in this video we want to discuss the Harvard framework in the context of HRM of course now this is a very important class it's one that's quite famous in the sense that everyone who's serious about the study of HRM will have encountered this class somewhere in their studies so it's important for us to cover it and to treat it seriously and it's advisable that you make your own notes and pad out your notes do some supplementary reading and make sure you've got a good understanding of the the content of the class you'll see from the bottom right hand corner of the slide in front of you that we have 97 slides so it's quite a significant amount of work so it's advisable to stop the video from time to time and have a break and return to it later so let's talk about the Harvard framework the Harvard framework is a model designed by the Harvard Business School and is the most influential model of HRM a very important model one that should be understood as I said one put forward by the Harvard Business School the model is associated as a soft HRM model it's a it recognizes a soft a terrain model as its primary focuses based on outcomes for people their well-being and organizational commitment so these are termed as soft models when essentially when we consider the focus on people and their well-being and organizational commitment these are not there's a lot topics that we can subject to very hard analytical scrutiny these are ones that are have many factors that contribute to the outcome people are not predictable not 100% predictable at least and organizational commitment and motivation within work and the application of effort within work can vary widely from organization to organization and under different circumstances so for all of these reasons we consider these type of models to be soft models they don't give us precise predictive outcomes the model views employees as stakeholders in the business who have their own interests they will only commit to an organization if they want to so people who work for organizations do so because it's in their interest to work for the organization they want a salary they want they won't be able to survive and pay their own bills they have their own agenda in other words and this means that organizations must accommodate their employees in terms of their requirements and their expectations unlike the Michigan model which focuses on business strategies the Harvard model focuses on gaining employee commitment and cooperation the focus of the Harvard the Harvard model is to to try to see what it is that motivates workers what is it that gains their loyalty and their cooperation and it tries to develop ideas associated with further developing cooperation and commitment and application within the working realm and employees are encouraged through incentive schemes and through all sorts of motivational methods to focus on their tasks to give good effort and to enable the organization to grow and to flourish the heart of Molli model acknowledges mutuality in all businesses and focuses on managers methods of managing employees there is a mutuality in the sense that it's in the employees interest that the business does well and clearly it's in the business's interest that the business does well so both sides have an interest to see the business doing well there is a mutuality in other words the managers for their part they are looking for methods that will enable them to use the employees effectively within the business but at the same time generating motivational techniques and generating methods of working and ways of deploying the personnel in a way that suits the the people suits their aptitudes their abilities recognizes their contribution applauds good work so the idea of motivation permits the whole organization it runs from top to bottom the model aims to delegate more responsibility to general managers to perform HR tasks getting general managers involved in HR in other words the the realm of Hajar is not confined to a HR department the realm of HR is the business and that all managers within the business should recognize the importance of Human Resources and should make efforts to engage with the the workforce to try to foster good practice and generate productivity gains and try to motivate the the workforce and congratulate them on a job well done and just generally created an environment which is cooperative so the responsibility for here char the HR department is probably along the lines of deciding on training programs or on recruitment or on people exiting from the the business and health and safety issues and putting those sort of programs into place but the the motivational factors the issues that are associated with productivity and with day-to-day running of the business these permit the whole business they run through all the various lines of management the Harvard framework follows a process where all stages influence each other the organization is seen as as one organization there are not distinct parts with different characteristics the the employees in one department need to be motivated in the same way as the employees in a different department both have a need for motivation both have a need for respect and for acknowledgement when they do a good job and and there needs to be trained and they need to be recognized so it's a human attribute so the the framework the HR framework puts a course across all of the organization the model distinguishes the link between internal and external factors on HRM there are significant internal factors that can be identified and we'll talk about these later but clearly remuneration working conditions greater understanding of the requirements of the workforce these are all internal factors but there are external factors as well the forces of the market for example the perception of the product in the mind of the customer who may buy it or not buy it the quality aspects of production also the general effect of the environment the economic environment the social environment and so on on the business and these need to be taken into account both the internal and external factors play an important role I'm developing HR policies and practices clearly the the business exists within society and therefore whatever is happening in society will somehow affect the business the business is not operating in a vacuum its operating in society so whatever the trends in society are the chances are these will be reflected in working practices within the business bikeways of course the economy which affects