[type text] - osn academy

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[2]

SUBJECT – LABOUR WELFARE (HR)

SUBJECT CODE – 55

UNIT - III

9118 888 501

[3] Human Resource Department (HRD)

CONTENTS

1. Human Resource Development (H.R.D.)

2. Human Resources Accounting and Audit

3. Knowledge Management

4. Human Resource Information System (HRIS)

5. International Human Resource Management (IHRM)


CHAPTER –1

HUMAN RESOURCE DEVELOPMENT

Concept & Definition

Human resource development is the key to enhancing and effective utilisation of

intellectual, technological and entrepreneurial skills of human resources. The concept of

Human Resource Development (HRD) is comparatively of recent origin and is now used at

both macro and micro levels. At the macro level, HRD is described as the core of all

developmental efforts in the sense of improvement of quality of life of people of a nation.

According to T.V. Rao, “HRD is a continuous planned process by which employees

are helped to :

(a) acquire or sharpen capabilities required to perform various functions associated with their

present or expected future roles;

(b) develop their general capabilities as individuals and discover and exploit their own inner

potentials for their own and organisational purpose; and

(c) develop [an organisational culture in which superior-subordinate relationships, team work

and collaboration among sub-units are strong and contribute to the professional well-

being, motivation of employees.

According to Ishwar Dayal, HRD involves:

(a) ways to better adjust the individual to his job and the environment,

(b) the greatest involvement of an employee in various aspects of his work; and

(c) the greatest concern for enhancing the capabilities of the individual.

Human Resource Development is an important part of human resource management

that specifically deals with training and development of the employees in the Organization.

Human resource development includes training a person after he or she is first hired,

providing opportunities to learn new skills, distributing resources that are beneficial for the

employee's tasks, and any other developmental activities.

Development of human resources is essential for any organisation that would like to

be dynamic and growth-oriented. Unlike other resources, human resources have rather

unlimited potential capabilities. The potential can be used only by creating a climate that can

continuously identify, bring to surface, nurture and use the capabilities of people

Human Resource Development (HRD) system aims at creating such a climate. A

number of HRD techniques have been developed in recent years to perform the above task

based on certain principles. This unit provides an understanding of the concept of HRD

system, related mechanisms and the changing boundaries of HRD.

http://www.whatishumanresource.com/human-resource-management

http://www.whatishumanresource.com/training-and-development


The concept of HRD was first introduced by Leonard Nadler in 1969 in a

conference in US. Human Resource Development (HRD) is the framework for helping

employees develop their personal and organizational skills, knowledge, and abilities. Human

Resource Development includes such opportunities as employee training, employee career

development, performance management and development, coaching, mentoring, succession

planning, key employee identification, tuition assistance, and organization development.

The focus of all aspects of Human Resource Development is on developing the most

superior workforce so that the organization and individual employees can accomplish their

work goals in service to customers

According to Leonard Nadler, "Human resource development is a series of organised

activities, conducted within a specialised time and designed to produce behavioural

changes."

According to M.M. Khan, "Human resource development is the across of increasing

knowledge, capabilities and positive work attitudes of all people working at all levels in a

business undertaking."

Human Resource Development (HRD) is the framework for helping employees

develops their personal and organizational skills, knowledge, and abilities.

Features of HRD

Main features of human resource development are as follows:

1. It is a planned and systematic approach to the development of the people

2. It is a continuous process of developing the competencies, motivating them to continuous

improvement in their efficiencies

3. It is based on the belief system that the development of an individual is a never-ending

process

4. It is an interdisciplinary concept and involves confluence of idea from many sciences.

5. It is concerned with improving the skills, attitudes and behaviors of employees to benefit

both the individual as well as organization.

Importance of HRD

The importance of human resources development can be understood through following

points.

1) Develops Hidden Potential - enhances the capabilities of people by exploring their

hidden potentials and shaping them to achieve organizational goals.

2) Improves the Communication System - improves the communication system to open

the channel of communication so that everyone understands the other person in a better

way and there is no chance of ambiguity.

