There are a variety of ways to approach the management of HR in a business. The business textbooks like to describe two broad approaches to HRM which are explained further below:
However, it is important to remember that, in reality, these two approaches are somewhat academic in nature. In real businesses, an HR department or manager would be likely to adopt elements of both soft and hard HR, and in many cases would not be interested in the slightest in the distinction!
The key features of the hard and soft approach to HR can be summarised as follows:
Treats employees simply as a resource of the business (like machinery & buildings)
Strong link with corporate business planning – what resources do we need, how do we get them and how much will they cost
Focus of HRM: identify workforce needs of the business and recruit & manage accordingly (hiring, moving and firing)
Short-term changes in employee numbers (recruitment, redundancy)
Minimal communication, from the top down
Pay – enough to recruit and retain enough staff (e.g. minimum wage)
Little empowerment or delegation
Appraisal systems focused on making judgements (good and bad) about staff
Taller organisational structures
Suits autocratic leadership style
Treats employees as the most important resource in the business and a source of competitive advantage
Employees are treated as individuals and their needs are planned accordingly
Focus of HRM: concentrate on the needs of employees – their roles, rewards, motivation etc
Strategic focus on longer-term workforce planning
Strong and regular two-way communication
Competitive pay structure, with suitable performance-related rewards (e.g. profit share, share options)
Employees are empowered and encouraged to seek delegation and take responsibility
Appraisal systems focused on identifying and addressing training and other employee development needs
Flatter organisational structures
Suits democratic leadership style
Which of the two approaches is better? The answer is – it depends!
The "hard" approach to HR might be expected to result in a more cost-effective workforce where decision-making is quicker and focused on senior managers. However, such an approach pays relatively little attention to the needs of employees and a business adopting a genuinely "hard" approach might expect to suffer from higher absenteeism and staff turnover and less successful recruitment.
The "soft" approach will certainly appeal to the "touchy-feely" amongst us who like to see people being treated nicely! And you can also make a good business case for an approach that rewards employee performance and motivates staff more effectively. However, the danger of taking too "soft" an approach is that when all the employee benefits are added up, the cost of the workforce leaves a business at a competitive disadvantage.
Fully worked A Grade answers to recent Edexcel GCSE Business Studies Unit 3 exam papers with detailed examiner commentary on how good technique scores top marks