The difference between "personnel" and "human resources" might be lost on most people. But HR professionals know the difference, especially those who have gone through the transition. Decades ago, personnel managers handled staff-related administrative functions and relations between employees and management. Today's HR managers have broader, more strategic responsibilities. They recruit and develop staff as an invaluable resource for employers.
Historically, personnel managers found people to hire, ran new employee orientation programs and explained employers' policies and rules. They also administered payroll and pensions and kept employees' personal and performance records. Personnel issued employee handbooks and often met one-on-one with employees to discuss insurance benefits. Personnel departments rewarded and disciplined staff, and worked with supervisors on controlling absenteeism and tardiness. Personnel managers weren't directly involved in management's concerns or organizations' strategic goals. Instead, they managed employees' day-to-day activities, often mediating conflicts between workers and negotiating contractual labor agreements. In short, personnel management focused on the workforce and staff-related administrative tasks.
HR operates with the organization's goals in mind, while ensuring that employees have the skills and training needed to perform their jobs. This strategic approach distinguishes HR from personnel's traditional administrative role. HR has kept pace with technology by automating employee benefits programs, employee newsletters and other internal communication and much of its recordkeeping tasks. Organizations often hold HR responsible for upholding the culture, values and ethical standards of the workplace. HR and personnel continue sharing such functions as recruiting, employee and labor relations, compensation and benefits, performance management, training and discipline. Although contemporary HR professionals generally think of themselves as "strategic partners" with employers, their organizations don't always perceive them that way. J. Craig Mundy, an Ingersoll Rand HR executive, addressed the problem in "Why HR Still Isn't a Strategic Partner," an article published in the July 5, 2012, issue of "Harvard Business Review." According to Mr. Mundy, heads of organizations don't always know why they have HR departments. And HR, he added, doesn't always know how to fill the strategic role.
Personnel transformed into HR when organizations began recognizing that employee performance was crucial to their success, reports the Management Study Guide, an online educational resource on best business practices. Another shift from personnel to HR occurred when service industries began adopting the HR model for managing staff. Personnel's administrative focus seemed adequate for manufacturing environments. But service industries, whose success depends on building and sustaining strong employee-customer relations, found the people-oriented HR approach more effective for managing performance. Over time, "HR" emerged as the preferred name for the profession and its future role.
Employment specialists have identified hiring the right people as HR's biggest challenge. According to Talent Management Alliance, an online information and news source on talent management and business development, building a high-quality workplace depends on HR's ability to recruit and hire people who fit their organization's culture. TMQ contends that HR managers aren't focusing as much as they should on searching for job candidates whose personal values are aligned with their organization's values and expectations of outstanding performance.