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Harvard ModelIn 1985, Richard Walton published an article in the
Harvard Business Review called From
Control to Commitment in the Workplace, which popularisedsoft
HRM as a distinctive
approach to managing human resources. His argument was that
effective HRM depends not on
strategies for controlling employees but on strategies for
winning employees commitment.
The Harvard model proposes that many of the diverse personnel
and labour relations
activities can be dealt with under four human resource (HR)
categories: employee influence,
human resource flow, reward systems and work systems. These are
general issues that managers
must attend to regardless of whether the organisation is
unionised or not, whatever management
style is applied, and whether it is a growing or declining
business.
Employee influenceEmployee influence is the question of how much
responsibility, authority, and power is
voluntarily delegated by management and to whom. One of the
critical questions here is, if
management share their influence, to what extent does this
create compatibility (the word the
authors used is congruence) of interests between management and
groups of employees? Theassumption the authors make is that any
influence employees have should be compatible with
managements purpose and priorities.
Human resource flow
Human resource flow concerns managing the flow of people into,
through, and out of the
organisation. This means making decisions on recruitment and
selection, promotion, termination
of employment, and related issues of job security, career
development, advancement, and fairtreatment. Managers and personnel
specialists, according to the Harvard model, must work
together to ensure that the organisation has an appropriate flow
of people to meet its strategic
requirements.
Reward systems
Reward systems regulate how employees are extrinsically and
intrinsically rewarded for their
work. Extrinsic rewards are tangible pay and benefits: pay,
overtime pay, bonuses, profit sharing,pensions, holiday
entitlement, health insurance; and other benefits, such as flexible
working
hours. Intrinsic rewards are intangible benefits and are said to
strongly influence employees
motivation, job satisfaction, and organisational commitment.
Intrinsic rewards are rewards fromthe work itself, such as sense of
purpose, achievement, challenge, involvement, self-confidence,
self-esteem, and satisfaction. The Harvard model recommends that
employees should be highly
involved in the design of an organisations reward systems but
observes that final decisions,
besides meeting employees needs, must be consistent with the
overall business strategy,management philosophy, and other HRM
policies.
Work systems
Work systems are the ways in which people, information,
activities, and technology arearranged, at all levels of the
organisation, so that work can be performed efficiently and
effectively.
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Policies in these four areas must be designed and applied in a
coherent manner because, Beer and
his co-authors argue, HRM is considerably less likely to be
effective where policies are
disjointed, made up of odd combinations of past practices, and
are ad hoc responses to outsidepressures. The four policy areas
must satisfy the many stakeholders of the enterprise for
example, shareholders, employees, customers, suppliers,
communities, trade unions, trade
associations, and government. Employees are major stakeholders
of the enterprise and it is theresponsibility of managers to
establish systems that promote employee influence. Some peoplewould
say that managers do not consider enough how to facilitate employee
influence: indeed,
Beer et al. claim that, of the four issues discussed, employee
influence is the central feature of an
HR system, as illustrated in the triangle in Figure 2.2.
A further recommendation of the Harvard model is that, when
making HRM policy decisions,
managers should consider the four Cs: commitment, competence,
congruence (compatibility),and cost-effectiveness. That is,
managers should ask to what extent the policies they implement
will: enhance the commitment of people to their work and the
organisations; attract, retain, and
develop people with the needed competence; sustain congruence
(compatibility) betweenmanagement and employees; and be
cost-effective in terms of wages, employee turnover, and
risk of employee dissatisfaction.
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