As an HR manager or executive, it is well worth your time to become acquainted with the fundamentals of these theories. Learning the theories and models allows you to experiment with applying them to your business, determining which one works best with your outlook and workforce, and optimizing how well your company performs.
Human Resource models can assist in explaining the role of HR in the business. This article will discuss the most practical HR models. We can use these models to explain what HR's role is, how HR adds value to the business, and how the business influences HR.
What are HRM Models?
The HRM model is also known as the HR framework. It is a term that refers to an organization's strategic plan for managing and coordinating human capital-related business functions. The goal of developing HRM models is to assist businesses in managing their workforce most efficiently and effectively possible to achieve the established goals.
An HR model is a conceptual representation of how an HR department functions. HR models are used to map out the workings of human resource management departments because it would be difficult to think about HR functions from scratch when starting and establishing a new business or revitalizing an existing one.
Human resource management is frequently defined as a concept with two possible approaches or forms. A hard approach to HRM is distinguished by its strong emphasis on performance management and the instrumental approach to employee management. A soft approach to HRM, on the other hand, focuses on employee empowerment, motivation, and trust, viewing individual contributors as the most valuable resource an organization can have.
Lynda Gratton, a British organizational theorist, consultant, and Professor of Management Practice concludes in her book "Strategic Human Resource Management: Corporate Rhetoric and Human Reality" that "...even if the rhetoric of HRM is 'soft,' the reality is almost always 'hard." HRM models frequently combine soft and hard HRM principles but with a greater emphasis on one of these two approaches.
What is the purpose of the HRM Models?
Consider two companies that have vastly different work cultures. Perhaps you have a soft spot for one of them and want to emulate their methods of operation. What makes this preferred company more appealing? According to this Forbes article, the answer is a plethora of factors ranging from transparency to diversity. As a human resources professional, you may feel compelled to investigate these factors to foster a positive work environment for your team. This is where HR models come into play.
The other purposes of the HRM Models are:
- They provide a framework for researching human resource management (for example, situational factors, stakeholders, strategic choice levels, competence)
- They legitimize specific HRM practices; a key issue here is the uniqueness of HRM practices: "What matters is a distinctive approach to selection or training, not the presence of selection or training."
- They describe human resource management that identifies variables and relationships to be investigated.
- They serve as a heuristic device for explaining the nature and significance of key HR practices.
The HRM Models
This list of HRM models is intended for HR professionals of all levels. It includes basic HR models developed by university professors and contemporary models developed by industry leaders. Consider adding it to your HRM resource arsenal.
The Standard Causal Model of HRM
The Standard Causal Model of HRM is the most well-known HR model. The Model is based on many similar models published in the 1990s and early 2000s. The Model depicts a causal chain that begins with business strategy and ends with (improved) financial performance via HR processes.
As a result, the Model demonstrates how HR activities aligned with organizational strategy lead to improved business performance. According to this Model, HR will be effective only if its strategy is in sync with the business strategy (in line with the best-fit theory). Thus, HR strategy is derived from the overall strategy.
HR practices are guided by the HR strategy. Hiring, training, evaluation, and compensation are some examples. These HR practices result in specific outcomes. Commitment, quality output, and engagement are a few examples.
These HRM outcomes, in turn, lead to increased internal performance. Productivity, innovation, and quality are a few examples. These results result in financial performance (e.g. profits, increased financial turnover, improved margins, and ROI).
The unmediated HRM effect, which shows that some HR practices can directly lead to improved internal performance, is one of two intriguing relationships. Good training, for example, can directly result in improved performance without necessarily influencing HR outcomes.
The Model's reversed causality demonstrates that stronger financial performance can sometimes lead to more investments in HR practices and better HR outcomes. Employees are often more engaged when their performance is strong (an HR outcome).
This demonstrates that the Model's relationships are not always unidirectional. However, in general, this Human Resources model demonstrates how HR strategy is developed and the impact of HR on internal business processes and financial outcomes.
The 8-box Model by Paul Boselie
The 8-box Model by Paul Boselie is a different HR model that is frequently used to model what we do in HR. The 8-box Model depicts various external and internal factors that influence the effectiveness of HR work.
The external general market context, the external population market context, the external general institutional context, and the external population institutional context are all visible. These are external forces that have an impact on how we do HR.
For example, if there is a shortage of certain skills in the market, we will approach sourcing, recruiting, and hiring differently than when qualified workers are abundant. The institutional context also shifts: legislation influences how we work in HR (for example, the day-to-day impact of HR), while trade unions and work councils limit what we can do.
The configuration is the first step in the middle process. The history, culture, and technology used by the company all have an impact on how we communicate in HR, what we want to achieve, and how effective our HR policies are. All of these factors have an impact on our HR strategy.
The human resources strategy is divided into six sections:
Intended HR practices
Actual HR procedures
We can have good intentions, but putting them into action requires collaboration between HR and the manager. When a manager decides to do things differently, the intention may be good, but the actual practices may be quite different.
