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8 HR Models Every HR...

8 HR Models Every HR Practitioner Should Know in 2024

Written by Erik van Vulpen

11 minutes read

HR must operate well to bring true value to an organization. A well-thought-out structure puts HR in a better position to deliver services effectively and create impact. HR models help define and explain the role of HR in the business. When HR practitioners understand how HR models work and are familiar with the philosophies of some widely-used frameworks, they can set up their HR organization for success.

In this article, we will go over eight practical HR models. Ready to learn?

Contents
What is an HR model?
HR models explained
– The Standard Causal Model of HRM
– The 8-Box Model by Paul Boselie
– The HR Value Chain
– The HR Value Chain Advanced
– The Harvard Model of HRM
– The Guest Model
– The Warwick Model
– The Ulrich Model
Selecting an HR model
FAQ

What is an HR model?

An HR model, or a human resources management model, is a framework for articulating HR’s role and positioning within the business. It serves as a guide for human resource management and intersects with the HR strategy. The HR strategy visualizes the future, and an HR model breaks down the plan for getting there.

HR leaders use an HR model to define how HR will be carried out by clarifying:

Key HR functions and processes.
HR roles and responsibilities required to manage the work of HR.
Principles for HR objectives, standards, and accountability.

As the world of work has evolved, so has the HR function. Rooted in policy management, HR expanded over the years to also focus on strategic HRM practices and earn a seat at the senior management table. A currently emerging position puts HR in a new era of being architects of the human experience.

Across these eras, various models and frameworks have emerged. The purpose of HRM models is to provide different perspectives to consider when structuring the role and value of HR.

HR models explained

HR professionals can increase their acuity as strategic players by learning about different HRM models and their basic theories. Let’s take a look at some of the best-known Human Resources models.

1. The Standard Causal Model of HRM

The Standard Causal Model of HRM is derived from many similar models published throughout the 90s and early 2000s. According to this model, HR will only be effective if its strategy is aligned with the business strategy.

The model shows a causal chain of how HR processes impact the organization. The chain starts with the company’s overall business strategy, which influences the HR strategy and processes. The chain ends with improved business performance.

For example, hiring, training, appraisal, and compensation practices can lead to outcomes such as commitment, quality output, and engagement. These HRM outcomes lead to improved internal performance, which, in turn, impacts financial performance (e.g., profits, financial turnover, better margins, and ROI).

This HR framework also shows that the relationships in the model are not always unidirectional. Some HR practices can directly lead to improved internal performance. For example, good training can directly result in better performance without necessarily influencing HR outcomes.

Furthermore, sometimes a stronger financial performance leads to more investments in HR practices and better HR outcomes. When performance is strong, employees are often more engaged, and engagement is an HR outcome.

2. The 8-Box Model by Paul Boselie

The 8-box model by Paul Boselie shows the eight external and internal factors that influence the effectiveness of HR practices.

It starts by identifying the four external forces that influence how organizations do HR:

External general market context
External population market context
External general institutional context
External population institutional context

For example, a shortage of certain skills in the market influences how companies source, recruit, and hire, compared to when there’s an abundance of qualified workers. Within the institutional context, legislation, trade unions, and work councils control what HR does and how they do it.

The four core elements show the progression of HR’s impact on the organization:

Configuration – The company’s history, culture, and technology all influence how HR communicates what it wants to achieve and how effective HR policies are.
HR strategies and practices element consists of four parts:
- Intended HR practices – Goals for recruitment, training, etc.
- Actual HR practices – How the practices are executed.
- Perceived HR practices – How employees perceive what’s going on in the organization.
- HR outcomes – Results of the perceived HR practices.
Critical HR goals – The above strategies lead to outcomes such as cost-effectiveness, flexibility, legitimacy, and so on.
Ultimate business goals – These outcomes contribute to the viability of the organization, i.e., profit, market share, and market capitalization.

3. The HR Value Chain

The HR value chain is one of the best-known models in HR. It is based on the work of Paauwe and Richardson (1997) and creates a nuance in the models above regarding how HR operates.

According to the HR value chain, everything HR does and measures can be divided into two categories:

HRM activities: Day-to-day activities, including recruitment, compensation, training, and succession planning. These activities are often measured using HR metrics. These are so-called efficiency metrics. The cheaper we hire and the faster we train, the better.
HRM outcomes: The goals we try to achieve with the HRM activities. We recruit, we train, and we compensate to achieve certain goals or outcomes. These outcomes include employee satisfaction, motivation, retention, and presence.

