This paper uses AWIRS 95 and IRWIRS 96-7 data to test whether workplaces which used ‘soft’ versus ‘hard’ Human Resource Management (HRM) policies and practices experienced significant differences in labour productivity improvements. Generally, the results support the proposition that management attitudes, policies and practices which aim to develop workforce skills, commitment and motivation were positively associated with improvements in labour productivity. Very few ‘hard’ practices other than performance pay had the same effect, and even this variable is open to interpretation as ‘soft’. EEO/AA and maternity leave policies were strongly correlated with improved productivity. The Illawarra region results were generally less significant than those for Australia as a whole. This suggests that managers in that region are less committed to either version of HRM. As economic performance in the region was relatively poor, it is suggested that greater use of ‘soft’ employment practices by managers in this region may help improve their labour productivity and, by extension, their competitive position.