Personnel refers to all the people who work for a firm. Most large companies have special personnel departments which are responsible for employer-employee relations. The personnel department is a staff department, which means that it is not directly involved with production, but that it provides a service to the managers. The most important services which the personnel department provides are recruiting, that is, finding new workers or managers for the company, deciding which applicants are most suitable for employment by the firm, and developing and implementing personnel policies and procedures for the benefit of the company as well as the employees.
Most businesses continually need to recruit good personnel to replace workers to retire or quit and to fill new jobs created when the company expands. After management has determined the goals of the company and the positions needed, the personnel department must find qualified people to fill those positions. Depending upon management policy and the nature of the position, nature recruiting may be done internally or externally. Internal recruitment means that the person chosen for the position is selected from the current employees of the company. This is either by promotion or transfer. Promotion means an employee receives a job with more authority and responsibility than his present job. The employee usually expects to receive an increase in salary along with the new position. A transfer without promotion is a lateral transfer. It may involve different working conditions or different hours. Companies that recruit internally often promote internally, which means that the managers have worked their way from lower positions. It may also mean that the hire up company may new employees only at lower position.