Note on Personnel and Human Resource Management

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Personnel and Human Resource Management

The term ‘Human Resource Management (HRM)” is the new version of what was previously known Personnel Management’. There are some differences between these two terms and it is useful to understand as to what they are.

Personnel Management

It is a traditional approach. It focuses on personnel administration, compensation, employee welfare and labor relations. It is discipline and control oriented.It has limited scope and an inverted orientation. It views labor as a tool, the behavior of which can be manipulated for the benefit of the organization and replaced when it is worn-out. Personnel management is primarily concerned with the administration of specific employee-related functions such as hiring, training, wage setting and disciplinary action. It assumes people as an input in the production process. It is a staff function in the organization structure. It is concerned with compliance of policies, rules, and laws.Personnel management is oriented towards strong control, direction, and discipline imposed on employees.

Human Resource Management

It is concerned with the management of human energy and competencies. It is concerned with acquisition, development, utilization and maintenance functions. It regards people as human resources. It emphasizes development and utilization of human potential. It is considered as a strategic function. It manages change.Human resource management refers to a management function through which managers acquire, develop, utilize, motivate and maintain an effective team of human resources who come from different background. HRM views people as an important source or asset to be used for the benefit of organizations, employees, and the society. It recognizes the value of people and gives the respect they deserve. HRM is emerging as a distinct philosophy of management aiming at policies that promote mutuality — mutual goals, mutual respect, mutual rewards and mutual responsibilities.


The difference between Human Resource Management and personnel management are as follows:

  1. Human Resource Management is primarily a philosophy, policies, procedures, and practices related to the management of people while personnel management is a functional area and function.


  1. Human Resource Management must remain at the center of management. It is the concern of all managers from top to button level in an organization, while personnel management is mainly the concern of personnel managers.


  1. Human Resource Management makes effort primarily to satisfy the human needs of the people at work which motivate them to make their best contribution to the achievement of organization goals and objectives, while personnel management follows rules, principles and legal provisions in maintaining the people.


  1. Human values and individual needs are given priority in Human Resource Management, while personnel management gives emphasis on efficient administration.


Human Resource outcomes

1)Quality of work Life (QWL) : Quality of work life refers to the quality of relationships between employees and the total working environment of the organization. It is employee’s perception of physical and psychological well-being at work.The quality of work life can be defined as the extent to which members of an organization are able to satisfy personal needs through the organizational process.The quality of work life concentrates on creating working environment that is suitable and gives satisfaction to the workers.The following five procedures or policies, that makes the work less routine and more rewarding for the employees are:

a) Autonomy:It deals with the amount of freedom that employee can exercise in their job.It involves employee participation in decision making to provide control over what they do. An example includes employees setting their own work schedules. Self-managing work teams also provide autonomy.

b) Recognition: This involves being valued by others and appreciation of contribution to an organization or it involves being valued by others in the company. An employee's contribution to the organization is noticed and appreciated.

c) Belonging: It refers to being part of the organization. This satisfies a social need. The employees conform to the values of the organization. They are regarded as valuable part of the organization.

d) Intrinsic rewards: They refer to internal rewards available from the job. They can be a sense of challenge and accomplishment, progress, and development.

e) Extrinsic Rewards: They refer to external rewards available in the form of salary, benefits, promotion, status etc. They are money-oriented.


2)Productivity: It is the efficiency relationship between input and output. It is the performance outcome of HRM. Productivity is the result of many factors.The key components are:

a)Technology: Availability of latest technologically advanced machinery and equipment helps to improve worker efficiency.This is the key to productivity.

b) Innovation: Process for generating and implementing new and creative ideas. Examples can be the development of new product or cost saving.

c) Learning : It consists of proper skills. Extensive training is important for learning new skills. Workers need to learn continuously.

d)Motivation: Ability and willingness of employees for doing jobs effectively. Increased motivation leads to increased productivity.

e) Performance reward linkage: There should be a strong linkage between improved job performance and the desired rewards.It should be appealing.


3) Readiness for Change: Change is making things different. It is a fact of life. Organizations must adapt to change to remain effective. It is the behavioral outcome of Human resource management.Employees tend to resist change. The main reasons for such resistance are:

a) Fear of the unknown: Employees like old ways and fear uncertainty and ambiguity. They feel uncomfortable with change.

b) Security: Employees may fear a threat to job security. They fear the loss of job, pays reduction and more workload.

c) Habit: Employees resist to change due to old work habits.They like old ways of doing things.

d) Misunderstanding: Employees may not understand the purpose of change. This creates resistance to change.

e) Social factor : Employees may feel a threat to existing social relationships for change.


Challenges Of Human Resource Management

The rapidly transforming business landscape means that there are currently many human resource management challenges which will continue to evolve for years to come. HRM operates in a dynamic environment.The changing political-legal, economic and technological forces pose challenges to HRM. The major challenges are:

1. Globalization: The rate of globalization has been increasing. It has facilitated trade without borders. Globalization has led to operations in several countries. Organizational are facing increasing competition.Product life cycles are getting shorter. The human resources in organizations have also assumed global dimensions. HRM will need innovative human resource management policies and practices to face the growing challenges of globalization.Global outsourcing of human resources is increasing. Employees are required to work in cross-cultural and cross-country situations. Globalization is making the world a smaller place and HRM must respond appropriately.

2 .Complexity: Modern organizations are increasing in size. With the increase in size, change :complexities of managing them are also increasing.
Competent and committed human resources are needed to cope with the challenges of size and complexities.

3. Technological change: Technology is changing rapidly. Human resources in the organization need to acquire new competencies to cope with the rapid technological change. The need is growing for computer and information technology friendly human resource.Technological changes have led to rapidly changing jobs and skills required to perform them.This pose challenge for HRM to avoid skill deficiencies.

4.Management of change: The future belongs to those who can learn to best manage change. Committed and competent employees are essential for managing change. Human resource management plays an important role in fostering employee commitment to change.

5.Learning organization: Organization is getting knowledge-based. They need continuous learning and knowledge updating. They need to find ways to expand employee capacity through continuous learning. They need knowledge workers whose job are designed around the acquisition and application of information. Learning organizations pose a challenge to HRM for knowledge management.



Kharel, S.k. (2006). Foundation of Human Resource Management. Asian.

Shrestha, P. (2014). Foundation of Human Resource Management. Samjhana.

Acharya, B. s. (2014). Foundation of Human Resource Management. Kathmandu: Asmita.

Adhikari, D. (2010). Human resource Management. kathmandu: Buddha.





  • The term ‘Human Resource Management (HRM)” is the new version of what was previously known Personnel Management.
  •   Personnel Management

    It is a traditional approach. It focuses on personnel administration, compensation, employee welfare and labor relations.

  •  Human Resource Management

    It is concerned with the management of human energy and competencies. It is concerned with acquisition, development, utilization and maintenance functions.
  •  Human Resource outcomes

      1) Quality of work Life (QWL)
       3) Readiness for Change

Challenges Of Human Resource Management  

  •  Globalization
  • Complexity                                                                                                        
  • Technological change                                                                              
  • Management of change                                                                    
  • Learning organization

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