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Keywords: Industrial revolution, Personnel Management, Human Resource Management, Michigan model,
Harvard model, Guest model, Hard and Soft HRM model.
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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
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Lists of Abbreviation
HRM…………………………………………………………Human Resource Management
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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.
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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.
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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.
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).
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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
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.
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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.
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.
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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:
Figure 2 Human resource cycle (Adapted from Fombrun et al., Human Resource Management, 1984)
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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.
2.1.3 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.
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.
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Harvard HRM policy diamond model
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.
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.
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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.
HRM strategy
HRM practices
HRM outcomes
Behaviour outcomes
Performance outcomes
Financial outcomes
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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.
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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.
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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).
(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
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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.
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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
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.
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.
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.
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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