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MBA HUMAN RESOURCE MODELS: HARD AND SOFT

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 ISTANBUL COMMERCE UNIVERSITY

MBA

HUMAN RESOURCE MODELS: HARD AND SOFT

Anthony Sadalla Khamis GADO

Assoc. Prof. Dr. Beliz ÜLGEN

March 13, 2018

Table of Contents
Abstract .................................................................................................................................................. iv
List of Figures .......................................................................................................................................... v
Lists of Abbrevation ............................................................................................................................... vi
Works Cited ........................................................................................................................................... vii
1.0 Introduction ...................................................................................................................................... 1
1.1 History of Human Resource Management ................................................................................... 1
1.2 Personal Management/Department............................................................................................. 1
1.3 Present Human Resource Management ....................................................................................... 1
1.4 Human Resource Management definition..................................................................................... 2
1.5 Aims of Human Resource Management ....................................................................................... 2
1.6 Human Resource Management concepts ..................................................................................... 3
1.7 Future of Human Resource Management .................................................................................... 3
2.0 Model of Human Resource Management......................................................................................... 4
2.1 Michigan/Matching Model ........................................................................................................... 4
2.1.1 Assumption of the Matching Model ...................................................................................... 4
2.1.2 Advantage of Michigan model ............................................................................................... 6
2.1.3 Disadvantage.......................................................................................................................... 6
2.2 THE HARVARD MODEL .................................................................................................................. 6
2.2.1 The Harvard model outline four HR policy areas. .................................................................. 6
2.2.2 Human Resource the four C’s ................................................................................................ 7
2.3 THE GUEST MODEL ....................................................................................................................... 8
2.3.1 Four crucial components that will result into organizational effectiveness. ....................... 10
3.0 Hard and Soft Human Resource Management Model.................................................................... 10
3.1 Hard and Soft Human Resource Management ........................................................................... 10
3.1.1 Hard Human Resource Management model ....................................................................... 10
3.1.3 Soft Human Resource Management model......................................................................... 11
3.2 Hard and Soft Humana Resource Management model at glance .............................................. 13
3.2.1 Hard (Instrumental) HRM model ......................................................................................... 13
3.2.2 Soft (Humanistic) Human Resource Management model ................................................... 13
3.3 Hard HRM model or Soft HRM: Which model is suitable? ......................................................... 13
3.3.1 Advantages of Hard HRM model.......................................................................................... 14
3.3.2 Disadvantage of Hard HRM model....................................................................................... 14
3.3.3 Advantages of Soft HRM model ........................................................................................... 14
3.3.4 Disadvantage of Soft HRM model ........................................................................................ 15
3.4 Research paper conducted on Human Resource Model (Soft and Hard Model) ....................... 15
3.5 Conclusion/Summary ...................................................................................................................... 16
3.6 Recommendation............................................................................................................................ 16
Reference .............................................................................................................................................. 17
Abstract
Human Resource Management has come a long way from craftsmen organizing themselves into guilds, armies
specialized jobs and visionary leaders to the era of 18th Century industrial revolution that laid a fundamental landmark
in the history of Human Resources Management. The industrial revolution gave birth to personnel management and
as a result of globalization, modern advanced technology, multinational corporation, Human Resource Management
concepts emerged. There are various Human Resource Management models that were introduced to understand the
concept. Fombrun et al (1984) were the first to propound Michigan/Matching model concept of strategic Human
Resource Management which emphasis that organizational structure should be managed congruent with the strategy.
Harvard model (the map of HRM territory) of Human Resource was postulated by Beer et al (1984) at Harvard
University. This model recognizes the legitimate and existence of various multiple stakeholders in the organization.
On the other, The Guest Model was developed by David Guest in 1987 which is close to both the hard and soft model
of HRM. In a quest to understand, explain and define Human Resource Management, Guest (1987) identified two
dimensions soft-hard and loose-tight while Storey (1992) had identified soft-hard and weak-strong dimensions. View
it whether the emphasis is placed on the human or the resource. Hard HRM model focuses on the resources aspect of
Human Resource and is referred to as ‘Utilitarian instrumentalism’. Soft HRM is associated with McGregor theory
of Y approach or notion of ‘Hermeneutical man’ human side and is refers to as ‘Developmental Humanism’.

