Hard vs. Soft HRM: Comparative Analysis and Organizational Examples

This report provides a comprehensive overview of Hard and Soft Human Resource Management (HRM) approaches. It begins by defining both concepts, explaining their core principles, and highlighting the differences between them. The report then delves into real-world examples, analyzing how organizations like the BBC and Toyota implement these HRM strategies. The BBC is used to illustrate the Hard HRM approach, focusing on cost control and task-oriented management, and the challenges this can create. Conversely, Toyota is presented as an example of Soft HRM, emphasizing employee development and engagement. The report examines the advantages and disadvantages of each approach, discussing indicators of their implementation within an organization. The report concludes by offering a comparative analysis, providing insights into how these strategies impact employee satisfaction, productivity, and organizational success.

Hard and Soft HRM

Table of Contents
INTRODUCTION..........................................................................................................................1
MAIN BODY...................................................................................................................................1
Definition and explanation of the Hard and Soft concepts of HRM...........................................1
Example of an organisation using a Hard approach to HRM.....................................................3
Example of an organisation using a Soft approach to HRM.......................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
HRM or Human Resource Management is referred to as a function of an organization
dealing with the concerns relating to the workforce of a company which includes recruiting,
selecting,hiring, training and managing them effectively in order to achieve organisational goals
and objectives. HRM can be divided into two categories namely- Hard Human Resource
Management and Soft Human Resource Management systems. The department responsibilities
can also be divided into three categories- individual, organizational an career (Ashton, 2018).
Hard Human Resource management is not a very employee friendly management system
and is very task oriented. In this type of management system the employees are seen as assets
that need to be managed in order to achieve high profits and competitive advantage. Whereas
Soft Human Resource Management is an approach that involves treating the staff as
organization's most important assets. The organization views employees as resources who are
key to a long term business (Cook and et. al., 2016).
Toyota is a company that follows a soft human resource management system and uses a
unique strategy of assessing its employees in order to stay ahead of its competitors where as
BBC is an example of a firm using hard management system with the company reducing the
payroll of its employees and increasing the company output by 6%.
This report explains the concepts of Hard and Soft HRM and what processes indicate if
an organization uses hard or soft human resource management system. Two organizations are
explained that demonstrate either hard of soft human resource practices.
MAIN BODY
Definition and explanation of the Hard and Soft concepts of HRM.
Human Resource Management (HRM) can be defined as the practice of recruiting,
selecting, hiring, deploying and managing an organization's employees (Çalişkan, 2016). Every
organization has a dedicated department working towards creating various policies governing the
staff and the relationship of the organisation with its employees and finally putting them to
effect. Human Resource Management helps in achieving the goals and objectives set by the
company through team spirit and team work. This is a constant process in all organizations
through proper utilization of the available workforce and making efficient use of the resources
available.
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Hard HRM is a concept where in the employees of a company are simply considered and
treated as assets like buildings and machinery that need to be controlled and in order to achieve
maximum profits and organization's goals. The main focus is on identifying and recruiting the
workforce accordingly (Cunningham, 2016). Hard HRM has features like paying enough to
recruit and retaining enough staff. There is minimal communication between the employees and
the top management. The appraisal systems in organizations following hard human resource
management system pay their main focus on making judgements about the staff. The judgements
may be either positive or negative. This type of management system generally suits autocratic
leadership style. The employees are seen as merely being passive and that they can be easily
replaced and are disposable. The human resource policies are linked closely to the objectives of
the company and hence are seen as short-term policies with employees being hired and fired
frequently. The staff is paid as much less salary as possible with employees having very little
control over their work. There is a judgemental appraisal and the communication is only in
downward direction. Also, there is no organizational flexibility. Some advantages include
constant monitoring of the employees with costs minimized and companies can increase or
decrease the amount of output whenever needed.
On the other hand, Soft HRM treats the employees in the company as the most valuable
and important resource and a source of competitive advantage with employees being treated as
humans and their needs being assessed and planned accordingly (Grimshaw, 2016). The main
focus of this type of management system is on the needs of the employees including their roles,
rewards and motivation. The soft human resource management assumes that the employees of
the organization work best when they are fully committed towards the organization. The
managers in a soft human resource management system consult regularly with the employees
thus maintaining a two way communication and control is often given to employees through
empowering them and through delegation with emphasis on training and development.