If we focus on measuring just HRM activities, we will automatically prioritize maximizing efficiency to reduce costs. However, this may not produce the best long-term results. Instead, we should focus on measuring HRM outcomes, as this helps to align our processes with our goals.

For example, we would rather spend a few days longer on hiring a new employee (time to hire, an efficiency metric) if this person will be a better fit in the company (quality of hire, an outcome metric). The goal should be to get the best person in the right position, not to cut corners and hire someone as cheaply and quickly as we can.

When HRM activities and HRM outcomes hit their marks, they should lead to better performance. This means that when we recruit the right people, send people to the right training programs, and retain our key players, the company’s performance increases.

There is also a different effect. When company performance is higher, HRM activities increase as well. This is because more profitable companies usually invest more in HR programs, including HR software and L&D opportunities for their people.

Our Strategic HR Metrics course, which is a part of the HR Metrics & Dashboarding Certificate Program, dives deeper into the HR Value Chain model and explores how it can be applied in practice.

4. The HR Value Chain Advanced

The original source for the HR Value Chain Advanced model is unclear. It is very similar to the HR value chain but with two key differences.

First, organizational performance is defined in the balanced scorecard. The balanced scorecard contains the key performance indicators from a financial perspective, a customer perspective, and a process perspective. These are integrated into the HR value chain. The scorecard helps to align and show the added value of HR to the business.

Second, the model starts with a number of HR enablers. These enablers are key to what HR is doing in the business. This includes HR systems, HR budget, capable professionals, and other key elements. The thinking is that these enablers need to be present in order for the value chain to operate effectively.

If HR lacks well-trained professionals, if the budget is low, or if the systems are outdated and hamper innovation, HR will be less efficient in reaching its HR outcomes and business outcomes.

5. The Harvard Model of HRM

The Harvard model of HRM has been attributed to Michael Beer in 1984 and contributions from Paauwe and Richardson in 1997. It takes a more holistic approach to HR and includes different levels of outcome.

This model comprises the following five components:

It starts, on the left, with stakeholder interest. These stakeholders include shareholders, management, employee groups, government, and more. These interests define the HRM policies.
At the same time, situational factors influence these interests. Situational factors include workforce characteristics, unions, and all the other factors that were also part of the 8-box model.
Situational factors and stakeholder interests influence HRM policies. These include the core HR activities, such as recruitment, training, and reward systems.
When done well, HRM policies lead to positive HRM outcomes. These include the previously mentioned retention, cost-effectiveness, commitment, and competence.
These positive HRM outcomes lead to long-term consequences. These can be individual, organizational, and societal.

6. The Guest Model

The Guest model was developed in the late 1980s and 1990s by David Guest, a professor at King’s Business School in the United Kingdom. The model positions the strategic role of HR and differentiates strategic HRM from traditional personnel management activities.

It was one of the first models to incorporate both the “hard” and “soft” perspectives of HRM. The model also positioned the impact of HRM on business performance and acknowledged the vital role that organizational behavior plays in achieving performance outcomes.

The Guest model describes HR in terms of six interrelated dimensions of analysis that align with a specific business strategy:

(1) The premise is that HRM starts with particular strategies that align with business intent; (2) which in turn informs the practices and policies of HRM, (3) that result in specific HRM outcomes, that lead to (4) desired employee behaviors such as commitment and motivation, that collectively (5) drives performance outcomes, (6) which results in financial outcomes.

The inverse of this human resource management model is also true; financial outcomes will be influenced by performance, which is driven by individual and organizational behavior. These behaviors result from specific HR outcomes as a result of targeted HR practices and policies based upon a particular HR strategy.

7. The Warwick Model

Another noteworthy model of HRM was developed by researchers Hendry and Pettigrew from the University of Warwick in the early 1990s. This model, although similar to both the Guest and Harvard models, contributes another perspective on aligning HRM practices with external and internal contexts.

It provides a framework for exploring how HRM is influenced by external environmental forces which affect the internal reality of the organization.

The model consists of the following elements:

Outer context – The macro-environmental (political, economic, societal, technological, legal, environmental) factors that influence HR policies.
Inner context – The internal elements, such as organizational culture, technology, and leadership that influence HR policy and practice and will be influenced by the outer context.
Business strategy – The strategic intent of the business articulated in business objectives and goals, which is influenced by the inner context of the organization, based upon the outer context, and in turn will influence the HRM context
HRM content – The role, definitions of work, and HR outputs based upon the business strategy and influenced by the HRM context
HRM context – The flow of HR work and aspects such as reward systems, employee relations, and work systems that are influenced by the business strategy

This model emphasizes the importance of strategic HRM. In other words, HR must understand and anticipate these factors and be able to adapt and change in response to their influences with effective business strategies.