3) Enhances Employee Morale - enhances the employee morale as well as develops the

same of belongingness as proper rewards are being given to the star performer.

http://www.whatishumanresource.com/mentoring

http://www.whatishumanresource.com/succession-planning




4) Improves Coordination and Cooperation leads to cohesive groups and terms

5) Achieving Organizational Goals - ultimately leads to overall growth and development of

the employee through the above mentioned techniques.

6) Brings Innovation:

It creates trust and openness among employees and develops analytical and rational skills

among employees which help them in becoming more innovative, proactive and risk

taking.

7) Helps in Bringing Change makes employees ready to change and undergo

transformation and relearn after unlearning what they had already learnt.

Functions of HRD

1. Training and Development:

Training and Development focus on changing or improving the knowledge, skills and

attitudes of individuals. Training typically involves providing employees the knowledge

and skills needed to do a particular task or job. Developmental activities have a longer

term focus on preparing for future work responsibilities while also increasing the

capacities of employees to [perform their current jobs.

2. Employee Orientation:

When a new employee enters the organization, usually in the form of employee

orientation and skills training. Employee orientation is the process by which new

employees learn important organizational values and norms, establishing working

relationships, and learn how to function within the jobs. The HRD staff and the hiring

supervisor generally share the responsibility for designing the orientation process,

conducting general orientation sessions and beginning the initial skills training.

3. Coaching:

In the coaching process, individuals are encouraged to accept responsibility for their

actions, to address any work related problems and to achieve and sustain superior levels of

performance. Coaching involves treating employees as partners in achieving both personal

and organizational goals.

4. Counselling:

Techniques are used to help employees deal with personal problems that may interfere

with the achievement of these goals. Counselling programs may address such issues as

substance abuse, stress management, smoking cessation, or fitness, nutrition, and weight

control.

5. Management Development Program:

To ensure that managers and supervisors have the knowledge and skills necessary to be

effective in their positions. These programs may include supervisory training, job rotation,

seminars or college and university courses.


6. Organization Development:

It is defined as the process of enhancing the effectiveness of an organization and the well

being of its members through planned interventions that apply behavioral science

concepts. The role of the HRD professional involved in an OD intervention is generally to

function as a change agent. Facilitating change often requires consulting with and

advising line managers on strategies that can be used to effect the desired change.

7. Career Development:

It is “ongoing process by which individual‟s progress through a series of stages, each of

which is characterized by a relatively unique set of issues, themes and tasks.” Career

development involves two distinct processes; career planning and career management.

Career planning involves activities performed by an individual, often with the assistance

of counsellors and others, to assess his or her skills and abilities in order to establish a

realistic career plan. Career management involves taking the necessary steps to achieve

that plan, and generally focuses more on what an organization can do to foster employee

career development.

Human Resource Development Process

Major adjustments in the external and internal environments necessitate corporate change.

Human Resource Development Process


One the need for change is recognized, the process of determining training and

development needs begins. Essentially, two questions must be asked: “What are our HRD

needs?” and “What do we want to accomplish through our HRD efforts?” The objectives

might be quite narrow if limited to the supervisory ability of a manager. Or they might be

broad enough to include improving the management skills of all supervisors.

Step-1 Determining Human Resources Development Needs

Three types of analysis are required in order to determine an organization‟s HRD

needs: organization analysis, task analysis, and person analysis.

(a) Organization analysis examines the entire firm to determine where training and

development should be conducted. The firm‟s strategic goals and plans should be studied

along with the results of human resource planning.

(b) In conducting task analysis, two primary factors should be determined: importance and

proficiency. Importance relates to the relevance of specific tasks and behaviors in a

particular job and the frequency with which they are performed. Proficiency is the

employees‟ competence in performing these tasks. Job descriptions, performance

appraisals, and interviews or surveys of supervisors and job incumbents should provide

the data needed.

(c) Person analysis, which focuses on the individual employee. The first step in a person

analysis is to compare employee performance with established standards. If the person‟s

work is acceptable, training may not be needed. However, if the employee‟s performance

is below standard, further investigation will be needed to identify the specific knowledge

and skills required for satisfactory job performance.

Step-2 Establishing Human Resource Development Objectives

Clear and concise objectives must be formulated for HRD. Without them, designing

meaningful HRD programs would not be possible.

