Proximal humerus fractures are common in elderly patients and are often associated with osteoporosis. The management of these fractures, particularly three-part and four-part fractures, remains controversial, with conservative and surgical treatments both employed. This study compared conservative and surgical management's functional outcomes in subjects over 50 years. This prospective observational study was conducted at Father Muller Medical College from December 2018 to June 2020. A total of 48 patients aged over 50 years with three-part and four-part proximal humerus fractures were included. Patients were divided into two groups: group A (conservative treatment with U-slab immobilization) and group B (surgical treatment with proximal humerus internal locking system plate fixation). Functional outcomes were assessed using the constant score at one-, three-, and 6-month intervals. Of the 48 patients, 25 (52.1%) had three-part fractures, and 23 (47.9%) had four-part fractures. At six months, the mean constant score for conservatively managed patients was significantly higher in both three-part fractures (77.23 vs. 52.58, p < 0.001) and four-part fractures (75.73 vs. 53.58, p < 0.001) compared to the surgically managed group. The conservative group also demonstrated better pain relief, range of motion, and shoulder strength. Complications were more common in the surgical group, with two cases of surgical site infection and one case of wound dehiscence, while no complications were observed in the conservative group. Conservative treatment of three-part and four-part proximal humerus fractures in patients over 50 years provides better functional outcomes than surgical intervention. Conservative management should be considered the preferred treatment approach, especially in elderly patients with low-demand lifestyles.