How Culture Shapes People Management

How a company manages its employees has a big impact on its culture and success. There are two main ways of handling Human Resource Management (HRM): Hard HRM and Soft HRM. Hard HRM treats employees like a resource that needs to be controlled for maximum efficiency, while Soft HRM sees employees as important assets whose happiness and involvement help the company succeed (Legge, 1995). These approaches affect workplace culture, employee motivation, job satisfaction, and overall business performance.

This article looks at the Harvard Model of HRM and Ulrich’s HR Model, explaining how company culture influences HR strategies. It also explores real-world examples, comparing Netflix (which follows Soft HRM) and Amazon (which uses Hard HRM) to show how these different methods affect a business.

Understanding Hard HRM vs. Soft HRM

The difference between Hard and Soft HRM is key to shaping a company’s culture. Both aim to make a business successful, but they manage employees in very different ways.

"A Comparison of Hard VS Soft HRM" [Photograph]. Crewlix, accessed 24 February 2025

Hard HRM: The Efficiency-Driven Approach

Hard HRM is based on Taylorism (Scientific Management), which emphasizes strict control to improve efficiency (Taylor, 1911). In this approach:

• Employees are seen as costs, not valuable assets.

• Management focuses more on productivity and numbers than employee well-being.

• Workers are closely monitored, and job security is low.

• Decisions are made by top management, with little input from employees.

A well-known example of Hard HRM is Amazon, where employees, especially warehouse workers, face high-performance expectations and strict targets. Reports suggest that Amazon tracks workers in real time and may even automatically fire employees who don’t meet required productivity levels (Baker, 2020). While this system improves efficiency, it also leads to high stress and frequent employee turnover.

Soft HRM: The People-Centric Model

Soft HRM is based on the Human Relations Movement (Mayo, 1933) and McGregor’s Theory Y, which believes that employees are naturally motivated and perform best when given trust and independence (McGregor, 1960). This approach includes:

• Treating employees as valuable assets rather than costs.

• Prioritizing employee engagement, well-being, and growth.

• Encouraging teamwork, open communication, and shared decision-making.

• Creating a work environment that supports creativity and innovation.

A great example of Soft HRM is Netflix, which builds a culture of trust and independence. Instead of strict policies and formal performance reviews, Netflix promotes a "freedom and responsibility" culture (Hastings & Meyer, 2020). Employees have unlimited vacation days, flexible work schedules, and the freedom to make their own decisions without constant oversight from managers.

The Harvard Model of HRM: How Culture Shapes HR Strategy

Created by Beer et al. (1984), the Harvard Model offers a strategic approach to HR that balances business goals with employee well-being. It highlights four key areas that HR policies should focus on:

• Employee Influence – How much employees are involved in decision-making.

• Human Resource Flow – Hiring, retaining, and career development.

• Reward Systems – How employees are paid and recognized.

• Work Systems – How jobs are designed and structured.

In Soft HRM cultures, employees have more say in decisions, and HR focuses on engagement and development (e.g., Netflix). In Hard HRM cultures, employee influence is limited, and HR is mainly used to control labor costs (e.g., Amazon).

Ulrich’s HR Model: The Role of HR in Shaping Culture

In 1997, David Ulrich introduced a model that defines four key roles of HR:

• Strategic Partner – Ensuring HR policies support business goals.

• Change Agent – Driving transformation and innovation.

• Employee Champion – Prioritizing employee well-being and engagement.

• Administrative Expert – Managing HR operations efficiently.

Companies using Hard HRM focus more on the Administrative Expert role, ensuring efficiency and strict policies. Meanwhile, Soft HRM organizations emphasize the Employee Champion and Change Agent roles, creating a workplace that supports growth and innovation (Ulrich & Brockbank, 2005).

Real-World Examples: Netflix vs. Amazon

Netflix: A Soft HRM Success Story

Netflix follows a high-trust, low-control approach, focusing on hiring and keeping top talent rather than enforcing strict performance rules. Key features of Netflix’s HR culture include:

• Freedom and Responsibility – Employees are trusted to make decisions without constant supervision.

• Flexible Work Hours and Vacation – There are no fixed schedules; employees manage their own time.

• Open and Honest Feedback – Transparent communication promotes accountability and trust.

Netflix’s Soft HRM model has led to high employee satisfaction, innovation, and strong business growth, proving that a people-first culture can enhance performance (Hastings & Meyer, 2020).

