Main Models of HRM - Essay Example

Critically evaluate the main models of HRM. In your view, what are the likely future developments in this area Models of Human Resource Management (HRM) began to emerge in the 1980's. At this time HRM was emerging as a common feature in academic literature, the term "Human Resource" having earlier being coined in the 1950's by Peter Drucker in one of his seminars. There are a number of models of HRM that have been produced over the years. These models provide us with an analytical tool to understand HRM development. The models allow us to consider the varying academic perspectives of HRM. Great academic debate surrounds the definition and meaning of HRM, Noon (1992 ) queries whether it is a 'map,' 'model' or 'theory' Armstrong (2006) questions its existence; its meaning and status. Mike Noon (1992) believes that much confusion arises because HRM is of an 'ambiguous pedigree' which can be traced back to organisational development and human capital theory. HRM appears to be an enigma, of which John Storey (1992) states is: " For a variety of reasons; ideological, empirical, theoretical and not least, the micro politics of professional vested interests" (Storey: 1992, 23-24) Torrington (1989) states that the nature of HRM is: " Not yet clear. Like most innovations it tends to be whatever the person speaking at the time wants it to be." (Torrington: 1989, 60) Hence, the main difficulties lie in what is drawn from the term HRM; is it: 1. Simply new terminology, a catch all term, just the re-labelling of the generic activities of personnel management - which is described as: " A basic management function or activity permeating all levels of management in any organisation. Personnel administration is organising and treating individuals at work so that they will get the greatest possible realisation of their intrinsic abilities, thus attaining maximum efficiency for themselves and their group, and thereby giving the enterprise of which they are a part its determining competitive advantage and its optimum results." (Pigors and Myers: 1969) (cited by Legg:1989) OR 2. A term that identifies a new and distinct approach to the management of people in the work environment. One which, although may incorporate the established personnel activities, is truly much more wide in its scope, and thus can be clearly distinguished as being such, is HRM a new phenomenon The models of HRM all lead us back to this underlying question, what is HRM, how can we define it, is it something new or simply the old re-branded, old wine in a new bottle (Torrington, 1989; Poole, 1990; Storey, 1995). Examination and analysis of the various theories and models allows us to consider whether there is one true model in existence or a combination, or, fragments of various models / ideologies. Also, we must consider how relevant in reality are the various theoretical academic frameworks, do they in fact reflect reality, or does each industry sector or business need to simply adapt their own type of model, appropriate to the nature of their enterprise One of the first models of HRM developed was in 1984 by Fombrum, Tichy and Devanna with their "matching model." The model was used to depict their proposed framework of HRM which identifies its position in relation to organisational strategy and demonstrates how HRM activities can be designed to support the strategy of an organisation. The model is manipulated to achieve strategy objectives and goals such as overall increased company performance. If HRM is to be viewed as a new management approach, then distinction from personnel management is required. Distinction may be by integration. This is proposed by Devanna et al (1984) with their model: "They suggest that Human Resource Managers perform four 'generic functions' of selection, appraisal, reward and development. Performance is the dependent variable; it is influenced by a 'cycle' of human resource interventions which represents, sequential managerial tasks." (Storey: 1992, 24) This type of integration in the form of "internal fit" can be acknowledged as being valuable but can also be criticised as being too simplistic a response to organisation strategy (Torrington and Hall;1998). It does not acknowledge forward planning, the strengths / weaknesses / potential of the workforce / motivation / employee relations / interests / behaviour. Torrington and Hall (1998) also note that it has unitarist assumptions, that it does not use an emergent strategy formation approach nor does it recognise employee interests and psychology. A second type of integration proposed to distinguish HRM is to be more business integrated. To acknowledge the importance of employees as a resource and to align them with other business production factors. To be more integrated with the organisations overall strategic plan. Storey (1992) criticises this view stating that the integration is not distinctive enough to validate a new approach, that: "A whole range of approaches which differ markedly could of course nevertheless show the characteristic of being 'integrated.' So if this is all, or even mainly, what HRM means then there would seem to be little that is truly distinctive