This presentation focuses on the Hard and Soft HRM. The Presenter also highlighted the Harvard, Michigan and Guest Theory of HRM. The presentation not only focuses on Hard and Soft HRM model, it also encompasses scopes of HRM.
1. HRM MODEL: HARD &
SOFT HRM MODEL
PRESENTER: ANTHONY SADALLA KHAMIS GADO
LECTURER: ASSOC. PROF. DR. BELIZ ÜLGEN
2. OBJECTIVES
By the end of this presentation, audience will be able to:
Trace the history of HRM
Define Human Resource Management
Know the theories of HRM model (Michigan, Harvard and Guest)
Hard and Soft HRM model
Decide which model is suitable for current SHRM
4. TOUGH DECISION
“Recently, I was asked if I was going to fire an employee who made a mistake that
cost the company $600,000. No, I replied, I just spent $600,000 training him. Why
would I want somebody to hire his experience?” Thomas John Watson sr., IBM
“If you fulfil the wishes of your employees, the employees will fulfil your visions.”
Amit Kalantri
5. BRIEF HISTORY OF HRM
Traced way back to where craftsmen
organized guilds
Army with visionary leader and well defined job
18th C British industrial revolution
World war era: Army welfare, visionary leaders
and well defined job
Personal departments/management
The Hawthorne studies (1924 to 1933):
Present day HRM (80’s-90’s)
6. SEARCH FOR HRM DEFINITION
The term Human Resource has puzzled academician for a very long time. 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)
Ian Beardwell & Len Holden (1994) identified four key questions in search of HRM
definition and understanding
7. IAN BEARDWELL & LEN HOLDEN
KEY QUESTIONS
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?
8. SEARCH FOR HRM DEFINITION
HRM “is concerned with the employment, development and reward of people in
organizations and the conduct of relationships between management and the
workforce” Armstrong (1999)
Edwin B. Flippo (1979) refers to HRM as “planning, organizing, directing,
controlling of the procurement, integration, maintenance and reproduction of
Human Resource to the end that individual organizational, societal objective are
accomplished
9. SEARCH FOR HRM DEFINITION
“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.
“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).
10. HR AS A HUMAN CAPITAL
Human capital which can be classified into three categories
Intellectual Capital: Specialized knowledge, tacit knowledge and skills, cognitive
complexity, and learning capacity
Social capital: Network of relationships, sociability and trustworthiness
Emotional capital: Self-confidence, ambition & courage, risk bearing ability &
resilience.
11. AIMS OF HUMAN RESOURCE MANAGEMENT
Organizational effectiveness:
Human Capital Management:
Knowledge management:
Reward management:
Employee relation:
Meeting diverse needs:
Bridging the gap between rhetoric and reality
12. FUTURE OF HRM (IS HRM FUNCTION GOING TO BE
OBSOLETE
Globalization,
Sophisticated advanced technology,
Open innovation,
Global recruitment,
Economic and political environment,
Global economy,
New policies and practices.
13. MODEL OF HUMAN RESOURCE MANAGEMENT
MICHIGAN/MATCHING MODEL
Developed by Fombrun, Tichy and Devanna (1984) at Michigan Business School
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).
The model stated that 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
14. MICHIGAN/MATCHING MODEL…
Its associated with “hard HRM” which emphasises the necessity of ‘tight fit’
between HR strategy and business strategy
Assumption of the Matching Model
Managing people will vary from organization to organization
Unitarism:
The model formed the basis for ‘best fit’ school of HRM
16. MICHIGAN MODEL GENERIC PROCESSES
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
Selection:
Appraisal:
Rewards:
Development:
17. MICHIGAN/MATCHING MODEL
Advantage of Michigan model
Market performance and organizational growth
Cost minimization as resource can be obtain cheaply
Disadvantage
Market failure due to ignorance of the environment
Disintegration of group diversity and intra-group conflicts which will result into
poor organizational performance.
18. EVANS AND LORANGE (1989)
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.
