SOFT AND HARD HRM PRESENTATION

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

3. HUMAN RESOURCE MANAGEMENT

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 18 th 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

15. MICHIGAN/MATCHING MODEL…

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

22. THE HARVARD MODEL

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

26. The Guest Model

27. Policies for hrm and organization

28. 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?

29. 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.

30. Hard HRM model

31. 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

32. 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.

33. 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

34. 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).

35. 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)

36. 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).

37.   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 Employees are paid as little as possible Employees have limited control over their work Communication mainly downward in direction Judgemental appraisal Managers consult regularly with employees (two ways communication) Managers often give control to employees through delegation, empowerment Emphasis on training and development Employee promotion which reflects long-term plan for employee development 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

38. 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?

39. 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

40. THINK TWICE Control over setting work targets HARD Organisational flexibility HARD

41. 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.

42. 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”.

43. 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

44. 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

45. 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

46. 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

47. 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

48. 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)

49. 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

50. 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.

51. 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

52. 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

53. 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

54. “True motivation comes from achievement, personal development, job satisfaction, and recognition.” — Frederick Herzberg

55. REFERENCE Alpander , G.C and Botter C/H, (1981) An integrated model of strategic Human Resource Planning and Utilization. Human Resource Management Vol 1, pp.189-203 Ashfaque Alam and Ujjal Mukherjee (2014) “HRM- A Literature Survey” IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 16, Issue 3. Ver. I PP 31-38 Ashfaque Alam and Ujjal Mukherjee (2014) “Human resource management practices contribution to company performance across different organizations”. IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 16, Issue 3. Ver. I (Mar. 2014), PP 31-38 Bach, Stephen (2005). Managing Human Resources: Personnel Management in Transition, Blakenell Publishing. Beardwell I, Len. H ( ed ) (1994) Human Resource Management: A contemporary perspective . Pitman Publishing. Leicester Business School De Montfort University, Leicester. Pp. 12 Beardwell J and Claydon T. (2007) Human Resource Management: A Contemporary Approach, Fifth Edition, Pearson Education Limited, England.

56. REFERENCE… Beardwell , I. ( ed ) (1998) contemporary industrial relations, Oxford: Open University Press Beaumont, P.B (1992) The US HRM Literature: A review in Salaman G ( Eds ) Human Resource Management. London: Sage Bondarouk , T. (2014). Orchestrating electronic HRM. Enschede: Twente University Press. Boxall, P and Purcell, J (2000) “Strategic Human Resource Management: Where have we come from and where should we be going ”? International Journal of Management Reviews , Vol. 2, No. 2, pp 183-203. Carol Gill (1999) “HRM to illustrate the gap between Rhetoric and Reality in Workforce Management”. Working Paper Series. ISSN 1038-7448 No.WP 99/13 PP: 4 Catherine Truss, Lynd G, Veronics H, Patrick M., Phillip S. (1997) “Soft and Hard Human Resource Management. A reappraisal ”. Journal of Management Studies 34;1 0022-2380 communication. American Psychologist, 39, 1123–1134.

57. REFERENCE… Creative HRM website “History of Human Resource Management2. Available at: http://www.creativehrm.com/hr-management-history.html (Accessed on 25/2/2018) Derek Torrington, Laura. H, Stephen. T (7th ed ) (2008) Human Resource Management. Pearson Education Limited, Edinburg pp. 6 Devanna M.A, Fombrun , C and Tichy N, (1984) A framework for strategic Human Resource Management. In Fombrun C, Tichy , N.M, anad Devanna , M.A ( Eds ) Strategic Human Resource Management New York Wiley Dunham, R.B and Smith, F.S (1979) Organizational Surveys, Glenview IL: Scoth Foresman Fombrun et. al. (1984). Strategic Human Resource Management, New York: John Wiley Publishing. Gratton L, Hope-Hailey V, Stiles P and Truss C. (1999) Strategic Human Resource Management. Oxford: Open University Press.

58. REFERENCE… Gurpreet Kaur (2016) “Human Resource Management”. BEST: International Journal of Management, Information Technology and Engineering (BEST: IJMITE) ISSN (P): 2348-0513, ISSN (E): 2454-471X, Vol. 4, Issue 3, 83-88 Hendry, Chris and Andrew Pettigrew, (1986), “The Practice of Strategic Human Resource Management”, Personnel Review, Vol.15 Issue: 5. HRM Guide Website “Guest model of HRM. Based on Human Resource Management, 4th edition by Alan Price”. available at: http://www.hrmguide.co.uk/introduction_to_hrm/harvard-map.htm accessed 22/02/18. (Accessed on 30th/02/2018) Ihuah , PW (2014) “A review of soft and hard approaches of human resource management and the success of real estate development in Nigeria”. Journal of Business Management and Economic Development (JBMED) Vol. 1(1): 16-23, April 2014 Kiesler , S., Siegel, J., & McGuire, T. W. (1984). Social psychological aspects of computer mediated Legge , K. (1995), "HRM: Rhetoric, Reality and Hidden Agendas", in Storey, J. ( Eds ), Human Resource Management: A Critical Text, Routledge, London, 1995.

59. REFERENCE… McGregor, D (1960) Theory X and Theory Y. In Pugh, D.S ( ed ) Organization Theory; Selected readings; London: Penguin Miles, R.E and Snow C.C (1984) Designing Strategic Human Resource System. Organizational Dynamics, Summer pp. 36-54 Nor Khomar I, Fakhrul Zaman, A, Zainal Abidin . R, (2011) “The Association between Hard and Soft Human Resource Orientation in the Malaysian Hotel Organization”. International Journal of Business and Social Science Vol 2 No: 22 pp: 2 Purcell J (1993) The challenge of Human Resource Management for industrial relations resource and Practice : International Journal of Human Resource Management Vol 4, No. 3 511-27 Purcell. J and Ahlstrand . B (1994) Human Resource Management in the multi divisional company: Oxford. OUP

60. REFERENCE… Storey S. and Sission K. (1993), Managing Work and Organization. Buckingham: Open University Press Storey, J. (1987), “Developments in the Management of Human Resources: An interim report. Warwick Papers in Industrial Relations, No.17. IRRU, School of Industrial and Business Studies, University of Warwick . Storey, J. ( ed ) (1995) Human Resource Management: A critical Text, London: Routledge Tanya Bondarouk & Chris Brewster (2016) “Conceptualising the future of HRM and technology research”, The International Journal of Human Resource Management , 27:21, 2652-2671, DOI: 10.1080/09585192.2016.1232296 The Harvard Map of HRM: Based on Human Resource Management, 4th edtion by Alan Price Tichy , Noel M.; Fombrun , Charles J.; Devanna , Mary Anne (1982), “Strategic Human Resource Management ”, Sloan Management Review, Vol. 23, Issue 2. Tom Redman, Adrian. W ( ed ) (2006) Contemporary Human Resource Management: Text and Cases. Prentice Hall Tyson S. and Fell A. (1986) Evaluating the Personal Function. London Hutchison