Human Resource Management versus Personnel Management

HRM vs. Personnel Management Marco Köster _______________________________________________________________________

Content

1. Introduction

2. Personnel Management versus Human Resource Management

.1 ‘Soft’ and ‘Hard’ Models of HRM .2 Theory and Philosophy .1 Similarities .2 Differences .3 Practical Implementation

3. Is HRM manipulative and exploitative?

4. Conclusion

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HRM vs. Personnel Management

Marco Köster

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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 rheto ric.

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.

1 Keenoy (1990: 8) stresses anot her 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.

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HRM vs. Personnel Management Marco Köster _______________________________________________________________________

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.

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HRM vs. Personnel Management Marco Köster _______________________________________________________________________

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’.

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