Management & Leadership

What’s the Difference between Business Management and Human Resource Management?

May 03, 2022 | By Saranne Durham
What's the Difference between Business Management and Human Resource Management? - SACAP
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While there are similarities and overlaps between business management and human resource management, they are different. For example, they share an overall aim to keep a company sustainable. But the primary focus of how to accomplish this is not the same.

What is Business Management?

Business management is the coordination and organisation of business-related activities, processes and systems. Part of this is monitoring and evaluating planned procedures to attain company goals. This takes place at an individual, team, department and overall company level. The aim of a business management strategy is to ensure continuous effective and efficient company performance. Thus, business management encompasses reviewing and refining processes within the company. So as to constantly maintain and improve performance at all levels.

Why is Business Management Important?

Business management is important because it directly impacts a company’s performance and therefore bottom line. This is because business management focuses on helping a company attain its financial and operational objectives. Within some companies this role is a dedicated one. In others it forms part of a department manager’s job.

What does a Business Manager do?

A business manager works in administration. Specifically focusing on overseeing operations within a company. Usually they are responsible for planning, monitoring and strategizing operations across a company. This means that they ensure that the coordination between departments and teams is efficient and effective. Additionally, they address any queries or challenges which arise in relation to operational matters. Their intent is to grow the business and while they drive this growth, they ensure that the business runs smoothly.

Business Managers are employable across various industries in both the public and private sectors. They are also well placed to start their own companies and step into an entrepreneurial role.

What is Human Resource Management (HRM)?

Human Resource Management (HRM) is about people. It is focused on people’s wellbeing. Therefore, it entails collaboration, building relationships and maintaining connections within the workplace once they are made. Within a work environment, the goal of HRM is to ensure that management and employees are happy so as to be most effective within their roles. Thus, part of a Human Resource Manager’s job is to mediate and find resolution when conflict or staff challenges emerge. However, the process of ensuring the wellbeing of those within a company is broader than labour and employee relations. It encompasses recruitment, selection and training of staff members. As well as performance reviews and reward management. Planning and strategizing company Human Resource policies and the rollout thereof also falls under the HRM mandate.

How can HRM Contribute to a Company’s Success?

It has been shown that corporate wellness can have an impact on company performance and therefore profit margins. Essentially a healthy working environment, which fosters employee wellbeing and values individuals’ contributions, enables better productivity. Another advantage that comes from corporate wellbeing is a decrease in staff turnaround. This has a direct impact on a company’s bottom line. Longer retention of staff, decreases the time and cost of advertising, selecting and training of new employees. This also enables managers to focus on scaling up their department’s performance as opposed to filling vacancies within their teams.

At its essence, HRM bridges the gap between employee performance and organisational strategic objectives. Thereby, better allowing for the attainment of company goals and improved as well as sustainable long-term profit margins.

What does a Human Resource Manager do?

Those working within the HRM arena oversee the recruitment, interviewing, hiring and training of new staff. This also includes administering payrolls, drafting and enforcing policies as well as coordinating leave schedules. Essentially, they plan and coordinate the employee component within a company. As such they serve as a bridge between management and company staff. This means that part of their role is to mediate when challenges arise as well as negotiate ways forward to mitigate risk. Usually, they are also responsible for employee wellbeing and programmes which assist in promoting wellness within a company.

Human Resource Managers can work in both the private and public spheres. They are well suited to work across various industries as HR Managers, Assistants, Advisors or Consultants.

Which is more Important: Business or Human Resource Management?

As the focus of each is different, neither is more important than the other. Business management focuses on maintaining the viability of a company through systems and processes. HRM seeks to do the same, through employee wellbeing and thereby productivity levels. Thus, they work hand-in-hand and ideally should both be prioritised within a company.

Working within HRM and Business Management

Given the difference in focus between Business Management and Human Resource Management, they require separate qualifications. However, understanding business management as someone working in HRM is an advantage. As is knowing about HRM when one works within the business management field. Both fields involve working with people and coordinating team work. Therefore, having a background component in Psychology is also a distinct advantage when one works in either of these fields.

Do you think that you have what it takes to work within HRM or to be a Business Manager? The South African College of Applied Psychology (SACAP) has a dedicated Management and Leadership Faculty. All courses have an Applied Psychology component which advantages SACAP graduates once they enter the workplace. This is because they have a better background understanding of employee dynamics than those without it. Contact us for further information or apply online today.

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