Beer Et Al’s (1984) Harvard Model of Hrm Notes

Regardless of almost twenty years of dispute in the traditional literature around the nature of personnel management (HRM), its intellectual borders and its application in practice, the field continues to be dogged by a variety of theoretical and practical restrictions. This book is intended to offer trainees with a fairly sophisticated and important discussion of the key arguments and themes around HRM as it is conceptualized and operationalized in the early part of the twenty-first century. Therefore the present contribution is planned to be in the custom of Floor (2007) and Legge (1995) and aims to provide trainees with a well-grounded and vital overview of the key problems surrounding HRM from a theoretical and practical viewpoint.

In doing so we draw on contributions from the leading scholars in the field who provide detailed discussions on key arguments in their particular offerings. In this introduction we offer the context for the book though thinking about a variety of overarching themes within which essential arguments in the field of HRM are located.

Specifically, we provide a summary conversation of the theoretical and intellectual limits of HRM, consider its introduction in historical context and recognize a few of the pervasive contradictions and restrictions which dominate in the literature. Lastly we provide a brief summary of the structure and content of this volume.

HRM defined

Our discussion begins by considering what HRM actually means. Given the importance of definition in understanding the boundaries of a field, this issue is clearly an important point of departure. However, this question is more difficult to answer than one would expect, since from its emergence HRM has been dogged by the still largely unresolved ambiguity surrounding its definition.

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As Blyton and Turnbull (1992:2) note ‘The ways in which the term is used by academics and practitioners indicates both variations in meaning and significantly different emphases on what constitutes its core components’. One of the dominant definitions (in the UK at least) has been to define HRM as a contested domain, with rival soft and hard approaches. The soft approach to HRM is generally associated with the Harvard School and in particular the writings of Michael Beer and colleagues (see Beer et al., 1984; Beer and Spector, 1985; Walton and Lawrence, 1985).

The soft school emphasizes the importance of aligning HR policies with organizational strategy; it emphasizes the role of employees as a valuable asset and source of competitive advantage through their commitment adaptability and quality (Legge, 1995; D’Art, 2002). It stresses gaining employee commitment to the organization through the use of a congruent suite of HRM policies. Soft HRM draws on behavioural sciences in particular, with strong resonance with the human relations school, while the concept of human growth, which is central to its theory, echoes ‘all-American’ theories of motivation, from McGregor’s Theory Y to Maslow’s Hierarchy of Needs (Legge, 1995). Hence it is sometimes conceptualized as ‘developmental humanism’ (Storey, 1989; Legge, 1995). HRM is operationalized in terms of strategic interventions designed to develop resourceful employees and to elicit their commitment to the organizational goal (Storey, 1992). However, sceptics have conceptualized soft HRM as the ‘iron fist in the velvet glove’, arguing that the theory of soft HRM ‘reduced … the complex debate about the role of people in work organizations to the simplistic dogma of an economic model which even its “creator” Adam Smith would probably not have wished applied in such an indiscriminate manner’ (Hart, 1993:29–30).

Another uncharitable definition of soft HRM is that it constituted a desperate rearguard action by liberal academics and practitioners, mostly writing in the United States, to sell more humane forms of managing people to essentially conservative owner interests that have in increasing numbers ruthlessly pressed for a maximization of short term profits, regardless of the cost to both employees and the long term good of the organization. In other words, soft HRM is about trying to encourage firms to be ‘nicer’ to their people, on the basis that such ‘niceness’ is likely to translate into greater commitment and productivity, and hence, even more profits. Soft HRM stands in contrast with the hard variant. Hard HRM is generally associated with the Michigan School (Forbrun et al., 1984). Its emphasis is on the use of human resource (HR) systems to ‘drive’ the attainment of the strategic objectives of the organizations (Forbrun et al., 1984). While soft HRM emphasizes the human element of HRM, the emphasis of the hard approach is very much on the resource as a means of maximizing shareholder value over the short term.

The duty of managers is quite simply to make money for owners, and a focus on other issues such as employee rights is simply a distraction: rather, by focusing on returns, the organization will perform most efficiently, which ultimately is in the interests of all. It has been argued that, in the tradition of Taylorism and Fordism, employees are viewed as a factor of production that should be rationally managed and deployed in quantitative and calculative terms in line with business strategy (Tyson and Fell, 1986; Storey, 1992). However, rather different to classic Taylorism or Fordism, job security in the new hard HRM is seen as an unnecessary luxury, whilst pay rates are to be kept to the lowest level the external labour market would permit: there is little mention in the literature illustrating how hard HRM echoes Henry Ford’s famous commitment to a 5 dollar/day wage. Human resource policies in the hard variant are designed to be both internally consistent and externally aligned with the organizational strategy.

