The importance of HRM strategy development

Human resource management (HRM) strategy involves long-term planning for a business's workforce. Developing this strategy is a key responsibility for HR directors or managers, as it helps integrate employees with other resources.

Reasons for planning HRM alongside other resources

All business resources require careful planning to support operations and growth, including finance, materials, business accommodation, and employees.

Consequences of lacking a long-term HRM plan

Without proper HRM planning, businesses will likely have:

• Incorrect workforce size with inappropriate skills
• Unsuitable payment methods
• Inappropriate employment contracts for different types/grades of employee
• Poor employee performance
• Poor application of information technology to HR issues

Characteristics of hard HRM

Hard HRM treats employees primarily as resources, similar to equipment and raw materials.

Key features of hard HRM

• Cost minimisation - Employees are obtained as cheaply as possible.
• Efficient utilisation - Workers are used sparingly and exploited to keep labor costs low.
• Limited employee support - There is little concern for work-life balance.
• Links to motivation theories - This approach is similar to Theory X view of workers and Taylor's motivation approach.

Characteristics of soft HRM

Soft HRM regards employees as assets to be cared for and developed.

Key features of soft HRM

• Employee development - Employees are seen as assets requiring care and development.
• Broad contributions - Workers are expected to contribute in multiple ways beyond physical effort.
• Links to motivation theories - This aligns with Theory Y view of workers and Herzberg's motivation theories.

Many businesses combine elements of hard and soft HRM rather than using one exclusively.

Application of HRM approaches to core and peripheral workers

Businesses often apply different HRM strategies to various employee categories.

Core workers

Core workers are employees businesses don't want to lose who are key to future success. Soft HRM is typically applied to them.

Peripheral workers

Peripheral workers are less important employees, often subject to a hard HRM approach.

Many businesses apply soft HRM to core workers and hard HRM to peripheral workers.

Potential problems with hard HRM

While hard HRM can reduce short-term costs, it may lead to significant long-term drawbacks.

Issues arising from hard HRM practices