Keywords: Industrial revolution, Personnel Management, Human Resource Management, Michigan model,
Harvard model, Guest model, Hard and Soft HRM model.

iv
List of Figures
Figure 1 The Michigan/Matching Model of HRM ................................................................................. 5
Figure 2 Human resource cycle .............................................................................................................. 5
Figure 3 Harvard HRM policy diamond model ...................................................................................... 7
Figure 4 The Harvard HRM model ........................................................................................................ 7
Figure 5 The Guest Model ...................................................................................................................... 8
Figure 6 Policies for identifying HRM and Organizational outcomes ................................................... 9
Figure 7 Hard HRM model Vs Soft HRM model................................................................................. 12

v
Lists of Abbreviation
HRM…………………………………………………………Human Resource Management

SHRM……………………………………………. Strategic Human Resource Management

HR……………………… …………………………………………………. Human Resource

SMAC………………………………………………………Social Media Analytical, Clouds

18th C……………………………………………………………………………...18th Century

vi
Works Cited
Ashfaque Alam, U. M. (2014). HRM- A Literature Survey. Business and Management (IOSR-JBM), 31-38.

Catherine Truss, L. G., H, V., & S, P. (1997). Soft and Hard Models of Human Resource Management: A reappraisal.
Management Studies, 54-69.

Gill, C. (1999). Use of hard and soft models of HRM to illustrate the gap between rhetoric and reality in workforce
management. School of Management, 5-38.

Ihuah., P. W. (2014). A Review of Soft and Hard Approaches to Human Resource Management and the Success of
Real Estate Development in. Business Management and Economic Development (JBMED), 17-20.

Nor Khomar Ishak, F. Z., & A, Z. (2011). The Association between hard and soft Human Resource Management
orientation in the Malaysian Hotel Organization. Business and Social Science, 213-214.

Tanya Bondarouk, C. B. (2016). Conceptualising the future of HRM and technology research. The International
Journal of Human Resource, 2-12.

vii
1.0 Introduction
1.1 History of Human Resource Management
HRM can be traced way back when the craftsmen in England organized themselves into guilds and associations to
improve the working condition. However, some people suggested that ancient armies were the first drivers of
innovation in Human Resource Management. The army required a visionary leader, a good working organization of
jobs and tasks. The modern history of HRM started with the British industrial revolution due to large factories,
mass production and increasing demand for workforce. The 18th Century (18th C) industrial revolution laid a
fundamental landmark in the history of HRM as a result of complex industrial society, changes in work conditions,
social patterns and labour conditions. In the 18th Century, there was the rapid development of new industrial
approaches, new inventions and evolution of new people management and practices. The history of HRM has a
connection with the world war era where there was scientific management, army welfare. However, in 1913,
industrial psychology was initiated which focused on workers, individual difference and maximum well-being of
workers. It should be noted that during the 18th Century industrial revolution, industries were a concern with
profitability, performance and large production which made them hire thousands of workers under hard working
conditions who worked up to 16 hours a day. Hence quick and cheap production became a top priority for many
industries during the industrial revolution.

1.2 Personal Management/Department

Because of the exploitation of workers, due to poor working conditions, unfair wage pay, personnel departments
were created to deal with employees related issues, drastic changes in technology, organization, the creation of unions
as well as government intervention concerning workers wellbeing and full compliance with the labour law
requirement. The employee’s wellbeing was witnessed after the second world war where the armies began training
programs for soldiers hence personal departments became recognizable. By the early 1900s, increased competition
and pressing demands to fulfil orders made factory owners take serious note of productivity, and issues such as
employee absenteeism and high turnover came into focus. The dominant philosophy during this time was that
employees would accept rigid standards and work faster if provided training and more wages. This approach led to
Frederick W. Taylor’s scientific management theory that involved time studies in an attempt to establish the most
productive way to undertake a process. The Hawthorne studies (1924 to 1933) were introduced to determine the
effects of illumination on workers and their output and it pointed out the importance of social interaction on output
and satisfaction. This stage is the most important in the evolution and history present and modern day Human
Resource Management.

1.3 Present Human Resource Management

Due to globalization, modern technological advancement, global economic environment, hyper-competition,
industrial and labour relations, ethical consideration, talent management, employment relationship gave room for
contemporary Human Resource Management. HRM replaced personal management due to new technology with a
large growth of the multinational organization. Human resource is now referred to as human capital which can be

1
classified into three categories (1) intellectual Capital consists of specialized knowledge, tacit knowledge and skills,
cognitive complexity, and learning capacity (2) Social capital is made up of network of relationships, sociability and
trustworthiness and (3) Emotional capital consists of self-confidence, ambition & courage, risk-bearing ability &
resilience.

