Personnel Management vs Strategic Hrm

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“Over the past decade a shift has occurred away from ideas of ‘personnel management’ towards HRM and concepts of people management” (Pass, S. & Hyde, P., 2005) This shift has been essential, as with the globalization of the market and more competitors, firms have found it more and more difficult to gain competitive advantage. In order to adapt to this changing environment, the firm’s traditional management system evolved to a more strategic approach towards human resource management. “Strategy is about building sustainable competitive advantage that in turns creates above average financial performance”. (Becker, B & Huselid, M., 2006) (Wielemaker, M. et al, 2005) states that before the shift, firms were seeking competitive advantage from…show more content…
& Lengnick-Hall, M., 1988) also noted “traditional models focus on matching people to strategy, but not on matching strategy to people.” This was the main issue with traditional personnel management.

(Bechet, T., 2000) Summarises clearly why there was a need for change: the organisations that used the traditional approaches of personnel management found that they were ineffective, and that the potential of a firm was not fully reached by using those. (Kim, P., 1999) states that the causes to this are the changes in the modern global economy, which highlighted the numerous challenges facing human resources. The industry became more and more competitive with the new firms entering the market and it therefore became harder to be successful. (Cook, D. & Ferris, G, 1986) highlights that traditional management had so far neglected to view the personnel management department as a strategic asset, as equally important as financial and technological assets.

Due to that finding, as (Nkomo, S., 1988) noted, a significant amount of attention had now been taken to the strategic aspect of human resources, as it has been regarded as a way to link organisational goals and strategies to the human resource objectives and programmes. (Lengnick-Hall, C. & Lengnick-Hall, M., 1988) confirms this by stating ‘achieving competitive advantage through human resources requires that these activities be managed from a strategic perspective.’ It can be concluded that it was at that
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