Reorientation

While orientation programs are typically conducted for new employees, programs

designed for employees who have been on the payroll for a longer period may also be

needed. As organizations change, different management styles may develop, communication

methods may be altered, and the structure of the organization itself may, and typically does,

take on a new form. Even the corporate culture may evolve into something different over

time. Any of these changes may warrant reorientation. Without it, employees may find

themselves in organizations that they do not even recognize.

Step- 3 Selecting Human Resource Development Methods

HDR methods are used both on and off the job. Often it is not feasible to learn while

doing. Thus, although a large portion of training and development takes place on the job,

many HRD programs occur away from the work setting.


A firm‟s future lies primarily in the hands of its management. This group performs

certain functions that are essential to the organization‟s survival and prosperity. Managers

must make the right choice in most of the numerous decisions they make. Otherwise, the firm

will not grow and may even fail. For these reasons, it is imperative managers keep up with

the latest developments in their respective fields and-at the same time-manage an ever

changing workforce operating in a dynamic environment. Thus, many organizations

emphasize training and development programs for managers. Management development

consists of all learning experiences resulting in an upgrading of skills and knowledge

required in current and future managerial positions. While critical knowledge and skills are

provided by organizations in development programs, the process also requires provided by

organizations in development programs, the process also requires personal commitment of

the individual manager. In fact, taking responsibility for one‟s own development may be the

most important aspect.

First-line supervisors, middle managers, and executives may all be expected to

participate in management development programs. These programs are offered in-house or by

professional organizations, colleges, and universities. In-house programs are planned and

presented by a firm‟s HRD specialists from the human resource department. Line managers

are also frequently utilized to conduct segments of a program.

Step-4 Human Resource Development Media

Organizations utilize various media to enhance their HRD programs. In this context,

media are special method of communicating ideas and concepts in training and development.

Multimedia presentations, using the computer in conjunction with video and/or other media,

appear to offer tremendous potential. More conventional media include videotapes, films,

closed-circuit television, slide projectors, overhead and opaque projectors, flip charts, and

chalkboards.

Step-5 Implementing Human Resource Development Programs

Implementing HRD programs is often difficult. One of the reason is that managers are

typically action oriented and feel that they are too busy for HRD. Another difficulty in

program implementation is that qualified trainers must be available. In addition to possessing

communication skills, the trainers must know the company‟s philosophy, its objectives, its

formal and informal organization, and the training program‟s goals. Human resource

development requires more creativity than perhaps any other human resource specialty.

A new program must be monitored carefully, especially during its initial phases.

Training implies change, which employees may resist vigorously. Others may sit back

waiting, perhaps even hoping, that the program will fail. Participant feedback is vital at this

stage because there will be bugs in any new program. The sooner these problems are

resolved, the better the chances for success.


Another difficulty in implementing HRD programs is record keeping. Records should

be maintained on all training the employee receives and how well he or she performs during

training and on the job. This information is important in terms of measuring program

effectiveness and charting the employee‟s progress in the company.

Step-6 Evaluating Human Resource Development

The credibility of HRD can be greatly enhanced by showing that the organization

benefits tangibly from such programs. Thus, the HRD department must document its efforts

and clearly show that it provides a valuable service. The documentation should be in the form

of memoranda to management, written reports of activities, and any other evidence that

indicates a quality product.

Organizations have taken several approaches to determining the worth of specific

programs. These involve evaluations of (1) the participants‟ opinions of the program, (2) the

extent to which participants have learned the material, (3) the participants‟ ability to apply the

new knowledge, and (4) whether the stated training goals have been achieved.

(1) Participants’ Opinions

Evaluating an HRD program by asking the participants‟ opinions of it is an

inexpensive approach that provides an immediate response and suggestions for improvement.

The basic problem with this type of evaluation is that it is based on opinion rather than fact.

(2) Extent of Learning

Some organizations administer tests to determine what the participants in an HRD

program have learned. The pretest-posttest, control group design is one evaluation procedure

that may be used. In this procedure, the same test is used before and after HRD training.

(3) Behavioral Change

Test may indicate fairly accurately what has been learned, but they give little insight

into desired behavioral changes. For example, it is one thing for a manager to learn about

motivational techniques but quite another matter for this person to apply the new knowledge.

