The History Of Harvard Model Of Hrm Business Essay

The History Of Harvard Model Of Hrm Business Essay:As a HR specialist the challenges I may face are: HR planning, managing performance and managing diversity. These processes interlinked with each others. Recruitment plan having the right person for the right time, for the right place is crustal for the organization performance. Also it is crucial to retain the work force. So, all processes are interlinked for the strategy. Especially HRM strategy should be the best fit for the organizational performance and work force appraisal.

Due to social and economical activities HRM has changed mainly in name various times throughout history. Industrial welfare was the first form of HRM in 1833. During the 1st world war personnel development increased due to government initiatives to encourage the best use of people. In 1921 the national institute of psychologists established and published results of studies on selection tests, interviewing techniques and training methods. During 2nd world war the focus was on recruitment and selection and later on training, improving morals and motivation; discipline; health and safety; joint consultations and wage policies. This meant that a personnel department had to be established with trained staffs. Consultation between management and the work force spread during the war, and personnel departments became responsible for its organization and administration. In 1990’s a major trend emerged where employers were seeking increasing flexible arrangements in the hours worked by employees due to an increase in number of part time and temporary contracts and the invention of distance working.

To many managers and management theorists it is vital to the survival and success of the organizations in the twenty-first century. Why they think so really derives from one single, simple idea “that people-there skills, knowledge and creativity are the key resources for economic and organizational success in what Peter drucker (1993) called “The knowledge based economy” A revolution in the people management occurred in 1980’s which seemly overturned the established paradigm of personnel management in favour of Human resources management.

Torrington and Hall define human resource strategy as a central philosophy of the way that

People in the organization are managed and the translation of this into HR policies and


Two mostly adopted models of human resources management are hard and soft versions. Guest (1987) in seeking to define HRM identifies two dimensions, soft-hard and loose-tight. Similarly storey (1992) plots existing interpretation of HRM along the two dimensions soft-hard and weak-strong. Guest (1987) and storey (1992) in their definition of soft-hard models of HRM view the key distinction as being whether the emphasis is placed on the human or the resource. Soft HRM is associated with the human relations movement, utilization of individual talent. This has been quated with the concept of a “high commitment work system” (Walton 1985b). Soft HRM is also associated with the goals of flexibility and adaptability and implies that communication plays a central role in management (Storey and Sisson 1993).

Hard HRM, stresses ‘he quantitative, culculative and business-strategic aspect of managing the “headcount resource” in as “rational” a way as for any other factor of production’ (Storey 1992,p.29; legge, 1995b). Hard HRM focuses on the importance of “strategic fit”, where human resources policies and practices are closely linked to the strategic objectives of the organization (External fit), and are coherent among themselves (Internal fit) (Hendry and Pettigrew, 1986), with the ultimate aim being increased competitive advantage (Devanna et al.,1984; Storey and Sisson,1993). However both guest and storey, while explicitly acknowledging this dichotomy, incorporate both when constructing their own HRM ‘model’ or ‘theory’.

HRM & Personnel Management :

The argument in david Ulrich highly influential Harvard business review article of 1998 “A new mendate for human resources” which has helped to shape human resources in the new century. After acknowledging that some commentators had been calling for the “abolition of HR” on the ground of serious doubts its contribution to organizational performance. The Ulrich agreed (Ulrich 1998; p.124) that “there is good reason for HR’s beleaguered reputation it is often ineffective in competent and costly”.

His solution was for HR to be “Re-configured” to focus on outcomes rather than on traditional processes such as staffing or compensation.

HR should not be defined by what it does but by what it delivers results that enrich the organizations value to customers, investors and employees. His recommendations were that; HR should become a “partner”, “expert”, “Champion of employees” and “Agent of continous transformation.

Ulrich’s model of the HR role has set the agenda for people management in the twenty-first century as being essentially about its contribution to organizational performance.


