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personnel managementThe branch of management concerned with administering the employment relationship and with achieving effective use of the human resources available to the organization. The rationale for employing personnel managers is that specialized knowledge of aspects of ‘people management’ – RECRUITMENT AND SELECTION, TRAINING, PERFORMANCE APPRAISAL, WELFARE, PAYMENT SYSTEMS, LABOUR LAW, INDUSTRIAL RELATIONS – will lead to better managerial and organizational performance. High standards of management in these areas will reduce certain potential costs such as those arising from ABSENTEEISM, LABOUR TURNOVER and INDUSTRIAL DISPUTES. Personnel management typically involves routine administration of employment matters, for example maintenance of personnel records (see PERSONNEL INFORMATION SYSTEM), provision of specialized advice on personnel issues to other managers, creation of procedures (for example DISCIPLINARY PROCEDURES) to guide and control the activities of these managers and, in some cases, conduct of COLLECTIVE BARGAINING with TRADE UNIONS. Often people management is largely undertaken by others, such as LINE MANAGERS; the objective of personnel managers is usually to ensure that these managers act consistently and equitably The full range of personnel activities, be they undertaken by personnel managers or others, is known as the personnel function. In the UK personnel management developed out of the industrial welfare movement earlier in the twentieth century. These origins, coupled with the emphasis in personnel management on fairness (in part for good business reasons), lead some managers to view personnel managers with suspicion. They are sometimes seen as ‘soft’ on the workers and as not ‘proper’ managers. In part this may also be due to resentment at the interference of personnel managers in what they view as their area of decision-making. These attitudes are reflected in status insecurity amongst some personnel managers; they feel that they stand midway between workers and management, and are not properly part of either.
One development that has raised the status of personnel management in the UK in recent years is the emergence of human resource management (HRM). Some argue that HRM is nothing new; it is simply personnel management with a new title, adopted by personnel managers to advance their interests. Others argue that HRM does possess distinctive characteristics. These include greater sophistication in the use of personnel techniques (for example wider adoption of PSYCHOLOGICAL TESTS in employee selection); a concern with resource maximization (exemplified in an emphasis on training and MANAGEMENT DEVELOPMENT) rather than the traditional one of cost minimization; and a closer integration of personnel management activity with BUSINESS STRATEGY. In addition, many of the more routine aspects of personnel work are passed to line managers, leaving human resources managers with the task of devising strategies to guide and train them in these activities.
An advanced form of HRM, rarely practised, is human asset accounting. This approach attempts to assign an accounting value to the organization's human resources, and to determine whether these assets appreciate or depreciate in the same way as do capital resources. In this way HRM can be brought into the calculation of the ‘bottom line’. The rationale of this approach is that the value of an organization's human resources has an important bearing on its long-term health. By generating data of this sort it provides managers with a higher quality of information upon which to base human resource decisions, and encourages them to adopt a more long-term perspective in the utilization of their workforces. See INSTITUTE OF PERSONNEL MANAGEMENT, MANPOWER PLANNING.