MGTS7603: Critical Analysis of SHRM Frameworks

Executive Summary

This report is a critical analysis of the two of the most popular Strategic Human Resource Management (SHRM) frameworks namely the Harvard Model of HRM and the Continuous-improvement Human Resource Management (CHRM) Decision-Making Framework. The analysis highlights the theoretical foundations, practicality and applicability along with ethical implications for contemporary HRM practice. The Harvard Model, which balances the organisational goals, employee well-being, and societal outcomes is a stakeholder-oriented approach. Whereas, the CHRM framework provides contextual and flexible HR interventions, suitable for unpredictable and changing environments. These models provides contrasting approaches yet HRM effectiveness can be enhanced by combining both models for better outcomes.

Introduction:

This report is a critical analysis of two popular Strategic Human Resource Management (SHRM) frameworks that is the Harvard Model of HRM and the continuous-improvement HRM (CHRM) decision-making framework. Both models are crucial in strategic human resource management, providing valuable insights, however, there is a significant difference in their strategic focus, adaptability, and approach to ethical considerations. This is the era of rapid globalization, technological advancement, and ever-changing workforce expectations. Hence, HR professionals need these models to align human resource practices with organisational goals to achieve sustainable competitive advantage.

Harvard Model of HRM

Introduced by Beer et al (1984), the Harvard Model hold critical importance in Strategic Human Resource Management. This model exhibits the interconnectedness between the stakeholders that include employees, management, shareholders, unions, and governments’ interest with situational factors including workforce characteristics, organizational strategy, and labour market conditions. According to Sato et al (2020), the model focuses on how HR policy making impacts employee outcomes such as commitment, performance, cost-effectiveness, congruence, etc., which affects the organisational and societal consequences in the long run. The positive aspect of the Harvard model is the multi-stakeholder perspective it provides, positioning HRM to close the gap between organisational objectives and societal expectations. This model ensures that employees’, welfare and concerns are addressed and the HR policies are not implemented in the organisation for economic outcomes.

CHRM Decision-Making Framework

The CHRM framework, or continuous improvement HRM, is a decision-making framework that provides a structured approach to evaluate the current alternatives and possibilities for transition according to the organisations’ specific internal and external contexts (Gemar et al., 2019). It provides a structured approach that enables HR to evaluate factors such as industry trends, organisational culture, and external stakeholders before developing the HR interventions. Thus, the CHRM framework’s major advantage is the flexibility it provides to develop relevant and practical HR solutions as it allows for adaptation to changing environments. It allows the pragmatic approach within dynamic and uncertain contexts (Jørgensen et al., 2017).

Critical Evaluation of Applicability

The organisations that focus on building long-term stakeholder relationships and sustainability, the Harvard Model is particularly applicable for these organisations. It provides a structured framework guiding HR professionals in aligning business goals with employee well-being and wider social responsibilities. Similarly, the model is not applicable in rapidly changing environments, where fixed frameworks will not be able to address emerging or unexpected contextual factors. The model focuses on harmony among stakeholders, which often complicates the decision-making process, especially when stakeholders’ interests do not align (Tiwari et al., 2019).

However, Wickramasinghe and Chathurani (2021), state that in volatile, uncertain, and complex environments, the CHRM framework is particularly applicable for these organisations. It encourages flexible HR approaches to respond to evolving situations. The CHRM approach facilitates flexible and effective HR interventions, especially in organisations considerably impacted by rapid technological change or global competition. However, this adaptability may be at the expense of long-term strategic consistency and can increase the risk of ethical compromises when short-term contextual pressures outweigh long-term decision-making.

The Application to SHRM Issues and Practices

Farndale and Paauwe (2018), highlight that the Harvard Model ensure a comprehensive framework that aligns with stakeholders’ interests and contributes significantly to SHRM by achieving sustainable organisational outcomes. It is well-applicable in healthcare, education, and public services sectors where employee well-being and societal outcomes hold significance.

However, the CHRM framework is highly applicable for organisations going through rapid changes belonging to technology, retail, and financial services sectors where responsiveness and adaptability are crucial. This framework focuses on decision-making that is context-sensitive, ensuring that the organisation develop HR practices in following changing circumstances. However, the absence of formal ethical guidelines may lead to inconsistent or short-term-oriented HR practices if not managed appropriately (Beraldin et al., 2022).

Comments on Ethical Implications

According to Smith et al (2018), the Harvard Model ensures ethical aspects by focusing on employee well-being, equity, and corporate social responsibility, and incorporating these into HRM. This framework provides an opportunity to cater for the economic and social value through HRM in highly competitive environments. However, when financial outcomes become prioritized, these ethical considerations may become hard to maintain.

Blaga (2020), states that where the CHRM framework indirectly acknowledges the significance of ethical considerations by considering stakeholder interests and organisational values, a structured ethical framework remains absent. This lacking can result in an emphasis on contextual adaptation over fairness or employee well-being in HR policy.

Conclusion

The significantly popular Harvard Model and the CHRM Decision-Making Framework in SHRM practice ensure best practices yet exhibit some lackings. Where the Harvard Model is well-applicable for industries having long term priorities of stakeholder relationships and ethical considerations, it is less practical in volatile settings. Similarly, the CHRM framework ensures adaptability and contextual relevance, ensuring that the organisation is able to respond to dynamic challenges efficiently. However, it risks ethical ambiguity and provides inconsistent decision-making. To maximize both the models the HR can combine both models that offer comprehensive and balanced strategy to address current HRM challenges.

References

Beer, M., Spector, B., Lawrence, P. R., Mills, D. Q., & Walton, R. E. (1984). Managing Human Assets. Free Press.

Beraldin, A. R., Danese, P., & Romano, P. (2022). Employee involvement for continuous improvement and production repetitiveness: a contingency perspective for achieving organisational outcomes. Production Planning & Control, 33(4), 323-339.

Blaga, P. (2020). The importance of human resources in the continuous improvement of the production quality. Procedia manufacturing, 46, 287-293.

Farndale, E., & Paauwe, J. (2018). SHRM and context: Why firms want to be as different as legitimately possible. Journal of Organizational Effectiveness: People and Performance, 5(3), 202-210.

Gemar, G., Negrón-González, A. M., Lozano-Piedrahita, C. J., Guzmán-Parra, V. F., & Rosado, N. (2019). Procedure for the continuous improvement of human resource management. Ingeniería e Investigación, 39(1), 53-62.

Jørgensen, F., Laugen, B. T., & Boer, H. (2017). Human Resource Management for Continuous Improvement. Creativity and Innovation Management, 16(4), 363–375. https://doi.org/10.1111/j.1467-8691.2007.00452.x

Sato, Y., Kobayashi, N., & Shirasaka, S. (2020, September). Structural analysis between HR systems and HR outcomes to motivate employees based on Harvard Model. In 2020 9th International Congress on Advanced Applied Informatics (IIAI-AAI) (pp. 570-575). IEEE.

Smith, S. S., Rohr, S. L., & Panton, R. N. (2018). Human resource management and ethical challenges: Building a culture for organization success. International Journal of Public Leadership, 14(2), 66-79.

Tiwari, V., Srivastava, S., & Kumar, D. P. (2019). Adoption of HRM practices: A practical model-case study of a hotel. IOSR Journal of Business and Management (IOSR-JBM), 21(4), 59-63.

Wickramasinghe, V., & Chathurani, M. N. (2021). Effects of continuous improvement in streamlining HRM practices. Business Process Management Journal, 27(3), 883-900.