Personnel Management: What is Its Function in the Company?
Personnel Management has gained enormous importance over the last few decades, for employees are one of the most important resources of a company, as their qualities and skills significantly influence the company’s results. Success stands and falls with them. Personnel management is therefore a central area of the company. There is always a tension between the needs of the company and those of the employees.
Definition: What is Personnel Management?
Personnel Management combines all personnel-related strategies, measures and fields of action that contribute to the development of the company. It includes various areas of activity, such as personnel planning, development and management or personnel controlling. All of this forms the basis for being able to attract and retain qualified employees. Well-structured personnel management is not just the task of the HR department. It’s a leadership role. Management and executives play a central role when it comes to ensuring a good working atmosphere or motivating employees.
How is Personnel Management Different from Human Resource Management?
Personnel Management sees itself as a traditional approach to controlling and leading employees. Human Resource Management, on the other hand, pursues a value-adding orientation and emphasizes the active management of the valuable human resource
Here are the most important differences at a glance
| People Management | Human Resource Management | |
| Tasks | Manage staff, strengthen employee well-being and work relationships | Acquire, develop and motivate employees |
| Role of Employees | Employees as a production factor | People as an important and valuable resource |
| Focus | Would like to achieve company goals through optimal staff management | Attaches great importance to employee satisfaction |
| Working Form | Strict division of labour | Group and team work |
| Decisions | Meets the management of the company according to the rules and regulations in place | Are taken jointly with the participation of the employees and the consideration of decentralization and competition. |
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Personnel Management: Goals and Tasks
Some executives only realize how valuable staff is when they don’t have enough qualified employees to complete upcoming orders. In times of demographic change and a shortage of skilled workers, human resources management must therefore achieve one goal above all: every area of the company must be staffed with the appropriate skilled workers at all times. Because without qualified employees, no company can be economically successful in the long term.
The main task of HR Management is therefore to select, deploy and promote employees in accordance with the company’s goals. However, this requires strategic and sustainable planning.
Goals in Human Resource Management
As in many other areas of the company, the HR department focuses on business goals. The economic goal is to provide the company with the best possible number of suitable employees, taking personnel costs into account, and to use them economically. But the HR department does not play a special role. Economic objectives are closely linked to social objectives.
Perceiving employees as people and not just as workers has a positive effect on the economic success of a company. Therefore, human resources management is also interested in the individual needs, wishes, demands and possibilities of the mployyees. The aim is to organize the working conditions in the best possible way and to strengthen or keep employee satisfaction in line with the company’s goals. Those who are satisfied at their job perform well and identify more easily with their employer. Motivated employees ensure a good output, a high quality standard, a lot of responsibility and fall ill less often. This not only leads to lower personnel costs, but usually contributes directly and indirectly to the success of a company. In times of a shortage of skilled workers, it is particularly important to retain good employees over the long term.
To achieve economic and social goals, HR managers must:
- Reconcile company goals and employee wishes.
- Increase and maintain employee satisfaction.
- Reduce personnel costs and keep the company competitive.
Tasks in Personnel Management
Basically, everything in personnel management revolves around the employees. A distinction is made between potential employees and existing staff. While the external personnel management keeps an eye on future employees and deals with personnel planning and recruitment, the internal department deals with issues such as personnel administration and development, as well as also pay management, personnel assessment and personnel controlling.
Some tasks are strategically oriented, such as personnel development or remuneration management or personnel development. In other fields of activity, such as personnel administration, it is about ensuring personnel-related procedures and processes. All areas of responsibility aim to develop the company sustainably and to assert itself on the market.
What does Personnel Management Include?
A strategic approach is required to select the right staff, deploy them in the right places and promote them accordingly. For this purpose, human resources management has different fields of activity at its disposal, which should be coordinated with one another:
- Workforce Planning
- Recruiting
- Personnel Administration and Deployment
- People Development
- Fee Management
- Personnel Controlling
Workforce Planning
How many staff does the company need? What qualifications are needed? Personnel planning determines the need for employees and the necessary qualifications, and this in the short, medium and long term. The aim is to have the necessary specialists available at all times for the smooth operation of a company. Personnel planning is a central component of corporate planning.