(4) Accomplishment of HRD Objectives

Still another approach to evaluating HRD programs involves determining the extent to

which stated objectives have been achieved. In evaluating HRD programs, managers should

strive for proof that the program is effective. While such proof may be difficult to establish,

the effect on performance should at least be estimated to show whether the GRD training

achieved its desired purpose.

Emergence of Human Resource Development :

During the 1960s and 1970s, professional trainers realized that their role extended beyond

the training classroom. Training and Development Competencies therefore expanded to


include interpersonal skills such as a coaching, group process facilitation, and problem

solving. This additional emphasis on employee development inspired the ASTD to rename

itself as the American Society for Training and Development (ASTD).

Further in the 1990s and up to today, efforts were made to strengthen the strategic role of

HRD that is how HRD links to and supports the goals and objectives of the organization.

There was also an emphasis within ASTD on performance improvement as the particular

goal of most training and HRD efforts, and on viewing organisations as high performance

work systems.

Emergence of Human Resource Development in India

The concept of HRD was introduced in India by T V Rao. He is regarded as the father

of HRD in India. Larsen and Toubro was the pioneer in India to design and implement

an integrated HRD system in the 1970s. Slowly other companies also started establishing

it. The concept of HRD scorecard was introduced in India by T.V. Rao and Dr. Udai

Pareek.

HRD scorecard is an indicator of the level of HR maturity of an organization and its

alignment with the organization‟s strategy. The model is based on the assumption that

competent and motivated employees are needed to provide quality products and services

at competitive rates and ways that enhance customer satisfaction. In the HRD scorecard,

the maturity level of HRD in an organization is measured on four dimensions.

Four indicators, as described after this, are used to arrive at a comprehensive score for

HRD maturity.

a) HRD Systems Maturity Score:

Employee competency and commitment can be developed through appropriate HRD

mechanisms (tools and systems). In an HRD mature organization, there will be well-

developed HRD systems such as:

Human Resource Planning and Recruitment

Performance Management System

Training

Career Development and Succession Planning

Job Rotation

OD Interventions

HR information systems (HRIS)

b) HRD Competence Score:

The competencies of the staff from different groups (HRD department, top management,

line managers and supervisors, trade union leaders, and blue / white collar employees) are

measured. Each group is assessed on the following dimensions:


The level of HRD skills they possess.

Attitudes and support to learning and their own development

Extent to which they facilitate learning among others in the corporation and those

who work with them

Their attitudes and support to HRD function and system

c) The HRD Culture:

The HRD culture measures values and processes created by the HRD tools. Employees

and their styles also play a crucial role in building sustainable competencies in the

organisation, these needs to be measured and monitored. It is possible for some

organizations to have minimal formal HR systems and yet have a high level of HR

competencies and HRD culture. Specialized questionnaires have been developed for

measurement of HRD culture for such organizations.

d) Business Linkage Score:

This score indicates the extent to which HRD efforts (tools, processes, culture, etc.) are

driven to achieve business goals or goals of the organization. The business linkage goals

include:

Business excellence including profitability and other outcomes the organization is

expected to achieve

Internal Operational Efficiencies

Internal Customer Satisfaction

External Customer Satisfaction

Employee Motivation and Commitment

Cost-effectiveness and Cost-Consciousness among Employees

HRD Culture

In the fast changing environment, the organisations have to develop and maintain an

enabling culture to become dynamic and growth oriented. The purpose of HRD is to facilitate

development of such a culture in the organisation. An enabling culture is one where

employees use their initiative, risk, experiment, innovate and make things happen.

