7.4 Human Resource Management (HRM) Strategy

2026 Syllabus Objectives

By the end of this topic, you should be able to:

  1. Explain the difference between 'hard' and 'soft' HRM
  2. Describe the advantages and disadvantages of flexible working contracts — including zero hours contracts, part-time, full-time, annualised hours, flexi-time, home working, shift working, job sharing, compressed working hours, and the gig economy
  3. Explain how to measure employee performance, and identify the causes and consequences of poor employee performance
  4. Describe strategies for improving employee performance
  5. Explain Management by Objectives (MBO) — how it is implemented and how useful it is
  6. Describe the changing role of Information Technology (IT) and Artificial Intelligence (AI) in HRM

1. Hard vs Soft HRM

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Human Resource Management (HRM) is the process of managing people within a business — from hiring and training to performance and motivation. There are two broad approaches a business can take: hard HRM and soft HRM.

Soft HRM

Soft HRM treats employees as the most valuable asset of the business. The focus is on building long-term relationships, developing people, and keeping them motivated and engaged.

Key features of soft HRM:

  • Employees are seen as long-term investments, not just costs to be cut
  • The business focuses on motivation, training, and career development
  • Employees are given a voice in decisions — they feel valued and listened to
  • Often leads to higher job satisfaction and lower staff turnover (fewer people leaving)

Example: A company that offers staff training programmes, career progression opportunities, and asks employees for their opinions before making changes is using a soft HRM approach.

Hard HRM

Hard HRM treats employees more like any other resource — something to be used efficiently and at minimum cost. The focus is on getting the most output from workers while spending as little as possible.

Key features of hard HRM:

  • Employees are seen as a cost to be controlled
  • Focus on efficiency, short-term contracts, and minimal employee involvement
  • Often linked to lower labour costs but also higher staff turnover (people leave more often because they feel undervalued)
  • Less focus on training and development

Example: A business that uses zero-hours contracts, replaces workers frequently, and makes decisions without consulting staff is using a hard HRM approach.

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