Human Resource Managment in Its Environment - Coursework Example

Compare and contrast two models of Human Resource Management, one of which must be the Harvard model (Beer et al). Human Resource Management (HRM) has become an important aspect of the contemporary strategic business management. The company’s employees and managers are being as a resource much like other resources of the organisation like the machinery, capital, and raw materials. But unlike other resources, they are commitment is sought with a proactive and employee friendly policy. Increasingly companies value and strategise their businesses in keeping with the priorities, needs and talent of its workforce. As organisations keep the Human Resource (HR) as central to their business strategies they develop a value system that enhances the satisfaction of employees. A satisfied human resource leads to competitive advantage. Human Resource Management is getting focus in all parts of the world and Trans-National Corporations (TNCs) strategise keeping socio-cultural and individual needs of its employees as important elements of their global business strategies. “Strategic HR Management has become a buzzword in organizations across multiple industries.”(Mishra, 2007). Sullivan (n.d.) describes five levels of basic and strategic contributions of HR to a firm. The levels one to three provide information management, functional services, coordination of activities to enhance productivity; the level four imparts competitive advantage by enhanced coordination of the HR talent of the organisation. According to Sullivan (n.d.) level five lends a strategic edge to the organisation in sorting problems and exploiting opportunities (Sullivan, n.d). Thus the importance of HR evolves from operational planning to tactical leadership in a company and enables it to achieve a strategic edge. The HR professional and the HR department make an organisation more efficient, value-based, ethical, and committed to achievement of its strategic goals. Ever since the start of industrial revolution, business owners have been experimenting and creating ways and means to increase the productivity of their workforces. Since employment existed in manufacturing industry only, most of the problems associated with Human Resources were atypical to the industrial environment. Clash of interests between class forces led to antagonism between employees and employers. This was often followed by unrest, unionisation, and strikes by workers. On the whole, company policies were rigid and dictatorial and held no scope for taking care of the social and psychological needs of the employees. Work on conceptualisation of theories, on which businesses could base their personnel management practices on, had begun in the early parts of the twentieth century; however, it was not till the proliferation of the service sector that it became a premier research area for scholars and managers. Till 1970s, the department of Personnel Management handled the task of dealing with the management and controlling the subordinates as an administrative function. Internet and globalisation lent a new paradigm to the Human Resource Management and a HRM ‘best practice’ started to be deliberated upon. Inagki (2004) states that HRM is not only an exercise in theorising of stating of the management perspective, but practical adoption and embedding of approaches in its systematic working and corporate structure (Inagki, 2004) With all this in background, Beer et al through their seminal work in 1984, advocated the use of soft approach in business. The Beer et al model, also called the Harvard or soft model tries to deregulate the workplace environment by proposing that productivity and efficiency of employees increases in a relaxed atmosphere, where individual talent is allowed to flourish. Among the typologies proposed, the soft and hard HRM orientations are the most acceptable and the subject of conceptual constructions and empirical enquiries. The HRM model signals a more business oriented and business integrated approach to management (Kidomobo, n.d.). This model known for its soft approach is called the Harvard model and can be contrasted to the Michigan Model that demands strict adherence to work place regulations and is less humanistic. The Harvard model incorporates an integral vision for business wherein it seeks to protect the interests of all the stakeholders. It aims to attain the four C’s of Commitment , Congruence, Competence and Cost effectiveness In other words it is practice of a commitment based HRM aimed at cost-effective deliverance through promotion congruent behaviour by competent people. A commitment based HRM seeks flat structure, shared goals, coordination and control. The Harvard Model recognises the interests of different kinds of stakeholders. It makes enough space for individual freedom and high performance level to co-exist in the work environment .The Harvard Model proposes a policy of selecting the right candidate for the organisation through tests and interview sessions that aim at spotting talent. The companies adopting HR proactive development type activities are more likely to improve employee satisfaction, customer satisfaction, and corporate performance. (Inagaki, 2004). Boxall (1992) views the ‘Harvard model’ as having some important strength, the first of which is the fact that it incorporates recognition of a range of different stakeholder interests. The Michigan model, standing in stark contrast to the Harvard model, is often characterised by its hard-approach wherein it states that employees are merely ‘resources’ that can be driven to achieve the desired the goals of the organisation through disciplined efforts and by working in totally measurable parameters. The Hard or Michigan model of HRM was proposed by Fombrun, Tichy and Devanna, (1984) in their study conducted for the Michigan Business School. The decision making powers are centralised and mechanism of decision making is intended to be rigid. However, the distinctions may not be as clear cut in actual application and what the companies may be practicing is a mix of soft and hard approaches. On the other hand the difference may also lie in theory and practice of a particular organisation. “The paper concludes that the rhetoric