HR & The Phases of Transition

Since the last twenty years, the word Personnel has synonymously been used to refer to Human Resources management. But gradually, the term “Human Resources” has replaced the antiquated term, “Personnel”. The term, personnel, was not changed simply because it needed a facelift, but because the role of personnel has evolved and morphed into something of a much greater magnitude. And the currently growing evolution of Strategic Human Resource Management will soon replace HRM. 

Personnel Management >>> Human Resource Management

Traditionally the term personnel management was used to refer to the set of activities concerning the workforce which included staffing, payroll, contractual obligations and other administrative tasks. In this respect, personnel management encompasses the range of activities that are to do with managing the workforce rather than resources.

There are several contributing factors that changed the use of the word personnel in modern day workforce management or administration. Key amongst those factors include: Technology, Legislation, Diversity, and Globalization. HRM differs from personnel management not only in its broader scope but also in the way in which its mission is defined. HRM goes beyond the administrative tasks of personnel management and encompasses a broad vision of how management would like the resources to contribute to the success of the organization.

In the last two decades there has been an increasing awareness that HR  functions were like an island unto itself with softer people-centered values far away from the hard world of real business. In order to justify its own existence HR functions had to be seen as more intimately connected with the strategy and day to day running of the business side of the enterprise.

Human Resource Management >>> Strategic Human Resource Management

 Many writers in the late 1980s, started clamoring for a more strategic approach to the management of people than the standard practices of traditional management of people or industrial relations models. SHRM can be defined as an approach that establishes an integration or linkage between the overall strategic aims of the business, human resource and its implementation.  Strategic human resource management focuses on human resource programs with long-term objectives. Instead of focusing on internal human resource issues, the focus is on addressing and solving problems that affect people management programs in the long run and often globally. Therefore the primary goal of strategic human resources is to increase employee productivity by focusing on business obstacles that occur outside of human resources.

The primary actions of a strategic human resource manager are to identify key HR areas where strategies can be implemented in the long run to improve the overall employee motivation and productivity.  Strategic HR managers need a change in their outlook from seeing themselves as relationship managers to strategic resource managers. Kossek (1987, 1989) argues that major HRM innovations occur when senior management takes the lead and adoption of innovative SHRM practices is dependent on the nature of relationship of the HR Department with the CEO and the line managers.

Personnel Management (till 20th century)	SHRM (21st century)
·        Reactive	·        Proactive
·        staff function	·        strategic function
·        production oriented	·        people oriented
·        people as liability	·        people as investment
·        just as resource in the production process	·        key player in competitive advantage
·        isolated from company’s goals and planning	·        integrated role in company’s goals and planning

Thus, SHRM is based on HRM principles, which integrate the concept of business strategy. Strategy here refers to “the pattern of organizational moves and managerial techniques or approaches used to attain organization objectives and to pursue the organization’s mission” (Inyang, 2004:20). SHRM is a more radical and systematic approach to the management of human capital, placing more emphasis on organizational performance rather than individual performance. It is this approach that helps to create a fit or congruence or integration of HR practices with business strategies that enables the organization to achieve sustained competitive advantage.