Critical Analysis of HRM Theory and Practice

The difficulty in finding a universal definition for the practice of Human Resource Management (HRM) is underscored by the fact that the meaning and theoretical significance of HRM itself have been the subject of prolonged debate (Bratton and Gold 2001; Guest 1994). The main contention has been between the “soft,” normative model which treated employees as a source of competitive advantage (Bratton and Gold 2001; Armstrong 2003; Guest 1997) and the “hard” stance that focused on “the calculative, quantitative, and strategic management aspects of managing the workforce in a ‘rational’ way (Bratton and Gold 2001; Guest 1997).

Nevertheless, there have been increasing attempts to reconcile the two paradigms as suggested by Beaumont (1993) that the central aim of HRM is building a balanced relationship between business interests and its human resources. While this necessarily leans to the ‘soft’ side, there has been, for the past decade, a perceived need to adopt more sophisticated initiatives that build and harness human capital in the face of the increasingly competitive business and labour climate (Horwitz and Chew 2004; Ichniowski and Shaw 2003; .

Ruona and Gibson 2004). This paper will therefore examine the relevance of HRM theory on the prevailing practice of human resource management in the hospitality industry, identify the extent to which these theories have been applied, and the issues and challenges which remain in accounting for the gap between HRM theory and its actual application. A Comparative Review of Three HRM Models

In trying to understand the significance of HRM, it is imperative to return to the basic models that defined the growth and development of HRM as a distinct field in the 1980s. Scholars generally agree that three models were responsible for laying the theoretical framework of HRM (Bratton and Gold 2001; Armstrong 2004; Tyson 2000): first is the Fombrun, Tichy, and Devanna (1984) model, second is the Harvard model proposed by Beer, et al. (1984), and Gates (2000) model.

The Fombrun, Tichy, and Devanna (1984) model “emphasizes the interrelatedness and coherence of human resource management activities (Bratton and Gold 2001),” by proposing that the HRM activities be seen in the terms of the HRM cycle. The HRM cycle therefore consists of four key components which are necessarily the HR activities aimed towards optimum organizational performance: selection, appraisal/performance management, development, and rewards.

This framework is also called the “matching model,” (Armstrong 2003) since the cycle basically starts at the selection process which means “matching available human resources to jobs. ” From here, an appraisal or assessment of the performance of human resources as individual and groups are undertaken, which leads to a rewards system (ie. performance incentives) to reinforce good performance, and a development path which focuses on enhancing the skills and capacities, hence, the quality of employees in the company.

The quality of the conduct of these activities are assumed to reflect on the over-all performance of the organization. While one of the advantage of this model is its very simple approach towards HRM, it is also its downfall. For instance, Bratton and Gold ( 2001 ) notes that among the weaknesses of this model is its inability to account for stakeholder interests, situational factors, and the “notion of management’s strategic choice,” and also the very prescriptive nature by which it defines the relationships between the key HRM practices.

Meanwhile, the Harvard Model attempts to fill the gap left out by the first model by aiming for a broader perspective by including the role of stakeholder interests, situational factors, HR policy choices, HR outcomes, and long-term consequences arising from HRM practice. It also tries to “describe the interlinkages between HRM and organizational goals (Tyson and York 2000)” by showing how these variables serve to mutually affect or reinforce each other.

The Harvard model proposed by Beer, et. al (1984) demonstrates the HRM process as starting from the knowledge of situational factors such as workforce characteristics, business strategy and condition, management philosophy, labour market condition, presence of unions, existing technology, and prevailing laws and societal values, which shape or influence stakeholder interests comprised by the company stakeholders, management, employee groups, the government, unions, and the community.

Both situational factors and stakeholders interest therefore influence HRM policy choices—which decide on the adoption of a particular human resource flow, reward and work systems, and employee influence. The impact of HRM policies are measured by the HRM outcomes such as the level of employee commitment, competence, expectation and output congruence, and cost-effectiveness. These outcomes are seen to affect individual employee well-being, organizational effectiveness, and society well-being in the long term, which in turn provide indirect reinforcing or impacting measures on situational factors, stakeholder interests, and HRM policy choices.