The financial crisis began in 2008 has given rise to the deterioration of global economics. An increasing number of firms had gone bankrupt while others are fighting for survival. A variety of aspects have great dominations on the fate of the firm, with human resource management being one of the most crucial principles. Human resource managers should resort to certain managements to impinge upon the firm. Be it Michigan Model or Harvard Model (which are also named as hard HRM and soft HRM), human resource managers can resort to these two mainstream managements to dispose the human resources. It had been widely debated that which practice can cater to the firms to survive the deterioration of global economics. Individually speaking, hard HRM is superior to soft HRM in the plight of financial crisis. This essay is revolving around the selection of HRM to benefit the firm, firstly by presenting how hard HRM differs from soft HRM, then the reasons and consequences of the usage of hard HRM, and lastly examining the hard HRM impact on HR managers and the firms.
Hard HRM differs from soft HRM in various aspects. These two propositions were academically developed by Harvard University in its MBA program in 1985 and Michigan University in 1984. The ideas have been critically processed by Guest and Storey and Sisson in the late 1980s. The Harvard model, drawing on human relations school, emphasized communications, team work and the utilisations of individual talents (Poole & Mansfield, 1994). The Michigan school is a more strategic approach with a unitarist outlook, which endorses management's views (Hendry & Pettigrew, 1990). The hard HRM values on the “resource” aspect of HRM, that is to say, it focus on the crucial importance of the close integration of human resource policies, systems and activities with business strategy. From this perspective human resources are largely a factor of production, an expense of doing business