Models of HRM

The term "HR model" can refer to various concepts in the field of Human Resources (HR). One common definition relates to the framework or structure that an organization adopts to manage its human capital effectively. Here's a broad definition:


An HR model is a systematic framework or approach implemented by an organization to manage its human resources, encompassing strategies, policies, processes, and practices aimed at attracting, developing, motivating, and retaining employees to achieve the organization's goals and objectives effectively.


Different organizations may have different HR models based on their size, industry, culture, and strategic priorities. Some common HR models include the traditional HR model, strategic HR model, high-performance work system (HPWS) model, and talent management model, among others. These models may vary in their emphasis on various aspects such as recruitment, training, performance management, compensation, and employee engagement.

HR models explained.
HR professionals can increase their acuity as strategic players by learning about different HRM models and their basic theories. Let’s take a look at some of the best-known Human Resources models.
1. The Standard Causal Model of HRM
The Standard Causal Model of HRM is derived from many similar models published throughout the 90s and early 2000s. According to this model, HR will only be effective if its strategy is aligned with the business strategy.The model shows a causal chain of how HR processes impact the organization. The chain starts with the company’s overall business strategy, which influences the HR strategy and processes. The chain ends with improved business performance.
For example, hiring, training, appraisal, and compensation practices can lead to outcomes such as commitment, quality output, and engagement. These HRM outcomes lead to improved internal performance, which, in turn, impacts financial performance (e.g., profits, financial turnover, better margins, and ROI).
This HR framework also shows that the relationships in the model are not always unidirectional. Some HR practices can directly lead to improved internal performance. For example, good training can directly result in better performance without necessarily influencing HR outcomes.
Furthermore, sometimes a stronger financial performance leads to more investments in HR practices and better HR outcomes. When performance is strong, employees are often more engaged, and engagement is an HR outcome.
2. The 8-Box Model by Paul Bosely
The 8-box model by Paul Bosely shows the eight external and internal factors that influence the effectiveness of HR practices.It starts by identifying the four external forces that influence how organizations do HR:External general market context
External population market context
External general institutional context
External population institutional contextFor example, a shortage of certain skills in the market influences how companies' source, recruit, and hire, compared to when there’s an abundance of qualified workers. Within the institutional context, legislation, trade unions, and work councils control what HR does and how they do it.
The four core elements show the progression of HR’s impact on the organization:Configuration – The company’s history, culture, and technology all influence how HR communicates what it wants to achieve and how effective HR policies are.
HR strategies and practices element consists of four parts:
Intended HR practices – Goals for recruitment, training, etc.
Actual HR practices – How the practices are executed.
Perceived HR practices – How employees perceive what’s going on in the organization.
HR outcomes – Results of the perceived HR practices.
Critical HR goals – The above strategies lead to outcomes such as cost-effectiveness, flexibility, legitimacy, and so on.
Ultimate business goals – These outcomes contribute to the viability of the organization, i.e., profit, market share, and market capitalization.3. The HR Value Chain
The HR value chain is one of the best-known models in HR. It is based on the work of Paauwe and Richardson (1997) and creates a nuance in the models above regarding how HR operates.
According to the HR value chain, everything HR does and measures can be divided into two categories:HRM activities: Day-to-day activities, including recruitment, compensation, training, and succession planning. These activities are often measured using HR metrics. These are so-called efficiency metrics. The cheaper we hire and the faster we train, the better.HRM outcomes: The goals we try to achieve with the HRM activities. We recruit, we train, and we compensate to achieve certain goals or outcomes. These outcomes include employee satisfaction, motivation, retention, and presence.If we focus on measuring just HRM activities, we will automatically prioritize maximizing efficiency to reduce costs. However, this may not produce the best long-term results. Instead, we should focus on measuring HRM outcomes, as this helps to align our processes with our goals.
For example, we would rather spend a few days longer on hiring a new employee (time to hire, an efficiency metric) if this person will be a better fit in the company (quality of hire, an outcome metric). The goal should be to get the best person in the right position, not to cut corners and hire someone as cheaply and quickly as we can.
When HRM activities and HRM outcomes hit their marks, they should lead to better performance. This means that when we recruit the right people, send people to the right training programs, and retain our key players, the company’s performance increases.
There is also a different effect. When company performance is higher, HRM activities increase as well. This is because more profitable companies usually invest more in HR programs, including HR software and L&D opportunities for their people.
Our Strategic HR Metrics course, which is a part of the HR Metrics & Dashboarding Certificate Program, dives deeper into the HR Value Chain model and explores how it can be applied in practice.
4. The HR Value Chain Advanced
The original source for the HR Value Chain Advanced model is unclear. It is very similar to the HR value chain but with two key differences.First, organizational performance is defined in the balanced scorecard. The balanced scorecard contains the key performance indicators from a financial perspective, a customer perspective, and a process perspective. These are integrated into the HR value chain. The scorecard helps to align and show the added value of HR to the business.
Second, the model starts with a number of HR enablers. These enablers are key to what HR is doing in the business. This includes HR systems, HR budget, capable professionals, and other key elements. The thinking is that these enablers need to be present in order for the value chain to operate effectively.
If HR lacks well-trained professionals, if the budget is low, or if the systems are outdated and hamper innovation, HR will be less efficient in reaching its HR outcomes and business outcomes.
5. The Harvard Model of HRM
The Harvard model of HRM has been attributed to Michael Beer in 1984 and contributions from Paauwe and Richardson in 1997. It takes a more holistic approach to HR and includes different levels of outcome.This model comprises the following five components:It starts, on the left, with stakeholder interest. These stakeholders include shareholders, management, employee groups, government, and more. These interests define the HRM policies.At the same time, situational factors influence these interests. Situational factors include workforce characteristics, unions, and all the other factors that were also part of the 8-box model.Situational factors and stakeholder interests influence HRM policies. These include the core HR activities, such as recruitment, training, and reward systems.When done well, HRM policies lead to positive HRM outcomes. These include the previously mentioned retention, cost-effectiveness, commitment, and competence.These positive HRM outcomes lead to long-term consequences. These can be individual, organizational, and societal.