unemployment inflation imports exports globalization these sort of considerations are important for the business also so whoever happens in one part to fix the business that happens in the other part the the business is not in a cocoon immune to everything that's around it the external factors outlined by the model include stakeholder interest and situational factors the stakeholder interest well stakeholders are simply any people who have an interest in the business the suppliers of raw materials have an interest in the business because that's who they sell to the suppliers of machinery have an interest in the business but so also have the trade unions so also has the government at the local community where the business is located they've got an interest in the business the employees certainly have an interest in the business their work for the business directly and depend on it for their incomes so there are various stakeholders we can identify usually a large number that are affected by businesses the situational factors well these are the situations that the business find itself itself in in terms of its position in the market in terms of its its technological base in terms of its customer base its perceptions and so on we'll talk about these in much more detail in the coming slides but just for the moment the external factors outlined by the model include stakeholder interest and situational factors as I will come to those shortly in fact very shortly in fact now this the situational factors I'm just going to put this this rectangle on here I'm not to fill out the rectangle as we go through but it's got to appear on this slide and now it's going to vanish in a moment and it'll come back later so don't get too worried about head coming and going but I'm going to fill in the various situational factors in this rectangle but for the moment let's let's see what we mean by them so situational factors well this is the the context in which the business operates it's the situation in which it finds itself the external environment influences the way in which HR policies and practices are developed so there is an external environment and the HR department must develop policies and practices broadly in line with whatever the external environment indicates as appropriate the business for example operates in an environment where there are legal obligations clearly the HR department must ensure that the business follows the legal obligations as set out by the law of the country the law of the land that's just one illustration they the company operates in an economy where there are big economic forces in play globalization the rate of interest changes money supply inflation unemployment there are many big influences coming from outside of the organization it's the situation in which the business finds itself it's a situational factor so situational factors include workforce characteristics the labor markets union representatives culture laws societal values management philosophy business strategy and technology requirements I'm sure the list can be added to there may be other influences as well but you can see it's it's very broad but that's what faces the business the business as I said earlier does not operate in a vacuum it's not cocooned from the world it's not locked away from the world it operates in the world and these are the forces that are in play in the world and they will impact on the business now the internal factors well there are workforce characteristics there is business strategy and conditions what is the business where does it see its of what does it want to do what does it want to focus on which markets does it want to operate in management philosophy looking at the way a management structures the business the way the business is designed the attitude of management towards the workforce the sympathetic views that management may have towards working conditions the way they apply health and safety regulations training within the organization so the management will have a particular philosophy or a view of how to operate the labor market of course would influence the the workforce as well if the labor market is buoyant and wages are rising in the economy in general then it may be difficult to retain workers within the business they want to move to higher appeared occupations so the labor market will have an influence the unions of course will have an influence because they are the ones that will negotiate with the management over pay general remuneration conditions of employment health and safety holiday entitlement so the unions must be taken into account as well task technology to tasks that the technology performed the business may imply specialist machinery perhaps robotic machinery or may have computer aided manufacturing or computer-aided design requirements and there may be changes in in the technology or the very upgrades and they may have the need for more training or technology impacts on the business it's important that the business is aware of what's happening in terms of technology and is close to the front because that's where productivity gains can be achieved and of course there are laws and societal values the attitude of management towards its workforce in terms of discrimination our managing diversity our employment of women or of disabled people or what sort of provisions did it make for the employment of these people do the accommodate their requirements and their needs what are the values of the society in which the business is located and of course the stakeholder interests that I mentioned earlier then stakeholder interest well these include all stakeholders who have an interest in the business stakeholders have a financial interest and want assurance that the business will grow now those are sorry shareholders so those are an important stakeholder there are the owners of the business management want to ensure organizational goals you're met and employees are interested in job security so the management will try to ensure the survival of the business and but also ensure their own survival they want high salaries good working conditions they want to be associated with a successful business but they're also to see that our employees having job security and because that will enable them to have more continuity at work it's easier to work with the existing workforce and have to train new employees perhaps to train them on on a regular basis the government are interested in employee protection and growth so that the government is a stakeholder but as I