Models of HRM

Fombrun’s human resource cycle model (1984)

The Michigan model by Fombrun (1984) explains strategic HRM that focused on
management, professional groups, and the new labor force. The main motive of the model
was to align the formal structure of the organization, their new strategies, and policies with
the human resource system. This helps to drive the strategic objectives of the organization in
a better way. They saw the employees of the firm as a strategic resource to have a
competitive advantage. Its elements include selection, appraisal, development, and rewards.
The model interlinks remuneration, assessment, development, and selection implying that
there must be a horizontal alignment. The drawback of this model is that it ignores
situational factors such as the interest of the stakeholders and the notion of strategic choice.
It emphasizes on market performance and organization growth (Mbongaya, 2006).

Figure 1: Fomburn’s human resource cycle model

Best HRM practices model

The best practice model is one that can be applied universally (Johnson, 2000). For the best
fit, human resource policies must be aligned with business strategy and objectives. This can
be done by checking regularly on the needs of the organization as well as employees. The
best practice leads to superior business employees. These processes help the organization to
have a comparative advantage. There are various practices that are universal in nature and
adopting them leads to the superior performance of the organization. These are:

• employment security,

• selective hiring,

• high compensation based on performance,

 • self-managed teams,

• training to have skilled workers,

• equality among workers,

• sharing essential information with the employees of the firm.

Storey’s hard and soft HRM practices (1989)

The model was developed by John Storey in 1989 (Truss, Gratton, Hope‐Hailey, McGovern,
& Stiles, 1997). Storey talks about two forms of HRM. First is the ‘Hard’ form that focuses
on the resource side of human resources. It focuses on notions of tight strategic control. It
emphasizes the role of management in cutting the cost by keeping only the required number
of workers in the organization. Its main elements are close integration of human resource
policies, systems, and activities with business strategy. The second form is soft HRM that
focuses on the human side. This lays importance on communication among employees and
motivation among them to lead the organization. They consider employees as a valuable
asset and a source of competitive advantage because of their commitment, reliability, skills,
and efficiency. This form takes the employees to determine strategic objectives (Gratton et
al, 2011; MacBryde & CakarUmit, 2005).
Fombrun’s model is a hard form of HRM while the Harvard model is soft form. “HRM
rhetoric is generally soft and reality predominantly hard” (Gill, 2009). Thus, this model can
be used to illustrate the gap between rhetoric and reality in workforce management. The
disadvantage of hard HRM is that people get tired of control. The control may lead to
productive efficiency for some time but in the long run, the strategy will collapse. This
problem cannot be seen in the soft HRM model, but it has its own set of weaknesses. The
cost of training, enhancing skills, increased wages, number of staff for support increases.
Due to collaborative decisions, decision making is delayed. Sometimes, the middle managers
in such a framework are discouraged as they may not find their value appreciated.
The Harvard Framework of HRM

Developed in 1984, the Harvard Framework of HRM is a holistic HR operating model that
focuses on overcoming problems associated with historical people management. It’s based on the
belief that when HR leaders formulate an HR strategy that enables the growth and well-being of
their employees, only then can personnel problems be solved and outputs increased.

This model includes the global development of businesses, the power of different stakeholders
like government, labor union, management, and link corporates with human resource strategies
(Poole, 2015). Hence in the globalized world, where economies are fluctuating, technologies are
advancing, and customer demands are changing, organizations are forced to adopt the Harvard
model on a practical basis. This HRM model directs HR teams to develop HRM policies by
factoring in stakeholder interests and situational factors which leads to better HR outcomes and
long-term consequences.
The limitation of the model is that it ignores the hard HRM approach which shows that there is a
high chance of business failures (Brunetto, Farr-Wharton, & Shacklock, 2011).

The 8-box model by Paul Boselie

The 8-box model shows eight boxes of factors that intertwine to lay the foundations of an HR
department. This model can be best explained by analyzing the diagram structurally.

▪ First comes the configuration box that describes how the company’s history, culture,
technology, and workforce directly influence HR functions.
▪ Then comes the core box of this model, human resources strategy and practices,
further divided into four small sequential boxes: intended HR practices, actual HR
practices, perceived HR practices, and HR outcomes.
▪ This core box of HR strategy and practices leads to the critical HR Goals box which is
concerned with the overall goals of the HR department and includes cost-effectiveness,
flexibility, and legitimacy.
 ▪ The critical HR goals box further influences the goals of the business as a whole, and
this is defined by the ‘ultimate business goals’ box. This box encompasses viability,
sustained competitive advantage, and the formulation of the business strategy.
▪ These four linear boxes are impacted by four other boxes that have an external influence.
These are general market context, population market context, general institutional
context, and population institutional context.

