Soft and hard human resource management (utilitarian instrumentalism versus developmental humanism)

In 1960 Douglas McGregor developed two sets of theories that would shape two antagonistic currents in human resource management: Theory X and Theory Y. They are based on radically different assumptions.

Charles Chaplin working Theory X style

Theory X is the classical managerial distrust approach. People are lazy by nature and only pursuing self-interests. That means that there are two different and opposite sets of interests: those of the company and those of its workers. It’s management’s task to induce the appropriate behaviour in workers so as that they actions pursue the accomplishment of the company’s goals, not their own. If there ever was a carrot and a stick, that’s the stick. Thus there’s a case for the existence of “correctives” and “coercion”.

It may be argued that this view doesn’t exactly reflect human nature but the organisations’ nature: they were born long ago, and one of the first theories that were developed (they have become the classic perspective) regarding on how to manage the workforce was scientific management. Those theories regarded people as resources in the same way that machinery was also a resource. People had to be assigned fixed, repetitive (I could add unfulfilling and alienating) tasks. That was only one hundred of years ago and there’s still a lot of Taylorism in us.

By the way that matches with many of our current economic theories when we say that people as economic agents are always looking to maximise their perceived utility. That’s what we mostly assume that consumers will do. But then there are still economic realities that cannot be explained from that point of view.

Regarding HRM many authors classify this approach as a classic approach, hard HRM or the Michigan model. Ever seen a manager that style? I bet you have, many of them.

Vicent le Moign, a freelance designer, working Theory Y style

Theory Y is the opposite approach. Instead of thinking of people as lazy machines deals with their emotions, feelings and motivations. People may actually want personal realisation and work can be one the ways to attain it. People like things well done, making a difference. Managers, thus, must enable them to do so and keep their motivation high. People don’t hate working, are not lazy and can be self-responsible. That way coercions are no longer needed.

Following this theory, compensation is still important, but not exclusively attained through money but also many implicit compensations are of utmost importance. Under the right circumstances, people will seek higher responsibilities, not reject them. The individuals can be creative and proactive, values that the organisation must nurture to ensure their commitment.

This approach is called the Harvard model, or soft HRM.

Fortunately it works. Unfortunately it does not always work. Theory Y integrates the personal objectives with those of the corporation, but that cannot always be done. Here comes the dilemma between the two models. In fact neither of them completely represents reality, because people can behave in very different ways. And I’m not referring to different people but everyone of us.

That means that we must use both models to describe reality. And that’s what many managers use. Sometimes a hard approach, sometimes a soft approach.

But that mixed approach holds a contradiction in itself, although if we don’t go deep into the theory we may not notice. Both models are holding two basic and irreconcilable fundamental ideas: self-interest versus self-direction, distrust and trust, negative and positive. How can both be mixed at a higher deductive level?

In the meanwhile, it has never been proved that committed workers are more productive than closely controlled ones. And, after all workers know that HRM considerations are always in a lower precedence than business strategy considerations, so the company, whatever it might say, has a clear precedence for hard shareholder goals over people goals. Some recent models have been developed to try to link employee satisfaction to results through the value chain. The same way as Balanced Scorecards try to enforce soft issues that have been marginal to date in front of long established hard issues. But still, if you think of your company… which are the most relevant business goals? Do you really think that people is among them?

(To think more about this, you may review the past posts: To commit or not to commit (treating and spoiling yourself at your post and The wide gap between theory and practice in human resource management)