HRD Culture Variables

The term OCTAPACE has been coined to denote the characteristics of HRD culture which

include:

a) Openness: The term „openness‟ refers to “freedom to express ideas, opinion, views”,

“frankness”, “outspoken”, “straightforwardness”.


b) Confrontation: The term confrontation refers to “conflict”, “encounter”, “dispute”,

“estrangement”, to evolve effective and efficient suggestions and solutions to a given

problem.

c) Trust: Trust means “belief”, “confidence”, “faith”. One cannot order others to trust, it

comes only through their experience.

d) Autonomy: The word autonomy refers to “freedom”, “independence”. Freedom to do a

thing in the way one wants tends to act as a morale booster.

e) Proaction: The term “pro-action” generally refers to “planning in advance”, “lead from

the front”, “the state of alertness / preparedness”.

f) Authenticity: The term “authenticity” refers to “genuine”, “factual”, “legitimate”,

“actual”. Every institution has a goal and various departments are used in the process to

achieve the objectives through their varied and specialised skills.

g) Collaboration: The term “collaboration‟ refers to “cooperation”, “participation”,

“teamwork”, “association”. Cooperation means working together.

h) Experimentation: Modern organisations are often systems and to cope with

environmental challenges, they allow their members to experiment with new ideas.

HRD Climate

Organisational climate is the summary perception which people have about an

organisation. It is a global expression of what the organisation is. Organisational climate is

the manifestation of the attitudes of organisational members toward the organisation itself.

An organisation tends to attract and keep people who fit its climate so that its patterns are

perpetuated at least to some extent.

HRD climate may be defined as perceptions the employee have of the developmental

environment of an organisation. HRD climate contributes to the organisations‟ overall health

and self-renewing capabilities which, in turn, increase the enabling capabilities of individual,

dyads, teams and the entire organisation.

HRD Matrix

HRD Matrix identifies the interrelationships between HRD instruments, processes,

outcomes and organisational effectiveness. HRD instruments include performance appraisal,

counseling, role analysis, potential development, training, reward system, job enrichment, etc.

These mechanisms may vary depending upon the size of the organisation, the commitment of

the top management, the environment, the culture and climate, the perception of the people,

technology used, methods employed by the competitors etc.


HRD Sub-Systems / Mechanisms / Instruments

T.V. Rao is of the opinion that HRD sub-systems comprise performance appraisal,

potential appraisal, career planning, training, performance coaching, organisation

development, employee welfare, rewards, quality of work life and human resource

information system. Udai Pareek refers to performance appraisal, feedback, counseling,

potential appraisal, career advancements, career planning and training as dimensions of HRD.

A well designed HRD programme should have the following sub-systems:

i. Performance Appraisal:

It is the process of determining how well a worker is performing his job. It provides a

mechanism for identification of qualities and deficiencies observed in an employee in

relation to his job performance. The object of appraisal is to determine the present

state of efficiency of a worker in order to establish the actual need for training.

ii. Potential Appraisal:

It provides necessary data which helps in preparing career plans for individuals. It

aims at development of latent abilities of individuals.

The HRD function has a long way to go in introducing a streamlined potential

appraisal system which ensures a good match between the employees and the job.

iii. Feedback Counselling:

Feedback of performance data can be used to monitor individual development and for

identifying training needs. Career counselling and verbal rewards are integral parts of

review discussions between the superior and the subordinate.

iv. Training:

It is a process that involves the acquisition of skills, concepts and attitudes in order to

increase the effectiveness of employees in doing particular jobs. Training is expected

to provide the needful stimulus to initiate impulses of changes in management and to

improve efficiency, productivity and administrative effectiveness.

v. Role Analysis:

It is a participatory process which aims at defining the work content of a role in

relation to all those with whom the role occupant has significant interaction in the

performance of his job.

vi. Career Planning:

It means helping the employees to plan their career in terms of their capacities within

the context of organisational needs. It is the planning of one‟s career and

implementation of career plans by means of education, training, job search and

acquisition of work experiences.


vii. Job Rotation:

The work tasks should be rotated among the employees so as to broaden their field of

specialization as well as their knowledge about the organisation‟s operation as a

whole. The work-tasks, therefore, should be rotated once a year among the various

employees depending upon their qualifications and suitability to perform new roles.

viii. Quality Circle:

It is a small group of employees doing similar or related work who meet regularly to

identify, analyse and solve product-quality problems and to improve general

operation. The quality circles are relatively autonomous units (ideally about 10

workers), usually led by a supervisor or a senior worker and organised as work units.

