One of the first explicit statements of the HRM concept was made by the Michigan School (Fombrun et al, 1984). They held that HR systems and the organization structure should be managed in a way that is congruent with organizational strategy (hence the name ‘matching model’). They further explained that there is a human resource cycle (an adaptation of which is illustrated in Figure 1.1), which consists of four generic processes or functions that are performed in all organizations. These are:
- selection – matching available human resources to jobs;
- appraisal (performance management);
- rewards – ‘the reward system is one of the most under-utilized and mishandled managerial tools for driving organizational performance’; it must reward short- as well as long-term achievements, bearing in mind that ‘business must perform in the present to succeed in the future’;
- development – developing high-quality employees
The Michigan model is also known as the 'matching model' or 'best-fit' approach to human resource management. In essence, it requires that human resource strategies have a tight fit to the overall strategies of the business. As such, it limits the role of HR to a reactive, organizational function and under-emphasizes the importance of societal and other external factors. For example, it is difficult to see how the current concern for worklife balance could be integrated into this model.
Fombrun et al identified four common HR processes performed in every organization:
Selection: matching people to jobs
Appraisal of performance
Rewards: emphasizing the real importance of pay and other forms of compensation in achieving results Development of skilled individuals
These processes are linked in a human resource cycle.
The matching model has attracted criticism. At a conceptual level, it is seen to depend on a rational, mechanical form of organizational decision-making. In reality, strategies are...