Recruiting
The task of recruiting is to attract new employees as soon as a position is vacant or newly created. The search for personnel can take place both internally and externally. The essential steps in recruiting are: creating a requirement profile, placing job advertisements, managing the applicants and finally selecting the personnel in coordination with the respective specialist department. Good HR marketing can be very helpful in this regard.
Personnel Administration and Deployment
Human Resources takes care of all administrative HR tasks from an employee’s onboarding to their departure from the company. This includes the creation of employment contracts, payroll accounting, processing employee applications, communication with authorities, health insurance companies and much more. It contributes to the satisfaction of the workforce if all processes in personnel administration are processed promptly and transparently.
In addition, the human resources department specifies the general working conditions and monitors compliance with them. This includes not only the legal regulations on job security and co-determination, but also the offer of flexible working time models and the provision of suitable work equipment.
When planning the deployment of personnel, the main thing is to use the personnel in the best possible way according to their qualifications and talents. This is not only economical, but also meets the wishes and needs of the employees. In this way, ideally, added value can be achieved for everyone – for the company and the employees.
Human Resource Development
Personnel development controls and coordinates all measures that contribute to maintaining and expanding employee skills. This includes education and training offers, coaching, training, job rotation, mentoring programs and retraining. The interests of employees should also be taken into account. A targeted personnel development strategy can have a significant impact on employee satisfaction.
Fee Management
Remuneration management deals with all aspects of remuneration – from basic salary to personal bonus. Above-average starting salaries and wage increases make it easier for companies to find and retain highly qualified employees. By linking the salary or wages to performance, the motivation and goal orientation of the employees can also be increased. Remuneration is a non-negligible factor in employee satisfaction.
Personnel Controlling
Personnel-relevant figures, data and facts: This is what personnel controlling deals with. It provides KPIs (Key Performance Indicators) and key figures in order to be able to plan, monitor and control personnel processes. The focus is on measuring quantitative factors such as, for example, personnel costs. In addition, qualitative aspects such as employee satisfaction or social skills are also examined. The focus is always on a group, never on the individual employee.
Fields of Personnel Management Application
Modern personnel management is characterized by change and further development. Gone are the days when HR work was primarily focused on managing the workforce. Today, HR managers should always keep an eye on the corporate strategy and be creative. They not only support the managers, but also involve them with an offer that is as networked as possible.
Only those who think and act holistically in HR management can explore the interactions between employees and managers, teams, departments and the management of the players in the company and steer them in a common direction. This makes the HR department more than just a “personnel administrator”. She becomes an important advisor to management and communicates at eye level.
Who can Apply Personnel Management?
Every company can and should apply Personnel Management, regardless of the industry and size. The reason is that the companies are becoming more and more similar in their services and offerings on the global market. It is therefore important to stand out on the market through quality, customer orientation and efficiency. Choosing the right employees plays a decisive role, especially for medium-sized companies, in order to be able to survive in the “War for Talents and Experts”.
Personnel management is still a marginal issue for many small and medium-sized companies. In relation to their number of employees, they employ fewer personnel experts than large companies do. There is also often a lack of strategic prospects. Many SMEs limit themselves to the fields of recruitment and personnel controlling. Personnel development only takes place sporadically, if at all. According to the owners, there is no time for further training.
Examples of Personnel Management
There are many methods to design personnel management. In personnel development, for example, motivational training, workshops and coaching are frequently used instruments to provide employees with additional skills and abilities. Methods such as rotation, job enlargement and job enrichment offer employees the opportunity to think outside the box and take on new or more demanding jobs.