The workers, who have a shared area of responsibility, meet periodically to discuss,

analyse, and propose solutions to ongoing problems.

ix. Reward System: Rewarding employees performance over and above their normal

wages and salaries is considered to be an important task of the HRD. In any

organisation, the managers and workers have similar motivations, although the

manager controls the means of achieving need-satisfaction at work and each employee

seeks self-development to go as far as possible on his own ability.

x. Organisation Development (OD):

It is an organisation-wide, planned effort managed from the top, placing emphasis on

making appropriate intervention in the ongoing activities of the organisation. It

provides a normative framework within which changes in the climate and culture of

the organisation towards harnessing the human potential for realization of

organisational objectives is brought out.

xi. Quality of Working Life (QWL):

The conditions under which the workers work and live, assume the form of

another important factor contributing to workers satisfaction or otherwise and

consequently the job satisfaction.

For an employee to be able to work at his best, it is necessary to understand that

inadequate working and living conditions produce adverse mental and physical

effect on the employee, ultimately causing decline in the efficiency.

xii. Human Resource Planning:

It is the process aimed at ensuring that the organisation will have adequate number of

qualified persons, available at proper time, performing jobs which would meet the

needs of the organisation and also provide satisfaction for the individuals involved.

xiii. Recruitment, Selection and Placement: Recruitment is generation of applications

for specific positions for anticipated vacancies. The ideal recruitment efforts will be


to generate adequate number of suitable applicants. Selection is the process of

ascertaining the qualifications, experience, skills, knowledge, etc. of applicants with a

view to appraising their suitability for a job. Placement is the process of assigning the

selected candidate with the most suitable job.

HRD Interventions

Interventions are challenges are hindrances which affect the HRD process directly or

indirectly. Some important HRD interventions are -

a. Increasing Workforce Diversity

b. Competing in a Global Economy

c. The Need for Lifelong Learning

d. Meeting the Need for Lifelong Individual Learning

a. Increasing Workforce Diversity:

The workforce has become increasingly more diverse, and this trend toward diversity will

continue. This includes increasing diversity along racial, ethnic, and gender lines, as well

as an increasing percentage of the workforce that is over age.

b. Competing in a Global Economy:

Competing in the global economy requires more than educating and training workers to

meet new challenges. In addition to retraining the workforce, successful companies will

institute quality improvement processes and introduce change efforts (for example, high

involvement programs). The workforce must learn cultural sensitivity to better

communicate and conduct business among different cultures and in other countries.

c. The Need for Lifelong Learning:

The challenge in HRD professionals is to provide a full range of learning opportunities for

all kinds of employees. One way that organisations are meeting this challenge is by

establishing multimedia learning centres (sometimes on the organisation‟s intranet).

These centres offer a variety of instructional technologies that can be matched to each

trainee‟s unique learning needs.

d. Facilitating Organisational Learning:

One challenge of HRD professionals is facilitating a transition from traditional training

programs to emphasising three things: learning principles and tactics; how learning relates

to performance; and more importantly, the relationship between learning and fundamental

change.

HRD vs. Personnel or HRM Function

Basically human resources consist of the total productive capacity of a firm‟s human

organisation. Human resource development efforts aim at providing conditions in which the


employees can improve their skills, knowledge, energy and talents, which in turn may lead to

improve productivity.

Basis Personnel Management Human Resource Development

1. Definition Personnel management is the

recruitment, selection, development,

utilisation, compensation and

motivation of human resources by

organisation.

Human Resource Development (HRD) is

concerned with the development of human

resources in an organisation. It means

improving the existing capabilities of the

human resources in the organisation and

helping them to acquire new capabilities

required for the achievement of the

organisational and individual goals.

2. Orientation The traditional personnel function is

regarded as mainly a service

function responding to the demands

of the organisation.

HRD is regarded as a proactive function.

The function of HRD is not merely to cope

with the needs of the organisation but also to

anticipate them and to act on them in

advance.

3. Mechanisms The traditional personnel function

considers salary and other economic

benefits, as important motivators.

HHRD emphasises the importance of higher

needs in motivating individuals. It considers

autonomous work groups, job enrichment,

job challenge and creativity as the main

motivating forces.

4. Emphasis on

Culture

The emphasis in the traditional

personnel function is on increasing

people‟s efficiency.

The emphasis in HRD is on building the

right type of culture in the organisation-a

culture which has such characteristics as

mutual trust, openness, collaboration, clarity

of goals and risk-taking capacity.

