JENNIFER M.

OESTAR
PhD Development Education
Student

Dr. NILO H. DATOR

Professor

Human Resource Development

OBJECTIVES

 Determine the different functions

and features of Harvard Model in
Human Resource Management.
 Creatively analyze the structure of
Harvard Model in HRM.
 Apply Harvard Model to improve
one’s skill in managing staff in
an organization.
KEYWORDS AND PHRASES
BASELINE RECALL

HRM
is concerned with the people
dimension in management. Since every
organization is made up of people,
acquiring their services, developing
their skills, motivating them to higher
levels of performance and ensuring
that they continue to maintain their
commitment to the organization in
order to achieve organizational
objectives.
 The HRM Models
There are a good number of models
that have been postulated by various
scholars to describe the HRM concept.
These are
 Fombrun, Tichy and Devana Model
BASELINE RECALL
 Harvard and Warwick Model
 Harvard model is premised on the belief that it is the
organization’s human resources that give competitive
advantage through treating them as assets and not costs.
 THE HARVARD MODEL
The Harvard Model was postulated by Beer
et al Michael Beer, Richard E. Walton, Bert A.
Spector, 1984 Harvard University.
The authors of the model also coined it the
map of HRM territory.
The Harvard model acknowledges the
existence of multiple stakeholders within the
organization. BASELINE RECALL
 These multiple stakeholders include
shareholders various groups of employees,
government and the community at large.
The recognition of the legitimacy of these
multiple stakeholders renders this model a
neo - pluralist model.
This model emphasizes more on the
human/soft side of HRM. BASELINE RECALL
 CHARACTERISTICS OF HRM in
Harvard Model
1.Line managers accept more responsibility for ensuring
the alignment of competitive strategy and personnel
policy.
2. Personnel has the mission of setting policies that
govern how personnel activities are developed and
implemented in ways that make them more mutually
reinforcing.
BASELINE RECALL
The analytical framework of the ‘Harvard Model’
consists of six basic components.
1.Situational factors
2. Stakeholders interests
3. Human Resource Management policy choice
4. HRM outcome (4Cs)
5. Long-term consequences
6. A feedback loop throughBASELINE
which the RECALL
outputs flow.
The Harvard Model claims to be comprehensive
in as much as it seeks to comprise six critical
components of HRM. The dimensions included in
the model are: stakeholders, interests, situational
factors, HRM policy choices, HR outcomes, long-
term consequences and a feedback loop through.
The outputs flow directly into the organization
and the stakeholders.
This map is based on an analytical approach and provides a broad
causal depiction of the determinants and consequences of HRM
policies. It shows human resource policies to be influenced by two
significant considerations:
1. Situational factors in the outside business environment or within
the firm such as laws and societal values, labor market conditions,
unions, work-force characteristics, business strategies, management
philosophy, and task technology.
2. Stakeholder interests, including those of shareholders,
management employees, unions, community, and government. Beer
et al argue that human resource policies SHOULD be influenced
by ALL stakeholders.
 COMMITMENT CONGRUENCE
-Psychological Attachment -Similarity between employees
and organization objectives
COST
EFFECTIVENESS 4 Cs
-Wage
-Turnover COMPETENCE
-Benefits -Ability to do the job properly
-Absenteeism
-Strikes
1.COMMITMENT
Organizational commitment predicts work
variables such as turnover, organizational
citizenship behavior, and job performance. Some
of the factors such as role stress, empowerment,
job insecurity and employability, and distribution
of leadership have been shown to be connected
to a worker's sense of organizational commitment.
Improved commitment may lead to more loyalty
and better performance for the business. It can
also benefit the individual through enhanced self-
worth, dignity, psychological involvement, and
identity.
2. COMPETENCE
 A cluster of related abilities,
commitments, knowledge, and skills
that enable a person (or an
organization) to act effectively in a
job or situation.
 Competence indicates sufficiency of
knowledge and skills that enable
someone to act in a wide variety of
situations.
3. COST-EFFECTIVENESS
 The cost effectiveness of
particular HRM policies can be
evaluated in terms of wages,
benefits, turnover, absenteeism,
strikes, etc.
 The costs can be judged for
organizations, individuals, and
society as a whole.
4. CONGRUENCE
 The integration of multiple goals, either
within an organization or between
multiple groups.
 Congruence is a result of the alignment of
goals to achieve an overarching mission.
 Based on the principle that an
organization's performance is derived
from four elements: tasks, people,
structure, and culture. The higher the
congruence, or compatibility, amongst
these elements, the greater the
performance.
 The authors also contend that human resource policies
have both immediate organizational outcomes and long-
term consequences. Managers can affect a number of
factors by means of the policy choices they make, including:

the overall competence of employees,

the commitment of employees,
the degree of congruence between employees' own
goals and those of the organization, and
the overall cost effectiveness of HRM practices.
BASELINE RECALL
The Harvard model proposes that many of the diverse personnel
and labor relations activities can be dealt with under four human
resource (HR) categories:
1.employee influence
2.human resource flow
3.reward systems and
4.work systems.
These are general issues that managers must attend to regardless of
whether the organization is unionized or not, whatever management
style is applied, and whether it is a growing or declining business.
EMPLOYEE INFLUENCE REWARD SYSTEMS
-Authority -Pay Systems
-Responsibilty -Incentives
-Power -Motivation
HUMAN
RESOURCE
POLICY
HR FLOW AREAS WORK SYSTEM
-Recriuitment, Selection -Design of Work
-Placement, Promotion -Alignment of People
-Assessment, Appraisal
-Termination
1. EMPLOYEE INFLUENCE
Employee 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? The assumption the
authors make is that any influence
employees have should be compatible with
management’s purpose and priorities.
2. HUMAN RESOURCE FLOW
Human resource flow concerns managing
the flow of people into, through, and out of
the organization. This means making
decisions on recruitment and selection,
promotion, termination of employment, and
related issues of job security, career
development, advancement, and fair
treatment. Managers and personnel
specialists, according to the Harvard
model, must work together to ensure that
the organization has an appropriate flow
of people to meet its strategic
requirements.
3. REWARD SYSTEMS
 Reward system is a critical part of any
organizational design. How well they
fit with the rest of the systems in an
organization has an important impact
on how effective the organization is
and on the quality of life that people
experience in the organization.
 A motivated workforce can be a
significant factor in organizational
success. When employees are
motivated to work at higher levels of
productivity, the organization as a
whole runs more efficiently and is
more effective at reaching its goals.
4. WORK SYSTEMS
Work systems are the ways
in which people, information,
activities, and technology
are arranged, at all levels
of the organization, so that
work can be performed
efficiently and effectively.
 `
Beer et al (Managing Human Assets by
Michael Beer, Richard E. Walton, Bert A.
Spector, 1984) propose that long-term
consequences (both benefits and costs)
of human resource policies should be
evaluated at three levels:
· Individual Well-Being
BASELINE RECALL
· Organizational Effectiveness
·Societal Well-Being
 `

Individual Societal Well-

Well-Being Being

Organizational
Effectiveness

BASELINE RECALL
1.INDIVIDUAL WELL-BEING `
They argue that the well-being of
employees must be considered separately and
distinctly from that of the organization.
Employees can be affected economically,
physically or psychologically by HRM policies.
But managers have different values and will
weight those consequences differently according
to those values. Some will focus on the
organization at the expense of workers whereas
others will regard employees as having
legitimate claims to fair treatment.

LONG-TERM CONSEQUENCES
 `
2.ORGANIZATIONAL EFFECTIVENESS
Obviously, human resource policies
have to be evaluated in terms of their
contribution to business goals and
organizational survival. Specifically, HRM
policies can increase an organization's:
- efficiency
- adaptability
- service performance
- price performance
- short-term results
- long-term results
 `
3. SOCIETAL WELL-BEING
HR practices can have wide
consequences on society. For example, Beer
et al ask: "What are the societal costs of a
strike or a layoff?" They point out that
"alienated and laid-off workers may
develop both psychological and physical
health problems that make them burdens to
community agencies funded by the local,
state, or federal government. Today
employers pass on many of the costs of their
management practices to society."
 ADVANTAGES OF HARVARD MODEL
1. It incorporates recognition of a range of
stakeholder interests; ·
2. It recognizes the importance of ‘trade-offs’, either
explicitly or implicitly between the interests of
owners and those of employees as well as
between various interest groups; ·
3. It widens the context of HRM to include ‘employee
influence’, the organization of work and the
associated question of supervisory style; ·
4. It acknowledges a broad range of contextual
influences on management’s choice of strategy,
suggesting a meshing of both product-market and
socio-cultural logics; ·
5. It emphasizes choice – it is not driven by
situational or environmental determinism.
 ADVANTAGES OF HARVARD MODEL
1. High levels of employee participation,
2. higher motivation
3. greater commitment from staff
4. less absenteeism
5. greater productivity
6. maintaining the company's employee collaboration
7. enhance cooperation
8. enthusiasm and work of the staff,
9. competitive advantage.
 APPLICATION OF HARVARD MODEL
According to the report of Toyota in 2005, we can see that the
company has applied Harvard Model and is very effective,
creating the trust, loyalty of employees in several ways:
Toyota to build the training academy staff and abroad, that
they have good skills and develop their own ability of; keep
staff numbers steady, communication with employees and
employee family regularly work with balancing Increased
support for childcare, long -term Contracts Offered to
contract employees, etc.
To respect human strategy, Toyota give employees long-
term jobs, better working conditions, needs and
interest in their lives, so they really want to stick with
the company, loyalty to company, to drive a
successful, working actively. The survey in 2004,
Toyota had 83% employee satisfaction with working
conditions of the company, and most of them say that
'I'm Proud to work at Toyota.
 CONCLUSION
The Harvard model sees employees as resource, but
human where the managers are responsible to make
decisions about the organisation and employee relation.
The employment relation is seen as a blending of
business and societal expectations and because it
recognises the role societal outcomes play, it could be
argued that the Harvard model provides a useful basis for
comparative analysis. The Harvard model also cover the
four HRM policy areas which are human resource flows,
reward system, employee influence, work system, which
leads to the four Cs; competence of employees,
commitment of employees, congruence of
organisation/employees goals and cost effectiveness of
HRM. As could be agued striving to enhance all four Cs
could lead favourable consequences for individual well-
being, societal well-being and organisational effectiveness
either as long- term consequences.
 REFERENCES
Beardwell, I., Holden, L. and Claydon, T. (2004) Human
Resource Management a Contemporary Approach, 4th
edition, Harlow: Prentice Hall.

Beer, M., Spector, B., Lawrence, P.R., Quinn Mills, D. and

Walton, R.E. (2004) Human Resource Management. New York:
Free Press.

Boxall, P.F. (1992) Strategic Human Resource Management:

Beginning of a new theoretical sophistication? Human Resource
Management Journal.

Dessler, G. (2003) Human Resource Management, 9th edition,

Prentice Hall