said earlier there are many other stakeholders we could list there are many people who have a financial interest in the business the suppliers of raw materials are specialist machinery or the local community there are many different types of stakeholders so I've only listed out a few here but there are others now if we go back to our diagram now we can see we filled out situational factors not exhaustively but a lot and now we're working on the stakeholder interest and we know what the who the stakeholders are at least some of the significant stakeholders there are others as I said the external environment is the context in which the arc organization operates businesses exist in society they exist in the economy as I keep saying Aris said a couple of times before they don't operate in a vacuum they're not isolated from the rest of the economy or of the rest of society they operate within it and therefore they must factor in the changes that are coming about in the economy the changes that are occurring about in society because that's what they're working with these factors are directly linked with internal factors such as HRM policy which in turns leads to HR outcomes so when there are pressures on the organization pressures for change perhaps for opening up new ways of working because of changes in society perhaps more flexible working to accommodate family life perhaps there are movements in society requesting this when the organization does it tries to implement this policy this is a hey char of policy and it has to come to HR outcomes it has to manifest itself in flexible working conditions the policy has to be brought through the organization agreed by senior management and the organization needs to be retooled or restructured to accommodate that so here's a situation where society has led to big changes within the organization the HR outcomes have long-term consequences which have a feedback response on stakeholders interest and situational factors so if we continue the example of flexible working as I've just introduced it earlier this will have an impact on stakeholders stakeholders may not get the same returns because the organization has to accommodate more flexible working and will not get a higher return on its assets perhaps as before so the introduction of policies which are really driven by external forces may lead to a diminution in returns so therefore stakeholders may be adversely affected so now we've we've seen that stakeholders who they are and how the stakeholders can be affected by changes in the situation which the business finds itself the situational factors management is a type of stakeholder as our employee groups the government of course is a stakeholder the company pays tax to the government it creates employment it creates economic well-being within that particular region or that particular area people find jobs there so we have the broader stakeholders we have the management are clearly stakeholders they want to have security of employment they want to have good jobs and well-paid employee groups trade unions have an interest and the government has an interest so also as I said earlier has the community because the the company creates employment it creates training gives people work experiences and some people work there and support their families in their lives through involvement with the business the unions are stakeholders the unions want their members to be treated well but they do want membership and they wanted to be involved in the business they want to be able to negotiate with the management they want to engage in collective bargaining and try to find good outcomes which will not just sustain the business but will give the the workforce better working conditions and perhaps better remuneration so these two sets situational factors which influence the stakeholders this leads to HR policy now if you can just think about HR policy here for a second the policy could be represented by something like this we have the work systems we have the human resource flow people coming into the organization and leaving the organization we have the rewards so we have the the corner points or the apex or whatever you want to call it here of this triangle and in this Center we have the employee influence so the employees influence the flow of Human Resources if the employees are happy they'll stay within the organization if they're not so happy they will have an incentive to move the work systems will also be influenced by the employees what the employees can do their skill sets their willingness to participate with the organization their willingness to engage in change and engage in technological innovations and upgrades of technology used within the workforce and of course the rewards will be a key determinant of whether the employees are going to continue or perhaps look for other occupations so the hater policy area is associated with this it's it's trying to deal with these almost conflicting issues having good human resource flow means a contented workforce means few people leaving but few people believe now it may not want to leave I should say simply because the work for the working practices are settled in other words the working practices could become out-of-date and upgrading the working practices with new technology and new ways of working may lead to employees wishing to leave so there are tensions within the organization the Harvard framework proposes for HR policy areas HR personnel and labor relation activities are dealt with under policy areas so personnel and labor relations these are dealt with under the policy areas these are dealt with in situations where the organization set out its policies regarding labor regarding remuneration regarding training regarding the requirements for work within the organization so the HR policy determines the approached the management will take towards its dealings with its its workforce the policies must be designed in line with the organization the employee and the stakeholder interest interest so policies that the HR department follow must they must satisfy the requirements of the organization the broad requirements of the organization in terms of its productivity its its functioning but also the employees there must be content and are as in each of the stakeholders HRM will be ineffective if policies are disjointed follow from all practices are ad-hoc responses to external pressures the HR department has an obligation to develop coherent policies ones which flow from one period to the next and which