5. Responsibility The personnel function is supposed

to be the responsibility of the

personnel department.

Human resource development is regarded as

the concern of all managers in the

organisation. Every manager is concerned

with developing the competencies of all

those working under his guidance and

supervision.

HRM

Basically human resources consist of the total productive capacity of a firm‟s human

organisation. Human resource development efforts aim at providing conditions in which the

employees can improve their skills, knowledge, energy and talents, which in turn may lead to

improve productivity


The HRD Models

There are a good number of models that have been postulated by various scholars to

describe the HRM concept.

However, as shall be seen these various models either fall under the soft or the hard

approach of HRM.

1. The Harvard Model

The Harvard Model was postulated by Beer et al (1984) at Harvard University. The

authors of the model also coined it the map of HRM territory. The Harvard model

acknowledges the existence of multiple stakeholders within the organization. These multiple

stakeholders include shareholders various groups of employees, government and the

community at large. The recognition of the legitimacy of these multiple stakeholders renders

this model a neo - pluralist model. This model emphasizes more on the human/soft side of

HRM. Basically this is because this model emphasizes more on the fact that employees like

any other shareholder are equally important in influencing organizational outcomes. In fact

the interest of the various groups must be fused and factored in the creation of HRM

strategies and ultimately the creation of business strategies.

Source : Beer et al (1984 : 16)

A critical analysis of the model shows that it is deeply rooted in the human relations

tradition. Employee influence is recognised through people motivation and the development

of an organization culture based on mutual trust and team work. The factors above must be

factored into the HR strategy which is premised on employee influences, HR flows, reward

system etc. The outcomes from such a set up are soft in nature as they include high

congruence, commitment, competencies etc. The achievement of the crucial HR outcomes


has got an impact on long term consequences, increased productivity, organizational

effectiveness which will in turn influence shareholder interests and situational factors hence

making it a cycle. It is thus important to note that the Harvard model is premised on the belief

that it is the organization‟s human resources that give competitive advantage through treating

them as assets and not costs.

2. The Warwick Model

One of the major setbacks in the conceptual developments of the HRM concept up to

this time was that most of the earlier developments were within an American Context.

Approaches outside of this context required a perspective of the particular cultural context

that exists in different countries. The Warwick Model, which emanated from the Centre for

Corporate Studies and Change at the University of Warwick by Hendry and Pettigrew (1990)

differs from the Harvard models by reflecting European traditions and management styles.

The model (Figure 2) basically comprise five interrelated elements which allows an analysis

of how external factors impact upon the internal operations of the organization reflecting the

open system theory of organizational thinking.

The Warwick Model (Hendry and Pettigrew, 1990)


Organizations in this case achieve an alignment between the external and internal

context to experience higher performance. The model recognizes the wider context in which

HRM operates and emphasizes the full range of tasks and skills that define HRM as a

strategic function (Loose more et al., 2003). Hendry and Pettigrew (1990)argue that, better

descriptions of structures and strategy making in complex organizations, and of frameworks

for understanding them, are essential under pinnings for HRM. In Armstrong (2003)‟s view,

Hendry and Pettigrew (1990) believe that as a movement, HRM expressed a mission, to

achieve a turnaround in industry: HRM was in a real sense heavily normative from the outset:

it provided a diagnosis and proposed solutions. Hendry and Pettigrew (1990) further added

that, what HRM did at this point was to provide a label to wrap around some of the

observable changes, while providing a focus for challenging deficiencies – in attitudes, scope,

coherence, and direction – of existing personnel management.

3. The Michigan/Matching Model

The Michigan model was propounded by Fombrun Tichy and Devanna (1984) at the

Michigan Business School. They also named this model a matching model of HRM.

Precisely, the matching aspect of this model demonstrates that the model is inclined towards

the harder side of HRM. This is because the matching model emphaizes more on “tight fit”

between the HR strategy and the buisness strategy. It demands that available human resources

must be matched with jobs in the organization. The HR strategy must be highly calculative in

terms of the quantity of the human resources required to achieve the objectives enshrined in

the business strategy. Business strategy takes the central stage in this model hence human

resources are taken like any other resource which must be fully utilised together with the

other resoruces to achieve organizational objectives.