8. The Ulrich Model

The Ulrich Model was proposed in David Ulrich’s 1996 book Human Resource Champions, which outlines four key roles the HR function must take on:

Administrative Expert: Handles the internal operations by overseeing HR processes and strategies for managing people.
Employee Champion: Manages workforce competencies and employee engagement levels to improve productivity. Focuses on maintaining a healthy employer-employee relationship.
Change Agent: Works with managers and employees to launch initiatives that enhance company culture and advance the business.
Strategic Partner: Aligns HR strategies with the company’s business goals. Creates the best methods for developing and managing the workforce to best support success.

This has also become known as Ulrich HR Business Partner model. The four roles do not have to be specific job titles, and HR professionals can assume one or more of the roles within the scope of their responsibilities.

The strategic partner role in this model helped HR progress from a strictly administrative and transactional role into a meaningful contributor to achieving organizational goals. In this strategic business partner affiliation, HR is connected with senior leadership, and people policies are merged into the overall business strategy.

Ulrich revised his four-role business partner model in 2005, expanding on the functions and adding a fifth role. The five roles are: Employee Advocate, Human Capital Developer, Functional Expert, Strategic Partner, and HR Leader.

Ulrich’s Human Resource Champions book also inspired another interpretation of the HR model for large organizations. It is often referred to as the “Three-legged stool model” and sometimes the “Ulrich model.” Its premise is that HR operates in four key roles:

Shared services – A centralized team accessed by employees and managers that handles routine administrative services and inquiries.
Centers of excellence – Specialists that address more complex situations and requests. They support management in implementing HR programs and policies.
HR business partners – Strategic HR professionals who work with management to provide tactical guidance on people issues.
HR leadership team – A team of HR leaders that design the HR function to deliver on its goals and priorities.

The term “three-legged stool” refers to the idea that leadership is the top of the stool and shared services, centers of excellence, and business partners are its three legs.

In 2008, Ulrich, together with Jon Younger and Wayne Brockbank, expanded on this model of HR service delivery, identifying five roles: Service centers, Corporate HR, Centers of expertise, Embedded HR, and Operational HR.

Selecting an HR model

Each organization, workforce, and HR team is unique and has distinct needs and goals. When choosing the right model of HRM for your business, there are several factors to consider:

Business strategy – Your business strategy should be the starting point when considering which HR model would best guide your effort.
Organizational design and structure – The design, size, and structure of your organization can influence which HR model would be the most effective.
Industry and competition – The specifics of the industry you operate it, as well as the competitive landscape, play an important role in designing HR’s position within the business.
HR team capabilities – When comparing different models of HRM, you should consider the capabilities of your HR team and ensure they have the necessary skills and resources to deliver HR services effectively.
Cost-effectiveness – Which of the HR models is going to provide a good return on investment for your organization? You need to take a look at the cost of HR services in relation to their impact on the organization’s performance and bottom line.

A final note on HR models

Familiarizing yourself with these HR theories and models expands your knowledge and can help you contribute more to your role and team. However, it’s important to understand that models are a simplification of reality and can’t paint the entire picture of how HR will function.

In addition, there is no one ideal HR model. Every organization and workforce has a different composition and needs. Therefore, it can take some time and experimentation before you discover the best-suited HR model for your purposes and desired outcomes.

FAQ

What are HR models?

HR models help explain the role of HR in the business. These models enable HR practitioners to explain what HR’s role is, how HR adds value to the business, and how the business influences HR.

What are the most common models of HR?

Some of the best-known human resources models include HR Value Chain, the Harvard Model of HRM, and the Ulrich model.

What are HR models going to look like in the future?

As HR and its role continue to evolve, the models of HR will develop as well. For example, technology plays an increasingly important role in HR service delivery. Agile HR is gaining popularity, and sustainable HR is also being explored. These are all elements that the future HR models will need to consider.

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Erik van Vulpen

Erik van Vulpen is the founder and Dean of AIHR. He is an expert in shaping modern HR practices by bringing technological innovations into the HR context. He receives global recognition as an HR thought leader and regularly speaks on topics like People Analytics, Digital HR, and the Future of Work.