Personnel Management

What's the Difference Between Personnel Management and Human Resources?

In a personnel management department, much emphasis is placed on paperwork, administration, pay grades, and consistency.
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Personnel management refers to the functions that many employers now refer to as Human Resources. These are the functions that Human Resources staff perform relative to the organization's employees and include recruiting, hiring, compensation and benefits, new employee orientation, training, and performance appraisal systems.

Personnel management also includes developing and implementing policies and processes to create an orderly, employee-supportive work environment.

It is an older term that is falling into disuse in modern organizations.

The Personnel Department

Traditionally, the Personnel department took care of all of these things on a rather low level. It was a lot of filling out forms and checking off boxes. Many people still think of it that way, even though most companies no longer have Personnel departments and instead have Human Resources departments. Companies also talk about HR management rather than Personnel Management today. 

Personnel management is a term that is still used in many government agencies, and primarily in the nonprofit sector, to describe the function that deals with the employment of people within an organization.

When I think of Personnel departments, though, I tend to think of the more transactional and administrative aspects of the HR management functions, but others still use the term to refer to the whole gamut of HR responsibilities and services.

What's the difference? There doesn't have to be one, but the best companies operate with the human side of things considered a critical - if not the most critical - aspect of running the business. Here's the difference.

Personnel Management:

Hiring across many organizations is done by a single person or group of persons.

Recruiters look at checkbox lists and match candidates' resumes to that list.

Compensation and benefits departments create strict rules around pay grades and increases. For instance, enforcing a limit on annual increases of no more than 10% and preventing promotions of more than one salary grade. The important part is keeping consistency.

New employee orientation consists of helping the employees fill out their benefits paperwork, showing them where the break room is, and handing out a copy of the employee handbook. The focus is on getting the paperwork done.

Human Resources Management:

Hiring is done by specialists who have a deep understanding of the needs of the organization. They partner with the hiring manager to find people who not only have the skills necessary to do the job, but fit the culture of the organization. They work from recruiting hiring process steps to ensure great hires.

Compensation and benefits departments recognize the need to not only have fairness and consistency across the company, but the need to meet individual employees' needs. The question on their minds is always “what is best for the business?”

This may mean that an employee with a specialized skill set gets a new title and grade so that her compensation will allow her to feel valued and not leave for a competitor.

They recognize that while pay is critical, many employees look towards benefits as the reason to join or leave a company. It's not just health insurance that great employees want, it's flexible schedules, perks and company culture.

New employee orientation consists of orienting the employee to the company. While paperwork is still important - everyone wants their health insurance paperwork filled out correctly - the HR department focuses on setting up the employee for success. Perhaps new employee orientation includes a formal mentoring program.

Perhaps it involves specific opportunities for meet-and-greets so that the new employees get to know people they will be working with in different departments. Perhaps it involves presenting new employees with critical information on company culture so that they don't feel lost.

What Do You Want for Your Business?

Small companies like to save money by having HR tasks taken on by an employee who has a whole bunch of other things on her plate. Big companies like to outsource rather than develop HR employees who thoroughly understand their own business.

Think long and hard about the amount of money you invest in your employees and ask yourself if you really want to cut corners in how they are treated and managed. Focusing on the human side of business can create a stronger company with higher morale and lower turnover - which saves money and increases productivity far more than running a check-box organization saves money.