Best Fit vs Best Practice
According to its proponents, the ‘best practice’ school of thought is the route to organizational success. If that is the case, why is ‘best practice’ not standard HR practice within all organizations? Proper management of human resources is a critical variable affecting an organization’s growth, competitiveness, productivity, profitability, and survival. The core strength of any organization lies in its human resources because it involves all management decisions and practices that directly affect or influence the organization, especially the organization’s workforce. Organizations do not exist without people, hence people are the most significant resources in an organization. General human resource management (HRM) practices emphasize sophisticated recruitment and selection, training with strong learning and development policies, performance-recognition and rewarded pay, disciplinary procedures, as well as efficient communications and teamwork — all activities collectively deemed to contribute to the employees’ skills and knowledge. The rationale that motivating employees strengthens their commitment to the organization nevertheless results in a conceived link between HRM and organizational performance. Within HRM strategies are two models of work. One model — ‘best fit’ — argues that human resource strategy will be more effective in improving performance when it is appropriately integrated with the organization’s specific strategic context. The other model — ‘best practice‘ — advocates universalism, arguing that there is a bundle of human resource policies — a set of ‘best practice’ activities that lead to high commitment of employees who are alas the key to the organization’s performance (Boxall, 2003). While both perspectives have its advantages and disadvantages, it is the ‘best practice’ school of thought that is perceived to be the route to organizational success because of its policy mix that presumably adapts to all aspects of the organization. Schuler
Bibliography: 1. Armstrong, M. (2006). A Handbook of Human Resource Management Practice. London: Kogan Page Publishers. 1. Boxall P. and Purcell, J (2003) Strategy and Human Resource Management London: Palgrave, Chapters 2&3. 1. MacDuffie, J. P. (1995). “Human Resource Bundles and Manufacturing Performance: Organizational Logic and Flexible Production Systems in the World Auto Industry.” Industrial and Labor Relations Review, 48, 197-221. 1. Marchington, M. & Grugulis, I. (2000). “Best Practice Human Resource Management: Perfect Opportunity or Dangerous Illusion?” International Journal of Human Resource Management, 11, 905-25. . 2. Pfeffer, J. (1994). Competitive Advantage Through People: Unleashing the Power of the Workforce. Boston: Harvard University Press. 1. Pfeffer, J. (1995). “Producing Sustainable Competitive Advantage Through the Effective Management of People.” Academy of Management Executive, Vol. 9 No.1. 1. Porter, M.E. (1985). Competitive Advantage. New York: The Free Press, 11-15. 1. Purcell, J. (1999). “Best Practice or Best Fit: Chimera or Cul-de-sac?” Human Resource Management Journal, 9(3). 1. Schein, E. (1978). “Increasing Organizational Effectiveness Through Better Human Resource Planning and Development.” Sloan Management Review, 19(1): 1-20. 1. Schuler, R. S. & Jackson, S. E. (1987). “Linking Competitive Strategies With HRM Management Strategies.” Academy of Management Executive, 1, 207–19.