HR practices as perceived by employees
This is how employees perceive what is going on in the organization. HR and managers can do everything they can, but if their activities are perceived differently than they were intended and carried out, the perception will not reflect the actual HR practices.
Perceived HR practices (hopefully) result in specific HR outcomes. These are similar to the ones described above in the Standard Causal Model of HR.
Critical HR goals
HR outcomes lead to critical HR goals (such as cost-effectiveness, flexibility, legitimacy, and so on), which in turn lead to ultimate business goals (such as profit, market share, and market capitalization – all of which are related to the organization's viability and other factors that help to build competitive advantage).
The HR value chain
One of the most well-known HR models is the HR value chain. It is based on the work of Paauwe and Richardson (1997) and adds nuance to the previous models in terms of how HR operates.
According to the HR value chain, everything we do (and measure) in HR can be divided into two categories: HRM activities and HRM outcomes.
- HRM activities include recruitment, compensation, training, and succession planning HR metrics are frequently used to measure these activities. These are known as efficiency metrics. The lower our hiring costs and the faster we train, the better.
- HRM outcomes are the objectives we hope to achieve through HRM activities. We recruit, train, and compensate to achieve specific goals/outcomes. Employee satisfaction, motivation, retention, and presence are examples of these outcomes.
If we only measure HRM activities, we will automatically focus on cost reduction (i.e., maximizing efficiency). Instead, we should concentrate on HRM outcomes because this helps to align our processes with our goals.
For example, if a new employee will be a better fit for the company, we would rather spend a few days longer on hiring (time to hire, an efficiency metric) (quality of hire, an outcome metric). The goal should be to hire the best person for the job, not to cut corners and hire someone as cheaply and quickly as possible. This demonstrates why we should measure outcomes rather than activities.
When HRM activities and outcomes are successful, performance should improve. This means that when we hire the right people, send them to the right training programs, and keep our key players, we improve the company's performance.
According to the literature, when a company's performance improves, so do HRM activities. This is since more profitable companies typically invest more in HR programs, such as HR software and learning and development opportunities for their employees.
The HR Value Chain Advanced
This Model is very similar to the HR value chain, but there are two significant differences.
First, the balanced scorecard defines organizational performance. The balanced scorecard includes key performance indicators from four perspectives: financial, customer, internal business processes and learning & growth. These are part of the HR value chain. This document assists in aligning and demonstrating the added value of HR to the business.
Second, the Model begins with several HR enablers. These enablers are critical to what HR does in the business. HR systems, budgets, capable professionals, and other critical components are included. The belief is that these enablers must be present for the value chain to function properly.
HR will be less efficient in achieving its HR and business outcomes if it lacks well-trained professionals, if the budget is limited, or if the systems are outdated and stifle innovation.
The Harvard Framework for HR
The Harvard framework for human resource management is a five-part HR model.
On the left, the Model begins with stakeholder interest. Shareholders, management, employee groups, government, and others are among the stakeholders. These interests shape HRM policies.
Concurrently, situational factors influence these interests. Workforce characteristics, unions, and all of the other factors listed in the 8-box model are examples of situational factors.
HRM policies, when implemented correctly, result in positive HRM outcomes. These include, as previously stated, retention, cost-effectiveness, commitment, and competence.
The Warwick Model
In the early 1990s, researchers Chris Hendry and Andrew M. Pettigrew at the University of Warwick developed the Warwick HRM Model. Based on the Harvard Model, this HRM framework represents an analytical approach to HRM.
The Warwick framework, like the Harvard Model, focuses on five distinct elements:
- The external context (which includes, among other things, political, technical, and competitive factors);
- The internal context (structure, leadership, culture, task-technology);
- Content for business strategy (representing company objectives, product market, and overall strategy);
- HRM context (role, definition, organization, and HR outputs);
- HRM information (HR flow, reward systems, employee relations, work systems, and other aspects).
Sam Michaels, an essay writing service contributor for HR and organizational matters, defines the Warwick model as a " framework focused on achieving performance and company growth by striking the appropriate balance between internal and external context," utilizing HRM context and HRM content elements that adapt to process changes.
The 5P's Model
Source: Research Gate
Randall S. Schuler, a renowned scholar dedicated to global HRM, strategic HRM, the function of HRM in organizations, and the interface of business strategy and human resource management, developed the 5P's HRM Model in 1992.
The 5P Model, as the name implies, is based on five constitutional aspects: purpose, principles, processes, people, and performance. Aligning and balancing these five principles, according to this framework, leads to company success.
The 5P Model specifies;
- The purpose is defined as the organization's vision, mission, and primary goals.
- Principles are operational protocols that are established to lead to the achievement of a goal.
- Processes include organizational architecture, systems, and operational methods.
- People are the most important HR resource, performing tasks by the established principles and processes.
- Finally, performance is a result that can be measured using the appropriate standards.