Why is it useful today: Thanks to globalization and advancement in technology, the world is
changing rapidly. It’s more important than ever before to factor in the various external influences
while formulating your HR strategies. A great example of the relevance of this model is the
coronavirus pandemic and its impact on businesses, remote work, and new HR technologies for
effectively managing people.

The Warwick Model

Formulated by Chris Hendry and Andrew Pettigrew at the University of Warwick, the Warwick
model of HRM draws upon the Harvard Model and analyses the five key factors that contribute
to the functioning of the human resources department. These five elements are:

▪ Outer context: This includes external factors such as politics, technical environment,
laws, competencies, and socio-economic conditions of a place that guide the inner
context of the company.
▪ Inner context: This is based upon the outer context and lays the foundation of a
company. Company culture, structure, leadership, technology, are some of the areas that
fall under this element.
▪ Business strategy: This includes the overall business strategy, objectives, goals, and
product market optimization.
▪ HRM context: This element focuses on the foundations of the human resources, such as
HR outputs, HR roles, organizations, definitions, etc.
 ▪ HRM content: This key factor deals with specific HR functions like reward system,
work system, employer relation, HR flows, and others.

Why is it useful today: Much like the 8-box model by Paul Boselie, this model acknowledges
the dynamic nature of the world we live in. The five aforementioned elements directly or
indirectly impact the HRM, and the organizations that try to align the internal and external
contexts are bound to perform better. For instance, A research by Gartner reveals that 76% of
newly remote/hybrid employees report a positive perception of the workplace.
The Advanced HR Value Chain

According to this model, the role of an HR department in creating value for an organization is
paramount. There are three HR factors that have a direct impact on key performance indicators
from the point of view of customers, processes, and finance. These three factors are:

▪ HR enablers: These are the factors that govern the functioning of an HR department and
include HR budget, HR processes, HR competencies, among other factors.
▪ HR activities: This category contains the core work of HRM and includes workforce
planning, performance management, recruitment, selection, and decision making.
▪ HR outcomes: These are the HR goals that every HR department strives for. Some of the
common measurable HR outcomes are employee engagement, retention, performance,
cost, workforce competence.

Why is it useful today: To achieve its business goals, an organization must pay heed to its HR
value chain. For example, if a business has a low HR budget, it might lead to a lower
compensation for its employees, which might further lower the retention and impact key
performance indicators.

The ASTD Competency Model

The ASTD Competency model was created in 2004 by The Association for Talent Development
(ATD), formerly known as the American Society for Training and Development (ASTD).

This model is designed for talent development practitioners and serves as a roadmap of
competencies that such professionals must build, in order to succeed in their careers. These
competencies are grouped under two sections, ‘Foundational Competencies’ and ‘Areas of
Expertise’ (AOEs), the former of which are base-level competencies that are used to build more
specific competencies.
According to this model, training and development professionals need to integrate both of these
competencies in their HR systems to operate efficiently and save training costs.

Why is it useful today: Over the decades, the HR profession has evolved. In order to thrive in
the ever-changing world and maintain a competitive edge, it’s important for HR managers to
build not only the foundational competencies but also find their area of expertise. The ASTD
competency model broadly highlights the various directions that HR leaders can head towards in
order to stand out.

The People Value Chain Model

Developed in early 2021, EY’s People Value Chain is a futuristic HR model that’s worth keeping
an eye out for. This newly-built model is a deliberate departure from the Ulrich model and puts
an emphasis on delivering long-term value creation across four key areas: financial value,
consumer value, societal value, and human value.
The People Value Chain is built on three core components:

▪ The digital people team: This team designs, adopts, and shares innovative services that
automate most administrative and operational tasks.
 ▪ People services: People consultants listen, solve problems, and innovate solutions to
unleash the human value that fuels business performance.
▪ Virtual global business services: This department takes on the HR organization work
and does so by working in a cross-functional service environment where similar tasks
from IT, finance, legal, and supply chain departments are combined to deliver impactful
experiences at scale.

Why is it useful today: Employees these days prefer an empathetic style of leadership.
According to this model, new tools and technology will help HR professionals focus more on
long-term value creation and less on mundane tasks.