Employees are offered promotions which reflects that the company plans for the overall
development of its employees. Different motivational techniques like delegation, empowerment
and other ways of giving the employees more power are followed. Soft HRM comes with its own
advantages and disadvantages like there is high employee participation and they are motivated
and committed towards their work as there are equal opportunities for each and every employee
(Ibrahim and Zulkafli, 2016). There is a healthy employee-employer relationship and easy
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communication with tasks being performed through teamwork. The management system comes
with its own disadvantages like high cost is involved in the development of employees,
providing them constant training and increases in wages which in turn results in delayed
decision-making (Itani and et. al., 2017).
As hard as it may sound, the hard HRM system can result in a more cost-effective
workforce where in decisions are made quickly and primarily focussed on senior managers. But
having such an approach followed in an organization results in paying little attention to the needs
of the employees and a business and might result in higher absenteeism and staff turnover
followed by less successful recruitment of employees.
Processes like competitive pay structure with suitable performance related rewards and
having appraisal systems mainly focussing on identifying and addressing training and other
employee development processes indicate that an organization follows a soft human resource
management system whereas dissatisfied employees with low morale and the human resource
management relying heavily on management are indicators of hard human resource management
being followed in the company. An organization which is more people focussed and considers
HR as the biggest asset and recruitment based on the attitude of the people and involvement
within the teams and the members understanding the bigger picture of achieving the goals are
features of an organization where soft management system of employee is followed (Johnstone,
2016).
Task-focussed employer attitude and having employees employed to do the job as
directed are seen mostly in organizations that are not lenient with their employees and expect
them to work as much as possible without giving them a standard amount of money for the
efforts they put into getting tasks done in the company. There is literally no progression offered
to the staff with no innovative ideas implemented and getting things done as they've always been
done account for organizations with a hard human resource management system. Both the
management systems have advantages as well as disadvantages depending on the type of culture
the organization has and has a highly defined job description with a narrow scope fo the
employees' growth and overall development (Kapoutsis and et. al., 2019).
Example of an organisation using a Hard approach to HRM
Hard approach of human resource management is the system in which employees are
treated as resource that requires to be a controlled in order to attain high profits and competitive
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advantage over rivals in market. In this, workforce within the organisation is seen similar as the
other resources like machinery, money or other facilities. Hard approach mainly aims on task
that requires to fulfil by employees, cost control and accomplishment of organisational
objectives (Rahman and et. al., 2017). As the business buys machinery at lowest prices for
acceptable quality, similarly firms hire employees at low wages and expect to get skilled
employees within business. There is no difference between decision making of management to
replace a broken machinery and replacing an individual or department that is not required within
organisation any more. BBC (British Broadcasting Corporation) is an example that implement
hard human resource approach within organisation. It is a public service broadcaster of Britain
which is headquartered in Westminster, London. The company is one of the oldest national
broadcasting firm of the world and is largest in terms of number of employees. The organisation
was established in year 1922 by John Reith. It offers products like broadcasting, web portals and
radio and services like television broadcast and others. The company has faced issue of high
employee turnover as employees were not satisfied to work in an organisation where they face
problems related to abuse, bullying and harassment etc. Due to these issues, employees working
there are not satisfied and they leave the organisation (Sabet, Daniali, Fathi and Alizadeh, 2017).
All these issues arise due to application of hard human resource management approach
within organisation. In previous years, the company was not treated its employees as the valuable
asset of company, but treated them as resource to whom they pay a particular amount of salary
for performing their work. All this resulted in reducing productivity and performance of
organisation as the employees were not satisfied from the way they are treated by the
organisation. Due to this, ultimately British Broadcasting Corporation suffered with high issue
of high turnover. Reducing satisfaction level of employees declines the productivity of company
as well as employees that highly impacted the profitability of company. In order to overcome this
situation, management of company decided to revamp its culture so that a healthy workplace
environment can be maintain within firm and employees feel happy and satisfied while working
within the company (Stewart, 2016).