“(Evans and Lorange, 1989) argue that the Michigan model is based on the

“product market logic” which demands that to gain high profits labour must be

obtained cheaply, used sparingly, developed and exploited fully.”

The Matching Model of HRM

Devanna (1984)


The point of departure in the Michigan Model is the pre-eminence and pre-dominance

of a business strategy, which must strictly be achieved by the available resources regardless

of whether, they are able to do so or not. In fact the business strategy must be achieved

through minimum labour costs enhanced by structural re-organization, Performance Related

Pay and staff reduction.

4. The Guest Model

The Guest model was propounded by David Guest in 1987. This model is a fusion of

aspects that resemble both a hard and a soft approach of HRM. Guest proposes 4 crucial

components that underpin organizational effectiveness. These 4 crucial components are:

(i) Strategic Integration

This is the ability of organizations to maintain a fit between the HRM strategy and the

business strategy. In other words, there must be congruence between business strategy and

the HR strategy for the organization to achieve its goals. Strategic integration shows the

harder side of the Guest Model. This is precisely because human resources are treated in a

similar manner like any other resource with the prime goal of achieving business objectives.

Thus there are implications of labour exploitation.

(ii) Flexibility

Flexibility is basically concerned with the ability of the organization and its people to

adapt to the changing business and work environment and to the capacity to manage

innovation. Flexibility can be numeric, functional, pay, distancing. Flexibility carries both

connotations of hard and soft HRM. Hard HRM for example can be seen through numeric

flexibility where employees are employed only when their production is required and when

their labour is not required they are discharged. This can be exemplified through seasoned

work. Flexibility can also show the soft side of HRM through the same example given above.

Flexibility in this case is not only concerned with the need to achieve business objectives but

also the need to treat its employees as fairly as possible.

(iii) High Commitment

This is concerned with the need to have both behavioural commitment, which is the

ability to go an extra mile, and attitudinal commitment, which is reflected through a strong

identification with the organization.

(iv) Quality

Quality is based on the assumption that provision of high quality goods and services

results from a quality way of managing people.


Using David Guest (1987)‟s Model and John Storey (1989)‟s model of HRM:

Critically demonstrate your understanding of Hard and Soft HRM.

(v) Model by John Sorey (1989)

John Storey emerged to be one of the strongest proponents of HRM as a completely

different discipline from the preceding disciplines embraced by the TPM approach. He

believed that HRM is a holistic approach with a set of interrelated policies with an

ideological and philosophical underpinning. Because of these ideological and philosophical

aspects, HRM does not only stand distinctively outstanding from TPM but also emerges to be

a much more humane approach to employment management. The model by John Storey is

based on four aspects.

1. Beliefs and Assumptions

The model is premised on the notion that HRM is based on a set of beliefs and

assumptions, which makes it a distinctive approach. Fundamentally it is believed that it is the

human resource among all the other factors of production, which gives the difference.

Successful organizations are distinguished from the rest by the capabilities and commitment

of the people who work for them. It is therefore imperative that the human resource ought to

be treated with great care and nurtured as valuable assets. Finally it is believed that the

employment relationship is based on commitment and not compliance.

2. Strategic Qualities

HRM is further distinguished by the fact that it is strategic in nature and therefore

requires the attention of senior management and top executives. The above-mentioned

assumption stems from the 1st belief that the human resource is the most important source of

competitive advantage. HR Policies are too important to be a product of prescribed best

professional practice only. In fact they must be sensitive to the demands of the competitive

business environment, business strategy and the HR strategy.

3. Role of Line Managers

Line managers have a very important role to play in people management. It is clear

from the HRM philosophy that people management is too important to be left to operational


personnel specialists. Fundamentally, the importance of line managers is seen through the

strong link that exists between them and their respective subordinates or employees.

4. Key Levers

There is a strong belief that culture management is important than managing

Procedures and systems. This is primarily important because culture management brings

consensus on overall organizational values, beliefs and assumptions. Culture management is

also believed to be essential in flexibility and commitment. Integrated action on all HRM

policies. Restructuring and job redesign to allow developed responsibility and empowerment.

[type text] - osn academy

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