Personnel Management

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

Human resources are the people you employ and the office that serves them.
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Personnel management refers to the functions that many employers now refer to as Human Resources. These are the functions that the human resources staff perform relative to the organization's employees. These functions 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 things related to employment but on a rather low level. Tasks consisted of a lot of filling out forms and checking off boxes. Many people still think of this department 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. 

While becoming extinct, personnel management is a term that is still used in many government agencies, and primarily in the nonprofit sector, to describe functions that deal with the employment of people within an organization.

In terms of functionality, a personnel department handles the more transactional and administrative aspects of the HR management team. However, there are those that still use the term to refer to the whole gamut of HR responsibilities and services.

To understand the difference between personnel management and HR management, consider the following:

Personnel Management Duties Include:

Hiring across many organizations which are 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 which create strict rules around pay grades and increases. For instance, enforcing a limit on annual increases of no more than 10 percent and preventing promotions of more than one salary grade. The important part is to create consistency.

New employee orientation which consists of helping 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 properly completed and filed away.

Human Resources Management Duties Include:

Hiring which 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 implement recruiting hiring process steps to ensure great hires.

Compensation and benefits departments which recognize the need to not only have fairness and consistency across the company but understand the need to meet individual employees' needs. Their primary point of focus is always, “what is best for the business?”

This may mean that an employee with a specialized skill set gets a new title and pay grade so that her compensation will allow her to feel valued and not leave to work for a competitor. They recognize that while pay is critical, many employees consider a benefits package 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 which consists of orienting the employee to the company. While paperwork is still important–and everyone wants their health insurance paperwork filled out correctly–the HR department focuses on setting up the employee for success. New employee orientation might even include a formal mentoring program. Or, it might involve opportunities for a meet-and-greet so the new employees get to know people they will be working with as well as those in different departments. 

What Do You Want for Your Business?

Small companies often prefer to save money by having an employee take on HR responsibilities, even if this is not their background. Big companies, on the other hand, are prone to outsource HR duties to companies or consultants well-versed in the field. 

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 employees are treated and managed. Focusing on the human side of your business can create a stronger company with higher morale and lower turnover. Ultimately, this saves money and increases productivity.