An issue prompting a rethink of personnel management methods concerns changes in the psychological contract between employee and organisation (Rousseau, 1990; 1995) • It is not possible to specify every aspect of the employment relationship in a detailed formal contract • The organisation aspects, for example, loyalty and commitment while employees expect fair treatment, a degree of security and personal development • Much of our behaviour is thus based on tacit, unspoken beliefs Hard and Soft HRM HARD HRM - Argues that people are organisational resources and should be managed like any other resource – obtained as cheaply and used as sparingly as possible is consistent with other requirements (commodity status) - Tight fit between business and HR strategy - Focuses on resource side of phrase Human Resource Management (emphasises the management aspect) • Argues that people are a resource unlike any other – far more costly/ important than other resources • For all organisations people are the one factor which can create value from the other resources • This is a resource whose creativity, commitment and skill can generate real competitive advantage SOFT HRM • Emphasises human aspect of HRM – communication, training and development, motivation and leadership • People oriented, rooted in human relations thinking (Theory x and y) • Soft HRM rules out practices that would deskill jobs and damage motivation The HR manager, to be effective, may have to find ways simultaneously to reduce labour costs and increase employee commitment, motivation and performance. The distinction between hard and soft HRM may be difficult to distinguish in practice Storey’ (1992) Model of Mapping of Various Meanings of HRM
So why is HRM different? Legge (1989, 1995) downplays the significance of a break between PM and HRM, particularly when the focus lies on what HR/Personnel Managers actually do. Key points of difference: HRM concentrates on managers rather than what managers do HRM emphasises the key role of line managers HRM emphasises the responsibility of top management for managing culture Some commentators argue that HRM is just a grander term for a mundane function, representing ‘old wine in new bottles’. Other argue that HRM reflects a fundamental shift in employment relations, made necessary by changes in the organisational environment HRM and Personnel Management • Armstrong (1987) points the possibility of a clash between values of HRM and the business focus of the organisation. To Armstrong HRM is just the “case of the emperor’s new clothes”. • Keenoy (1990a), considers it “a wolf in sheeps clothing” and enhances the ambiguity of the term that could mean almost anything in management. • However this rejected by Guest (1987, 1989) who upholds that HRM is more suitable and better in achieving ‘strategic integration’, high commitment (Wood, 1995) and flexibility.