Soft Human Resources Management Framework

1. Executive Summary

Human resource policies, if well designed, can help organizations integrate people decided to support the organization's mission and goal and to ensure that the organization's human resources, contribute to the success of the organization to make the greatest effort. The main objective that we write this report is to discuss how human resources policies are designed to help organizations achieve their strategies.

In this report, we will focus on soft human resources management framework that increase its popularity in recent years and some best human resource scholars practices advocate by academics. At the end, we can have a better idea on how organization to design and adopt these policies to achieve the organization's strategy to gain competitive advantage via HRM practices, attracting and retaining the best employees in order to meet future business needs; improving the business performance.

Our key findings and conclusions in how human resources policies can assist organizations achieve their strategy are summarized as follows:

- When organisation should consider factors from both internal and external environment. Its human resources policy should be design in the way that it will reflect the significant factors the organisation is facing

- There are certain practices of human resource management that has better influence/positive impact to the performance of the organisation. However, when organisation adopting these best practices, it should be complement each other and adjust to fit the organisation.

2. Introduction

In recent years, organizations have recognized that it is not just financial and technological capital that provides companies with the competitive edge, but employee, or human resources, an organization's most important asset is the key to the organization success. To attract and retain the right people, without human resources with the right skills and training, an organization cannot succeed. The role of human resources professional continues to evolve, develop and start to increase its significance in the effectiveness of the organization. Therefore, how an organization design its human resource management policy will have significant impact to the organization's success.

In practice, many organizations' strategy to increase its effectiveness, performance and to gain competitive advantages or benefits can be achieved through strategic human resource management policies. We will focus on how human resources are designed to help organisation to achieve these strategic and move toward their goals.

3. Human Resources Management ("HRM")

The overall purpose of human resource management is to ensure that the organization is able to achieve success through people. As Ulrich and Lake (1990) is:

'HRM systems can be the source of organizational capabilities that allow firms to learn and capitalize on new opportunities.'

According to different HRM functions, a distinction was made by Storey (1989) that HRM has been generally classified into Hard HRM and Soft HRM

Hard HRM

(Legge, 1998) defined the 'Hard' HRM as a process emphasizing 'the close integration of human resource policies with business strategy which regards employees as a resource to be managed in the same rational way as any other resource being exploited for maximum return'

The Hard HRM emphasizes that people are important resources through which organizations achieve competitive advantage. These resources have therefore to be acquired, developed and deployed in ways that will benefit the organization. The focus is on the quantitative, calculative and business-strategic aspects of managing human resources in as 'rational' a way as for any other economic factor

Soft HRM

The Soft HRM traces its roots to the human-relations school; it emphasizes communication, motivation and leadership.

In contrast of Hard HRM, the soft version of HRM sees employees as 'valued assets and as a source of competitive advantage through their commitment, adaptability and high level of skills and performance'.

As described by Storey (1989) it involves 'treating employees as valued assets, a source of competitive advantage through their commitment, adaptability and high quality (of skills, performance and so on)'.

As the importance of human resources becomes more and more important in today's knowledge economy, both Hard and Soft HRM are significant to the success of the organisation's human resources management.

4. Designing and implementing HRM practices and policies

In designing and implementing HRM practices and policies, organisation needs to be able to assess the appropriateness of effectiveness of its Human Resources Policies. One of the frameworks widely adopted by organisation is Beer et al (1984)'s Harvard map, also known as Harvard model.

The Harvard model, drawing on human relations school, emphasized communications, team work and the utilisation of individual talents and considered to be more soft in nature because it views individuals as potential assets or human assets rather than variable costs. We will look into detail on how Harvard model can assist in shaping organisation's human resources policies.

Harvard model

The famous Harvard model of FRM is shown in the diagram below: -

This framework recognizes the wide range of stakeholder interests and situational considerations (environmental factors) that may influence human resources policies. Situational factors mainly refer to relevant law and regulations (i.e. minimum wages), societal value, labour market condition, workforce characteristics, technology, organisation strategic and management philosophy. As for stakeholder, Harvard model emphasis that all stakeholders, such as shareholders, management employee and government's interest should be met or the enterprise will fail as an institution eventually. It also holds the viewpoint that employees will only adopt an organisation's objectives if they wish to.