about it." (Storey: 1992, 25) Walton (1985) (cited by Storey: 1992) believes that HRM needs to have generic activities integrated with performance and to be business integrated; and that something extra so as to be considered as a new innovative management approach. Thus, if integration as highlighted, is to be the distinguishing factor then clearly HRM can have different adaptations due to the fact that integration is viewed differently. Again leading back to the thought that it is whatever an organisation wants it to be. The two major models of HRM are the 1984 Harvard Model of Beer and Spector, originating in the US, and that of Guest (1989), originating in the UK. The two models can be compared to get an interesting perspective on how the cross Atlantic divide may affect HRM and also to assess if the characteristics lean more towards HRM as distinctive approach or towards traditional personnel management. However, when considering such models it must be noted, as highlighted by Mike Noon (1992), that the Harvard Model first appeared in 1981 in an MBA syllabus and its writers did not intend for it to be a new approach / theory, simply: "A framework for thinking and managing human resources that general managers will find useful" (Beer et al 1984) (cited by Noon: 1992, 16) Their intention was to focus attention on the need to develop a specific course at the Harvard Business School. It was other academics that gave the framework the status of being a theory, new approach. Noon (1992) also notes that Guest based his model greatly on the work which emerged from Harvard and that he does give his work the status of being a theory with the intention being: "To develop a set of testable propositions and finally to arrive at a set of prescriptive policies." (Guest; 1987) Both of the models are prescriptive in terms their outcomes as also is personnel management. Prescriptive in that they are stating that these are what the outcomes should be, that this is the one best way. Apart from its outcomes (commitment / competence / congruence / cost effectiveness) the Harvard model is analytical. Guests' model is completely prescriptive in its outlook, which agrees with personnel management. Yet, as noted by Torrington and Hall (1998) its policy goals (strategic integration, commitment, flexibility and quality) align themselves with HRM in that they are opposed to personnel management, again leading back to the debate over what HRM is. The Harvard model only exhibits a one-way relationship between organisational strategy and HR strategy, again similar to personnel management that is based on compliance. Yet HRM focus' upon commitment, which is, however, acknowledged by the model as a prescribed outcome. Again, we are lead back to the debate on definition of HRM, it may have been expected that the model would express a two-way relationship (dialogue) between its HRM policy choices and HR outcomes. Guests' model does identify a two-way relationship, thus distinguishing it from personnel management. In relation to Guests model, the goals are viewed as a package, all are required to achieve the desired organisational outcomes. The clarity of the goals can be viewed as a strength and as a weakness. Purcell (1991) sees the goals as being unattainable and disagrees with the prescriptive nature which suggests that there is only one way and that this is it. Hendry and Pettigrew (1992) devised the Warwick Model which was based on the Harvard Model. However, their model is purely analytical, there are no prescriptive elements. It also identifies a two way relationship and emphasis is placed upon the role of the personnel function in HRM. This model has, however, not received a great deal of academic attention. Many authors are critical of the models. Benkhoff (1997) states: " Those models offer hardly any theoretical arguments why the suggested HR outcomes should be combined. We have no evidence that in reality they are linked with each other, or that the combined characteristics lead to superior organisational performance and individual well-being. We neither know whether HRM is good for the employer, nor whether it is good for employees" (Benkhoff: 1997, 47) Legg (1989) believes that there is no single model of either personnel management or HRM. The contrasts and comparisons of these two models with the generally accepted characteristics (derived from wide research of academic sources) of personnel management can be highlighted and summarised by the means of tabular format. Harvard Guest Personnel Management Prescriptive Y Y Y Analytical Y N N One way strategic relationship Y N Y Two way strategic relationship N Y N Strategic integration Y Y N Commitment Y Y N Flexibility Y Y N Quality Y Y N Y = YES N = NO There are a number of key differences between the models of Beer et al and Guest. Both models compared are prescriptive, suggesting what should be done. Other models forwarded may be descriptive thus commenting on what is happening or, they may be conceptual. John Storey has proposed such a conceptual model which contains no suggestion or description but which relates: " The theoretical inferences behind the definition of HRM to the wider processes of