19. THE HARVARD MODEL
Postulated by Beer et al (1984) at Harvard University
Referred to as “‘the map of HRM territory”
Recognizes the legitimate and existence of various multiple stakeholders in the
organization.
Focuses on the human or soft side of Human Resource Management
20. THE HARVARD MODEL…
The Harvard model outline four HR policy areas.
Human Resource flows:
Reward system:
Employee influence:
Work system:
21. FOUR C’S
These HR policy areas resulted into four C’s (HR outcomes) that needs to be achieve
Commitment
Congruence
Competence
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
23. HARVARD MODEL: BASIC FEATURE
There are basically two characteristic feature which include
Line managers accept more responsibility for ensuring the alignment of
competitive strategy and personal policy.
Personal has the mission of setting policies that govern how personal
activities are developed and implemented in ways that make them more
mutually reinforcing.
24. THE GUEST MODEL
Developed by David Guest in 1987
Close to both the hard and soft model of HRM.
Emphasis more on strategic management unlike other HRM models that
concentrated more on personal development and management
Needs of all individual are taken into consideration rather than concentration on
the workforce alone.
25. DIMENSION OF ANALYSIS
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
29. SNAPCHAT QUESTIONS
How would you feel when your employer treated you as just another resource?
If the company didn't really value you as a person and didn't really care for your
input?
How would you feel if the your work are monitored, not motivated, not involved
in decision making?
How will feel when your hard work is not recognized?
30. 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)
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).
Guest (1987) identified two dimensions soft-hard and loose-tight while Storey
(1992) had identified soft-hard and weak-strong dimensions.
32. HARD HRM MODEL
Based on McGregor Theory X
Focus on the resources aspect of Human Resource
Emphasis costs in the form of ‘headcount’ and places control firmly in the hands of
management
Legge (1995) refers to Hard HRM model as ‘Utilitarian instrumentalism’
Human resource are viewed as being passive and can be easily replaced and see as
disposable
Emphasis on the ‘quantitative, calculative and business strategy’ side of managing
‘headcounts’ which is referred to as human assets (Storey 1987
33. HARD HRM MODEL
Bach (2005) viewed Hard HRM model as;
HRM is unitarist
Interest of other stakeholders
A predominant interest
Playing down on external and collection (Unionization) issues.
34. HARD HRM MODEL
Tichy et al (1982), Fombrun et al., (1984) and Hendry and Pettigrew (1986),
assumed Hard HRM as;
Factor of production or variable cost of doing business
35. HARD HRM MODEL…
Hard HRM emphasis 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) (Baird
and Meshoulan, 1988; Hendry and Pettigrew, 1986) with the ultimate aim being
increased competitive advantage (Alpander and Botter, 1981; Devanna et al., 1984;
Miles and Snow, 1984; Storey and Sission, 1993; Tichy et al., 1982; Tyson and Fell,
1986).
36. SOFT HRM MODEL
Emphasis on the ‘human side’ which is connected to the human relation school of
Herzberg and McGregor (Storey, 1987)
Soft HRM is associated with McGregor theory of Y approach or notion of
‘Hermeneutical man’ (Catherine Truss et al., 1997)
Soft HRM model as ‘Developmental Humanism’ with a concept of a ‘high committed
work system’ (Legge, 1995)
Focus on the wellbeing 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)
37. SOFT HRM MODEL
Employee’s nature is seen as proactive rather than passive inputs into
production processes (Legges 1995)
The Soft HRM model assumes that employees will work best if full committed to
the organization (Beaumont, 1992; Dunham and Smith, 1979).
Emphasis that employees will be committed if they are trusted, trained,
motivated, developed, and be allowed to work autonomously and have control
over their work (Guess, 1987; Hendry and Pettigrew, 1990; Purcell, 1993; Purcell
and Ahlstrand, 1994; Tyson et al., 1994).
