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Why personal management is important to firms

Human Source Management, in simple, is a way of management that links people-related activities to the strategy of your business or firm, which at the same time satisfies specific needs and wishes of employees. Over the years, Human Resource management experienced tons of changes in its functions, roles, objectives, etc and, in today's day, it has already reached a milestone from being just an administrative and functional management (personal management) to a strategic contributor (SHRM).

The purpose of this statement is to critically examine the importance for HR management to convert from being mostly administrative and functional to learning to be a more tactical contributor.

The objectives of the statement are to,

Explain What is Personal Management and what is Human Source Management

Identify the factors which influenced the change

Explain The importance of shifting from Personal Management to SHRM

Present real life examples to confirm the importance of the change

This record will be concentrating on the secondary research materials such as Human being resource literature, business articles, online publications, professional web pages to provide explanations and real world illustrations for the reader, to aid the discussion.

Personnel Human Source Management

Traditional HRM or Personnel HRM can be explained as "handling, directing, and controlling of individual employees rather than of worker as a group. It handles individual interactions, including employees issues with management with employees as non-organized groups. It covers the acquisition and. " (Perfecto S. Sison, 2009, p17)

Basically workers HRM is considered as a traditional, regular, maintenance-oriented, administrative function which doesn't involve the bigger level managers of the organization, and, maneuver at the operational level of a business, performing responsibilities such as interacting with pay sheets, complying with occupation law, and handling similar functions, etc. This mainly focuses on the average person person rather than the employees as entire and attempts to fulfill the employees using wages, bonuses, compensations, simplified jobs, etc and also to ultimately lead to reaching organizational success.

As mentioned above, the functions of employees HRM can be broadly categorised as work, development, compensation and employee relations, which require only the low level management of a business, making it a separate function from the main management of the business.

Strategic Human Source of information Management

Strategic HRM focuses on aligning all the HR functions of an organization with the business strategy that the business is currently predicated on. "SHRM is normally perceived as a unique method of managing people which seeks to attain competitive advantages through the proper development of a highly committed and able workforce (Appleby & Mavin (2000) s555).

SHRM is about managing the real human capital of an organization so concerning achieve some form of competitive advantage. Having not only a committed workforce, but also creating a workforce that is experienced for the work that must be performed achieves the competitive edge. Moving in this path is where human resources become SHRM.

The starting place for SHRM, unlike the traditional HRM which begins from people, begins from the organization's requirements and needs about possessing a suiatable labor force. Also SHRM includes not only the functional level professionals, it involves higher-level professionals such as HR managers and it straight features with the organization's strategy by formulating, employing and analyzing company's strategies through real human resource activities which may involve recruiting, selecting, satisfying and training company workers.

The Below diagram shows how Human being Resource Strategy fits the Organization strategy.

Managing recruiting: employees management in transition/ By Stephen Bach/4th edition

Blackwell bublishin, 2005

The above diagram suggests that modern HRM is not a separated function as it was in past, and clearly shows that it is interconnected with the strategy, culture, current situation, money of the business.

SHRM is targeted on the contributions that the HR strategies will make to enhance organizational effectiveness, and how these proper contributions are achieved and it requires designing and executing a couple of internally constant regulations and procedures to ensure an organization's human capital plays a part in the core business aims and strategies.

Contrasting Employees Management with Strategic HRM

Personnel management, from name itself shows that, it is all about managing and expanding the folks and the abilities employed. On the other hand, SHRM is focused on developing worker knowledge, abilities, talents, aptitudes, creative skills, etc.

Personnel management is a more reactive way of controlling HR because it only includes administrative jobs that are both daily habit and traditional only providing a response to requirements and apprehends as they are presented. Where as SHRM is more proactive, regarding ongoing development of HR functions and procedures for the purposes of improving a suitable labor force for the business, in present and for future needs.

Personnel management is often thought to be an independent function which usually the lone responsibility of the employees department of a business, where as SHRM is an integrated function which frequently entails all the professionals of an organization in some manner to develop the skill models and capabilities of different employees in several departments to achieve a primary goal of the entire organization.

Personnel Management creates high ambiguity in obtaining goals and taking decisions as it's another function from the core management where as SHRM offers less ambiguity as it is in line with the company strategy and integrated with other functions of an organization.

Personnel management motivates employees through increased salaries, bonuses, compensations, simplified careers etc, while in SHRM, the drive is gained through work organizations, effective approaches for meeting obstacles, and job creativeness.

Transition from Traditional HR to SHRM

In the present day business world, the key for a successful business is to incorporate all the functions of the business to ensure all departments and functions of the business flows in the same way. For doing that competency, the traditional HR managing system had to be transformed into a more integrated, top-management-involved, strategy oriented function, known as SHRM. Competition, Globalization, technical advancement, demographic factors will be the most possible factors which influenced the change.

Competitive advantage

"When a firm is employing a value creating strategy not all together being integrated by any current or potential opponents, then it could be said the organization has a

competitive edge" (Controlling human resources: personnel management in transition/ By Stephen Bach) SHRM system capacities can donate to sustainable competitive benefits because they 1) can help exploit opportunities and neutralize threats in a firm's environment, (2) are difficult to build up and therefore unusual in the competitive environment, (3) are extremely difficult to imitate, and (4) can't be easily displaced by strategically significant substitutes. Delta Air Lines, Southwest Air lines, Walmart are cases for businesses which climbed to the very best of the ladder using the competitive gain.

