Module 2: Human Resource Management

Week 1 – Day 2:
Theories and Approaches of HRM
HRM and Organisational Effectiveness
 Classroom Rules

Be on time and be
always prepared for Keep your mobile Ask only relevant
your class. Bring your phone switched off questions
laptop in class. or in a silent during teaching
mode. time.

Be polite and
Do not interfere with
respectful of the
the teaching and
teacher, yourself, Always do your best.
learning of your
your classmates and
colleagues.
your institution.
 Module Learning Outcomes
3 On successful completion of this module, students should be able to:

• Demonstrate a critical understanding and evaluation of key theories and concepts in

Human Resource Management (HRM).

• Explain and apply key principles and practices in employee staffing and staff
development.

• Evaluate the importance of HRM, in terms of both strategy and practice, for the
performance of businesses with application to the tourist industry.

• Show critical awareness of current debates and the challenges facing human HRM.

• Demonstrate appropriate academic writing skills, referencing and good academic

practice.
 Session Learning Outcome
By the end of this session students should be able to:

Demonstrate a critical understanding of key theories, models,

approaches and concepts of human resource management.

Evaluate the importance of HRM, in terms of both strategy and

practice, for the performance of businesses with application to the
tourist industry.
 Class Activity 1 - Revision:

In pair discuss the questions below and present your answers to the class:

I. What does the term HRM mean to you?

II. What are the various function of HRM?

III. How is HRM functions evolving?

 Introduction: The different approaches to
understanding HRM
• HRM models and theories are the multifaceted description of the different approaches to
understanding HRM and deploying its functions.

• They are frameworks for understanding the responsibilities of HR functions in an organisation.

• They might include how the work of HRM can impact the organisation and how the organisation
can influence HRM.

• HR practitioner and line managers can use the models or theories to guide their work and find
ways of adding value to their organisation.

• The models and theories enable businesses to clearly identify the outcome they are seeking to
achieve when implement a HRM system.

(Bratton and Gold, 2017; and Beardwell and Thompson, 2017)

 Models, Theories, and Approaches of HRM

The two most influential models of HRM:

 Harvard Model
 Michigan Model
 Some other important approaches of HRM:
 Soft HRM approach
 Hard HRM approach
 Best practice approach
 Best fit approach
 Strategic HRM
 The Harvard Model of HRM
• Developed by researchers (Beer et al.,1984) at Harvard Business School.

 Titled: “The map of HRM territory”.

• The model recognises that there are a variety of ‘stakeholders’ in organisations and
the legitimate interests of diverse stakeholders most be considered in the creation of
HRM strategies and ultimately the business strategy.

• “The main influence of this model is based less on considerations of stakeholder

interests and situational factors and more on the benefits to employers of adopting a
‘soft’ approach to HRM that seeks to enhance the quality and commitment of the
workforce” (Beardwell and Thompson, 2017).
 The model was developed around the ideas of mutuality
and stakeholders at the organisational level.
 The Harvard Model of HRM
• The stakeholders include shareholders, various groups of employees, the
government, the community, unions, etc.

• The model provides businesses with a framework for understanding and

managing their staff, focusing on areas such as recruitment, training,
performance management, rewards and recognition.

• It is an effective approach to managing human resources within an

organisation through the five primary components:
Stakeholder interest, Situational factors, HRM Policies, HR outcomes, and Long-term
consequences.
(Bratton and Gold, 2017, Beardwell and Thompson, 2017)
 The Map of the HRM territory

The map of the HRM territory (Beer et al.,1984: 16). Source: Beardwell and
Thompson (2017, p. 10)
Harvard Model of (Soft) HRM –
Brenda Harrison
 The Harvard Model

 The Harvard model is associated with universalistic approach to HRM which

suggest that a single best practice for HRM exists for all organisations. 
 It suggest that some HR practices are better than others and all organisations
should adopt these best practices.
 Some elements of best practices and universalism include:
 Employment security
 Sophisticated selection
 Team-working and decentralization
 High wages linked to organisational performance
 Extensive training
 Narrow status differentials
 Communication and involvement
(Beardwell and Thompson, 2017)
 Michigan Model of HRM
 The Michigan HR resource cycle - Designed by academics (Fombrun, et al.,
1984) at Michigan Business School.
 The Michigan model is also known as the ‘Matching model' or ‘Best-fit’ or
“Contingency approach to human resource management. 
 The matching model is closely allied with the ‘hard’ interpretation of HRM, that
is, the deployment of human resources to meet business objectives.
 The model was developed based on strategic HRM which suggests that HRM
must match with business strategy.
(Beardwell and Thompson, 2017)
 The Michigan HR resource cycle

Rewards
for
performance

Effective
selection Employee Appraisal
performance

Training
and
development
 Michigan Model of HRM
 It is of the viewpoint of human resource strategies having a tight fit to the overall
strategies of the business.
 The Michigan Model shows that there is a Human Resource cycle consisting of
four core people management activities that affects individual and organisational
performance. The four core activities of this cycle are:
 Effective Selection
 Performance Appraisal
 Training and Development
 Rewards for performance
(Beardwell and Thompson, 2017; and Bratton and Gold, 2017, p. 19)
Michigan and Matching Models of HRM

 The most effective means of

managing people will vary from
organisation to organisation and
is dependent on organisational
context.