The same components are used in the 5P Model developed by M. G. Pryor, C. White, and L. Toombs in 1998 as a tool for the long-term continuity and progress of businesses. The strategy drives the system, the system influences staff behaviour, and staff behaviour drives performance.
In a nutshell, the 5P's HRM Model states that organizational performance is directly dependent on the performance of people engaged in processes and guided by organizational purposes and principles.
The Ulrich Model
Dave Ulrich, dubbed "the father of modern HR," introduced the Ulrich Model (also known as the Business Partner Model) in 1995. Ulrich expanded on this concept in his 1997 book "Human Resource Champions."
The Ulrich Model is a creative HRM model that focuses on organizing all HR functions into four central roles: strategic partner, change agent, administrative expert, and employee champion (or employee advocate). Rather than focusing on processes and functions, this Model focuses on the people in the organization and the roles they play in the big picture.
However, Ulrich emphasized that HR transformation does not rely solely on HR functions. He emphasized that the CEO, along with senior management, plays an important role in the process.
Although there is much debate about whether the Business Partner Model is still valid today, it represents an important milestone in HRM history and is still used in many organizations.
The ASTD Competency Model
The American Society for Training and Development developed the ASTD Competency model in 2004 following a conference and research process conducted by ASTD, DDI, and Rothwell and Associates.
The Model provides a success roadmap that compares performance to a credible set of descriptors. Since then, the Model has been slightly modified twice: once in 2008/09 and again in 2010/11.
This framework is built on three successive layers or blocks:
- Personal, interpersonal, and managerial competencies are included at the foundational level.
- Areas of Expertise (AoE) such as coaching, improving employee performance, social learning, career planning, and evaluation are introduced at the Focus level.
- At the execution level, four critical professional roles are highlighted: learning strategist, project manager, business partner, and professional specialist.
Professional development, according to the ASTD Competency Model, is the key to personal and organizational success. It primarily addresses the question, "What competencies should people possess and develop in order to succeed in their field and contribute to the organization?"
The Fombrun, Tichy and Devanna Model
This is the first Model (from 1984), and it emphasizes only four functions and their interdependence. Selection, appraisal, development, and rewards are the four functions. These four human resource management constituent components are expected to contribute to organizational effectiveness. The Fombrun Model is insufficient because it focuses on only four HRM functions while ignoring all environmental and contingency factors that influence HR functions.
The Guest Model
David Guest created this Model in 1997. It explains how human resource management differs from personnel management. It is presumptuous that the human resource manager will begin with certain strategies that will result in outcomes. The Model incorporates HRM practices that lead to improved individual and organizational performance. It has six analysis dimensions: Strategy, practices, outcomes, behavioural outcomes, performance outcomes, and financial outcomes are all examples of outcomes.
The Harvard map's essential elements of HRM have a direct relationship with valued business outcomes. Previous versions of the models, add a new level of analysis. Performance is a multi-level phenomenon as well as a cross-level phenomenon. It is useful in establishing a link between HRM practices and performance. The main limitation of this Model is that it fails to account for differences in HRM practices, which may complicate cross-level processes in the chain.
The High-Impact HR Operating Model
Deloitte's HR Operating Model is a blueprint for an HR function based on adaptability, innovation, and expertise. This Model is comprised of four main components:
- HR customers: They continue to be at the centre of the Model and have a direct impact on the workforce experience.
- The Digital Workplace: This enables and connects employees.
- Workforce Insights: These are derived from digital solutions and HR analytics and are used to develop business strategies.
- Fluid interaction among the HR components: The Model's strength is the Model's fluid interaction among the HR components, which breaks down silos.
In addition, the Model describes how to transition from current ways of working to high-impact HR in a framework known as the 4 Cs: create capacity, grow capability, empower the community, and boost credibility. Why is it relevant today: According to their research, high-impact HR operations lead to overall business growth.
Wrapping it up
All HR efforts remain focused on increasing productivity and meeting company goals. Although no model developed to date provides a perfect solution for all HR efforts, understanding HRM frameworks in their various forms is critical.
HRM models developed thus far provide HR teams and specialists with a solid foundation for designing, adjusting, improving, and developing new practices for the future.
To achieve the ultimate goals of HRM, each organization requires a unique approach, which includes recruiting the best employees, providing quality and relevant staff training, monitoring performance in ways that produce reliable results, designing and implementing employee welfare measures, and managing relevant reports.
This article describes the Human Resources models you should be familiar with. Brilliant academics have developed various models that are sometimes similar and sometimes quite different. Models, on the other hand, are never finished. A model is, by definition, a simplification of reality, and all of the HR models we discussed above are examples of this. This is also a plus: a model can show us what we need to do to achieve the desired result. I hope you found this HR model overview useful.
Kudzai Derera is the Business Systems Manager at Industrial Psychology Consultants (Pvt) Ltd, a management and human resources consulting firm.
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