1.4 Human Resource Management definition

The term Human Resource has puzzled academician for a very long time. This is because, it is not easy to define it.
Some researchers defined it in terms of its functions and characteristics, body of management activities while others
denote it to a particular approach of management of people which is distinct from personal management (Derek
Torrington et al 2008, p: 6). According to Ian Beardwell & Len Holden 1994, p:12), to define, describe, analysis and
explain the HRM phenomenon, four questions for defining the characteristics is very important part of the debate.
These critical questions about Human Resource Management as stated by Bearwell and Len (1994, p.12) are:

 Is HRM a practitioner-driven process which has attracted a wider audience and prompted subsequent
analytical attention?
 Is HRM an academically-driven description of the employment relationship, to which practitioners have
subsequently become drawn?
 Is HRM essentially a prescriptive model of how a relationship ‘ought’ to be?
 Is it a ‘leading edge’ approach as to how such a relationship actually ‘is’ within certain types of organization?

According to Armstrong (1999, p. 3) HRM “is concerned with the employment, development and reward of people
in organizations and the conduct of relationships between management and the workforce” whereas Edwin B. Flippo
(1979), cited by (Ashfaque Alam, 2014) (p. 32) found that HRM can be defined as “planning, organizing, directing,
controlling of the procurement, integration, maintenance and reproduction of Human Resource to the end that
individual organizational, societal objectives are accomplished.

Storey defined HRM as “a distinctive approach to employment management which seeks to achieve competitive
advantage through the strategic deployment of a highly committed and capable workforce, using an integrated array
of cultural, structural and personal techniques (Storey, 1995, p.5).

A broader definition of HRM is provided by Boxall and Purcell. They defined HRM as “anything and everything
associated with the management of employment relationships in the firm. We do not associate HRM solely with a
high-commitment model of labour management or with anything particular ideology or style of management (Boxall
& Purcell 2000, p.184).

1.5 Aims of Human Resource Management

1. Organizational effectiveness: HRM makes a significant impact on firm performance
2. Human Capital Management: Human Capital is the prime valuable asset of the organization. Its aim is to
develop the inherent capacity of the people
3. Knowledge management: support the development of firm-specific knowledge

2
 4. Reward management: Enhance motivation, job engagement, employee empowerment
5. Employee relation: Harmonious relationship
6. Meeting diverse needs: Stakeholders, workforce
7. Bridging the gap between rhetoric and reality

1.6 Human Resource Management concepts

Human Resource Management: The strategic and coherent approach to the management the most of organization’s
most valued assets –the people working there who individually and collectively contribute to the achievements of its
objectives.

People Management: The policies and practice which govern how people are managed and developed in
organizations.

Human Capital Management: An approach to obtaining, analysing and reporting on data which informs the direction
of value adding people management strategic investment and operational decisions at the corporate level and at the
level of front-line management.

Personal Management: Concerned with obtaining, organizing and motivating human resources.

1.7 Future of Human Resource Management

The four corners of the world have challenges that require both presents and future solutions. The world business is
seeing continuous globalization, sophisticated advanced technology, open innovation, crowdsourcing, global
recruitment, economic and political environment, global economy, new policies and practices. Therefore, we need to
sharpen our swords and see the future as a present challenge. Critics claimed that due to these challenges, a Human
resource as a function will be obsolete in that all jobs performed by HR professional will be replaced by smart
software. (Tanya Bondarouk, 2016) (p.2) found in (Bondarous, 2014) that digital revolution technologies such as
clouds, e-HRM, HRM data mining, cloud computing, amplification of HRM, SMAC (Social Media Analytical,
Clouds), human robots, social media, gamification are transforming HR functions and adding new vocabulary to
modern Human Resource Management. Kisesler, Siegel and McGuire, (1984), cited by (Tanya Bondarouk, 2016)
(p.3) found that these technological terminologies have reshaped and altered HRM organization communication. In
a recent survey conducted by society for Strategic Human Resource Management (SHRM, 2015, p.12), found that
HR professional says that the three biggest challenges facing HR executives over the next 10 years area; retaining
and rewarding of best employee (59%), developing the next generation of corporate leaders (52%), and Creating a
corporate culture that attracts the best employee (36%).