do not represent radical departures in policy because that will upset the the workforce it'll upset the the stakeholders indeed because the stakeholders will see the workforce alienated from the organization so the policies the HR follow should we should represent a continuum it should be ones which are based on the past but but modified and updated according to current practice current understanding and modernized because the business itself will be renewing itself in accordance with the technological requirements for modern businesses and also more enlightened ways of dealing with the workforce so ad hoc responses are just made-up responses to external forces could represent a situation where the business seems to be out of control there's no confidence in the business which will alienate the workforce so employee influenced well this is the central feature of hey char systems employees are important stakeholders and management must have systems in place to promote employee influence organizations have changed over since the Industrial Revolution at the time of the Industrial Revolution management was all-powerful and the employees were merely operators there are functionaries these the the employees simply serve a function within the business their opinions were not sold but over a period of time they have been recognized as a valuable source of information of criticism constructive criticism they make a valuable contribution to the life of the business they are not just facilitators of production they are people they have opinions and attitudes they may have strong ideas about the quality of the product or the price of the product or the placement the distribution channel for the product the image of the product there may also be consumers so there may work but also be consumers and therefore have an opinion about the product and it's good for the marketing section for example to be able to consult with the the workers and ask their opinions about the product or about some proposal the introduction of quality procedures depends critically on the contribution of the workers and the extent that which they buy into the policy so the employees are important stakeholders and management must have systems in place to promote employee influence the the employees have a lot to lose if the business doesn't do well they lose job security they might lose bonuses or annual increments in in pair so the management must recognize that the employees are genuinely interested and therefore they can seek their advice and their opinions and the employees should have an influence in the direction in which the business is traveling to what extent do managers delegate power authority responsibility and decision-making to employees that's the question it's trust it's based on trust to what extent does the management trust the employees to make good decisions to what extent should the management delegate power to the employees delegate authority and responsibilities do they trust the employees to be able to do this or to perhaps the employees will not commit themselves and therefore the business could be damaged because it loses time it loses momentum because the employees are not focused on the tasks which were delegated but if the employees recognize the importance of the business to them and their to their families and in terms of the job security and their ability to to survive in life then presumably the employees will make a good contribution and will relish the fact that they have been rewarded by having more power and more authority and more freedom to act more responsibility and more involvement with the business any influence exerted on employees should be compatible with management objectives and priorities there is no need to exert pressure on employees if it is not aimed at supporting the corporate objectives of the business or of achieving some objective which is felt desirable the objectives of the business should be clearly set out the priorities of the business should be set out and getting employees to focus in on those and trying to influence their thinking that should be compatible with the achievement of the objectives and priorities of the business otherwise there's a mismatch the employees are thinking about something else and the business is thinking about something else and the two were moving in different directions so clearly there should be a focus both should be focused in on the achievement of the same objectives and achieving the same priorities achieving the same outcomes so the human resource flow well the flow of employees meets the business requirements first of all the right employees should be engaged with the right skills and at the right time that's a function of the HR recruitment policy it's a question of finding the right employees with the right skills at the right time it's not an easy task it depends on the complexity of the business it depends on the location of the business it depends on during generation being offered so it depends on many factors but essentially the right employees should be found and and that is the pressure that's on the HR department to recruit the right people the policy is concerned with the flow of employees into through and out of the organization managing the human resource flow is part of the HR remit that's what they're there for it's to get in proper employees good employees with suitable skills into the business look after the employees in the business to ensure continuity of employment and continuity of the business and then see the employees out at the end and see them out on good terms with good memories and good experiences so it involves decision-making on recruitment selection promotion cessation of employment job security Career Development and fair treatment that's a good list of some of the issues that the HR policy should address and should have should bear in mind when managing the human resource flow the reward systems well employees should have an influence over the types of rewards they receive for their progress so the employees should be able to influence the types of rewards they should be able to speak to management and talk to management over the rewards and and look at the the differences in rewards between occupations and at different levels throughout the business to ensure there's some sort of fairness and some sort of recognition of how the rewards systems are allocated extrinsic rewards are tangible involving pay and benefits they they have performance-related pay overtime bonuses pension profit