The concepts of Human Resource Management (HRM) and Personnel Management (PM) are considered to be synonymous and many human resource academics agree that the differences between these two management models are rather philosophical than practical. The term PM emerged in the middle of the 20th century though the development of this function of management takes source from so called “welfare offices” that appeared in the end of the 19th century. At that, the concept of HRM came out in the 1980s and was a product of the evolution of personnel management function in modern management.
The problem of identifying the differences between HRM and PM was a subject of interest and researches of many modern experts and professionals in organizational management, including Marco Koster, an Austrian specialist from University of Manchester, or Dr. P.C. Tipathy, an Indian specialist and the author of several books on organizational management. According to the findings of the latter (2002), the following differences between HRM and PM can be identified:
a) PM is a classical, traditional function of organizational management that is more oriented on administration and routine activities connected with personnel issues (including everything related to employment law, employee insurance, payroll, etc.), but HRM is more a developing, ongoing managerial function, which is oriented on improving human relation processes in organization and deals with such broad concepts as personnel planning and selection, career development, training, performance evaluation, and so on.
b) PM is mostly focused on routine tasks and personnel administration, therefore, its spectrum is relatively narrower than the one of HRM. The latter has more dynamic orientation and embraces much wider range of activities that are linked not only to administration, but also to personnel development and training, stimulating teamwork, looking for ways to motivate the employees for working with their maximal efficiency, improving organizational culture, and so on.
c) Taking into account the above, HRM can be considered more anticipative, dynamic and strategically developing part of organizational management, however, PM is more individualized and static function that is able to react on possible demands or response on possible problems in business organization when they arise.
d) PM and everything connected with PM is usually a responsibility of the related department in a business organization. In contrast to this, HRM must be considered as a concern of the whole organization, because HRM is a macro function oriented on managers of all levels and aimed on improving their skills of dealing with the employees of all levels of authority and qualification.
e) With its more classical approach to the issues of personnel motivation, PM considers such factors as various rewards and compensation for work, work simplification, etc. to be the most powerful motivators for the employees. At the same time, HRM sees a great potential in motivating the personnel with such concepts as working in teams, creativity, setting up interesting and challenging objectives, and so on.
f) Finally, PM must be considered as an independent function of organizational management, with it own structure and sub-functions. However, HRM is an integrated part of organizational management that does not tend to be independent as it uses systems thinking approach and is strongly interconnected with all elements of organizational structure.
Therefore, the differences between HRM and PM are quite minor and mostly focused around the nature of functions and the scope of these both types of management, as well as around their orientation and approaches to the issue of motivation. At the same time, some specialists underline that in terms of modern dynamic business environment, the distinctions between PM and HRM tend to become more considerable.