3
2.0 Model of Human Resource Management
2.1 Michigan/Matching Model
An earlier model of HRM was developed by Fombrun, Tichy and Devanna (1984) at Michigan Business School
where they introduced the concept of strategic Human Resource Management linked to the formation and
implementation of strategic corporate and business objectives (Devanna et al, 1984, p. 34). According to this model,
HR system and the organization structure should be managed in a way that is congruent with the organization strategy
hence the origin of the name matching.

The matching model is inclined to hard Human Resource Management which emphasises the necessity of ‘tight fit’
between HR strategy and business strategy. The Matching model concerns with jobs being matched in the
organization. Regarding the HR strategy suggested by Matching model, it should be highly calculative inline with
the quantity of human resources required to achieve the business objectives.

Business strategy takes the central stage in this model hence human resources are taken like any other resource which
must be fully utilised together with the other resources to achieve organizational objectives.

2.1.1 Assumption of the Matching Model

 Managing people will vary from organization to organization and is dependent on organizational context
 Unitarism: The assumption that conflicts or differing views cannot exist in the workplace because everyone
(managers and employees) are working to achieve the same goal
 The model formed the basis for ‘best fit’ school of Human Resource Management.

The Michigan model is ‘hard’ HRM because it is based on strategic control, organisational structure, and systems for
managing people. It acknowledges the central importance of motivating and rewarding people, but concentrates most
on managing human assets to achieve strategic goals. Subsequent empirical research has not produced evidence of
organisations systematically and consistently practising hard HRM, although a longitudinal study (by Truss et al.,
1997, 64-69) of large organisations (including BT, Citibank, Glaxo, Hewlett Packard, and Lloyds Bank) found that
employees were strongly managed towards organisational goals. A company practising hard HRM would have a
style of management that treats employees in a calculated way, primarily as means to achieving business goals.

4
Matching Model

Figure 1 The
Michigan/Matching Model of HRM

According to this model, there is a human cycle of HRM which consist of four generic processes or functions that
are performed in the organization. These four generic processes include:

 Selection: Matching available human resource to Jobs

 Appraisal: Performance and Management
 Rewards: Focus on organization performance. Reward system is one of the most under-utilized and
mishandled managerial tools for driving organizational performance.
 Development: Developing high-quality employee.

These generic processes all geared toward performance.

Human resource cycle

Figure 2 Human resource cycle (Adapted from Fombrun et al., Human Resource Management, 1984)

5
According to Evans and Lorange (1989), they argued that the Michigan model is based on the ‘product market logic’
which demands that to gain high profit, labour must be obtained cheaply, used sparingly, developed and exploited
fully.

2.1.2 Advantage of Michigan model

 Market performance and organizational growth
 Cost minimization as a resource can be obtained cheaply

2.1.3 Disadvantage
 A market failure due to ignorance of the environment
 The disintegration of group diversity and intra-group conflicts which will result in poor organizational
performance.

2.2 THE HARVARD MODEL

The Harvard model of Human Resource was postulated by Beer et al (1984) at Harvard University. This model was
also named as ‘the map of HRM territory’. This model recognizes the legitimate and existence of various multiple
stakeholders in the organization. These stakeholders include, government, a various group of employees and
community. Like the Michigan model that focuses on the hard HRM, this model focuses on the human or soft side
of Human Resource Management.

2.2.1 The Harvard model outline four HR policy areas.

Human Resource flows: Human resource flow concerns managing the flow of people into, though, and out of the
organisation. For instance, decisions on recruitment and selection, promotion, termination of employment, and
related issues of job security, career development, advancement, and fair treatment. Recruitment, selections,
placement, promotion, appraisal and assessment, termination

Reward system: Reward systems regulate how employees are extrinsically and intrinsically rewarded for their work.
The rewards can be tangible and intangible or in kind. Employees need to be motivated, rewarded for their work, and
besides, the work system or payment system should be designed for the benefits of the employees as well.

Employee influence: Employees wanted to be part of the organization as a family. Work delegation of authority,
responsibility makes them feel part of the organization.

Work system: Every organization has a working design and employee alignment. The design makes the work in the
organization to work effectively and efficiently.

6
Harvard HRM policy diamond model

Figure 3 Harvard HRM policy diamond model

2.2.2 Human Resource the four C’s

When making Human Resources Management decision on policies, management should consider the Human
Resource policy the “four C’s”; Commitment, Congruence, Competence and Cost-effective

Beer et al., (1984) proposed that long-term consequence should be evaluated at three level individuals, organization
and societal which in turn should be analysed using the four C’s. Through this, there will be increased productivity,
organizational effectiveness which will influence the shareholder's interest and situational factor hence making it a
cycle.