job regulation, organisation restructuring and the management of change." (Clarke: 1993, 3) Essentially the work of Storey outlines 27 key differences, factors that distinguish HRM from personnel management, under four headings (beliefs and assumptions / strategic aspects / role of line managers / key levers). Storey's work is an elaboration of earlier contrasts made by Guest (1987) (cited by Gunnigle et al: 1995) and presented in a table of differences. However, as highlighted by Gunnigle et al (1995) Guest in his approach of summarising the key differences was: "Cautious that this does not necessarily infer that HRM is better that 'traditional' personnel / industrial relations management and should be adopted by organisations in general. Rather, Guest suggests that traditional approaches may be more appropriate in certain organisational contexts such as large bureaucratic organisations or heavily unionised organisations with adversarial collective bargaining traditions, while HRM may be appropriate in organisations with more organic structures and characterised by more individualist high trust management-employee relations. " (Gunnigle et al: 1995, 245) Storey approaches an analysis of HRM by creating an 'ideal type', the purpose of which: ' is to simplify by highlighting the essential features in an exaggerated way' (1992:34, cited in Beardwell and Holden, 1997, p.19). Twenty seven points of difference Dimension Personnel and IR HRM Beliefs and assumptions 1 Contact Careful delineation of written contracts Aim to go 'beyond contract' 2 Rules Importance of devising clear rules/mutuality 'Can do' outlook; impatience with 'rule' 3 Guide to management action Procedures 'Business-need' 4 Behavior referent Norms/custom and practice Values/mission 5 Managerial task vis--vis labor Monitoring Nurturing 6 Nature of relations Pluralist Unitarist 7 Conflict Institutionalized De-emphasized Strategic aspects 8 Key relations Labor management Customer 9 Initiatives Piecemeal Integrated 10 Corporate plan Marginal to Central to 11 Speed of decision Slow Fast Line management 12 Management role Transactional Transformational leadership 13 Key managers Personnel/IR specialists General/business/line managers 14 Communication Indirect Direct 15 Standardization High (e.g. 'parity' an issue) Low (e.g. 'parity' not seen as relevant) 16 Prized management skills Negotiation Facilitation Key levers 17 Selection Separate, marginal task Integrated, key task 18 Pay Job evaluation (fixed grades) Performance-related 19 Conditions Separately negotiated Harmonization 20 Labor management Collective bargaining contracts Towards individual contracts 21 Thrust of relations with stewards Regularized through facilities and training Marginalised (with exception of some bargaining for change models) 22 Job categories and grades Many Few 23 Communication Restricted flow Increased flow 24 Job design Division of labor Team work 25 Conflict handling Reach temporary truces Manage climate and culture 26 Training and development Controlled access to courses Learning companies 27 Foci of attention for interventions Personnel procedures Wide ranging cultural, structural and personnel strategies Researching and analyzing the various HRM models highlights the apparent scale that is in operation with regards to HRM, that is, hard and soft versions. Hard HRM concentrates on the resource, workers as a commodity: " That is something to be used dispassionately and in a formal rational manner" (Storey: 1992, 26) Soft HRM places more emphasis on the human aspect and as noted by Storey (1992) relates back to the human relations movement from where personnel management can claim some of its origins. Guest (1989) has mapped the various meanings on a matrix that can be used to show the type of HRM practiced by an organisation. HRM can thus have differing origins / intellectual antecedents depending on the type (hard / soft) of approach adopted. Soft HRM lays its origins with the 1930's human relations movement, stressing motivation and participation. Hard HRM focus' on resource and emerges from a strategic, calculative approach. An example of this is human asset accounting or utility analysis that calculates in monitory terms the value of an organisations human assets. Such an approach relies heavily on information technology and specific software designed for its use as the mathematics involved is extremely time consuming. Michael Sturman (2003) however, firmly stands behind such an approach (especially in hospitality where, from his findings, HR accounts for up to 50% of costs): " General managers and human resource decision makers need to be trained to think quantitatively about human resource interventions to be able to determine where investments in human capital are necessary to contribute to the organisations bottom line. Utility analysis is a tool that can help make this happen." (Sturman: 2003, 106) Guest (1999) believes that this hard version of HRM is an approach adopted due to external competitive threats within the marketplace and therefore the need to exploit the human resource to its full potential and that: "The resultant exploitation may be paternalist and benevolent; but, equally, it