These interventions are designed to ensure full utilization of the labour resource (Storey, 1992). It is legitimized and finds its impetus from a market-responsive frame of reference (Storey, 2007). At the extreme, implicit contracts regarding pensions and tenure are seen as hampering effective management: these should, if possible, be jettisoned, with employee rights being pared back as much a possible. Critics of this point of view have argued that such a focus is likely to make for higher staff turnover rates, with the inevitable loss of job specific skills and accumulated wisdom, low trust, low levels of organizational commitment, and hence, higher transaction costs (see Marsden, 1999). In other words, hard HRM is likely to make organizations less efficient. It could be argued that most successful incrementally innovative high value added manufacturing firms have shunned hard HRM. In contrast, it has been more widely deployed in more volatile areas of economic activity, such as financial services.

A second and simpler way of viewing things is that HRM in the narrow sense can be defined as a strategic approach to managing employees, which came to the forefront in the liberal market economies, particularly the US and the UK, in the 1980s. Whilst having both soft (‘people friendly’) and hard (‘people as a resource to be deployed, utilized, and, if need be disposed of’) variations, common to this approach was an emphasis on optimal shareholder outcomes, with enhancing outcomes for other stakeholders being at the best a secondary objective, and at worst, an unnecessary distraction. This ‘two sides of the same coin’ point of view argues that, since the end of the long boom that lasted from the post World War II period up until the 1970s, there has been a period of erratic and unstable growth and recession.

This period has been characterized by employers gaining the upper hand over employees, on account of the very much weaker bargaining position of the latter (cf. Kelly 1998). Given this, managers – particularly in the liberal market economies, such as the US and UK, where workers have historically had fewer rights under both law and convention – have taken the opportunity to fundamentally change the way they manage people. This has taken the form of systematic attempts to undermine collective bargaining with unions, replacing this with weak forms of consultation with individual employees. Collective employment contracts – where workers performing similar jobs are rewarded according to a pre-agreed pay scale – are replaced with individual ones, with employees being rewarded on the basis of regularly appraised performance, and/or through pay rates simply being linked to outputs. In other words, the role of the employee in the firm is not a dynamic and, in some sense, negotiated relationship, but rather simply the deployment of a resource, in the same way a firm would deploy other physical resources, such as raw materials.

A third way of looking at things is to simply conceptualize HRM as little more than a renaming of personnel management. In this vein, writers such as Armstrong (1987) describe HRM as ‘old wine in new bottles’, while Guest (1987) pointed to the fact that many personnel departments changed their names to HRM departments, with little evidence of any change in role. In practice, this would suggest that much HR work really concerns the administration of systems governing the administration of pay, promotion and recruitment procedures, etc. In turn, this would imply that HR managers are likely to lack power within the organization and have little say in setting real organizational strategies. Finally, HRM may be defined broadly in terms of including all aspects of managing people in organizations and the ways in which organizations respond to the actions of employees, either individually or collectively.

The value of this catch all term is that it describes the wide range of issues surrounding both the employment contract, situations where an employment contract has yet to be agreed on (recruitment and selection), and ways in which employees may be involved and participate in areas not directly governed by the employment contract to make working life more agreeable and/or to genuinely empower people. In other words, it goes beyond simply ‘industrial relations’ or ‘employment relations’. The terms ‘personnel administration’ or ‘personnel management’ would not provide a totally accurate label, given their administrative and non-strategic connotations. Some insights into the different ways HRM has been conceived have been provided by the Keele University affair in 2007–2008. A conservative university administration resolved to restructure business and management studies in the university through the simple device of making academics that had formally specialized in ‘industrial relations’ redundant. In many respects, this was a surprising decision, given robust student numbers, and the fact that industrial relations research was one area where Keele had gained an excellent reputation.

Backed up by the findings of a committee of external ‘experts’, university administration implied that industrial relations academics were likely to be less capable of teaching HRM, and, by implication, had skills sets not relevant to modern business education. Tellingly, a petition signed by many leading HRM and industrial relations academics in Britain, in response to this decision, included a statement that HRM could not be separated from industrial relations, and that the skills necessary to teach industrial relations could broadly be applied to understanding HRM. In other words, HRM was simply a collective noun describing work and employment relations in the broadest possible sense, and was not really about special new skills, or a new and different agenda (see

The preceding discussion highlights the ambiguity around the boundaries of HRM. These differences are summarized in Table 1.1. The tension around definition persists in the literature and a central theme in this volume is highlighting the contradictions between these two broad understandings of HRM. We argue that for ethical and sustainability reasons, more stakeholder orientated approaches to people management are preferable, with shareholder dominant approaches facing both quotidian micro-crises at firm (encompassing problems of human capital development and commitment) and at macro-economic (encompassing problems of excessive speculation-driven volatility, industrial decline, and chronic balance of payments problems) levels. HRM and personnel management compared

