Difference Between HCM and HRMS
HCM vs HRMS
“HCM” stands for “Human Capital Management” while “HRMS” stands for “Human Resource Management Systems.”
There are many similarities between Human Capital Management and Human Resource Management Systems. The most important is that both deal with the Human Resource Department which is the specialized office of a company or business that deals with the workforce or employees and all related issues and concerns like employment, recruitment, orientation, training and development, payroll and benefits, performance appraisal and analysis, and other work-related services to the employees.
Since the workforce or the employees are considered to be the best assets of any business or company, much attention and effort is expended to make the employees satisfied in order to return a good service or perform better at their jobs. It also focuses on the employees themselves and their potential to the company.
Human Capital Management can also refer to a software program which is basically Human Resource Management Systems in essence. The main difference between Human Capital Management and Human Resource Management Systems is the definition of both concepts. While Human Capital Management has an ambiguous meaning, it has been associated with terms like organization management, human resource management, and personnel change management. It is also concerned with the development of the employees and all related work issues that will impact the company’s strategic and operational objectives.
Human Capital Management can also be considered as a strategic approach that contains all the practices, processes, and systems that are used for people management and development. Some have even categorized it into the following:
On the other hand, Human Resource Management Systems’ definition is very specific. It is a computer software and program application which integrates and combines the activities and practices of the human resource department with computer technology. With this kind of program, a company can create a database which encompasses all the information of the employees and other employment-related issues.
The benefits of this application or program include:
Reducing the workload as well as the paperwork of the department.
Increase the work effectiveness.
Ease of access and easy information retrieval.
Introduce standardization in terms of the department’s efficiency.
Systemized, integrated and centralized data system.
The systems are a great way for small and medium-sized businesses to analyze and create potential for their workers as well as the Human Resource Department functions that every company needs. Since some small business are lacking in terms of people and labor, the Human Resources Department is often abandoned or neglected. This situation often results in bad people management and ruin of the company. With HRMS, that scenario can be avoided by employing a department with less costs and with the same results as in a big company.
1.Human Capital Management has an ambiguous meaning but many associations while Human Resource Management Systems have a definite meaning.
2.Human Capital Management is more of an approach and a strategy compared to Human Resource Management Systems which is the specific tool to Human Capital Management.
3.Human Capital Management can refer to the approach and the tool (which is also a computer program like HRMS) while Human Resource Management Systems only refers to the tool being used.
4.Human Capital Management is bigger and more involved in all aspects of Human Resource compared to Human Resource Management Systems.
5.Human Resource Management Systems is more related to the computer side of doing Human Resource. Human Capital Management is more related to “how to do things.”
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