Are you losing key staff…

… because you are finding it increasingly difficult to align their needs with your crucial productivity and profit goals?

The term “you snooze, you lose” comes to mind as a cheeky intro to this month’s blog on the subject of traditional “Personnel Department” methods designed in the early 1900s and how these are rapidly disappearing. Are they out of date? The answer is YES!

If a business decides to snooze in a “we’ll be right” attitude towards the way they manage people and operate their HR, the business will lose key staff and find it increasingly difficult to align people’s needs with achieving business goals.

This month we want to talk about the evolution of the outdated idea of a “Personnel Department” into the modern concept of HR or “Human Resource Management”.

Most importantly, we want to explain why it needed to change and the differences between the two concepts.

It is also crucial to understand the benefits to business owners of implementing HR Management practices in developing business plans with a wide range of cultural, structural, and personnel strategies. This discussion may highlight whether your organisation is up to date or behind with current HR practice, and whether you need to employ an HRM professional to support the growth of the business.

Why the need for change?

Personnel got a bad rep due to the way they were used to “sort this problem person out” without proper understanding and respect within the business.

Personnel was kept out of the boardroom and was basically an operational function completing admin duties, acting as maintainers of personnel and administrative systems, ensuring the i’s were dotted and the t’s were crossed to protect the organisation from potential staff law suits. Personnel weren’t given authority to make key decisions and were piggy-in-the-middle, justifying management decisions to staff. Hirers and Firers were two of the key expectations, criticised when this went wrong!

All this negative press resulted in Personnel Departments being outsourced as the value for money for service delivered wasn’t realised and costs appeared too high. Change was needed for personnel professionals to be involved at the business strategy meetings to ensure business decisions included initiatives to develop human capital to achieve business goals.

What are the differences between Personnel and Human Resource Management?

In essence, HRM is proactive and Personnel is reactive.

Personnel is about the maintenance of personnel and administrative systems with emphasis on following procedures. HRM is about forecasting and the continuous monitoring and adjustment of the people-related initiatives to keep pace with the needs of the organisation.

HRM is involved at the concept stage of a business plan, asking the right questions of senior management about the people requirements, reminding them that the more you get out of your people the more successful your business will be. In short, making sure the right people are in the right jobs at the right time to deliver business results.

One of the biggest shifts from Personnel to HRM is encouraging managers and employees to revisit goals regularly rather than in an annual performance review. HRM improves management capability to provide feedback and coaching to develop employees on a continuous basis rather than running a one-off training event once a year on “learning how to be better at your job”.

This type of transformational leadership, rather than transactional management of command and control helps to create engaged, focused staff who understand the aims of their role, and how they contribute to team and organisational goals.

HRM is also about continuous talent acquisition rather than recruiting too late when jobs open and valuable company, industry, and customer knowledge has gone out the door due to sudden resignations.

What happens when effective HRM is in place?

Organisational initiatives are directly aligned with the business strategy and integrated, as opposed to piecemeal, to achieve organisational performance and sustained competitive advantage.

The HR professional has moved from a service provider to a business partner.

Next month we will discuss how to implement a HR Management function to benefit organisations, and the expectations of HRM professionals.

Until next time,
Jan Alley
Human Resource Specialist

P.S.  If you need more advice on how to take your personnel function to HR Management, then give us a call on 09-579-8566 or email me.

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