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Personnel Management and Human Resource Management (HRM) are very similar and many would say interchangeably, for example on help-wanted adverts or in job descriptions (.....). However this is not entirely true, although the difference may be very subtle they are slightly different.
Personnel Management is defined as the “Administrative discipline of hiring and developing employees so that they become more valuable to the organisation” (www.bd...). One of the defining features of personnel management is the tendency for personnel practise such as recruitment, payroll management and training to be structurally and procedurally separated from each other (.......).
Human Resource Management (HRM) is defined as “Administrative activities associated with human resources planning, recruitment, selection, orientation, training, appraisal....” (www.bd....). HRM of an organisation is responsible for the move ‘overall’ management of the workforce in the organisation, i.e. coordinating the ‘activities’ of staff.
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The integrated approach to HRM is used among many organisations to emphasise the need for HR managers and the others with responsibility for HR processes and practises to integrate a firms HRM into a coherent integrated system (......). These practises I mention are the activities i.e. the behaviours/actions that people take when implementing these practises carried out. Because these activities may often happen at the once, HR processes are formed structuring the practises, processes and activities into an integrated system that aims at achieving organisations needs, and ideally recognizing that there are logical practises and research informed connections between these activities and practises. When integrating a firm HR functions into a system, the HR managers need to adopt what is known as ‘systems thinking’ to ensure the coordination of all HR strategies, polices etc are integrated into a system (Horizontal Fit). This HR system is designed to help companies with advanced workplace practises including leading edge recruitment polices, performance reward programs, skill development, team based management and empowerment programs.
HRM also need to ensure the recognition that these HR activities work together in an integrated system i.e. horizontal Fit, and to recognise a clear link between HR processes, practises and the firm’s strategy for achieving its objectives (Vertical Fit) (...........).
An example of this is within McDonald’s. It places emphasis on the training and development of its employees. McDonalds aims to provide career opportunities for people to achieve their potential and offers both full and part-time career opportunities, which helps staff to combine work with family or educational commitments. McDonalds integrates its HRM in many ways one way is through job progression, this is used to encourage employees who got their first job in the company to progress to management positions. These promotions are based on the performance of the staff member, and now over half of the company's middle and senior managers have moved up from restaurant-based positions (..............).
Another example is that of Fonterra, They want to attract and develop people of the highest calibre, to challenge and to be challenged, and to be proud of their performance and of the company. (........)
To do this Fonterra have a rigorous people management process called ‘PERFORMplus’, they have a set of comprehensive tools to help develop their people right across the organisation, i.e. both managers and employees. These tools include such alternatives like career planning, performance management. Fonterra drives its performance, development, succession, talent management and recruitment processes, so when hiring/recruiting Fonterra incorporates the attributes, skills and behaviours that are most important to their success at Fonterra. The diagram shown above and to the right show Fonterra’s PERFORMplus framework and some of the tools they use as part of their people management process, and the performance objectives and values and how they link together to provide a comprehensive performance and development framework. (...........)
When determining whether to reflect upon myself as a human asset. Human resource or Human capital many alternatives and ideas come into play, e.g. ‘do I want to be owned?’ ‘Would I prefer to be used?’
A human asset is not easily defined, but if we look into the part of the term ‘asset’ then the general asset is defined as “An item of economic value owned by an individual or corporation, especially that which converted into cash (..........id). With that in mind, a human asset would be an employee or staff member who is an asset to the organization, i.e. an employee who brings value to the company, sometimes that the company benefits from having as an employee. However to be an asset to a firm although you feel irreplaceable and of value, the words ‘owned by...’were used therefore to be of significant value is great but to be owned by the business isn’t something that is to be taken lightly.
A Human resource is a term also used in the same context; it is the “Scarcest and most crucial productive resource that creates the largest and longest lasting advantage for an organization. It resides in the knowledge, skills, and motivation of people, is the least mobile of the four factors of production, and (under right conditions) learns and grows better with age and experience which no other resource can. (.........bd.com).
As this definition defines being a human resource mean that you will be the most crucial productive resource that creates the largest and longest lasting advantage for an organization, so you feel like part of the company and if you are considered scarcest than you are even more important and on a higher demand. However, when we think about resources, we think about an economic factor required to accomplish an activity or as means to undertake an enterprise and achieve desired outcome. (bd.com) i.e. a factor that is used as part of an activity, that may be disposed of after its use. So you have to consider whether to be used or not.
Human Capital is more complex it’s the “The totality of experiences, intelligence and skills that are held collectively by the firms employees and which is developed over time through staffing and performance management practices, including training and development investments” ( old book). So when determining whether or not to not described as human capital, you need to think about these things, you will be considered to be measure of the accumulated financial strength of an organisation and to generate future returns above investment costs.
In summary I would prefer to be reflected upon and described as ‘Human Capital’ because to be known as capital, is something that is more prestige than a resource and asset, to be an asset is too owned and to be resource I feel is to be used. Being know as capital means that you are a part of the business and if the business fall you may too, but you belong and benefit something which is what I would like to be described as.
Macky, K (2008). Managing Human Resources. Contemporary perspectives in New Zealand. McGraw-Hill.
Macky, K. and Johnson, G. (2003) 2nd Ed., Managing Human Resources in New Zealand. McGraw Hill Inc., N.Z.
human capital. BusinessDictionary.com. Retrieved July 21, 2008, from BusinessDictionary.com website: http://www.businessdictionary.com/definition/human-capital.html
human resource, BusinessDictionary.com, Retrieved July 21, 2008, from BusinessDictionary.com website: http://www.businessdictionary.com/definition/human-resource.html
Fonterra Co-operative Group, Retrieved July 19, 2008, from fonterra.com, website: http://www.fonterra.com/wps/wcm/connect/fonterracom/fonterra.com/Home/
Biz/ed, Retrieved July 19, 2008, from bized.co.uk, website: http://www.bized.co.uk/compfact/mcdonalds/mc16.htm