sharing health insurance and so on so these are extrinsic rewards these are tangible in the sense that they they're they can be identified against areas like overtime working or working to meet particular targets and bonuses are paid and so on intrinsic rewards are intangible for example motivation job satisfaction achievement self-confidence and sustained commitment so intrinsic rewards may not have a monetary aspect at least an explicit overt monetary aspect they may be related to recognition that a job was well done congratulations worker of the month or it could be some sort of extra responsibility perhaps at the same level but extra responsibility and more recognition of the job well done it doesn't have to be more pay it could be recognition and certain fringe benefits perhaps within the organization work systems I said there were four HR policies on an earlier slide and see now we've worked our way through to the final one on the HR policy the work systems this refers to work structure to ensure that it is efficient productive and meets organizational objectives so the HR policy should try to ensure that the work structure is efficient it should be explained to the employees quite a structure is the way it is why it's felt that is the efficient structure they should be trained in the use of any equipment or machines or in any processes that needs to be understood to enable the work system to continue and to be productive and which will enable it to meet the organizational objectives so the onus is on proper training and orientation of the workforce towards meeting the organizational objectives work systems must encourage communications channels and appropriate technology is in place to allow employees to do their job so good work systems should have good communications channels they should the employees should be able to talk to the line managers and line managers to talk to departmental managers and so on depends on the structure of the business but there should be good communications channels issues should be brought up and dealt with straight away it shouldn't be allowed to fester and go bad and cause bad feelings or cause discontent in the future it could be good ideas come through and the communication system will feedback good ideas about how to improve the work situation appropriate technology should be in place not just the facility at the communications channels but also in terms of enabling the employees to do a good job the the proper tools should be made available and in sufficient supply and of sufficient quality plus there should be adequate training in all of these to ensure that the employees are able to use them effectively information activities and technology are arranged at all levels of the organization so the the flow of information within the organization should should be efficient it should information should be disseminated widely so that the employees throughout the organization know what's happening what the policy is the direction that the business is running in what it's planning what there should be no surprises to the employees please do not like surprises they don't like turning up for work to find that something has changed radically over the weekend they're like continuity and they can cope with change if adequately informed plus it indicates trust in the employees the management are taking the employees in their trust and explaining what they're doing that's for the HR section to enable this to happen to disseminate the information to pass it out to ensure that the the the context in which the information is delivered is properly understood but also that the message itself is presented in a manner which is acceptable that the language is acceptable the technicalities are explained and the rationale for the changes if there are changes proposed are clearly articulated so we've looked at the de for HR policies that we mentioned earlier now the HR outcomes well this section follows on from HR policy and is concerned with the four C's commitment congruence competence and cost-effectiveness management must consider the extent to which HR policies enable your organization to achieve the four C's so hatred policy should enable your organization to achieve these four C's now start with commitment then competence congruence and cost-effectiveness commitment to what extent should HR policies gain employee commitment to the organization well it's a leading question to some extent because clearly the HR policy should gain commitment clearly the workforce should be committed towards achieving the objectives of the business the business and the employees should be pulling in the same direction if they're pulling in the opposite directions then the business is doomed but getting the commitment from the employees is a function of HRM this is an outcome from the stages we talked about earlier and it's important that the effectiveness of the HR policy is judged in terms of the amount of commitment that the employers decide the employees give to the employers so commitment is important congruence already employees compatible to management styles and fit in with other employees it's important again it's an outcome have the right people being recruited have they got a commitment to the management to the youngest and the management did you understand and relate to management objectives do they simply just agree with management or order conflict between between them is the conflict inevitable is it personality what is it what's what's the problem it's the congruence between one set of employees in another perhaps the employees can't work together they find it difficult to relate to each other the copy for all sorts of reasons competence the organization the organization's capability to attract retain and develop employees to desired levels of competency it's the compas competency of the employees which generates the productivity which in turn cuts costs and increases profitability so it's important that the employees have competencies and these competencies can be trained but they're also developed out of learning by doing over a long period of time and this for this reason alone it's important that the HR department recognize that it's important to retain those workers if the workers leave then that competency will leave as well and they'll have to be replaced by new employees who will have to be retrained and trained and developed and and will make mistakes and and so on until they have achieved competency as well so here's our outcome should be to have