The Harvard HRM model

Figure 4 The Harvard HRM model

According to Harvard model of HRM, there are basically two characteristic feature which includes

 Line managers accept more responsibility for ensuring the alignment of competitive strategy and personnel
policy.

7
  Personal has the mission of setting policies that govern how personal activities are developed and
implemented in ways that make them more mutually reinforcing.

According to Boxall (1992) cited in this article (individual difference”, 2015, p.9) found the advantages of this model
includes (1) it incorporates recognition of a range of stakeholder’s interest, (2) recognize the importance of ‘trade-
offs’ either explicitly or implicitly between the interest of owners and those of employees as well as between various
interest groups and (3) widens the context HRM to include employee influence, the organization of work and the
associated question of supervisory style.

2.3 THE GUEST MODEL

This model was developed by David Guest in 1987. This model is close to both the hard and soft model of HRM.
This model is different because of its emphasis more on strategic management unlike other HRM models that
concentrated more on personal development and management. This model has six (6) dimension of analysis as
compared to other models.

 HRM strategy
 HRM practices
 HRM outcomes
 Behaviour outcomes
 Performance outcomes
 Financial outcomes

The Guest Model

Figure 5 The Guest Model

8
Policies for identifying HRM and Organizational outcomes

Figure 6 Policies for identifying HRM and Organizational outcomes

He stated that these four HRM outcomes will lead to the desirable organisational outcomes of: high job performance,
stronger problem solving, a greater change consistent with strategic goals and improved cost-effectiveness, while
also reducing employee turnover, absences, and grievances. However, Guest warned that these outcomes will be
achieved only if an organisation has a coherent strategy of HRM policies fully integrated into the business strategy
and supported by all levels of line management.

According to this model, the overall employee relationship is sum total of the relationships that individual employee
has with the organization as the needs of all individual are taken into consideration rather than concentration on the
workforce alone.

9
2.3.1 Besides the 6 dimensions of analysis, the model proposes four crucial components that will
result in organizational effectiveness.
Strategic integration

This is the ability of the organization to maintain a fit between HR strategy and the business strategy. This means
that there must be a congruence between business strategy and the HR strategy for the organization to be successful
and achieve the stated goals. The strategic integration shows the harder side of the Guest model.

Flexibility

Flexibility is a concern with the ability of the organization and its people to adapt to the changing business and work
environment. Flexibility falls in between the soft and hard side of HRM model and it’s not only concern with the
need to achieve business objectives but also the need to treat its employee’s fairly.

Commitment

This is component is a concern with the need to have both behavioural commitment and attitudinal commitment.
Behavioural commitment is the ability to go the extra mile while attitudinal commitment is the ability to reflects
through a strong identification with the organization.

Quality

This is the four-crucial component and it’s based on the assumption that provision of high-quality goods and services
results from a quality way of handling and managing people in the organization.

3.0 Hard and Soft Human Resource Management Model

3.1 Hard and Soft Human Resource Management
Storey (1989) has distinguished between hard and soft models of HRM proposed by Michigan and Harvard models.
The dichotomy of hard and soft HRM had its roots in the United State (Carol Gill, 1999 p:4). The Harvard model for
soft HRM (Beer et al., 1985) and the Michigan model for hard HRM (Fombrun et al., 1984) had not been used in the
American literature but mostly, the debate was in the British literature (Hendry & Pettigrew, 1990). The hard and
soft HRM terminology was used in the work of Guest (1989) and Storey (1987, 1992). In their quest to define HRM,
Guest (1987) cited by (Catherine Truss, H, & S, 1997) (p.54) identified two dimensions soft-hard and loose-tight
while Storey (1992) had identified soft-hard and weak-strong dimensions. Guest (1987) and Storey (1992) in their
search for definition and interpretation of HRM. View it whether the emphasis is placed on the human or the
resource.

3.1.1 Hard Human Resource Management model

Hard HRM model focus on the resources aspect of Human Resource. It emphasis costs in the form of ‘headcount’
and places control firmly in the hands of management. Legge (1995, p.66-67) refers to Hard HRM model as
‘Utilitarian instrumentalism’. Human resource is viewed as being passive to be provided and deployed as a number

10
of skills at the right price rather than the source of creative energy (Legge. 1995, p: 66-67). The Hard HRM model
emphasis on the ‘quantitative, calculative and business strategy’ side of managing ‘headcounts’ which is referred to
as human assets (Storey 1987, p.29).