(Beardwell and Thompson, 2017, p.9)

 Michigan Model of HRM
 Two assumptions underpin this model:
 The first is that the most effective means of managing people will vary
from organisation to organisation and is dependent on organisational
context.
 The second assumption is that of unitarism, that is, the assumption that
conflict, or at least differing views, cannot exist in the workplace because
everyone (managers and employees) is working to achieve the same
goal, the success of the organisation.
(Bratton and Gold, 2017; and Beardwell and Thompson, 2017)
The Michigan
Model of (Hard)
HRM – Brenda
Harrison
 Class Activity 2

In group discuss the question below and present your answer to the
class:

 The Harvard and Michigan HR resource cycle Models were conceived 30

years ago. To what extent are they still relevant to the study of HRM in
organisations today?
 Soft HRM Approach
 Soft HRM approach emphasizes the need to treat employees as assets which must be
cared for, trained, developed and rewarded in order to get the best out of them.
 According to Wilton (2002, p.8), the approach “has its emphasis on developing and investing
in human capital, nurturing employee loyalty and providing well-rewarded and satisfying
work”.
 This approach stresses the importance of getting organisational commitment from
employees.
 The viewpoint of this approach is like the pluralist perspective of HRM, which acknowledges
consultative approach to management, therefore allowing for employees the ability to have a
voice concerning management decisions.

 Employees are treated as the most important resource in the

business and a source of competitive advantage.
 Hard HRM Approach

 This model is often associated with exploitative practices such as intensive working, low
pay, low level job security, and subsequently, low level employee commitment (Wilton, 2022
p. 9). Associated with the unitarist perspective of HRM
 Hard HRM treats people as commodities that exist to help the company meet business
goals.
 “An employee management system in which workers are considered as a resource that
needs to be controlled in order to achieve the best possible profit and competitive
advantage” (Cambridge University Press & Assessment, 2023).
 Conflicting objectives are seen as abnormal, caused by deviant behaviour, poor
management and bad communication, by this perspective.
 Hard HRM Approach

 This perspective has a paternalistic and authoritarian approach and

anticipates the loyalty of the employees.
 This viewpoint suggests that the employee voice is not only unnecessary,
but not beneficial to any of the parties in the employment relationship.
 Managers focus on the profits and treat employees as sources of
business, no different from machine and tools (Wilton, 2002, pp.8-9).
 Class Activity 2

In group discuss the question below and present your answer to the
class:

 The Harvard and Michigan HR resource cycle Models were conceived 30

years ago. To what extent are they still relevant to the study of HRM in
organisations today?
 Best Practice Approach
• The best practice approach claims that certain bundles of HR activities exist which
universally support companies in reaching a competitive advantage regardless of
the organisational setting or industry.
• The model stresses the importance of:
employee selection
training
flexibility
performance management
incentive-based pay
Clear link between HR activity and business performance.
(Marchington et al., 2016. pp 76–78)
 Best Practice Approach
 Best practice bundle – advanced selection methods, commitment to employee
involvement, investment in training and development, individualised reward
systems, etc.

Limitations:

• If you want to be competitive, adherence to best practice can become stifling –

reducing the desire to innovate and try different ideas as well as alternatives.

• Suggests a kind of final state that is good for all circumstances and times. 

• Neglect issues of collective employee relations.

(Marchington et al., 2016. pp 76–78)

 Best Fit Approach
 The 'best fit’ model “suggest that organisations must adapt their HR strategies to other
elements of the firm's strategy and to its wider environment.

 Best-fit approach is also known as the contingency model and proponents of this
approach suggest that there is no universal way of doing things as what might work
well in one organisation may be unsuccessful in another organisation.

 i.e., all is contingent on particular circumstances.

 HR policies are required that fit and are appropriate to situations. Key variables include
– size, dominant product market, etc.

(Beardwell and Thompson, 2017)

Limitations of Best Fit Approach
• Deterministic and top-down

• HRM shaped by many different factors

• Managers do not have total control

• Models not dynamic enough to apply

• Problems of categorisation

• Multiple service or/and product markets

Strategic HRM
• An approach that defines how the organisation’s goals will be achieved through
people by means of HR strategies and integrated HR policies and practices
(Armstrong, 2017).

• Strategic HRM, or ‘people strategy’, is about creating a coherent planned

framework for employees to be hired, managed and developed in ways that
supports an organisation’s long-term goals.

• It helps ensure that the various aspects of people management work together
to drive the behaviour and climate needed to create value and meet
performance targets (CIPD, 2021).
 HRM and Organisational Effectiveness
 The study of the link between HR practices, organisational effectiveness,
and improved organisational performance dominates HRM research
agenda.
 Organisations seek to gain competitive advantage. HRM function
contributes to this via attracting and developing human capital.
 HRM also contributes to organisational reputation: as being stable and
ethical.

