A level Business Revision - Hard & Soft HR

Summary

This tutorial explores the two key approaches in human resource management: the 'hard' HR strategy, where employees are seen as a cost to minimize, focusing on lower wages, minimal training, and temporary contracts, and the 'soft' HR strategy, which treats employees as assets, investing in competitive wages, training, and long-term contracts. While the hard approach may cut costs in the short term, it can lead to high turnover and productivity loss. In contrast, the soft approach, focused on employee retention and development, enhances motivation and long-term productivity, though at a higher initial cost. Businesses must choose based on their goals for cost minimization or growth.

Takeaways

• 😀 Hard HR approach views employees as a cost, focusing on cost minimization in workforce management.
• 😀 Firms adopting a hard HR approach tend to offer minimal pay rates, such as minimum wage or lower salaries.
• 😀 Less emphasis is placed on staff training in a hard HR approach, with preference given to hiring employees with existing skills.
• 😀 Legal obligations are met, but businesses following a hard HR approach typically do not exceed minimum standards in areas like health, safety, and employee welfare.
• 😀 Temporary contracts are used to maintain workforce flexibility and avoid long-term employment costs in times of fluctuating demand.
• 😀 Soft HR approach sees staff as an asset, emphasizing their value and fostering long-term investment in development.
• 😀 Firms using a soft HR approach offer more competitive salaries and fringe benefits, aiming to retain and motivate their employees.
• 😀 More investment is made in training and developing employees, aiming to promote from within rather than recruiting externally.
• 😀 Long-term permanent contracts are often offered in a soft HR approach, providing job security and greater employee motivation.
• 😀 The soft HR approach can lead to increased productivity, innovation, and higher rates of employee retention due to a more engaged workforce.

Q & A

What are the two contrasting approaches to Human Resource management discussed in the script?

The two contrasting approaches are 'hard' HR, where staff is viewed as a cost, and 'soft' HR, where staff is viewed as an asset.

What is the main goal of a business using the hard HR approach?

The main goal of a business using the hard HR approach is to minimize labor costs as much as possible, viewing the workforce as a cost that needs to be controlled.

What are some strategies used by firms with a hard HR approach to minimize labor costs?

Firms with a hard HR approach minimize labor costs by paying minimum wage, investing less in training, hiring externally instead of developing current staff, sticking to legal minimums for welfare, and using temporary contracts to manage demand fluctuations.

How does a hard HR approach affect employee welfare?

A hard HR approach often involves minimal investment in employee welfare, only meeting the legal minimum for things like health and safety, holiday pay, and sick leave, without offering additional benefits.

What are the potential long-term drawbacks of using a hard HR approach?

In the long term, a hard HR approach can lead to high staff turnover, absenteeism, lower productivity, and potentially higher costs due to the constant need to replace staff.

What does the soft HR approach emphasize in terms of employee treatment?

The soft HR approach emphasizes viewing staff as an asset, investing in their development, offering competitive pay and benefits, and fostering employee retention and job security.

What are the key strategies of a business that adopts a soft HR approach?

A business that adopts a soft HR approach offers competitive salaries, invests in employee training and development, provides generous benefits like paid time off and health insurance, and offers long-term, permanent contracts to increase job security.

How does the soft HR approach contribute to employee motivation?

The soft HR approach contributes to motivation by making employees feel valued and secure in their roles, which leads to increased productivity, innovation, and overall engagement.

Why might a business choose to adopt a hard HR approach over a soft HR approach?

A business might choose a hard HR approach if it operates in a highly price-competitive industry where minimizing costs is essential for survival, and the investment in employee development is not financially feasible.

What is the relationship between business objectives and the choice of HR approach?

The choice of HR approach depends on the business objectives. Firms focused on cost minimization may prefer a hard HR approach, while those emphasizing innovation and quality may benefit from a soft HR approach, as it encourages employee loyalty and creativity.