may operate against the interests of workers. Essentially, workers are simply resources to be squeezed and disposed of as business requirements dictate." (Guest: 1999, 7) On this view of Hard HRM John Monks (1998) (cited by Guest: 1992) states: "In the wrong hands HRM becomes both a sharp weapon to prise workers apart from their union and a blunt instrument to bully workers" (Monks: 1998) (Cited by Guest: 1992, 8) Some academics view the hard version of HRM to have little distinguishing features. Certain fragments of distinction may be present in that it has the potential to incorporate factors such as flexibility and HR policies / strategies (such as performance management / performance related pay etc.). However, it has been criticised, Legge (1995) views this approach as re-labelling, simply reasserting management control but under a different guise, under the guise of Human Resource Management. Soft HRM, which looks at employees as humans rather than just another resource, has psychological underpinnings, it focus' on aspects such as employee behaviour, employee relations etc. Intangible concepts such as commitment are viewed as highly important in order to achieve organisational goals. Commitment defined as: " An attitude or an orientation toward the organisation which links or attaches the identity of the person to the organisation" (Sheldon: 1971) (cited by Benkhoff 1997, 47) Brigit Benkhoff (1997) believes that it can be explained by social identity theory developed by Tajfel and Turner (1985) that: "Individuals like to perceive themselves and others as members of psychological groups. This happens because they need to define their social identity as an important part of their self-concept, and want to enhance their self-esteem by belonging to groups that are positively valued." (Benkhoff: 1997, 47) Commitment is clearly related to integration because employees would not be able to identify with an organisations strategy is it was against their values and if they did not feel like an important part of the business. However, within the unitarist framework of HRM and the individualist nature, is this approach always successful Do practices such as personal development, individual training plans etc not simply encourage commitment to ones career instead of the desired commitment to the organisation Therefore may this be deemed poor practice as it will cost the organisation in terms of finance, turnover and performance It is evident from research of emergent literature on HRM and its models that it is an extremely topical and debatable issue that exhibits a great deal of contradiction. But to what extent does the theory relate to reality, is it evident Have the ideals and practices associated with HRM been adopted by the industry Are they evident within the workplace Academic peers within have taken differing viewpoints on the matter. In modern industrial society the most dominant sector is the tertiary service industries, which includes sectors such as retailing, hospitality, leisure and tourism. These industries are in many cases strategically reliant on business generated due to the quality of the"experience" received, and hopefully enjoyed, by the customer. Many aspects of what the customer pays for are intangible products, namely is the service, welcome and impression provided by front line staff. Hence it would therefore make logical business sense (from a long term, strategic prospective) to adopt a HRM model which embraces the soft version of HRM in such service type industries. Hoque (1999), due to the findings of his study, positive in his view of HRM within the hospitality industry especially because HRM: "As a concept is rooted firmly within a manufacturing paradigm, and its credibility will be seriously undermined if it is shown to be irrelevant or inapplicable within the services" (Hoque, 1999, 79). Hoque's study found that there was great interest in HRM and high levels of strategic importance put upon HR issues. He found that there were a great number of personnel specialists in the hospitality industry. In his opinion this highlighted the importance of HRM and the time spent on its activities. Although, admittedly it also gives credence to the more negative view expressed on this factor by other authors, e.g. Lucas (1995), who believe that the greater number of specialists is due to the constant need to recruit and carry out basic training because of the industry's characteristic high labour turnover. Hoque (1999), however, remains positive and believes that despite the need for development and improvement of HR policies and practices, that larger hotels, due to their sector size within the industry, may influence standards across the board and provide good example. Hoque (1999) believes that the change / growing concern he found in relation to HRM is due to the growing realisation by managers that service quality is essential in order to obtain customer satisfaction and thus prosperity. In a study similar to Sisson (1993) Rosemary Lucas carried out a survey based on information from the 1998 Workplace Employee Relations Survey, which incorporated hotels/bars/restaurants/cafes/holiday camps. The study was designed