2.1 Best practice approach
The best practice approach states that
certain bundles of HR activities occur which exclusively support companies in
reaching a competitive advantage irrespective of the organizational setting or
industry (Redman and Wilkinson 2009). Best practice models involve a close connection between HR
practices and organizational performance and are habituallyallied with high
commitment management (Paauwe&Boselie 2003). Empirical research in the
best-practice field shows similar groups of HR polices which are especially appropriate
for exploiting performance irrespective of
market and product strategies (Peffer 1998, Guest 2000). Best practice combines
of activities are characterized as mutually compatible HR activities which counterfeit
high levels of workforce competence, encourage
motivation and introduce a workdesign enhancing employee commitment (Maloney
and Morris 2005). Based on concepts from expectancy theory (Vroom 1964, Lawler
1971) best practice HR will result in higher levels of quality, productivity
and low rates of absenteeism and wastage (Guest 2000).
The best practice approach grieves
from a series of restrictions. Firstly, when executing best practice standards
organizations run risk of introducing mutually exorbitant combinations like
team working and compensation based on individual performance resulting in a weakening
of employee collaboration through over-exaggerated competition (Delery 1998 in
Redman and Wilkinson 2009). Secondly, high commitment management systems are
generally a difficult undertaking requiring large inputs of planning and top
level management commitment. Thirdly, critics like Milkovich and Newman (2002)
argue that best practice HR deficiencies direct associations with
organizational strategies and is coined by the credence that outstanding high
performing human resources will encourage strategy. By making HR policy lead
corporate strategy an organization, risks advising standardized sets of “one
size fits all” best practice approaches which will not upkeep the particular
needs of employees and be unfavorable to overall strategic objectives (Maloney
and Morris 2005). Fourthly, discussions with regard to the appropriate choice
of best practice measures resulting from an inadequate research methodology and
theoretical definition exist (Marchington and Grugulis 2000 in Redman and
Wilkinson 2009).
The best-fit model is measured as a variation from standard models of Harvard, Michigan and York and is called “matching model” for HRM (Sparrow and Hiltrop 1994). It is based on emerging HRM policies according to business strategy. Strategy involves planning future activities, performances objectives, and policies towards reaching the corporate aims. HRM strategy should be designed and applied to upkeep the given corporate strategy (Lawler 1995). The “best-fit” approach enquiries the universality assumption of the best-practice perspective. It emphasizes contingency fit between HR activities and the organization’s stage of development, an organization’s internal structures and its external environment like clients, suppliers, competition and labour markets (Redman and Wilkinson 2009). HR policy should be minted by the appropriate context of individual employees and therefore support the overall competitive strategy. Aligning HRM practices to strategies can enable companies to create potential competitive advantages (Schuler and Jackson 1987 in Redman and Wilkinson 2009).
2.2 Best fit approach
The best-fit model is measured as a variation from standard models of Harvard, Michigan and York and is called “matching model” for HRM (Sparrow and Hiltrop 1994). It is based on emerging HRM policies according to business strategy. Strategy involves planning future activities, performances objectives, and policies towards reaching the corporate aims. HRM strategy should be designed and applied to upkeep the given corporate strategy (Lawler 1995). The “best-fit” approach enquiries the universality assumption of the best-practice perspective. It emphasizes contingency fit between HR activities and the organization’s stage of development, an organization’s internal structures and its external environment like clients, suppliers, competition and labour markets (Redman and Wilkinson 2009). HR policy should be minted by the appropriate context of individual employees and therefore support the overall competitive strategy. Aligning HRM practices to strategies can enable companies to create potential competitive advantages (Schuler and Jackson 1987 in Redman and Wilkinson 2009).
The
best fit approach is also subject to sever criticism. Firstly, Boxall and
Purcell (2003) criticizes that in a changing business environment companies and
their strategies are subject to multiple alternating contingences and that it
is merely possible to adjust entire HR systems to new challenges frequently.
Secondly, as companies move through their life-cycle HR practices have to be
aligned which leads to an alternating treatment of employees which can have a
demotivating effect and show inconsistency in corporate culture (Boxall and
Purcell 2003).
