The Harvard Model of Human Resource

Management
The seminal Harvard Model (also referred to as the Harvard Map or Framework) was
devised to assist managers in their assessments of the effectiveness of human
resource policies and practices. Created by Michael Beer et al,[1] it takes an
analytical approach to the causal factors or determinants of HRM policies, as well as
their likely consequences. It offers the architects of a strategic HR process a valuable
opportunity to model the potential outcomes of people decisions.

The members of the Harvard School of HRM, including Michael Beer, Richard
Walton and Bert Spector amongst others, have collectively been described as some
of the founding fathers of HRM.[2] Their central contention is that problems around
people issues can only be solved when HR considers a vision of the
employee/organisation interrelationship, and creates policies and practices around
this. They claim that, without either a central philosophy or a strategic vision []
HRM is likely to remain a set of independent activities, each guided by its own
practice tradition. This advocation of a cohesive and strategic approach defines
strategy as a longer-term perspective in managing people and consideration of
people as potential assets rather than merely a variable cost.

Defining Effectiveness
Whilst an increasing amount of pressure is being placed upon HR functions to justify
their existence through proven impact on the bottom line, Beer et al are quick to
explain that effective HR policies will not focus exclusively on short-term financial
benefits. They suggest that human resource management has much broader
consequences than simply last quarters profits or last years return on equity.
Moving away from this narrow financial perspective, they clarify that by
organizational effectiveness we mean the capacity of the organization to be

responsive and adaptive to the environment. In todays environment of ongoing

change, this ability to adapt has become one of the central priorities of the strategic
approach to HR.

Influencing Factors
Beer et al identify two key considerations influencing human resource policy
decisions: situational factors and stakeholder interests.

Situational Factors
These may be external in terms of the business environment surrounding an
organisation, or internal. They include the following:
legal imperatives
societal values
labour market conditions
unionisation
workforce make-up and diversity
technological capacity and competitiveness
business strategies
dominant management philosophy
internal cultural norms
Beer et al note that while these factors may be a constraining influence on HRM
policies, they may also be influenced by such policies. An obvious example here is a
change in internal culture brought about by the shifting of key organisational values,
reflected in new performance review and reward processes.

Stakeholder Interests
Beer et al emphasise the importance of taking the broad spectrum of stakeholder
interests into account when designing the policies and practices of human resource
management. If these perspectives are not taken into consideration, they warn, the
organisation will fail to meet the needs of these stakeholders in the long run and it
will fail as an institution. Such stakeholder interests include:
employees
employee unions
management
shareholders
community
government

Outcomes and Consequences

Beer et al contend that HRM policies and practices can have immediate effects on
the organisation, as well as long-term consequences. This is the key reason why a
long-term strategic view of the implementation for such practices is essential for
success and competitive advantage over time. By making choices in people policies,
managers can affect:
the competence of employees
the commitment of employees

the degree of congruence achieved between the goals of the employee and
those of the organisation at large
the overall cost-effectiveness of HRM policies and practices in the long term
The consequences of people process choices are varied and far-reaching. Beer et al
do not claim that their 4 Cs model covers every possible area of these effects, but
they hope that it will provide a useful framework for analysis. Other thinkers have
added their own aspects for consideration (see below), in order to broaden an
appreciation of these potential impacts.

Three Levels of Evaluation

The 4 Cs model has become a high-profile approach to analysing the
consequences of people policies and processes at the following three levels:

Individual
The well-being of employees, argue Beer et al, should be considered as a separate
entity, as well as in conjunction with organisational decisions. HRM policies will have
economic, physical or emotional effects upon employees, but these consequences
will considered differently by employees and their managers. Considering employee
well-being in isolation offers the opportunity to assess policies while placing people
first.

Organisational
Contribution to business goals and ongoing organisational competitiveness will
obviously be an aspect of the assessment of the value of human resource policies.
Impacts can occur with regard to:
short-term results
long-term results
levels of service performance
operational efficiency
adaptability in the face of change

Societal
Wide societal consequences can occur from people policy decisions. Beer et al
contend that the social implications of these decisions, external to the company,
should be taken into consideration. They offer the example of stress placed on local
government and state resources when a large number of workers are laid off with no
further employment opportunities in the area.

A Closer Look at the 4 Cs

The key questions associated with the 4 Cs model, and which address the
organisational outcomes at the three levels detailed above, are as follows:

Commitment
Do HRM decisions develop and support the commitment of the workforce to their
particular position, and to the organisation as a whole?

If so, the benefits may include not only better performance, but higher retention
levels of skilled employees, as well as the personal psychological benefits of job
satisfaction and a sense of self-worth for the employee, which can further benefit the
surrounding society.

Competence
Do HRM policies serve to identify, attract, retain and develop employees with
valuable knowledge and skills?
If so, the organisation benefits from flexibility in response to the market, and, again,
employees may benefit from a sense of self-worth, value and increased financial
security.

Cost-effectiveness
Are the HRM policies cost-effective in terms of outlay for implementation versus the
costs derived from such things as absenteeism and turnover?
If so, the financial benefits are felt by the increased market value of the organisation
going forward, and by the financial security felt by all employees.

Congruence
Are the HRM policies congruent with the actual practices of the organisation in the
experience of managers and their employees, the various employee groups, the
organisation and its community, and employees families? Are the organisations
goals understood consistently throughout its workforce?
If there is a lack of congruence between policies and practices time, money and
energy will be wasted, and trust and commitment can be lost and replaced by stress
and dissatisfaction.

Further Cs to Consider
Several thinkers have added further aspects to the model, in an attempt to create a
more comprehensive consideration of the impacts of HRM policies and practices.
Alan Price, author of Human Resource Management in a Business Context, has
added six further Cs to the model as follows:

Credibility
Do employees place their trust in the senior management team, and

Communication
Is the level of internal communication such that objectives are understood by all
employees, and barriers to information and understanding are overcome?

Control
Are performance levels constantly monitored and brought in line with the wider
business objectives?

Creativity
Are unique and forward-thinking strategies used to create competitive advantage?

Comprehensiveness
Do the HRM strategies used take a comprehensive view of the varied aspects of
people management?

Change
Do the HRM strategies employed increase organisational adaptability, and allow for
continuous improvement and development in response to internal and external
change?
While the Harvard Model takes a systematic approach to the inputs and
consequences of people policies and practice that is certainly valuable, Prices
revisions demonstrate that these are varied, complex and problematic to measure.
Beer et als original text goes on to discuss the issues of measurement for the
outputs involved, and discusses just these complexities. However, the original three
levels of impact, and 4 Cs which may effect them, offer an interesting starting point
for any HR professional aiming for a more comprehensive view of the people strategy
system.
[1] Michael Beer, Richard E Walton and Bert A Spector, Managing Human Assets
(HBS Publishing, 1984).
[2] Michael Armstrong, Strategic Human Resource Management: A Guide to Action
(Kogan Page 2001), p 11.

Image Credit: Flickr timsackton (accessed 08 October 2014).