Human Resource Management (HRM) refers to the practices and knowledge within an organization that is concerned with the organization’s primary responsibility and employment relations (Redman, & Wilkinson, 2009). As such, it is a discipline that is guided by numerous models that include Guest, Harvard, Warwick, Storey, and Fombrun models. The Guest model developed by David Guest contends that the HR manager is initially presented with specific strategies which then create a need for certain practices within the organization in order to achieve the desired outcome. It bears six aspects that include HRM strategy and practices as well as behavior, performance, and financial outcomes. It takes a soft approach to HRM as it encourages the involvement of workers in designing a reward system hence they are a special resource.
The Warwick model was developed by Pettigrew and Hendry centers on the internal and external contexts in HRM practices. It seeks to address the interaction that takes place between the external and internal environment hence allowing for alignment that ultimately leads to improved performance (Torrington, 2008). The Fombrun approach developed by the Michigan Business School is similar to the Harvard model in terms of the central role that employs play in designing the reward system, however, unlike the Harvard model, it takes a much harder approach in which employees are viewed just like any other organizational resource which lends them to exploitation in order to optimize their utility. The Storey model takes either a soft or hard approach to HRM (Storey, 2001). The soft approach emphasizes on the human aspect of the organization in which their views are taken into consideration. In the hard approach, workers are viewed primarily as costs hence an aspect of individualism that lowers the extent of employment relations (Price, 2007).
Determining the Most Strategic Model
In determining the most effective strategy of the human resource management models, it is important to have a look at the definition of HRM based on Storey and in relation to the basic characteristics of human resource management. Based on the Storey model, HRM takes two distinctive approaches, a hard versus a soft approach. As mentioned earlier, the hard approach views employees as a business resource whose primary goal is to facilitate the organization in achieving its goals and objectives. On the other hand, a soft approach to HRM encourages the bridging of the relationship that exists between the employer and employees which leads to the employees becoming more committed towards achieving the goals of the organization. An evaluation of the major models of human resource management illustrates that the Harvard model is well suited in improving managers’ knowledge and training in terms of managing people within the organization (Lojić, Škrbi, & Ristić, 2012). It therefore lends the Harvard model as the most strategic of all the human resource management models.
As a soft approach to HRM, the Harvard model moves away from the traditional personnel management approach in which the primary function of the personnel manager was controlling employees in which they were viewed merely as a means to an end rather than part of the organization’s production process. The approach taken by the Fombrun model therefore tends to be more inclined to personnel management and not human resource management hence not the most strategic of the models (Redman, & Wilkinson, 2009). Soft approaches such as the Harvard model are concerned with the aspect of the reward system. A reward system includes monetary and non-monetary compensation as well as intrinsic rewards such as career development. Such an aspect of human resource management helps to motivate the workforce which in turn raises productivity and overall attainment of the goals and objectives of the organization. The productivity is further improved in the event that the employees are involved in the designing of the organization’s reward system with the managers’ primary task being to ensure that such a system is in line with the organization’s goals and objectives as set out in the strategic vision. It is because the employees are invested in the process hence become part and parcel of the organization.
Work systems form an essential element of the Harvard model. Unlike the other models, the work systems in the Harvard model take into account the interests of the stakeholders in which the employee fraternity is also included. The consideration of the employees extends to situational factors such as workforce characteristics and the labor market, human resource management policies, outcomes, and long term consequences. As a result, the employees are involved in the entire process. Contrary to personnel management, human resource management views employees as assets rather than merely business resources. It therefore creates a conducive environment in which learning and development are integrated in the human resource management process. Another critical characteristic of human resource management is creating a lean management structure in order to facilitate direct communication between employers and employees which is an attributed that is well anchored in the Harvard model.
The model views employees as a special resource which is in line with human resource management principles in which orientation to workers and their values are viewed as the most important resource base for the organization as compared to other tangible resources such as raw materials. In line with employee involvement in the decision making process, the Harvard model is the most strategic of the human resource management models.