competent workers and having a competent workers is a reflection of good HR policy cost-effectiveness how can management maintain costs while enhancing employee job satisfaction so having policies which generate interest amongst the employees and gains their confidence and and motivates them and gets them more involved a lot of these exercises can be costly may take time may take training programs and there might be training on new skill acquisition and updating skills and so on it's expensive so how can the business manage its costs at the same time as engaging in these activities improving employees skills and improving the way employees see the job and see the organization improving their job satisfaction so it's for the HR department to try and find solutions which will enable them to develop the employees and create better job satisfaction but at the same time controlling costs so out of the HR policy which was born from situational factors than the stakeholders interest we've got the HR outcomes now the hater outcomes are going to lead into long term consequences this section follows on from here policy and outcomes it's concerned with individual well-being it's the long term consequences of everything we've talked about really it's it's the individuals well-being how the individual sees the organisation how the individual feels about working there how the individual feels about their self-worth how they feel about the way they spend their working lives the organisation must consider if HR policy and outcomes meet the needs of employees and their well-being employees are people they're spending their lives the big proportion of their life perhaps working for the organisation that is their life and their well-being is important their physical well-being and their mental well-being is important and the policies that were designed by HR and the outcomes from those policies should promote the well-being of the workers which will give them greater job satisfaction they should find going to work not stressful and onerous this should feel that it's a supportive organization and they in turn should do their best - not just promote the ideals of the organization but to do so efficiently and competently is the organization able to effectively compete within the external market the outcomes from here to our policy should not just be developing people and developing a sense of well-being as we talked about earlier and developing good communications channels within the organization more involvement and and so on but it should also enable the business to compete effectively it should lead to increases in productivity reductions in cost it should enable the organization to have better quality better health and safety records as well for the employees better distribution more knowledge of the markets and there should be a keenness amongst the workforce to make the business work and work effectively and become perhaps even market leader so the organization should be should be capable of competing externally in the marketplace and it's able to do that because it has a willing workforce behind it does the policies are do the policies I should say and outcomes benefit the society in the community if the company is going to stay in existence then there's the society benefit does the community benefit does it create more employment does it put back something its existing within the community there are there's an outside community the business shared the roads with those people and it may make noise and pollute the atmosphere to some extent does it do that or does it benefit the society does it put something back does it support a sports club or does it create employment which helped local producers of other products to sell their products because there's more income in the area so to what extent do the policies of the business promote the interest of the community what are the connections can these be identified organizational objectives and societal well-being you can see there are feedbacks from this of course the long-term consequence going back towards the stakeholders the community does the community benefit from from all of what we said if it doesn't then it will feed back to the stakeholder interest which may lead to the development of a pressure group or some sort of local activist group who'll oppose the business and get the business a bad name and a bad reputation or or perhaps it will feed back to the stakeholder group something positive and the the community will support the business but you can see there are feedbacks the long-term consequences go back feeds back to the situational factors it feeds back to the stakeholders and these have to come again must be modified coming in through new HR policies which will generate new hitch are outcomes which will generate new long-term consequences so there is a cycle the model is a soft approach to HRM and identifies employees as important stakeholders this is our summary so that's what the the Harvard model is about the assumption is that stakeholder interests are most more most likely to be met if HR policy and outcomes positively respond to long term consequences so stakeholder interests interests are most likely to be met if hey Chara policy and outcomes positively respond to long term consequences so HR policy should be fixed on the long term consequences what are the long term consequences of the policy it's clearly not the case as I said earlier that HR policy should vary on a regular basis because it will lead to uncertainty and insecurity the model also emphasizes on in-plane play influence and decision-making as key to success so employee influence is very important working with the workforce the management working with the workforce is seen as as the optimal solution employees give their opinions give their recommendations they cooperate with the management and taking their decisions into account is important that's one of the keys to success and I'll just see from the bottom right hand corner of the slide we're on slide 96 so we're just about finished this is a long class it's well worth revisiting the class perhaps several times making your own notes and understanding what's involved in the Harvard framework this is a very important task it's one that all professionals within the HR sector will have encountered and will have studied it's one that is essential that everyone in hey char should know and understand but that's all we're going to do in this session so we're going to leave it at that and say thank you for watching