Bach (2005) cited by Nor Khomar et al (2011, p.241) stated that Hard HRM model is viewed as;

 HRM is unitarist; employees and employers interest should coincide but the focus should be on the
organizational effectiveness
 The interest of other stakeholders including employees were marginalized
 A predominant interest within the firm on individual employee motivation and aspiration and
 Playing down on external and collection (Unionization) issues.

According to Tichy et al (1982), Fombrun et al., (1984) and Hendry and Pettigrew (1986), Hard HRM model is
assumed to be a factor of production or variable cost of doing business. Baird and Meshoulan, 1988; Hendry and
Pettigrew, 1986) cited by Catherine Truss (1997, p.59) stated that Hard HRM emphasise the importance of ‘strategic
fit’ where human resource polices and practices are closely linked to the strategic objectives of the organization
(external fit), and are coherent among themselves (internal fit) With the ultimate aim being increased competitive
advantage cited by Catherine Truss (1997, p.60) in Alpander and Botter, 1981; Devanna et al., 1984; Miles and Snow,
1984; Storey and Sission, 1993; Tichy et al., 1982; Tyson and Fell, 1986).

3.1.3 Soft Human Resource Management model

Storey (1987) cited by Carol Gill (1999, p. 4) found that Soft Human Resource Management model on emphasis on
the ‘human side’ which is connected to the human relation school of Herzberg and McGregor. Soft HRM is associated
with McGregor theory of Y approach or notion of ‘Hermeneutical man’ (Catherine Truss et al., 1997 p:56). Legge
(1995, 66-67) refers to Soft HRM model as ‘Developmental Humanism’ with a concept of a ‘high committed work
system’ (Legge, 1995 p:66-67). The Soft HRM model focus on the well-being of employees by treating them as a
valuable asset and a source of competitive advantage through commitment, adaptability and high-quality skills and
performance (Gill, 1999, p.4). Legge (1995, p. 66-67) noted that employee’s nature is seen as proactive rather than
passive inputs into production processes. Beaumont; Dunham and Smith, (1992,1979) cited by Catherine Truss
(1997, p.56) found out that Soft HRM model assumes that employees will work best if fully committed to the
organization. According to McGregor (1960) in his book ‘The human side of enterprise’; employees in theory X are
inherently disliked work and will try to avoid if they can, they do not like to take up responsibility, wanted to be
motivated. However, Theory Y which Soft HRM is associated with stated that employees are happy to work on their
own initiative, they like to work, are self-motivated, view work as fulfilling and challenging, solve problems
creatively and imaginatively, accept responsibility. McGregor (1960, p.326) stated that “man will exercise self-
direction and self-control in the service of the object to which he is committed”. Hence Soft Human Resource
Management model is associated with goals of flexibility and adaptability.

(Guess, 1987; Hendry and Pettigrew, 1990; Purcell, 1993; Purcell and Ahlstrand, 1994; Tyson et al., 1994) cited by
Catherine Truss (1997, p.56) found that soft HRM model emphasis that employees will be committed if they are

11
trusted, trained, motivated, developed, and be allowed to work autonomously and have control over their work.
According to (Nor Khomar Ishak & A, 2011), p.214), Soft HRM orientation includes (1) extent of team cohesiveness
referred to as relationship among employees and the level of management support or activities that would bring
employees close to management; (2) conditions of the work environment including the workplace climate
surrounding the employees and (3) patterns of communication flows with an aim of examining the nature of
communication related directly to employee’s task.

Hard HRM model Vs Soft HRM model

Hard HRM Model Soft HRM Model

Time Scale  HRM seen as a short-term policy  Takes a long-term view of using
 Employees are hired and fired the workforce for possible long-
 Treats employees as resources of the term to achieve corporate
organization objectives
 Treats employees as most valuable
resources (assets)
Key Features 1. Employees are paid as little as 1. Managers consult regularly with
possible employees (two ways
2. Employees have limited control over communication)
their work 2. Managers often give control to
3. Communication mainly downward in employees through delegation,
the direction empowerment
4. Judgemental appraisal 3. Emphasis on training and
development
4. Employee promotion which
reflects a long-term plan for
employee development
5. Developmental appraisals
Motivational  Motivated by pay with limited use of  Delegation, empowerment,
techniques delegation and team working extensive use of techniques
used designed to give employees more
power
Figure 7 Hard HRM model Vs Soft HRM model

