Soft & Hard HRM | 60 Second Business

Soft and hard HRM are two contrasting approaches to managing people.
Hard HRM treats employees as a resource, like any other input. The focus is on cost, control and efficiency. Pay is kept tight. Workers are recruited as needed and let go when they're not. Performance is closely measured. Sports Direct, before its reforms, was widely criticised in the press for hard HRM practices in its warehouses.

Soft HRM treats employees as an asset, the source of competitive advantage. The focus is on engagement, development and long-term commitment. Pay is competitive. Training and development are heavily invested in. Employees have a voice in decisions. The John Lewis Partnership, where every member of staff is a
partner who shares in the profits, is the textbook UK example of soft HRM.

Most real businesses sit somewhere on the spectrum, often using a mix - soft for skilled core staff, harder for temporary or peripheral roles.

The right approach depends on strategy. A discount retailer's strategy depends on cost - hard HRM fits. A professional services firm's strategy depends on talent - soft HRM fits.

The risks of getting it wrong are real. Hard HRM in a talent business loses key people. Soft HRM in a low-margin business pushes up cost.
For any business, soft and hard HRM aren't right or wrong. They're tools that have to match the strategy.

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