The issues related to bullying and harassment are highly associated with application of
hard human resource management approach within company. Due to implementation of this
approach within company, employees are pressurised to work more and attain targets on time.
The management of British Broadcasting Corporation has not listening to the issues of
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employees and they only want that the work should be done on time, no matter whether
employees face any issue while working or not. They emphasise only on cost control and
accomplish objectives of company (Smith, 2016). This creates a pressure on employees reduce
their ability to perform the assigned tasks in effective and efficient manner. This pressure
increases the turnover within organisation and increases the cost of human resource department
as it needs to hire a candidate on vacant position who is skilled enough to perform his/ her
duties well. The cost of company also increases as company invests high amount of money in
providing training to employees for developing their skills and knowledge. If an organisation
invests high amount to train employees and if they leave organisation after that, then it
negatively impacts the profit ratios of company and harm its productivity. Implementation of
hard human resource approach hampers the productivity of British Broadcasting Corporation as
treating employees as resource can never makes an employee to feel sense of belongingness
with firm which ultimately leads to declining productivity of company. However, company now
started to treat their employees as valuable resource of company and ensure that no employee is
feel pressurised while working and work effectively towards attaining goals and objectives of
company in an effective way (Verheul, 2018).
Example of an organisation using a Soft approach to HRM.
Toyota can be cited as an example of having applied soft human resource management
that has proved to be very effective creating trust and loyalty among the employees. The
company is a Japanese MNC headquartered in Japan and was founded on 28th August, 1937. The
company's main business activities includes production of motor vehicles and plans to build a
training academy for the staff so that they have good skills and the company an keep the develop
and the ability to retain its staff. Toyota has initiated a programme for maintaining a steady
communication with its employees and their families with balancing increased support for
children and long-term contracts being offered to the employees etc. The company provides long
term employment to the people and works constantly towards creating better working conditions
for the employees so that they commit more towards their work and are loyal towards the
company (White, 2016).
Toyota Motor Corporation creates a healthy working environment for the people by
providing them more career opportunities besides incentives to call up their productivity as well
as creativity. Moreover, the management is focussed on training the employees and providing
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them training and educational programs as the organization believes that learning is essential for
an improvement in the staff's performance. Appropriate opportunities are provided to the
employees from time to time to enable them to pursue higher education. Toyota ensures that
employees are treated fairly as per rules and regulations and if there are any cases of authority
abuse by the supervisor on the lower employees, they in turn have a right to turn on to the HR
department of the company with it involving as a liaison and arbitrator to address the situation in
a correct manner (Ibrahim and Zulkafli, 2016).
The company is very much concerned about their employees' overall physical and mental
well being and believes that the employee will provide foundation for a better life quality.
Therefore, the company does its best in providing the staff and their families with additional
opportunities like receiving medical treatments which will contribute to the life quality for the
employees and the employees in turn maintaining their commitment towards their work and the
organization. Toyota appraises its employees three times in a year, once for promotion and twice
for bonus payments with a detailed evaluation of the employee's performance. In addition to all
this, the company has establishments like Toyota Academy in Europe, South Africa and
Thailand which aim towards the overall development of the company's employees. With Toyota
establishing more and more institutions, this is resulting in equipping the employees with new
skills that are needed by them to cope with their high demanding jobs in the company (Itani and
et. al., 2017).
The company, till now has never faced an issue with its employee compensation and
employee benefits packages. Toyota has a policy of treating its employees as their greatest assets
and paying them good amount of salaries for the efforts that they put in getting the tasks done.
The wages are determined keeping in mind a fair market value and it is the “me” versus “we”
attitude that drives the company's overall success. Toyota always achieves the performance
desired by them with immediate production, constant improvement, one-piece flow and self
checking of the products. The success is also a result of their business philosophy to benefit the
society. The base is dependent upon the ability of the management, corporate culture, teamwork
and developing mutually beneficial relationships with each other.
Toyota has a unique strategy of motivating its employees which includes agreeing to
guaranteeing lifetime employment to its employees (Johnstone, 2016). The organization has a
system of internal promotion which enables the workers to rise within the hierarchy wherein
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good employees get a chance to become team leaders and either minor managers or managers.
