Human resource management strategy
Chapter 16
16.1 Approaches to human resource management
strategy
HRM strategy: a long-term plan for the management of an organisation’s human
resources
● Developing an HRM strategy is one of the most important jobs of an HR
director or manager
● All resources need to be planned for: finance, materials, business
accommodation and employees
● Without a long-term HR plan, a business will almost certainly have:
○ The wrong number of employees, many with inappropriate skills
○ Unsuitable payment methods
○ Inappropriate employment contracts for different types and grades of
people
○ Poor employee performance
○ Poor application of IT to HR issues
Hard and soft HRM
Hard HRM: an approach to managing employees that focuses on cutting costs
Soft HRM: an approach to managing employees that focuses on their development
so that they reach self-fulfilment and are motivated to work hard and stay with the
business
● Hard HRM is to view employees as resources just like any other business
resource
● People are managed in a similar way as raw materials as they must be
obtained as cheaply as possible and be used as much as possible to keep
labour costs per unit low
● There is little to no concern about work-life balance
● Similar to the theory X view and Taylor’s approach to motivation
● Soft HRM views employees as an asset to the business who must be cared
for and developed
● As a result, employees will contribute to the success of a business, not just
physically
● Theory Y view and Herzberg’s theory of motivation
● Some businesses now adopt a hard approach to their less important
peripheral workers and the soft approach to their core workers
, ● Core workers are the employees the business doesn’t want to lose and they
are considered the key to future business success
● They should be developed, trained and motivated in ways that will greatly
increase the chances of having high morale and a desire to stay with the
business
The hard approach might save money on the peripheral workers’ costs in the short
term but:
● It could increase recruitment and training costs in the long term as temporary
workers have to be recruited frequently
● Demotivated workers with little job security might be unproductive which
reduced company efficiency and profitability
● Bad publicity regarding insecure employment contracts might lead to negative
consumer and pressure-group actions against the company
● Hard HRM ignores the findings of Maslow, Mayo and Herzberg as workers
aren’t offered job security, esteem or job enrichment
Employment contracts
● It’s a legal requirement in most countries for employers to provide workers
with an employment contract
● They are not required to give a full-time employment contract but some key
employees offer this certainty
Full-time employment contracts: an employment contract that is for a complete
working week
Permanent employment contracts: a contract that employs the worker unless
they’re dismissed, made redundant or decide to leave
Advantages of full-time and permanent employee contracts
● They help satisfy employees’ safety and security needs defined by Maslow
● They can result in employee loyalty to the business being high and in labour
turnover low
● Employers are more likely to finance training programmes as the workers are
likely to stay with the business
Disadvantages of full-time and permanent employee contracts
● Labour costs become fixed costs as they can’t be varied with output or
demand for the products of the business
● The contracts are inflexible, they don’t allow employers to vary their working
hours, amount of workers etc
Chapter 16
16.1 Approaches to human resource management
strategy
HRM strategy: a long-term plan for the management of an organisation’s human
resources
● Developing an HRM strategy is one of the most important jobs of an HR
director or manager
● All resources need to be planned for: finance, materials, business
accommodation and employees
● Without a long-term HR plan, a business will almost certainly have:
○ The wrong number of employees, many with inappropriate skills
○ Unsuitable payment methods
○ Inappropriate employment contracts for different types and grades of
people
○ Poor employee performance
○ Poor application of IT to HR issues
Hard and soft HRM
Hard HRM: an approach to managing employees that focuses on cutting costs
Soft HRM: an approach to managing employees that focuses on their development
so that they reach self-fulfilment and are motivated to work hard and stay with the
business
● Hard HRM is to view employees as resources just like any other business
resource
● People are managed in a similar way as raw materials as they must be
obtained as cheaply as possible and be used as much as possible to keep
labour costs per unit low
● There is little to no concern about work-life balance
● Similar to the theory X view and Taylor’s approach to motivation
● Soft HRM views employees as an asset to the business who must be cared
for and developed
● As a result, employees will contribute to the success of a business, not just
physically
● Theory Y view and Herzberg’s theory of motivation
● Some businesses now adopt a hard approach to their less important
peripheral workers and the soft approach to their core workers
, ● Core workers are the employees the business doesn’t want to lose and they
are considered the key to future business success
● They should be developed, trained and motivated in ways that will greatly
increase the chances of having high morale and a desire to stay with the
business
The hard approach might save money on the peripheral workers’ costs in the short
term but:
● It could increase recruitment and training costs in the long term as temporary
workers have to be recruited frequently
● Demotivated workers with little job security might be unproductive which
reduced company efficiency and profitability
● Bad publicity regarding insecure employment contracts might lead to negative
consumer and pressure-group actions against the company
● Hard HRM ignores the findings of Maslow, Mayo and Herzberg as workers
aren’t offered job security, esteem or job enrichment
Employment contracts
● It’s a legal requirement in most countries for employers to provide workers
with an employment contract
● They are not required to give a full-time employment contract but some key
employees offer this certainty
Full-time employment contracts: an employment contract that is for a complete
working week
Permanent employment contracts: a contract that employs the worker unless
they’re dismissed, made redundant or decide to leave
Advantages of full-time and permanent employee contracts
● They help satisfy employees’ safety and security needs defined by Maslow
● They can result in employee loyalty to the business being high and in labour
turnover low
● Employers are more likely to finance training programmes as the workers are
likely to stay with the business
Disadvantages of full-time and permanent employee contracts
● Labour costs become fixed costs as they can’t be varied with output or
demand for the products of the business
● The contracts are inflexible, they don’t allow employers to vary their working
hours, amount of workers etc
