2.2.2 The Harvard framework
The pioneers of this model were the Harvard School of Business. Beer et al (1984) developed that what Boxall (1992) 'Harvard framework'. This framework is based on their belief that the problems of historical personnel management can only be solved when general managers develop a viewpoint of how they wish to see employees involved in and developed by the enterprise, and of what HRM policies and practices may achieve those goals. Without either a central philosophy or a strategic vision, this can be provided only by general managers. HRM is likely to remain a set of independent activities, each guided by its own practice tradition.
The Harvard school suggested that HRM had two characteristic features:
Line managers accept more responsibility for ensuring the alignment of competitive strategy and personnel policies;
Personnel has the mission of setting policies that govern how personnel activities are developed and implemented in ways that make them more mutually reinforcing.
Figure 2.2 The Harvard framework of human resource management
Source: Beer et al, 1984
According to Boxall (1992) the advantages of this model are that it:
Incorporates recognition of a range of stakeholder interests;
Recognizes the importance of 'trade-offs', either explicitly or implicitly, between the interests of owners and those of employees as well as between various interest groups;
Widens the context of HRM to include 'employee influence', the organization of work and the associated question of supervisory style;
Acknowledges a broad range of contextual influences on management's choice of strategy, suggesting a meshing of both product-market and socio-cultural logics;
Emphasizes strategic choice - it is not driven by situational or environmental determinism.
Walton (1985) expanded the concept by emphasizing the importance of commitment and mutuality as 'the new HRM model is composed of policies that promote mutuality in terms of goals, influence, respect, rewards and responsibility. The theory is that policies of mutuality will produce commitment which in turn will yield both better economic performance and greater human development.'
The Hard and Soft Model
Another debate concerning HRM focused on the distinction between 'hard' and 'soft' models of HRM (Storey 1989; Legge 1995). The 'hard' approach is often associated with a particular formulation of the matching model, where employees are positioned as management dictates. In contrast with this, 'soft' models focus more on the management of resourceful humans (like the Harvard framework). The approach assumes that employees are valued assets and a major source of competitive advantage. Within this approach, managers need to stimulate commitment and loyalty in order to ensure high levels of performance. Whereas the 'hard' model allows for a range of ways to manage staff, the 'soft' approach argues that one style is superior to all others in achieving the levels of employee motivation, commitment, and satisfaction that are required for excellent performance. Storey's approach (2001) is often seen as an archetype of the 'soft' variant; defining HRM as 'a distinctive approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce using an array of cultural, structural and personnel techniques'. He defines four elements that distinguish HRM.
It the human resource that really makes the difference and whose capabilities and commitment distinguishes successful organization from the rest.
Because HRM is of strategic importance, it needs to have top management involvement and HRM policies should be integrated into the business strategy.
Because of the long-term implications of HRM, it needs to be of intimate concern to line managers, because they operate as deliverers and drivers of HR policies-HRM is, therefore, too important to be left to personnel specialists.
The key levers of HRM (selection, communication, training, reward, and development) should be used to gain employee commitment to the organization and its goals and not just compliance with them.
Theories that reinforce HRM practices
2.3.1 Human Capital theory
Human capital theory states that investment in people adds to their value to the firm. Individuals expect a return on their own investment and firms recognize that the increased value of their employees should be rewarded. Human capital theory encourages the use of skill-based or competence-related pay as a method of reward. It also underpins the concept of individual market worth which indicates that individuals have their own value in the marketplace, Armstrong, (2001). Human capital theory focuses attention on 3 main strategies which are:-
Resourcing strategies are concerned with matching human capital resources to the strategic and operational needs of the organization and ensuring the effective utilization of those resources.
Human resource development strategies address issues relating to the development of the capabilities of individuals and teams. It aims to attract and retain human capital as well as develop it.
Reward strategies: From a financial reward point of view, the implication of human capital theory is that investment in people adds to their value to the firm. Individuals expect a return on their own investment, and firms have to recognize that the increased value of their employees should be rewarded. Human capital theory encourages the use of skill-based or competence-based pay as a method of reward. It also underpins the concept of individual market worth.