Amazon: The Hard HRM Efficiency Model

Amazon’s culture is defined by high performance expectations and data-driven decision-making. Some key aspects include:

• Strict Productivity Monitoring – Employees are tracked through metrics to ensure efficiency.

• High-Pressure Environment – Warehouse workers and corporate employees often report intense workloads (Baker, 2020).

• Customer-Centric Focus Over Employee Well-Being – Amazon prioritizes customer satisfaction over employee retention, leading to high turnover rates.

While Amazon’s Hard HRM approach has resulted in unparalleled efficiency and scalability, it has also led to negative employee experiences, with frequent criticisms of stressful work environments and high attrition Harney, B (2023).

How a company can effectively manage HR

• Match HR Strategy with Business Goals – Companies should choose an HR approach that fits their business needs. Ulrich (1997) says HR should support business goals to add value and improve performance. Becker and Huselid (2006) also found that strategic HRM helps companies stay competitive.

• Balance Productivity with Employee Well-Being – Even in strict work environments, providing employee support and training can help keep staff from leaving. Kramar (2014) explains that focusing only on efficiency can cause stress and high staff turnover. Guest (2017) found that companies that care about both efficiency and employee well-being have happier and more loyal workers.

• Build a Strong Workplace Culture – No matter which HR approach a company uses, having a clear and consistent culture is key to long-term success. Schein (2010) says a strong culture creates shared values that guide employees and improve company performance. Denison and Mishra (1995) also found that companies with strong cultures perform better financially and adapt more easily to change.

Which HRM Approach Is Better?

There is no single best approach. Hard HRM works well in industries that focus on competition and efficiency, while Soft HRM is better suited for workplaces that value creativity and people.

A company’s HR strategy shapes its culture, affecting employee motivation, innovation, and overall success. Hard HRM focuses on efficiency and control, while Soft HRM emphasizes employee well-being and growth. Companies like Netflix and Amazon highlight these different approaches, showing how HR policies influence workplace culture.

To succeed, businesses need to choose an HR model that fits their goals, balancing operational efficiency with long-term employee satisfaction.

References

• Baker, M. (2020). ‘Amazon's intense work culture and employee monitoring’, The Guardian, 14 September. Available at: https://www.theguardian.com [Accessed 20 Feb. 2025].
• Harney, B (2023). ‘The Limits of HRM in a New Era of Work: Bezonomics and the Amazon Effect’. Available at: https://www.researchgate.net/publication/367296661_The_Limits_of_HRM_in_a_New_Era_of_Work_Bezonomics_and_the_Amazon_Effect [Accesses 24 Feb. 2025]
• Beer, M., Spector, B., Lawrence, P., Quinn Mills, D. and Walton, R. (1984). Managing Human Assets. New York: Free Press.
• Hastings, R. & Meyer, E. (2020). No Rules Rules: Netflix and the Culture of Reinvention. London: Penguin Business.
• Legge, K. (1995). Human Resource Management: Rhetorics and Realities. London: Palgrave Macmillan.
• Mayo, E. (1933). The Human Problems of an Industrial Civilization. New York: Macmillan. McGregor, D. (1960). The Human Side of Enterprise. New York: McGraw-Hill.
• Taylor, F.W. (1911). The Principles of Scientific Management. New York: Harper & Brothers. Ulrich, D. (1997). Human Resource Champions: The Next Agenda for Adding Value and Delivering Results. Boston: Harvard Business School Press.
• Ulrich, D. & Brockbank, W. (2005). The HR Value Proposition. Boston: Harvard Business Review Press.
• Becker, B.E. and Huselid, M.A. (2006) 'Strategic Human Resources Management: Where Do We Go From Here?', Journal of Management, 32(6), pp. 898-925.
• Denison, D.R. and Mishra, A.K. (1995) 'Toward a Theory of Organizational Culture and Effectiveness', Organization Science, 6(2), pp. 204-223.
• Guest, D. (2017) 'Human Resource Management and Employee Well-being: Towards a New Analytic Framework', Human Resource Management Journal, 27(1), pp. 22-38.
• Kramar, R. (2014) 'Beyond Strategic Human Resource Management: Is Sustainable Human Resource Management the Next Approach?', The International Journal of Human Resource Management, 25(8), pp. 1069-1089.
• Schein, E.H. (2010) Organizational Culture and Leadership. 4th edition. San Francisco: Jossey-Bass.
• Ulrich, D. (1997) Human Resource Champions: The Next Agenda for Adding Value and Delivering Results. Boston: Harvard Business School Press.