adopted by the companies frequently embraces the tenets of the soft, commitment model, while the reality experienced by employees is more concerned with strategic control, similar to the hard model.” (Truss et.al 1997). Truss et al emphasize distinction, to be made between rhetoric of a soft, Harvard like approach touted to be held by the management, and the employees speaking of a reality, based on hard Michigan like model, in case of company’s HR policy. The Hard model is also called the ‘best fit’ model as it seeks to fine-tune Human Resources with the overall strategy of the business. The Hard model lowers the significance of an individual employee and the factors extraneous to the environment especially the social pulls and pressures that affect his performance. The Michigan Model, a prescriptive and a normative model, proposes that the employee performance can be objectively measured and improved upon through a rigorous system involving selection, appraisal, rewards, and development. Michigan model supposes Human Resource as a reactive controlled with a mechanical decision making mechanism. The Hard model is characterised by a management that exercises top down control and coordination. “The Hard model is known for its unsympathetic treatment of an employee by management and co-workers, lack of control over the content and organization of work, and makes it difficult for an employee to balance his personal and social life with the workplace responsibilities.” (ILO, 2007). However, the use of similar terminology like Human and resource may at times lead to confusion. It may not lead us to discount the fact that despite the seeming similarity we are looking at concepts they are totally opposite in theory and approach. . “These two perspectives on human resource management are viewed as opposing: what is striking is that the same term [HRM] is thus capable of signalling diametrically opposite sets of assumptions ( Storey 1992: 26) (Anon: n.d.)” Quite often working under such stressful environment and doing the ‘balancing trick’ between the management and employees the HR staff may itself become susceptible to stress. “The stress could be borne from insufficient powers to implement, dual allegiance to the management and blue collared employee.” (Sharma). Hence the HR professional should be not only be trained but also empowered to handle tough situation and delicate situations with methodological precision days after day. The U.S. Office of Personnel Management describes the Personal competence of a HR professional as marked by empathy, self-awareness, motivation, self regulation and possession of social skills. Which of these two models would better prepare an organisation for managing stress? It is not difficult to reach a conclusion that the Harvard (Beer et al) model of HRM is more conducive to workplace environment and hence a better method to tackle stresses induced in employees due to rigorous of jobs. Stress has been defined as “stress is the reaction people have to excessive pressures or other types of demand placed on them” by United Kingdom Health and Safety Commission (1999). Directorate General for Employment and Social Affairs, European Commission defines it as “the emotional, cognitive, behavioural and physiological reaction to aversive and noxious aspects of work, work environments and work organisations.” A moderate level of stress can be an important motivational factor and can be instrumental in achieving a dynamic adaptation to new situations. However, chronic and increased stress levels seriously impair the cognitive and behavioural abilities of employees. Often stress is borne out of multiple factors arising out of domestic, social and workplace situation of an employee. Some sources squarely blame the lack of control over factors like conditions at workplace to directly to the increase in stress levels. “If a worker perceives they have a high level of responsibility for output or deadlines but little control over the resources to meet demands then a number of stress symptoms can become evident.” (Stress Awareness, UA). The costs of stress are borne by an individual employee and the organisation. For the individual (ILO), it may be less success at work, including loss of career opportunities and even employment. It can give rise to greater strain in family relationships and with friends. It may even ultimately result in depression, death or suicide. For the organisation the costs of stress take many forms. These include absenteeism, higher medical costs and staff turnover, with the associated cost of recruiting and training new workers. “It has also been shown in recent years that stress takes a heavy toll in terms of reduced productivity and efficiency.”(ILO) One of the most important facets of the Harvard model is its encouragement of communication, and self-expression that acts as a stress busting mechanism in the company It gives an employee a platform to share his or her emotional disturbances, social concerns and also creative abilities. This model HRM encourages both formal and informal and horizontal and vertical communication. Sometimes the line managers address the stress related problems of the employee right at the genesis. Hence the Harvard model also encourages empowerment and decision making in a top down management typology. Over five million employees in the UK are experiencing very stressful work environment (Scott). The silent epidemic leads to ill-health resulting in loss of man hours that affect the productivity of the organisations. Stress was the number one reason for long-term absence in the non-manual workers (CIPD cited by Scott). High levels of stress also lead to development of suicidal tendencies, and alcoholism. “Organisations may have high levels of absence, underperforming at work, and they may have conflict at work. (Willmot quoted by Scott). The results of the survey carried out jointly by emotional health group ‘Samaritans’ and healthcare company ‘Medicash’ couldn’t tell the story better. “32 percent of the respondents drank alcohol up from 23 percent in 2003. Worryingly, 12 percent of the respondents felt that they felt suicidal due to stress” (Scott). “A lot of organisations are waking up to realise that the problem is severe and can not be