6. The Guest Model

The Guest model was developed in the late 1980s and 1990s by David Guest, a professor at King’s Business School in the United Kingdom. The model positions the strategic role of HR and differentiates strategic HRM from traditional personnel management activities.

It was one of the first models to incorporate both the “hard” and “soft” perspectives of HRM. The model also positioned the impact of HRM on business performance and acknowledged the vital role that organizational behavior plays in achieving performance outcomes.

The Guest model describes HR in terms of six interrelated dimensions of analysis that align with a specific business strategy:

(1) The premise is that HRM starts with particular strategies that align with business intent; (2) which in turn informs the practices and policies of HRM, (3) that result in specific HRM outcomes, that lead to (4) desired employee behaviors such as commitment and motivation, that collectively (5) drives performance outcomes, (6) which results in financial outcomes.

The inverse of this human resource management model is also true; financial outcomes will be influenced by performance, which is driven by individual and organizational behavior. These behaviors result from specific HR outcomes as a result of targeted HR practices and policies based upon a particular HR strategy.
7. The Warwick Model

Another noteworthy model of HRM was developed by researchers Hendry and Pettigrew from the University of Warwick in the early 1990s. This model, although similar to both the Guest and Harvard models, contributes another perspective on aligning HRM practices with external and internal contexts.

It provides a framework for exploring how HRM is influenced by external environmental forces which affect the internal reality of the organization.

The model consists of the following elements: Outer context – The macro-environmental (political, economic, societal, technological, legal, environmental) factors that influence HR policies.
Inner context – The internal elements, such as organizational culture, technology, and leadership that influence HR policy and practice and will be influenced by the outer context.
Business strategy – The strategic intent of the business articulated in business objectives and goals, which is influenced by the inner context of the organization, based upon the outer context, and in turn will influence the HRM context
HRM content – The role, definitions of work, and HR outputs based upon the business strategy and influenced by the HRM context
HRM context – The flow of HR work and aspects such as reward systems, employee relations, and work systems that are influenced by the business strategy

This model emphasizes the importance of strategic HRM. In other words, HR must understand and anticipate these factors and be able to adapt and change in response to their influences with effective business strategies.
8. The Ulrich Model

The Ulrich Model was proposed in David Ulrich’s 1996 book Human Resource Champions, which outlines four key roles the HR function must take on:Administrative Expert: Handles the internal operations by overseeing HR processes and strategies for managing people.
Employee Champion: Manages workforce competencies and employee engagement levels to improve productivity. Focuses on maintaining a healthy employer-employee relationship.
Change Agent: Works with managers and employees to launch initiatives that enhance company culture and advance the business.
Strategic Partner: Aligns HR strategies with the company’s business goals. Creates the best methods for developing and managing the workforce to best support success.

This has also become known as Ulrich HR Business Partner model. The four roles do not have to be specific job titles, and HR professionals can assume one or more of the roles within the scope of their responsibilities.

The strategic partner role in this model helped HR progress from a strictly administrative and transactional role into a meaningful contributor to achieving organizational goals. In this strategic business partner affiliation, HR is connected with senior leadership, and people policies are merged into the overall business strategy.

Ulrich revised his four-role business partner model in 2005, expanding on the functions and adding a fifth role. The five roles are: Employee Advocate, Human Capital Developer, Functional Expert, Strategic Partner, and HR Leader.




Reference:
https://www.aihr.com/blog/human-resources-models/
https://www.youtube.com/watch?v=v2wWpKsRelE