Main three theories that address the relationship between employee performance and human resource management are universal, contingency and configuration theories. The best fit is a contingency approach and best practice is universal approach (Croonen et al., 2016). Best fit focus on achieving competitive advantage while best practice focus on motivation and employee commitment (Kimble, 2016). Moreover, this author state that both best fit and best practice has worked well in different times depending on organizational culture. Foluso (undated) recommend that best practice approach need to define to accommodate national differences and should align with organizational and workers interest to enhance employee commitment. Therefore, best practice and best fit strategies have to align with the situation to work best.
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ReplyDeleteBest Practice and Best Fit approaches are having an important role in achieving and supporting organizational objectives and strategies. Common agreement in both approaches are that the reward and recognition should be consistent in HR Practices. Both focus on strengthening organizational culture and structure. However, there are Best Practice is a universal approach and Best fit is a contingency approach (Kumar, 2016). Further, a common or frequent mistake the organizations do is taking a common process or a tool which is used before without tailoring it to the new environment. The nature and the businesses are so different and rarely that a practice developed to one organization can be applied to another organization (Ashkenas 2010). Moreover, Best practice creates high motivation and better employee commitment while the best fit strategy results in achieving competitive advantage and firms should nurture the type of employee behavior that is essential to the success of their competitive strategy (Hsieh, 2011).
ReplyDeleteHi Prashanth,One of the key features of ‘best practice’ HRM is capable of being used in any organization, irrespective of product-market situation, industry, or workforce, and evidence is produced from a range of industries and studies which he claims demonstrates the case for ‘putting people Žfirst’ . He notes that the industries in which a ‘best practice’ approach has been shown to work ‘range from relatively low technology settings such as apparel manufacture to very high technology manufacturing processes. The results seem to hold for manufacturing and for service Žfirms. Nothing in the available evidence suggests that the results are country-speciŽc. The effects of high performance management practices are real, economically signiŽcant, and general . Support for this line of argument is provided by the results from several other studies. For example, Huselid states that ‘all else being equal, the use of High Performance Work Practices and good internal Ž fit should lead to positive outcomes for all types of Žfirms’ (1995:644).Mick and Irena (2000) identifies elements of best practice HRM as employment security,selective hiring,self-managed teams/teamworking,high compensation contingent on organizational performance,extensive training,reduction of status differences and sharing information.
ReplyDeletePrashantha, the positive impact of human resource management on organizational performance is based on application of proven best practices in human resource management that help to achieve expected organizations results through achieving desired employees abilities, motivation, results and behavior (Martin, 2015). Furthermore researchers in theoretical stream assume that firms need to select ‘best fit’ HR practices that fit with the context in which they operate in order to be maximally effective (Croonen et al, 2016). In addition, some researchers contend that best practices vary from firm to firm, evolving over time and with changes to the marketplace (Murray et al., 2002). Therefore there is no “one best way” to achieve high performance but rather different routes to the same goal.
ReplyDeleteBoth approaches have confidence in that HR practices should be complimentary. However, according to Purcell (1999), the most prominent fact in best practice is that there is no discussion on company strategy. So this attract super human resources, talent and competencies. “These superior human resources will, in turn, influence the strategy the organization adopts and is the source of its competitive advantage” (Milkovich & Newman, 2002, p. 30). Therefore, for this approach, policy heads strategy.
ReplyDeleteBest fit focuses on high achievers of employees with high replacement
costs. These employees require to be satisfied that their reward package equals or
exceeds what they will earn in the external market.
Best practice, believes that there are a number of interrelated policies that appeal them to the
organization. All employees are wisely chosen and are a source of competitive
advantage. Employees stay with an organization because of the challenging environment,
meaningful work and competitive pay package (David and Maureen, 2018). Best fit and best practice approaches are powerful tools for determining human resource management processes. Therefore, it is important to analyze both the concepts before implementing it in an organization.
Firstly, when implementing best practice standards organizations run risk of introducing mutually prohibitive combinations like team working and compensation based on individual performance resulting in a deterioration of employee collaboration through over exaggerated competition (Delery 1998 in Redman and Wilkinson 2009). Best fit approach of aligning HR goals with corporate quality strategy. It is coherent with Lincoln’s strategy of binding the best employees and rewarding them for their long-term achievements with responsibility thus keeping its intellectual capital and ensuring a sustainable competitive advantage in fields of performance, knowledge and quality. To put everything under consideration, one can see that best fit and best practice approaches offer companies powerful tools for shaping human resource management processes is almost impossible because of regional differences in work-related practices, laws & culture and characteristics of motivation.
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