The terms “personnel” and “human resources” have somewhat overlapping definitions because they both fundamentally refer to the same people. In their most basic forms, “personnel” generally refers to the employees or workers at a business, while “human resources” customarily alludes to the strategic management of employees, which encompasses business components directly affected by the employees. How the two terms progressed from one to the other is a subtle lesson in the evolution of commerce.


Until recently, the terms “personnel” and “human resources” were used interchangeably. Personnel, or employees, were managed by a personnel department through the supervision of employees' hours worked, wages, benefits and other administrative duties. As business needs changed over time, personnel departments metamorphosed into the management of employees who possessed attributes that affected the workplace. Employees became appreciated as assets to the company with qualities that could enhance business success in major ways. Personnel managers were developed to oversee the total well-being of the business’s most important resource: its human resources.


Historically, the need for formal employee protection from exploitation came about when low wages, poor working conditions and employee mistreatment were the norm until employees rioted against those situations. Employee maltreatment declined when it became clear that the management of personnel should include the administration of organized recruitment efforts, training, collective bargaining, wage increases and health benefits. These duties were considered strictly employee administrative functions and were not associated with more discerning business concerns.

Human Resources

With the introduction of a global economy, businesses sought more and better ways to stay competitive. By scrutinizing every aspect of their business plans, company owners began to see great potential in managing their employees in more innovative ways to increase productivity. For example, HR professionals began to encourage productivity through providing a safe, culturally diverse environment where employees were compensated fairly, received regular performance appraisals and had opportunities for advancement. As an important strategic business partner, human resources began focusing on using creative motivational tactics to encourage employee involvement as a means to achieving the concurrent growth of the company.

HR's Future

The intensity of expansion and global competitiveness has placed many pressures on businesses, not the least of which are maintaining and amplifying a dynamic workforce, and remaining in compliance with a plethora of labor laws. As business and commerce reach farther into the international environment, the human resources function may become increasingly centralized on the all-encompassing welfare of the humans that companies employ. In doing so, HR’s moniker may evolve yet again.