resource Management where people are now viewed as one of the most important assets an organization has and must be developed and empowered. It also provided for the creation of new roles for HR Managers. The days of simply maintaining personnel files and advising on hiring, firing, and compensation or long gone for HR professionals. Today, they fulfill a variety of roles that require knowledge and competencies in areas that were foreign to them in the past (Salvatore et al., 2005).
Differentiation of Personnel Management & Human Resource Management
The stark contrast between Personnel Management and Human Resource Management is how the people working in an organization are viewed and managed. The most notable definition of Human Resource Management is by Edwin Flippo when he stated that Human Resource Management “is the planning, organizing, compensation, integration, and maintenance of people for the purpose of contributing to organizational, individual and societal goals.”
Working on this definition, we can identify keywords that address the key concepts that are vital to the success of an organization. The keywords are as follows:
Planning focuses on finding the right people at the right time for the right position. In Personnel Management this is a one-way process that includes the determination of the need for an employee, searching for and hiring the employee, and determining how to compensate them for their work. Personnel Management focuses more on the administrative tasks of managing employees while in Human Resource Management, the focus extends to planning ways to further develop the employees, how to keep them motivated, and retaining them in order to gain a competitive advantage. Most importantly, it plans for the professional journey of the employees within the organization. This is further evidenced by the Chartered Institute of Personnel and Development’s identification of the “10 Professional Areas” that HR Professionals can specialize in.
This focuses on managing the resources of the organization and it is also one of the dimensions that differentiated Personnel Management from Human Resource Management. Personnel Management focuses on people as a resource like any other in the organization that needs to be carefully and cost-effectively controlled whereas Human Resource Management focuses on people as the most important resource the organization has and as such other resources must be invested toward empowering and developing them.
Salary administration is one of the prominent functions of Personnel Management. The differentiation in this font is that while salary/compensation administration is often performed effectively, it has varied relationships between various activities or with the overall organizational goals (Kipkemboi, 2015) unlike Human Resource Management, where compensation and benefits are closely linked with the organizational goals.
In personnel management, training and retraining workers were given the same level of attention and resources compared with Human Resource Management. Since Human Resource Management is tied and owned by the major stakeholder of an organization HR plans strategically complement organizational goals and to realize those goals, resources are allotted to develop workers and provide them with opportunities for upward mobility essentially encouraging workers to stay with the organization effectively reducing the cost of hiring and training new people.
In Personnel Management, not a lot of attention was given to the integration of workers into the workplace and the interpersonal relationships of the workforce. Personnel Management’s primary concern is that there must be someone who will do the job. As HR ideas and practices evolved Human Resource Management has put greater attention on finding ways to effectively integrate workers into the organization’s culture and philosophies. Nowadays, this is very evident as HR Managers consider a prospective worker’s fit with the organization’s culture, and once hired orientation and training are designed to engrain the organization’s culture and philosophy into the workers.
One way to better differentiate Personnel Management from Human Resources is by looking at the focus, philosophy, pervasiveness, and management techniques each employs.
- FOCUS. Personnel Management’s focus is on how to meet organizational goals. Decisions concerning workers are made to respond to these goals without much consideration of the workers. In Human Resource Management, the focus is on finding and developing workers that fit the organization’s culture and objectives. Investment is made to equip the workers to realize both individual and organizational goals.
- PHILOSOPHY. Personnel Management is concerned with the functional area of managing workers. Workers are often viewed as mere cogs in the machine without much consideration while a lot of people argue that Human Resource Management humanizes how workers are managed. Human Resource Management, recognizes the workers’ individuality and their different sets of abilities and skills and considers those motivating them to work toward a collective goal.
- PERVASIVENESS. In Personnel Management, the Personnel Managers, Line Managers/Supervisors are the ones responsible for carrying out the functions of personnel management while in Human Resource Management, it is related to all those who manage people in the entire organization from top to the bottom.
- MANAGEMENT TECHNIQUES. Traditionally, Personnel Management often uses coercive techniques to motivate people to work while Human Resource Management has tapped into workers’ individual psychological needs, skills, and abilities to design strategies to motivate workers through a reward system, challenging job, and career development opportunities.