ignored.” (Moran cited by Scott). Stress has acquired epidemic proportions in the population. “Whatever the cause, organisations can’t ignore stress?” (Scott). The situation may warrant the employees to leave companies that lead to low retention rates. Low retention rate is cause of frequent depletion and inductions entailing not only increased training costs and but also acting as a disturbance in smooth workflow. In fact one of the reasons for increase in stress levels pointed out by experts is lack of communication. “If companies don’t have a culture where people can talk to each other [about feeling stressed], a channel of communication can be closed down and people have to do it formally, possibly through a disciplinary (Ferns).” Such situations are indicative of prevalence of Hard model of HRM. Stress, lack of emotional security, absenteeism and serious pathological conditions like tobacco and alcohol abuse, insomnia, hypertension are outcomes of the implementation of Hard models that has high conformance, performance and tight control of individual activity as its standards. Rather than meeting its intended aim of generating greater productivity and value from Human Resource it acts as a dampener on the success of the company. Often a combination of stress-inducing factors at work and at home leads the worker to a point that he is no longer efficient to cope up with stress. Moran (cited by Scott) calls for entrenchment of communication channels and an increased role of line managers. Besides, making the company aware of individual difficulties, such involvement by line managers can bring down stress perceptibly. However, Willmot (cited by Scott) bails out organisations. He stressed that dealing with such situations is part of the business. “Stress management should not be seen in isolation (Willmot). CIPD suggests stress management strategy calling for regular audits of systems, procedures, and well-being of employees, adopting a dynamic problem solving technique, and individualised and focussed approach. Stress is both the cause and effect bad managerial practice. Geare et. al describe the HR as “focused on establishing a cause effect relationship between the use of various HRM practices and outcomes considered related to firm performance, such as financial performance (Huselid 1995), productivity (Guthrie 2001), and employee retention and absenteeism (Wood & de Menezes 1998).” It is only through a multiple stake holder point of view that understanding the implementation and implications of HR best practices becomes easy. No concern, problem or initiative can be studied in isolation. Each policy deployment, action and its outcome have manifold effects on different set of stake holders. “HRM, as a functional domain operating within an organisation, clearly has an effect on multiple stakeholders.” (Geare et al. 2004). It is only while treating the ‘headcount’ of employees as a mere resource as in Michigan model like approach, much like its fixed assets, that the emotional, social, and psychological aspects of a person are ignored and it leads to unfavourable climate at the workplace. Further Geare et al (2004) moot that the aim of a HRM model wherein employee satisfaction is a goal than being merely an end to achieve productivity. “These models [including Harvard] claim that the primary purpose of the HRM function is to serve and meet the needs and expectations of a number of different constituency groups, namely “… executives, managers, and employees.” (Tsui & Milkovich 1987: 521), and the “… fulfilment of many employee needs is taken as a goal rather than merely a means to an end.” (Walton 1985: 49)”[Geare et.al, 2004]. The soft model, however, doesn’t end at securing a relaxed and a flexible environment for the employee. By looking into the employee’s workplace needs, looking after an employee’s social and emotional concerns, the organisations tends to exercise organisational controls, more cohesion leading onto more productive and efficient climate. The organisations can, for example, ensure itself against problems like stress leading absenteeism, attrition, and discontent. “The soft model emphasizes that this commitment will be generated if employees are trusted, if they are trained and developed, and if they are allowed to work autonomously and have control over their work ( Guest 1987; Hendry and Pettigrew 1990; Kamoche 1994; Mahoney and Deckop 1986; Purcell 1993; Purcell and Ahlstrand 1994; Tyson 1995 a )” (Anon, n.d.). Thus soft model of HR not only improves the lot of employees but enhances the productivity quotient of the organisation as a whole. A bi-forked approach of soft and hard models too can aggravate conflict tension between the managerial staff, the HR department and employees. “Ultimately, then, there is a tension and conflict between elements of self-expression and high trust contained within the soft model, and of direction and low trust within the hard model ( Noon 1992).[Anon, n.d.] Conclusion: Hence it is desirable that a company commits itself to implementation of the Soft Model (Beer, et.al) of Human Resource Management thus ensuring total commitment by the employees to its goals, targets, and strategies. Successful companies are adding to the facilities of employees and taking care of the requirements of their individual and family. They involve the employees at all levels to participate in the decision making process. References Inagaki, Kimio, 2004, Human resource management models to enhance customer satisfaction, employee satisfaction, and corporate performance, Mitsubishi Research Institute, Inc., Retrieved December 25th, 2007, http://www.mri.co.jp/E/JOURNAL/43/8.html Sriyan, de Silva (1997), The changing focus of industrial relations and human resource management, Bureau for Employers Activities International Labour Office, ILO, Retrieved December 25th 2007, http://www.ilo.org/public/english/dialogue/actemp/papers/1998/srsirhrm.htm Safework (n.d), ILO, What is workplace stress? http://www.ilo.org/public/english/protection/safework/stress/whatis.htm#healthef. Geare, A., Edgar, F. & Deng, M. (2006). Implementation and Consumption of HRM: Stakeholder Differences, Research and Practice in Human Resource Management, 14(2), 34-48. 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