Financial incentive systems, in which a bonus is paid out when a goal is reached, for example, are also often used to increase employee motivation and performance. But good employee communication is also beneficial for achieving economic and social goals. In order to be in regular contact with employees, HR managers use a company intranet, an employee newspaper, company meetings or a bulletin board, for example. In order to optimize personnel administration, personnel information systems can be set up to which the employees also have access. This increases transparency and the availability of relevant personnel information for employees.
Reference and Process Models for the Development of Organization-Specific Solution Patterns in Personnel Management
There are various process models for coordinating the various fields of activity in personnel management and implementing them in the sense of a holistic strategy. The German Society for Personnel Management (DGFP e.V.) has developed a model for integrated professional personnel management.[1]This model combines life cycle-oriented with overarching design fields. The life cycle-oriented design fields relate to all tasks that arise with employees in the service creation processes of companies. The overarching design fields relate to the strategic, cultural and organizational requirements of the company’s human resources work.
Professional Personnel Management works on all twelve design fields. This includes not only a conceptual orientation (strategy), but also the support of suitable instruments and methods for the implementation of the respective concept and the clear definition of processes and responsibilities. Configuration professionalism results from the interaction of these different dimensions within a design field and between the design fields.
Configuration professionalism has an impact on strategy penetration, employer attractiveness, the quality of social partnership, the efficiency of HR processes, the organization’s ability to innovate, and the quality and availability of staff, and all of this ultimately affects the company’s success.
Copyright © DGFP e.V. – ISSN 1613-2785 / PraxisPapier 3 / 2011 – Seite 6
HR Management FAQs
What is Personnel Management?
Personnel management bundles all personnel-related strategies, measures and fields of action that contribute to the development of the company.
It includes various areas of activity such as personnel planning, development and management or personnel management.
All of this forms the basis for being able to attract and retain qualified employees.
What are the Tasks of Personnel Management?
Some executives only recognize the value of employees when they do not have enough qualified employees to fulfill upcoming orders.
Therefore, the main task of personnel management is to select, deploy and promote employees in accordance with the company’s goals.
However, this requires strategic and sustainable planning.
Why is Personnel Management so Important?
Strategic and employee-centric personnel management helps companies to react to current changes and to recruit, deploy and promote employees in the best possible way.
If it’s long-term, it has a big impact on the company’s success.
In order to ensure a uniform, coordinated strategy, all sub-areas of personnel management should be taken into account.
What Areas does Personnel Management Cover?
In order to select the right employees, deploy them in the right places and promote them accordingly, a strategic approach is required.
For this purpose, human resources management has various fields of action available that should be coordinated: personnel planning, , recruiting, personnel administration and deployment, personnel development, remuneration management and personnel controlling.
What are the Goals of Personnel Management?
In times of demographic change and a shortage of skilled workers, personnel management must achieve one goal above all: every area of a company must always have the right skilled workers at its disposal, because no company can be economically successful in the long term without qualified employees.
It is therefore all the more important to design the best possible working conditions in the company and to increase or maintain employee satisfaction with the company’s goals.
Conclusion: Function of Personnel Management in the Company
The world of work has changed significantly. This also applies to the wishes and needs of the workforce. While the highest possible income for employees is no longer the measure of all things, flexibility, design options and a good working atmosphere have become more important. The pandemic has further accelerated this process of change. In an increasingly digitized working world, employees have new needs and requirements. In addition, the global competition for sought-after talent and experts is becoming increasingly fierce.
In a working world in which business models are constantly changing, a wide variety of megatrends such as digitization or demographic developments are taking effect and employees are formulating new requirements for their work, it is more necessary than ever to set the right priorities for personnel management to put tomorrow.
Strategic and employee-centric Personnel Management helps companies to react to current changes and to be able to recruit, deploy and promote employees in the best possible way. If it is long-term, it has an enormous influence on the company’s success. In order to guarantee a uniform, coordinated strategy, all sub-areas of personnel management should be taken into account.
