STRATEGIC HRM

Michingans Model
Michigans model emphasizes the necessity of tight fit between business strategy, organizational structure and HRM, which also influenced by economic, politic, and cultural forces. This model underlines the deployment of HRM to achieve the business objectives. Accordingly, this model recognizes the various styles in managing people among organizations which depend on organizational context. This model, moreover, assumes that everyone in the organization should have same orientation; it is to achieve organizational goals.
Figure 2.1 The Matching/ Michigans Model of HRM

Source: Devanna et al. (1984); Tichy et al. (1982: 48)

To give clearer picture of the Michigans model, Tichy et al. (1982) provide an excellent illustration how to fit among business strategy, organizational structure, and HRM in table 2.5

Table 2.5 HRM Links to Strategy and Structure HRM Strategy Single Product Structure Functional Selection Functional oriented: subjective criteria used Appraisal Subjective measure via personal contact Rewards Unsystematic and allocate in paternalistic manner Development Unsystematic largely through job experiences: single function focus Functional specialists with some generalists; largely through job rotation Crossfunctional but not crossbusiness

Single Product (Vertically Integrated)

Functional

Functional oriented: standardized criteria used

Interpersonal based on cost & productivity data

Related to performance & productivity

Growth by Acquisition (holding company of unrelated business) Related of Diversification of Product Lines through Internal Growth & Acquisition

Separate, self contained business

Functionally oriented, but vary from business to business

Interpersonal: based on return on investment & profitability

Formulabased & includes return on investment & profitability

Multidivisional

Functionally & generalist oriented: systematic criteria used

Interpersonal: based on return on investment productivity, & subjective assessment of contribution to overall company Interpersonal: based on multiple goals such return on investment, profit tailored to product & country

Large bonuses: based on profitability & subjective assessment of contribution to overall company

Cross functional, cross divisional, & cross corporate: formal

Multiple Products in Multiple Countries

Global orientation (Geographic center & world-wide)

Functionally and generalist oriented: systematic criteria used

Bonuses: based on multiple planned goals with moderate top management discretion

Cross divisional & cross subsidiary to corporate: formal & systematic

Source: Tichy et al. (1982: 49)

Harvards Model
Harvards model recognizes that HRM is influenced by wide range of stakeholder interests and contextual factors. As the result of the interaction between those factors, organization is able to identify what the most suitable HRM policy choices; which relate to employee involvement, human resource flow (including recruitment and selection, training and development, and performance management), reward system, and work system. This process illustrates that HR activities is an integrated system which also integrated with broader organizational strategy. As the outcomes of the implementation of HR policies are organizational commitment, competence, congruence, and cost effectiveness; which turn to long-term consequences for individuals, enterprises, and society. More completely about the Harvards model of HRM can be seen in figure2.2.
Figure2.2 The Harvards Model of HRM Stakeholder interests: Shareholders Management Employee groups Government Community Unions

Situational factors: Workforce characteristics Business strategy & conditions Management pdilosophy Labor market Unions Task technology Laws & societal values
Source: Beer et al. (1984: 16)

HRM policy choiches: Employee influence HR flow Reward system Work system

HR outcomes: Commitment Competent Congruence Cost effectiveness

Long-term consequences: Individual wellbeing Organizatinal efectiveness Societal wellbeing