(Stavrou, Brewster, and Charalambous, 2010; Gollan, 2012; and Wilton, 2022)
 Possible link between HRM and
business performance

HR effectiveness Quality of goods

and services

Business
strategy

HR HR Financial
practices outcomes performance

HR
strategy
Productivity

(Adapted from Guest and Conway and 2011)

HRM's Contribution to
High Performance - GreggU
 Added Value
So how can staff add value to the business?
• By contributing more than they cost

• By improving customer satisfaction

• By performing to acceptable standards

• By taking on additional skills through training

• By being flexible

HRM responsibility is to ensure all the above have happen.

(Taylor and Woodham, 2022. pp.6-9)

 Weekly Formative Activity

In group research and discuss any of the questions below and present your
answer to the class:

• Explain how HRM function can manage employee recruitment. Define recruitment, explain the recruitment
process, discussion different types of recruitment methods, and give an example of a job advertisement for
a role within the tourism industry.

• Describe how HRM function can manage employee selection and induction. To provide the discussion, you
should: Define selection in employee resourcing, explain the selection process, discuss different types of
selection methods, explain staff induction and why it is important.
Evaluating the HRM Function

It is necessary to evaluate the contribution of the HR function in order to

ensure that it is effective:

• at the strategic level

• in terms of service delivery and support

(Taylor and Woodhams, 2016)

Evaluating HR performance/
Evaluation criteria:
Evaluation methods
For most HR activities, there are
• HR statistics
three basic questions:
• key performance indicators (KPIs)
• Are we doing this as effectively as
• balanced scorecards
possible?
• stakeholder perceptions
• Are we doing it as efficiently as
• benchmarking (internal and external)
• human resource auditing possible?

• survey-based evaluation • Are we doing it as fairly as

• goal-based evaluation. possible?

(Taylor and Woodhams, 2016)

 Evaluating the HR contribution:
• Hard to do as many HR outcomes are intangible.

• Outcomes cannot easily be allocated to specific initiatives.

• Growing interest in Human Capital Reporting.

• CIPD human capital taskforce identify 4 broad headings:

- acquisition and retention of people
- learning and development
- human capital management (policies and procedures)
- performance.

• Each area – narrative statement on company approach and use of statistical

indicators.
(Taylor and Woodham, 2022. pp.6-9)
 Class Activity 3

In group discuss the below question and present your answer to the class:

• Set out and explain at least three criteria that might be used to evaluate the

contribution of the HR function, and at least two key methods used to do this.

• How does high performance work and investment in human capital impact on

organisational practice and performance?

Any Question
 References
 Armstrong, M. (2017) Armstrong’s handbook of Human Resource Management in Practice. 14th ed. London: Kogan Page.
 Beardwell, J. and Clayton, T. (2017) Human Resource Management – A Contemporary Approach. 8th ed. Harlow: Pearson
 Bratton, J. and Gold, J. (2017) Human Resource Management – Theory and Practice. 6th ed. Basingstoke: Palgrave.
 Cambridge University Press & Assessment (2023) Hard HRM [Online] Available at: https://dictionary.cambridge.org/dictionary/english/hard-hrm Accessed
date: 30/06/2023
 CIPD (2021) Strategic Human Resource Management Factsheet [online] Accessed from:
https://www.cipd.org/en/knowledge/factsheets/strategic-hrm-factsheet/#what Accessed date: 18/05/2023
 Gollan, P. (2012) HR on the line: human resource managers’ contribution to organisational value and workplace performance. Asia Pacific Journal of Human
Resources. Vol 50, No 3, July. pp288-307.
 Guest, D.E. and Conway, N. (2011) The impact of HR practices, HR effectiveness and a ‘strong HR system’ on organisational outcomes: a stakeholder
perspective. International Journal of Human Resource Management. Vol 22, No 8, April. pp1686-1702. Available at:
http://www.cipd.co.uk/hr-resources/onlinejournals. Accessed date: 11/05/2023
 Marchington, M., Wilkinson, A., Donnelly, R. and Kynighou, A. (2016) Human resource management at work. 6th ed. London: Chartered Institute of
Personnel and Development.

 Taylor, S. and Woodham, C. (eds.) (2016) Studying human resource management. 2nd ed. London: Chartered Institute of Personnel and Development.

 Taylor, S. and Woodham, C. (2022) Studying human resource management. 3rd ed. London: Chartered Institute of Personnel and Development.

 Stavrou, E. T., Brewster, C and Charalambous, C. (2010) Human Resources Management and firm performance in Europe through the lens of business
systems: best fit, best practice or both? The International Journal of Human Resources Management. Vol.21, No 7 June. Pp. 933-962.

 Wilton, N. (2022) An introduction to human resource management, 5th ed. London: SAGE Publications.