Approaches to Human Resource Management (HRM) (Cambridge (CIE) A Level Business): Revision Note

The difference between ‘hard’ and ‘soft’ HRM

• Businesses use different approaches to meet their HR objectives. These are typically grouped into soft and hard human resource management (HRM) strategies:

  • Soft HRM

    • Focuses on employees as valuable long-term assets

    • Emphasises motivation, engagement, and development

    • Often linked to higher staff retention and job satisfaction

      • E.g. The John Lewis Partnership applies soft HRM by giving employees a stake in the company and a voice in key decisions

  • Hard HRM

    • Treats employees more like a resource to control and minimise costs

    • Focuses on efficiency, short-term contracts, and minimal employee involvement

    • Often linked to lower labour costs but higher labour turnover

      • E.g. Sports Direct has been criticised for using zero-hour contracts, a hallmark of hard HRM

• Most businesses combine elements of both approaches depending on their strategy, budget, and industry

Flexible working contracts

• Flexible working contracts include those that allow employees to choose when, where, or how they work to better suit their needs and lifestyle

Full-time contracts

• A full-time employment contract requires the employee to work the number of hours per week set by the company

  • In the UK, full-time employees are classified as those who work 35 hours a week or more

  • At Save My Exams, a full-time employee works 40 hours each week

Part-time contracts

• Employees who work part-time may only work two or three days a week

  • Part-time employment may be more flexible and can be adjusted subject to employee availability and employer requirements

    • Part-time employees at the US company Costco work between 24 and 40 hours per week

Annualised hours

• An annualised hours contract sets the employee’s working time as a total number of hours to be completed over the whole year, rather than a fixed number each week

  • Wages are usually spread evenly, so employees receive the same salary each month even though weekly hours may rise or fall

Compressed working hours

• A compressed hours arrangement means an employee works their normal total hours for a period, but squeezes them into fewer, longer working days

  • E.g. Government offices in Australia allow staff to compress fortnightly hours into eight longer days, freeing every ninth and tenth day

Shift working

• This involves working different periods at different times, usually on a rota

• It usually refers to anything outside of the standard Monday-Friday working week

  • Some warehouse employees might need to work an early shift to ensure deliveries are ready to go

  • In many care homes, night shifts are a regular part of the job

Flexi-time

• Flexi-time allow employees to schedule working hours around their individual needs and accommodate their commitments outside of work

• It usually involves working some set hours, with the remainder of hours organised according to the employees' needs

  • E.g. An employee may be expected to be at work between the hours of 10am and 2pm, but can choose when they complete the rest of their working hours

Home working

• Advances in communication technology have enabled a larger proportion of workers than ever before to work from home

  • Employees use tools such as email, instant messaging, collaborative software, scheduling apps and videoconferencing to carry out work remotely

Job sharing

• Job sharing is where two or more employees divide a job between them to cover one full-time role

  • Pay, benefits and leave entitlement for job sharing are allocated on a proportional basis

Zero hours contracts

• This is where an employee agrees to be available for work as and when required, with no particular number of hours or times of work specified

  • In the UK, zero-hour contracts are controversial

    • Trade unions and the media have accused businesses, such as Sports Direct, of using them to exploit workers

    • In 2015, UK employers were banned from offering zero-hour contracts that prevented employees from working for another employer at the same time

The gig economy

• This is where people earn money by completing short, on-demand tasks instead of holding traditional, permanent jobs

  • E.g. In India and Southeast Asia the rapid expansion of ride-hailing and food-delivery apps such as Gojek and Swiggy has created many jobs in the gig economy

Management by Objectives (MBO)

• Management by objectives involves managers and employees jointly setting clear, measurable goals that link each job to the organisation’s overall aims

  • Performance is then judged on the results achieved

How MBO is implemented

• Set organisational goals

  • Senior management define a set of strategic targets

• Cascade and agree individual objectives

  • Each manager works with team members to translate these targets into personal SMART goals

• Action plans, monitoring and feedback

  • Resources and deadlines are agreed, progress is tracked, and regular check-ins provide guidance

• Appraisal and reward

  • At the review stage, achievement of the agreed objectives informs performance ratings, pay rises and further development plans

Usefulness of MBO to a business

• Focus and alignment

  • Everyone understands exactly what is expected and how their work supports corporate goals, reducing wasted effort

• Motivation and engagement

  • Because employees help set their own targets, they feel ownership, leading to higher commitment, better communication and stronger job satisfaction

• Fair, data-based management

  • Clear, quantifiable objectives give managers unbiased criteria for appraisal, feedback and rewards, cutting disputes and making decisions more transparent

• Broader benefits

  • Goal-setting encourages forward planning, highlights training needs, and can improve overall company performance by linking day-to-day tasks to long-term strategy