12
3.2 Hard and Soft Humana Resource Management model at a glance
3.2.1 Hard (Instrumental) HRM model
 Employees are view as a passive factor of production, an expense
 Associated with McGregor Theory X
 Employees can be easily replaced and see as disposable
 A strategic quantitative aspect of managing Human Resource Management as an economic factor

3.2.2 Soft (Humanistic) Human Resource Management model

 Stresses active employee participation (Theory Y)
 Gains employee’s commitment, adaptability and contribution of their competence to achieve organizational
goal
 Employees are valuable assets
 Emphasizing communication, motivation and leadership

3.3 Hard HRM model or Soft HRM: Which model is suitable?

Truss et al. (1997) cited by Gill (1999, p.13) found out the following factors to determine whether organisations were
using soft or hard models of HRM.

 Training received by employees and employee's perception of training and promotion opportunities (soft).
 Communication and trust between management and staff (soft)
 Integration of HR and business strategy including performance management techniques such as appraisal
(hard)
 Control over setting work targets (hard)
 Organisational flexibility (hard)

Legge (1995) and Beardwell & Claydon (2007) cited by (Ihuah., 2014) (p.18) stated that if “hard” approach is used
to explain a strategic approach to Human Resource Management, then “hard” and “soft” are not compatible. They
argued that “hard” may contain some elements of soft HRM model and “soft” might contain elements of hard HRM
outputs. This means that both hard and soft co-exist in any strategy of Human Resource Management in an
organization. Research conducted by Gratton et al (1999) cited by (Ihuah., 2014) (p.18) found that both hard and soft
variant Human Resource Management in eight (8) organizations and that there is no precise difference between them.

David Guest (2001) stated that “Unless we can develop our own more precise theory, there is a risk (or the promise)
that the field will be colonized by economists as industry increasingly recognizes the value of Human resource and
social assets we can expect significant stimulus to Human Resource Management Theory coming from economy
theory”.

To answer the question which model is suitable (better), the answer is it DEPENDS!

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3.3.1 Advantages of Hard HRM model
Staff are monitored: since the employees are monitored in the organization, it makes it easier for a company to adapt
the size and composition of their workforce to match the needs of their customers.

Cost minimization: There is yet another merit of hard HRM which results in lower costs, especially in the short-term.
The model uses employees with lower skill levels with profitability orientation in mind. Besides, management can
Increase/reduced output where necessary hence it ends up in cost minimization.

Greater centralization; there is a greater centralization in the organization when hard HRM is used due to management
control. Because of that, there will be a standardized process as the decision is made by management.

3.3.2 Disadvantage of Hard HRM model

Employees are controlled. From its name “hard”, employees did not have space to work freely as their work and
movement are controlled and monitored. In this model, there are strict restrictions on management,

Limited close employee-employer relationship: This is the most important aspect of HRM. Once there is no
employee-employer relationship in an organization, there will always be misunderstanding, junior employees work
with fear, which can lead to low productivity and performance.

Treats employees as resources of the organization. In this mode, employees are seen as a factor of production. They
are treated as resources of the organization.

Communication mainly downward in direction: Since employees are controlled, monitored, the flow of
communication is a downward direction. Because of this, some employee’s issues regarding working conditions,
unfairness will not reach the concerned managers to handle them.

3.3.3 Advantages of Soft HRM model

Employee participation: Employee participation involves management actively encouraging staff to assist in running
and improving business processes and operations. Also known as employee involvement, employee participation
includes management recognizing individual employees' opinions and input, so that employees understand that
management views them as unique and individually valuable to running the business.

Motivation, commitment, empowerment. Management plays a crucial role in empowerment, commitment and
motivation as employees cannot manage themselves without being trained properly. Once employees are well-
informed and educated regarding problem-solving strategies, management may then transfer some decision-making
authority to them.

High productivity. As a result of close relationship, motivation and employee participation, employees work towards
the benefit of the organization. They see the organization as their own hence it leads to work effectively and
efficiently.

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The employee-employer relationship, collaboration When employees are working closely together, conflict is
inevitable. By putting a focus on fostering relationships between managers and employees, multiple levels of your
organization are on the same page and can more easily resolve conflicts as they happen. strong relationships are vital
to not only individual employee productivity, but that of the organization as a whole. A reinforced culture of
collaboration, teamwork and mutual motivation, makes employees work smarter and more efficiently.