The company provides a pay scale based on three components of the company profitability- one
bonus based on seniority and not job classification, another payment relating to a team's
performance and an additional bonus payment allocated to an employee's merit (Kapoutsis and
et. al., 2019). As a result, employees at Toyota are always continuously committed on making
improvements rather than only responding to a particular problem. Different courses are offered
to the employees by Toyota such as Toyota Way Development , Technical and Management
Development to develop and improve their skills. Financial support is also offered to employees
who wish to complete external education to support “life long learning”.
Each occupational qualification has a structured growth within the company with courses
clearly identified for overall development of the staff. Also, the leaders and mentors are engaged
actively on developing the employees through “on the job” training and mentoring.
The company aims at providing clear career pathways with appropriate balance of technical and
personal skills development, in turn enabling them to maximize their capability. A survey
conducted revealed that Toyota had 83% employees satisfied and happy with the working
conditions of the company (Sabet, Daniali, Fathi and Alizadeh, 2017).
Toyota Motor Corporation has developed an inclusive policy for transferring and
reassigning the employees within its branches and offices globally. There are ample
opportunities provided by the company to its employee with respect to training and development
to ensure the growth of not only its leaders but also lower employees with employees directly
involved in running the company's production system.
CONCLUSION
From the above report, it can be concluded that different organizations opt for different
Human Resource Management systems based on their functioning. The companies can either opt
for a hard HRM or soft HRM. Companies with hard HRM typically treat employees as merely
assets for achieving the objectives and goals specified by the company whereas organizations
following a soft HRM system tend to believe and support their employees by using various tools
and techniques for the enhancement of their employees and by treating them as individuals and
not machines only to generate output.
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In simpler words, the contentment of the workforce at the workplace reflects their
contentment and commitment towards their work and the organization . The way employees are
treated at work is one of the main factors that can affect their desire to remain in a particular job,
their overall behaviour and health.
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REFERENCES
Books and Journals
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satisfaction and job retention in the Thai hotel industry. Journal of Human Resources in
Hospitality & Tourism. 17(2). pp.175-199.
Çalişkan, B.Ö.Ö., 2016. HRM practices and problems in family-owned SMEs. In Project
Management: Concepts, Methodologies, Tools, and Applications (pp. 2304-2322). IGI
Global.
Cook and et. al., 2016. HRM and performance: The vulnerability of soft HRM practices during
recession and retrenchment. Human Resource Management Journal. 26(4). pp.557-571.
Cunningham, I., 2016. Non-profits and the ‘hollowed out’state: the transformation of working
conditions through personalizing social care services during an era of austerity.Work,
employment and society. 30(4). pp.649-668.
Grimshaw, D., 2016. Minimum wage. Edward Elgar Publishing Limited.
Ibrahim, H.I. and Zulkafli, A.H., 2016. Corporate governance, HRM practices and organizational
performance. Соціально-економічні проблеми і держава. 14(1). pp.30-40.
Itani and et. al., 2017. Ideological Evolution of Human Resource Management. Emerald
Publishing Limited.
Johnstone, S., 2016. Hard and soft HRM. In Encyclopedia of Human Resource Management.
Edward Elgar Publishing Limited.
Kapoutsis and et. al., 2019. Hard, soft or ambidextrous? Which influence style promotes
managers’ task performance and the role of political skill. The International Journal of
Human Resource Management. 30(4). pp.618-647.
Rahman and et. al., 2017. Identifying the Reliability and Validity of Hard and Soft HRM
Measures: A Study on the Banking Sector of Bangladesh. ABAC Journal. 37(2). pp.104-
117.
Sabet, M.T., Daniali, H.M., Fathi, A.R. and Alizadeh, E., 2017. Experimental analysis of a low-
cost dead reckoning navigation system for a land vehicle using a robust AHRS. Robotics
and Autonomous Systems. 95. pp.37-51.
Smith, A., 2016. Experiential learning. Edward Elgar Publishing Limited.
Stewart, J., 2016. E-learning. Edward Elgar Publishing Limited.
Verheul, I., 2018. Commitment or Control? HRM Practices in Female and Male-led Small
Businesses. International Review of Entrepreneurship. 16(3).
White, G., 2016. Reward management. Edward Elgar Publishing Limited.
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