to establish if 'fragments' or 'bundles of practice' were evident within hospitality. The study concluded that HRM has the potential to be more strongly set up in the hospitality industry than in all other industries and services due to line managers who are strongly active in HRM matters and because of evidence of strategic planning. Various fragments such as and individualist / controlling approach, management driven participation and involvement and poor HR practices (low pay, long hrs etc.) indicate practice of hard HRM, described by Lucas as: "An extreme example of the 'retaining control / cost control'" (Lucas, 2002, 301 ). Yet despite the hard approach the results showed that hospitality employees: "Show a stronger level of endorsement for the way they are managed than their all industries and services counterparts. They are more likely to be proud to tell people who they work for, and to believe their managers understand their needs towards meeting family responsibilities and encourage them to develop their skills. They are also more likely to be satisfied with the respect they get from their supervisors and line managers" (Lucas, 2002, 300). Worsfold (1999) highlights that when researching HRM and the hospitality industry, the type of HRM (hard or soft) adopted is rarely addressed: "It would be reasonable to assume that sectors such as the fast-food industry would adopt a 'hard' version with its emphasis on control, whereas, in a luxury hotel the 'soft' version of HRM with its emphasis on engendering commitment might be considered appropriate" (Worsfold, 1999, 342). If soft HRM were to be the recommended way forward due to the service aspect and reliance on the human resource of our modern industries then models which highlight these important issues and are focused on achieving commitment and quality would definitely be advised. Following her study Lucas (2002) recommended that perhaps soft HRM should be adopted in hospitality. Worsfold (1999) stated: "The literature concerning 'soft' versions of HRM suggest that one outcome of the adoption of HRM is organisational commitment. The commitment resulting from HRM policies is considered to result in greater effort which, in turn results in improved performance." (Worsfold: 1999, 344) This would seem extremely desirable in the hospitality industry, a committed workforce who provide the highest quality service to guests, a very important feature as much of hospitality is intangible, which meets / exceeds customer expectation and enhances performance. Within hospitality employees can be regarded as the most valuable asset, working on the front line, able to make or break a sale. Hence, the recommendation towards softer HRM approaches. This would appear to be an emerging trend within the industry. Many organisations have been accredited with the Investors in People standard: "The Standard provides a national framework for improving business performance and competitiveness, through a planned approach to setting and communicating business objectives and developing people to meet these objectives. The result is - what people can and are motivated to do matches what the organisation needs them to do. Investors in People is cyclical and should engender the culture of continuous improvement." (IIP: 2003) It is a standard based achieving excellence through the commitment of staff in which the organisation has vested a great deal of time and money through various training and development initiatives. IIP is a growing feature within the service sector as are other such initiatives. Many retailing businesses now also pride themselves on their training and development schemes which are designed to promote a good organisational culture, a committed workforce that is not only integral to, but, part of the organisation; examples include Sainsbury's, Marks & Spencer & Asda. It can therefore be concluded that within today's industries that employ models designed around a soft approach to HRM are the most likely tool that will achieve strategic success. A recent study carried out by Paula Silva (2006) of hotel chains in the western U.S. concluded that management should consider the use of personality tests in the selection of hotel employees as the results suggest that certain traits are related to an employee's job satisfaction and organisational commitment. Again, evidence that softer methods of HRM are the most productive methods and that a strategic approach to HRM should be implemented by success seeking business'. In terms of future development the work of British HR guru Guest is fundamental but perhaps in a non prescriptive and more inclusive fashion. Strong focus upon commitment and quality is highly recommended. (WORD COUNT: APPROX 3500) References Armstrong, M. (2000) The name has changed but the game has remained the same. Employee Relations [online]22 (6). Available From: http://www.emeraldinsight.com/10.1108/01425450010379207 [Accessed 14 Oct 2007] Armstrong, M (2006) A Handbook of Human Resource Management Practice. 10th edition. London: Kogan Page Beardwell, I & Holden, L (1997) Human resource management: A Contemporary Perspective. 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