Competitive advantage: As employees are seen as a valuable resource, motivated and involved in decision making
in the organization, the organization will realize high productivity and develop a strong base for competitive
advantage.

Easy communication and teamwork. Communication in an organization is a key. Employees in soft HRM has a close
communication with the management unlike the Hard HRM where there is a distant gap of communication between
the management and the employees.

Equal opportunity for each individual: This is yet another merit of Soft HRM. In a soft HRM employees are seen as
valuable assets, proactive not passive and only considered as resources. There is an opportunity for every employee
in the organization. Employees are seen as part of the family in the organization.

3.3.4 Disadvantage of Soft HRM model

The high cost of employee’s development, training, wages increases. Because Soft HRM focus on the human side,
employees are trained to equip them with basic knowledge, their wages are increased as an external motivation hence
due to these, the organization will incur more costs in developing the employees.

Delay in the decision-making process. Since everyone is part of the family in the organization and they are all
involved in the decision-making process, this will result in a delay in making a decision that requires a quick response.

3.4 Research paper conducted on Human Resource Model (Soft and Hard Model)
The research paper was carried out (Nor Khomar Ishak & A, 2011) on the topic: The association between hard and
soft human resource management orientations in the Malaysian hotel organizations at Faculty of Hospitality and
Tourism Management University of Management & Technology Malaysia, published on the International Journal of
Business and Social Science Vol. 2 No. 22; December 2011. The objective of the study was to examine the
relationship between Hard HRM and Soft HRM orientation. The research was conducted using the methodology of
the four-star and five-star hotels located in Kuala Lumpur and Selangor were chosen as the unit of analysis. A total
of 63 4-star and 5-star hotels were identified in these two states of Malaysia. The research hypothesis stated that there
is no relationship between Hard HRM and Soft HRM orientations in Malaysia’s Hotel Organizations and there is a
relationship between Hard or Soft HRM orientation and turnover rate of an employee in Malaysia’s Hotel
Organizations. The research found out Strong support for the proposition in only 1 hotel and minimal support in 3
hotels and that the Hard HRM orientations were mainly organization-centred and reactive. However, Soft HRM
orientations were predominantly employee-centred, in support of teamwork and with activities that enhanced the
work environment.

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The second research study on HRM model was conducted by (Gill, 1999) on the topic: Use of hard and soft models
of HRM to illustrate the gap between rhetoric and reality in workforce management at RMIT University: School of
Management ISSN 1038-7448 No. WP 99/13. The objective of the study was examining the nature of the gap between
rhetoric and reality in workforce management using hard and soft models of Human Resource Management

Methodically, this study identified the rhetoric of Australian organisations through an analysis of annual reports of
organisations on the Australian Stock Exchange. The organisational reality was assessed through a review of recent
Australian Workforce Surveys. The results of this study support the main hypothesis that rhetoric would align most
strongly with soft HRM and reality would align with hard HRM. This study found that organisational rhetoric is
"soft" with a focus on treating employees as valued assets and a source of competitive advantage through their
commitment, adaptability and high-quality skill and performance. The "hard" model is not supported in the annual
report rhetoric, employees are not consistently referred to as a factor of 41 productions or an expense of doing
business.

3.5 Conclusion/Summary
Legge (1995) cited in Gill (1999, p.10) found that there is not one language of HRM, but two, "soft" HRM and "hard"
HRM. These are reconciled through the language of 'tough love', which seeks to co-opt the assent of both those who
may suffer as well as those who may benefit from its effects

The “hard” HRM model to HR might be expected to result in a more cost-effective workforce where a decision-
making is quicker and focus on senior managers. However, such approach pays relatively little attention to the needs
of employees and business adopting a genuinely hard model might expect to suffer from higher absenteeism and staff
turnover and less successful recruitment.

The “soft” model of HRM will certainly appeal to the “touchy-feely” amongst those who like to see people being
treated nicely. This model will help business to by rewarding employee performance and motivates staff more
effectively. However, the danger of this model is that when all the employee’s benefits are added up, the cost of the
workforce leaves the business at a competitive disadvantage.

3.6 Recommendation
Although Soft HRM looks so convincing to adopt, soft or hard depends on the business goals, the corporate culture,
the nature of the business environment, the nature of the business strategies. The distinction is an academic though
because a good HR manager will demonstrate both hard and soft skills. A good mix of both soft and hard HRM style
should be adopted.

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