As noted above, a key point of reference in definitions on HRM is through comparing it with its predecessor – personnel management. Although this debate is somewhat dated, it remains important. Thus it merits summary discussion. During the early days of HRM’s emergence as a mainstream approach to people management a number of commentators were sceptical about the extent to which it represented something different to its predecessor – personnel management. Over time it has become apparent that there are substantive differences between the two, Table 1.1 Definitions of HRM… Definition | Implication |

Contested domain | HRM is a contested domain, with two rival paradigms, hard and soft HRM | Two sides of the same coin | Whether hard or soft, HRM is about the management of people in a particular, new way. This may involve the use of strategy to manage people, or simply reflect structural changes that have strengthened management at the expense of employees | ‘New wine in old bottles’ | HRM is little more than the extension of traditional personnel management | Collective noun | HRM is a commonly reflected description for a range of practices associated with managing work and employment relations | At least at a theoretical level. In illuminating these differences a brief discussion on personnel management is merited (for a full discussion, see Legge, 1995). While there are a number of accepted definitions of personnel management, some of which in the US context are closer to accepted definitions of HRM (see Kaufman, 2001; Strauss, 2001), there is a degree of consensus as to its key characteristics. First, personnel management is largely conceived as a downstream activity with a limited strategic role.

And, despite the rhetoric, HRM is often not that strategic: after all, both hard and soft HRM ultimately depict HRM as a transmission belt, passing down an agenda of shareholder value. Further, personnel management is generally considered to be reactive and piecemeal with little integration between its various elements. One of the greatest management thinkers – if popular management writing can be considered thought at all – of the last century, Peter Drucker (1961:269), neatly summarized the personnel role as ‘a collection of incidental techniques with little internal cohesion. As personnel administration conceives the job of managing worker and work, it is partly a file clerk’s job, partly a house keeping job, partly a social worker’s job and partly fire-fighting to head off union trouble or to settle it’. This limited role is alluded to by Legge’s (1995:88) observation that ‘in the UK “personnel management” evokes images of do-gooding specialists trying to constrain line managers, of weakly kowtowing to militant unions, of both lacking power and having too much power’.

Indeed it has been argued that the perceived welfare role of the personnel function was one aspect of it that limited its credibility as a managerial function. It also resulted in females playing a key role in personnel in its formative years in the UK context (Legge, 1995). A scrutiny of the gender composition of classes at many Chartered Institute of Personnel and Development approved training centres provides some corroboration for the gendered nature of much HR work. A further dimension of the broad personnel role in the UK was its key role in negotiating with trade unions, a characteristic which points toward the fire-fighting role of personnel. Indeed, it was this element of the role that bought increasing numbers of males into the profession (Gunnigle et al., 2006). However, more recent evidence in the UK points to a shift in the balance towards a greater feminization of the HR function (Kersley et al., 2006:69).

This engagement with trade unions points to a collectivist orientation and, owing to the historical prominence of trade unions, particularly in the UK and Ireland, personnel management became infused with a pluralist frame of reference (Flanders 1964). Given the importance of bargaining, managing the industrial relationship gained a distinct identity: it is worth noting that the divide between basic personnel management and industrial relations persists in the academic literature, with, as a general rule, those academic journals focusing on the former having low prestige, and on the latter, high prestige. Newer explicitly HR journals represent something of a cross over and incorporate aspects of both, as well as insights from, other disciplines. The preceding discussion suggests that HRM and personnel management – and industrial relations – may differ in a number of substantive ways. The first is that HRM is conceived as having a more strategic role and hence elevated to the top management table, suggesting a more upstream role, even if, in practice, this has been little more than wishful thinking.

Nonetheless, HRM does concern attempts to develop an integrated and congruent set of HR policies as opposed to the piecemeal approach apparent in the traditional personnel role. Furthermore, HR policy and practice is also targeted at the individual level. This is reflected in the preference for individual performance related pay, individual communication mechanisms, employee opinion surveys and the like. A final key distinguishing factor is that, reflective of the individualist orientation, HRM is premised on a unitarist understanding of conflict. Unitarism suggests that there are no intrinsic conflicts of interest in the employment relationship as all within the organization are working toward a common goal for the success of the organization. The common goal is reflected in the idea that there is a single source of authority within the organization – management. Given that there are argued to be no conflicts of interest within the organization – conflicts are caused by breakdowns in communication or by troublemakers. Conflict should be suppressed by improving communication or removing troublemakers from the organization.

Unions are opposed on two grounds: (1) there are no conflicts of interest within the workplace and thus they are unnecessary and (2) they would represent an alternative source of authority. Alternatively, unions may be co-opted to the managerial agenda, through ‘partnership’, with unions trading off militancy for continued recognition, and the benefits that would arguably flow from greater organizational competitiveness. More critical strands of the HR literature suggest that this focus is mistaken, that employees often retain a collective identity, and that managerial power will inevitably continue to be challenged in ways that would make new accommodations necessary if the organization is to work in the most effective way.

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Beer Et Al’s (1984) Harvard Model of Hrm Notes
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