Dessler (1999:2) stated that “Human resource management refers to the practices and policies you need to carry out the personnel aspects of your management job…”. Through the last two decades many changes were made. One of the primary keys for organizational success is the management of people at work (Mathis and Jackson: 1994). Human resource management (HRM) appears to express a special approach to managing that asset.

In the following analysis, a comparison of personnel management with HRM is taking place for the discrimination of the main differences between them. Also, usages and definitions of HRM, as have been stated from some great economists during these last decades, help us to understand the main basis of this term. Finally, two different roles and models of HRM, which are used in different organizations and in a different rate, are placed and analyzed.

1. Personnel Management and HRM

In 1980s, some incremental changes, help to the replacement of personnel management from human resource management. Personnel management was facing some problems. According to Storey (1995) these problems were unreliability and ambiguity regarded an inarticulate set of duties. As Beaumont (1994:1) stated, “…particularly in the product market area, triggered a number of changes in management and organizational practice that pointed in the human resource management direction”. Gennard and Kelly (1997) go further in analyzing these changes, arguing that, an ‘enterprise culture’ was developed while companies sought to improved productivity and quality and also to increase employee commitment, creativity and flexibility.


The main differences between personnel management and Human Resource Management (HRM) are stated below:

  1. Personnel Management is workforced-centered, while management is resource-centered (Mullins: 2002). That means that HRM emphasizes on management needs for the employment of human resources, rather than personnel management, which emphasizes at the margins of organizational life, the employees.
  2. HRM promote the integration of practices and policies that concern organizational and human resourcing strategies (Leopold: 2002). On the other hand personnel management contains practices that remain isolated at the periphery.
  3. In personnel management there is short-term time of planning, organizational structure is bureaucratic and employee’s evaluation is based on cost-minimization (Beaumont: 1994). As will be seen, in HRM there is long-term time of planning, proactive strategy, the structure is characterized to be organic and there are policies that boost self-control and minimizes external control.
  4. The above applications have a main target in HRM. As Leopold (2002: 10) stated, “ …the commitment of employees which is gained through inner understanding of the attitudes and behaviors expected, rather than gained through compliance measures of time-keeping, strict supervision and repeated quality checks”.

Nowadays, HRM is at the heart of business decision-making (Cheatle: 2001). The pivotal role of human resource management is clearly seen through its application in a lot of private and commercial organizations and its use in many aspects of people management. Some statistics concerning organizations’ strategy show that:

  • 90% of them said that in the past three years, management of people has become one of their high priorities.
  • 97% said that training is important for the success of a business.
  • 100% of them have a team structure.

2. Terminology

Daft (2003: 406) defines Human Resource Management as “The activities undertaken to attract, develop and maintain an effective workforce within an organization”. These activities include a proper design and application of formal systems in the working environment. The integration of those systems in business structure will create a stable way of resource management strategy for the achievement of organizational and personal goals. Furthermore, the main aspects of this strategy, except the goal accomplishment, are the quality improvement of working life, the high levels of performance and commitment and finally the movement towards the creation of a competitive advantage (Huczynski and Buchanan: 2001).

3. Usages of HRM

  • As a different name for personnel management. Legge (1989 and 1995) reinforce this with the conclusion that there are very little, but important, differences between the two. It’s like to be ‘old wine in new bottles’. These differences have to do with the expectation of overcoming the weaknesses of personal management. Some examples are given above.
  • As a tendency that spreads to more than one managerial activity, that have to do with the relationship between employees and organization.
  • As a policy that contains ‘new management’ practices for higher employees’ commitment and more effective division of labor.

As it is clearly seen, the term of ‘human resource management’ belongs to a complex area of explanation. The existence of a big number of different meanings makes it very difficult to distinguish which of these are applied in the real world business.

4. Definitions of HRM

For further explanation of the complex and contested area of HRM, some definitions of HRM are listed below. Firstly, Fobrum et al. (1984) define HRM as the management task that supports the HR systems of selection, appraisal, rewards and developments, to keep pace with the strategic objectives of the organization.

Secondly, Guest (1987) argues that the main objectives of HRM related with strategic integration, employee commitment, flexibility and quality. Strategic integration has two meanings:

  • Integration of all employment management policies in the working environment. Huczynski and Buchanan (2001) further suggest that some changes in the organizational environment will help this fundamental shift in employment relations.
  • Close interrelationship of human resource strategy with overall business strategy.

Some of the main targets of an organization is the necessity to meet the needs of its customers, to enhance its reputation and finally to increase its profits. Loyalty and commitment are two aspects that are directly connected with business’ success. Also, flexibility has to do with the number of key tasks that an employee performs for the completion of his/her goals. Finally, quality involves the conditions in which an employee delivers high-quality goods or services that help the organization to obtain a competitive advantage (Leopold: 2002).

  1. A different name for ‘personnel management’.
  2. A strategic practice for the increase of commitment.
  3. A strategic practice for the continuous utilization of labor resources.

These three meanings of HRM are shown in the following diagram. In the latter HRM regarded as holistic and strategy centered term to employment management.

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