38. Hard HRM Model Soft HRM Model
Time Scale HRM seen as short-term policy
Employees are hired and fired
Treats employees as resources of the
organization
Takes a long-term view of using the
workforce for possible long-term to
achieve corporate objectives
Treats employees as most valuable
resources (assets)
Key Features 1. Employees are paid as little as possible
2. Employees have limited control over their
work
3. Communication mainly downward in
direction
4. Judgemental appraisal
1. Managers consult regularly with
employees (two ways communication)
2. Managers often give control to
employees through delegation,
empowerment
3. Emphasis on training and development
4. Employee promotion which reflects
long-term plan for employee
development
5. Developmental appraisals
Motivational
techniques used
Motivated by pay with limited use of
delegation and team working
Delegation, empowerment, extensive
use of techniques designed to give
employees more power
39. QUICK QUESTIONS
Hard HRM model or Soft HRM: Which model is suitable?
Which approach do you think works best and why?
Does the approach used depend on anything?
Which approach allows the business to achieve HRM objectives?
40. THINK TWICE
Truss et al. (1997) 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
42. CONTRADICTION
Legge (1995) and Beardwell & Claydon (2007) identified that if “hard” approach is
used to explain a strategic approach to Human Resource Management, then
“hard” and “soft” are not compactible.
“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.
43. Research conducted by Gratton et al (1999) 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”.
44. HARD HRM MODEL:
ADVANTAGES AND DISADVANTAGES
ADVANTAGES
Staff are monitored
Cost minimization
Increase/reduced output where
necessary
Greater centralization; management
control
Standardization of process
DISADVANTAGES
Employees are controlled
Limited close employee-employer
relationship
Treats employees as resources of the
organization
Communication mainly downward in
direction
45. SOFT HRM MODEL:
ADVANTAGES AND DISADVANTAGES
ADVANTAGES
Employee participation
Motivation, commitment, empowerment
High productivity
Employee-employer relationship, collaboration
Competitive advantage
Easy communication and teamwork
Equal opportunity for each individual
DISADVANTAGE
High cost of employee’s development, training,
wages increases
Delay in decision-making process
46. RESEARCH PAPER ON HRM MODE (HARD AND
SOFT)
Topic: The Association Between Hard And Soft Human Resource Management
Orientations In The Malaysian Hotel Organizations
Author: NOR KHOMAR ISHAK, Ph.D
Faculty of Hospitality and Tourism Management University of Management &
Technology Malaysia
International Journal of Business and Social Science Vol. 2 No. 22; December 2011
47. The objective of the study:
Examine the relationship between Hard HRM and Soft HRM orientation.
METHODOLGY:
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
48. HYPOTHESIS
There is no relationship between Hard HRM
and Soft HRM orientations in the Malaysia’s
Hotel Organizations.
There is relationship between Hard or Soft
HRM orientation and turnover rate of
employee in the Malaysia’s Hotel
Organizations.
FINDINGS
Strong support for the proposition in only 1
hotel and minimal support in 3 hotels.
The Hard HRM orientations were mainly
organization-centered and reactive
Soft HRM orientations were predominantly
employee-centered, in support of teamwork
and with activities that enhanced the work
environment
49. PH.D. THESIS PAPER
Topic: Use Of Hard And Soft Models Of HRM To Illustrate The Gap Between
Rhetoric And Reality In Workforce Management
Author: Ph.D Carol Gill
RMIT University: School of Management
ISSN 1038-7448
No.WP 99/13 (November 1999)
50. The objective of the study:
Examines the nature of the gap between rhetoric and reality in workforce
management using hard and soft models of Human Resource Management
Methodology:
This study identified the rhetoric of Australian organisations through an analysis of
annual reports of organisations on the Australian Stock Exchange. Organisational
reality was assessed through a review of recent Australian Workforce Surveys
51. HYPOTHESIS AND FINDINGS
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 production or an expense of doing
business.
52. HARD HRM MODEL VS SOFT HRM MODEL
The answer is it DEPENDS!
The “hard” HRM model to HR might be expected to result in a more cost-effective
workforce where a decision-making is quicker and focussed 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
53. 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 business at a competitive
disadvantage
54. 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
55. “True motivation comes from achievement, personal development, job
satisfaction, and recognition.” — Frederick Herzberg
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