The Core Elements of Human Resource Management
The core elements of Human Resource Management are the Organization, the People working within the Organization, and the Management of the people. Every organization is unique and has its own philosophies, culture, and goals. The organizational goal is the reason for its entire existence and to realize those goals, manpower is needed. People have to work towards those goals. However, it is not as simple as getting people and putting them to work.
It is vital that the organization’s need for manpower is carefully evaluated to determine the number of people it needs, their qualities, and qualifications that will contribute to the realization of those goals. It is also important to note that organizations have both short and long-term goals. In order to meet those long-term goals, ways to retain workers must be identified and implemented. This is where the element of management comes in. The organization has already set the destination it wants to pursue and the management element will guide the way for the people working for the organization towards that destination. A failure on any of these elements will result in the failure of any organization thus it is vital that every element works in perfect unison.
Future Organizational Management Challenges in the Human Resource Field within the Healthcare Industry
As with all other industries, the Healthcare Industry is very dynamic and is subject to change based primarily on healthcare needs and technological advancements in medicine. What sets it apart from other industries is that it is harder to identify the exact direction of change, its extent, and the type of change.
Workforce Shortage & Economic Trend
The pandemic has negatively affected the economy of all countries around the globe and exposed the healthcare industry to a high level of stress. According to the World Health Organization (WHO) between 80,000 and 180,000 health and care workers around the world may have died from COVID-19 between January 2020 and May 2021 alone. In the Philippines, the economic effects of the pandemic combined with high work demands and inadequate protection and compensation have forced health workers to shift to other industries which offer higher compensation and fewer risks or to seek employment in other countries. If this pattern continued, the country’s healthcare system is expected to face a workforce shortage and with large numbers of highly experienced workers leaving, the education system for healthcare workers like nurses may also be negatively affected.
It is imperative that HR Managers in healthcare act immediately in finding effective ways to attract and retain the best and brightest individuals in the healthcare industry. With other countries offering better compensation, and career growth opportunities, traditional forms of compensation may not be enough to keep healthcare workers from leaving. HR Managers together with major stakeholders of organizations must find other intangible benefits to maintain and sustain the needed workforce for the healthcare industry.
People are at the heart of any healthcare organization, whether that organization is government- or privately run, or in the city center or a small health facility in the rural areas. There is a perception that the best health facilities are the ones with high-tech equipment and facilities or those offering a large number of health services. Oftentimes, the attention is primarily focused on these patients and little attention is placed on the welfare of the healthcare workers.
We must always take note that it is the healthcare workers who are behind the technology, treatment protocols, and services of the organization who will ensure the quality of care, and how the healthcare organizations manage and invest in them will impact the quality of care and services being provided on that organization.
As the healthcare industry is subject to rapid change and predicting these changes is very difficult. HR Managers and stakeholders in an organization must take active steps to identify and understand current trends in the healthcare industry and human resource management to come up with strategic plans that will ensure that the organization has adequate manpower to meet the ever-changing healthcare needs of the people.
• Armstrong, M. (2006). A handbook of human resource management practice (10th ed.). Kogan Page. (Original work published 1977)
• Budd, J. W. (2016). Evolution of HRM [YouTube Video]. In Carlson School of Management. https://www.youtube.com/watch?v=Kxc8KceOb14
• Kipkemboi, J. R. (2015). History, Evolution and Development of Human Resource Management: A Contemporary Perspective. Global Journal of Human Resource Management, 3(3), 58–73.
• Leiyu Shi. (2007). Managing human resources in health care organizations. Jones And Bartlett Publishers.
• Salvatore, P., Halem, D., Weitzman, A., Smith, G., & Schaefer, L. (2005). How the Law Changed HR. HR Magazine 2005 Anniversary Issue, 50(13), 47–56.
• United Nations. (2021, October 21). Up to 180,000 health workers may have died from COVID-19. UN News: Global Perspective Human Stories; United Nations. https://news.un.org/en/story/2021/10/1103642