Changing the Mind Set

Businesses have to totally change their attitude in the process of making employees management into a far more strategic partner. Personnel management's strong focus on administrative responsibilities and the inability to directly measure its impact on the outcome was the major down fall season of workers management, restricting its contribution to the business strategy. Therefore, Strategic HRM needed a totally different attitude, which centers mainly on transformation using change management rather than focusing on administrative and operational activities.

Demographic Influence

If the business enterprise strategy of the business is to distributed the business in several geographic areas or in several cultural backgrounds, the business should use, not staff management but SHRM to match the business enterprise strategy. Utilizing the workers management will disregard the idea that the employee should culturally match the job, should be outfitted with appropriate terminology skills, match the required gender and the religion, to suit the region that he has to work, and it will only facilitate to achieve the HR strategies like recruiting cheaper people, having basic requirements etc. This has a negative effect on the business enterprise as it cannot effectively provide their customers, therefore the business has to use SHRM to be able to align the HR strategies with business strategies, to consecutively match the business enterprise that they are doing.

"IBM in Australia and New Zealand comprises of many differing people from a number of cultures and backgrounds. The normal thread between us is our dedication to IBM's success available on the market and IBM's long-standing principles and idea in inclusion" http://www-07. ibm. com/au/diversity/cultural_awareness_and_acceptance. html

Impact of Globalization

In order to expand and prosper many companies would like business opportunities in global market. This has damaged the HRM management system as well. So globalization is the key component that would have an impact on to the change of THRM to SHRM. It's the integration of business activities over the physical and organizational restrictions.

Coca Cola Company has 92, 400 affiliates about the world live and work in the markets we provide -- more than 86 percent of these outside the U. S. On this geographically diverse environment, employees learn from each market and share those learning quickly. Because of this, Coca Cola Company culture is a lot more collaborative. From beverage theory and development to merchandising, our affiliates are posting ideas across departments and market segments in new ways. Therefore, Coca Cola Company associates are increasingly thinking about their work and motivated to turn strategies into action.

Coke website


As the quick change of technology, the companies have to change their human learning resource management system into more strategic approach. The proper HRM along with technology; facilitates employees to boost their work life balance, creativeness and production.

For example Motorola is extending real human capabilities by providing integrated cordless communication and embedded electronic solutions for the average person, the work-team, the vehicle, and the home. Motorola is committed to providing technology that will increase employee productivity attract and preserve key ability and help employees balance their professional and personal lives. Source; http://www. bc. edu/centers/cwf/research/highlights. html)

The recruitment will go high-tech in Vietnam; the service is an expansion of the Labor Department's website (www. vieclamhanoi. net), where employees can gain access to job information. It is stated to be the Department's treatment for ineffective and formulaic job fairs in Vietnam. The brand new service will make it faster and easier for employers and job seekers for connecting.

As a start, the new online site has work details from over 1, 000 foreign and local companies in Hanoi, and will soon expand to 1 1, 400. Within the first week of its start, employers had linked with and hired nearly 1, 300 job seekers through the service.

Current Role of SHRM

The business community today uses the SHRM methods and benefits thorough it very effectively. Some businesses focus on HR strategy more than the business strategy sometimes, and in a few occasions the HR strategy becomes the business enterprise strategy as well.

Microsoft is a good example for the HR strategy to become the core business strategy as well. "A lot of what we do with the staff value proposition is just win available on the market. People want to know they're with a winning team. I notify Lisa still that in some senses our No. 1 HR strategy is our business strategy. When we're succeeding and winning and doing great stuff, success breeds success. " Business week

The pursuing diagram indicates how the Australian Government's Office of Education, Science and Training has executed their HR ways of be align with the main element organizational strategies. This resulted a good result of the department's people management strategies in setting up a motivated and employed workforce and, through this, achieved a strong contribution to the delivery of business effects.

"An focus on strong leadership is an integral strategic element for creating an environment of value, support and development for all people in the department. In this manner, the department has built and maintained a creative and engaged labor force in a position to deliver the government's growing and diverse education, science and training plan. "

http://www. annualreport2007. dest. gov. au/chapter_eight/people_management. htm

During the recession back in 2008, Pepsi came up with a business technique to lower their cost, and the HR strategy matched the business strategy by laying off employees. Regarding to Pepsi Bottling Group's chairman and ceo Eric Foss, Pepsi Bottling Group Inc is designed to slash about 3, 150 jobs across US, Canada Europe and Mexico within its restructuring plan. That is expected to cause pre-tax savings as high as $160 million. "These goes will allow our business to better deal with the challenging macroeconomic conditions that presently are present, " http://www. newsweek. com/id/121095

Coca-Cola has demonstrated that tailoring career development to suit high-potential employees can significantly increase internal promotions and in that way save the business huge recruitment costs which was a major aim of the money division to reduce the entire cost.


Personnel HRM is recognized as a traditional, usual, administrative function which doesn't entail the strategic degree of the business, and, creates high ambiguity, tends to be more reactive and works as a separate unit apart from the organization.

strategic human learning resource management is a function which is targeted on aligning the HR strategy with the overall business strategy to achieve organizational success and, is considered as a more proactive, designed, and less ambiguous way of handling HR.

Factors such as competition, globalization, current economic climate, demographic factors, increasing technology induced the human tool management to change from Staff management to Strategic HRM

Microsoft, IBM, Motorola, THE WEST Airlines, Delta Air lines, Toyota are few examples for organizations who achieved business success through applying SHRM in their organizations.

By critically examining all the factors in this record, it could be concluded that it was very important for the firms to improve their way of controlling human resources from traditional HRM to Strategic HRM, to be able to face the exterior factors effectively and lead their business into the the surface of the ladder.

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