People relationships within organizations are important in HRM. It will influence how we expect people to behave, how we think they ought to behave and we react to the behavior of others major prospective

“Pluralist” – collective bargaining

“Unitarist” – high profit and shared value

“Redical” – All work as inevitably being exploitive of workers

HR theories

The theoretical heritage of HRM includes the managerial writing of peter drucker, the human relation school, human capital theory and organizational development

Interest in HRM preceded alongside others developments in economics, business strategy and organizational change. Many of these ideas revolved around the notion of the resource based theory of the firm (Barney 1991) and core competencies (Prahalad and Hamel 1990) which argued that sustained competitive advantage ultimately derives from a firm’s internal resources provides that these can all value, unique, deficult for competitors to imitate and non substitutable (Storey 1995)

guest model (1987) shows a model of HRM that is commitment based, which is distinct from compliance based personel management. According to guest HRM is,

1. linked to the strategic management of an organization

2. seek commitment to organizational goals

3. focuses on the individual needs rather than the collective workforce

4. enables organization to devolve power and become more flexibility

5. emphasis people as an asset to be positively utilized by the organization

Harvard model of HRM

Central issue here is performance. Managing human resources to achieve positive HR out comes in terms of a committed work force, working in harmony with objectives of the organization and achieving competence and cost effectiveness. These out comes in turn lead to positive long term consequences firstly organizational effectiveness but also individual and society well being.

The Harvard model has been influential worldwide. Hollinshead and Leaf (1995) used the model as a frame work to examine HRM in some European countries, Japan, Australia and USA. However as these authors acknowledge (1995;p.27) although the fundamental principles and relationships identified by the model are the pretty much universal. It is always necessary when applying it in specific country to give due weight to specific cultural factors.

In reality the debate in HRM is usually about the range and choice of techniques rather than one of absolute principle.

Some generic HR process and general principles of people management common to all successful organizations (Boxall and Purcell 2006;p.69)

Huslied (1995) argues that for a universalist case for specific high performance work practices impacting on firm’s financial performance.

Huslied (1995) argued at a general level that HR practices could help create a source of competitive advantage, particularly if they are aligned with firm’s competitive strategy.

Hard and soft

Two main variant of HRM were “hard” and “soft” models. “Hard” HRM with an emphasis on the strategic quantitative aspects of managing HR as an economic factor in production, and “soft” HRM rooted in the human relations school and emphasizing communication, motivation and leadership (Storey 1989)

All models of HRM are concerned with strategic issues but hard models typically here a stronger focus on ensuring that the HRM strategy “Fits” and is driven by the overall corporate strategy (Keenan 2005)


Differences include visible and non visible factors of people are called diversity. Managing diversity is valuing everyone as an individual valuing people as employees, customers and clients. It is important to recognize that a “one size fits all” approach to managing people does not achieve fairness and quality of opportunity for every one.

Managing diversity depends on:

Overall strategy / workplace behavior/ communication / training / measure, review, and reinforce.

Performance management

Armstrong and baron define performance management as a process which contributes to the effective management of individual and team in order to achieve high level of organizational performance.

Performance management should be strategic (Broad issue and long term goals), Integrated (Should link various aspects of the business, people management, individual & teams).

Performance management should incorporate

Performance improvement / development / managing behavior

So performance management is about establishing a culture in which individuals and group take responsibilities for the continuous improvement of business process and of their own skills, behavior and contribution.

Tools of performance:

Performance appraisal

360 degree feedback

Learning and development

Objectives and performance standard



It cannot be denied that the success or failure of performance management programs of any organization depends on the philosophy that it is connected to business goals and the attitudes and skills of those responsible for its implementations and operations

It is acknowledged that a lack of performance appraisal can have adverse effect on employees’ motivation and contribute to employees’ turnover intentions (Laura, 1996)


Arthur, Lain Stewart Henderson, Human Resources Management for MBA students CIPD-2008

Human Resources Management 6th Edition , Derek Torrington, Laura hall and Stephen Taylor

Diversity in the work place an overview – CIPD Factsheets October 2012

Performance management an overview – CIPD Factsheets April 2012

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