New-Liberalism
The concept of individualism refers to a society in which the bonds that exist between individuals are not as strong as a society in which interdependence is the main form of social organization. The growth of individualism has coincided with a move towards market based principles such as liberalization and reduced levels of government participation in the market which has also extended into the human resource management field. The primary motivation for the move towards neo liberalism is the need for improved overall organizational performance. It is grounded in the belief that individuals tend to lay more emphasis on personal development and self-interests as opposed to common interests. It is therefore only logical that human resource policies in an organization take cognizance of this fact and focus their attention towards individual development. Despite the perceived positive co-relation between improved individual performance and human resource management practices, the neo liberal approach has some inherent weaknesses.
The individualistic approach is more inclined towards the cultural practices of the west in which equity based reward systems and personal achievement are the main measures for the success of human resource management policies. However, such an approach may not work well in places where the cultural orientation is more inclined towards interdependence. It is especially the case in the east. Secondly, an individualistic approach does not contain an element of collective harmony and as such individuals are incentivized to personal development regardless of the effects it has on other employees and stakeholders. Despite improving the level of organizational performance in the short run, the disharmony it creates affects the organization’s bottom line in the long run due to the moral hazard and adverse of the internal competition. The consequences of an individualistic approach are manifested in the eventual fall of the energy giant Enron Corporation.
CEO’s Pay
The high pay that a majority of the CEOs earn is an extension of the individualistic approach to human resource management policies. In most of the cases, the high pay does not reflect the organization’s true financial position. It is because individualistic approaches emphasis on personal development and equity based reward systems which also affect the chief executives. The achievement of personal development is irrespective of the effects that such personal success will have on others within the organization. Therefore, due to the lack of a collective approach, a chief executive is inclined to direct performance towards areas that will highlight their personal development even if such areas may not be aligned with the organization’s long term goals and those of the other stakeholders which presents a moral hazard for the organization. Therefore, in the short term, the organization’s performance may appear to favor the chief executive’s high pay yet the underlying business strategy may not be able to support the business’s bottom line in the long run.
Apple Inc.
Apple Inc. is one of the largest technology companies in the world. While much of its success is often credited to its innovative products, its employees play a huge role in making the company a success story. The high productivity of the company’s employees is attributed to the human resource management practices it has put in place with some of those practices being strategic which is meant to enable the company stay ahead of its competition. In its human resource management practices, the company does not exclusively apply any one single model of human resource management but rather constitutes a blend of the best practices of each model.
The Fombrun model views employs as any other business resource that must be fully exploited to obtain maximum utility. It is an approach taken by Apple Inc. only that it seeks to achieve its goals by creating a conducive environment for its employees. It also incorporates elements of the Harvard model in its HR policies. The company has a reward system in which the employees are part and parcel of its formulation. The compensation package is competitive when compared to that of the industry average. Secondly, it offers several benefits to the employees such as health insurance, employee stock ownership programs as well as savings and investments programs. Its reward system is also tailored to suit its employees as illustrated by the FlexBenefits program in which an employee can customize their compensation and benefits package to suit their needs. Its employees also get opportunities for career growth and development. It is as a result of its human resource practices emphasizing on job rotations, on the job training and leadership development as part of growing its knowledge base.
On the downside, Apple Inc. is over-reliant on the Fombrun model in exploiting the knowledge base of its employees (Torrington, 2008). It is especially the case for its engineers and other technical staff who more often than not are forced to work long hours in order to reach their targets. The company demands an extreme work ethic from its employees regardless of the impact it has on their work life balance. It is also illustrated by the inability of the company to offer its employees employment security but rather lays emphasis on employability security. In fact, the company is often unapologetic for any layoffs that might occur which lends credence to the view that its employees are merely business resources rather than part of the community of Apple Inc.
Apple Inc.’s recruitment practices form a strategic part of its human resource management practices. Its recruitment process has been tailored to ensure that the company only gets employees that suit its value systems and organizational culture. As such, it is highly selective and potential employees are hired irrespective of experience as long as an individual has background knowledge on computers. The company takes pride in its rigorous recruitment process which has enabled it produce some of the most innovative products that have ensured the company remains a market leader and trend setter in its various product categories.
References
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Lojić, R., Škrbi, Z., & Ristić, V (2012). Strategic approach to human resources management.
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Price, A. (2007). Human Resource Management in a Business Context. London, UK: Cengage
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