Human resource management (HRM) has evolved significantly as organisations found the ability to gain competitive advantage through human capital. As a result, strategic HRM aligned with the organisations goals and objectives has become a core function in organisations (Boxall and Purcell, 2003). Effective management of human capital can be a main determinant of organisational performance. An organisation can be deemed as successful when financial, market and shareholder performance is improved (Stavrou, Brewster & Charalambous, 2010). Decades of research demonstrated that there has been strong debate on how HR practices should be implemented in order for organisational performance to flourish. This has been based on two approaches of
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Past research has shown that organisations with very different HR practices still result in similar performance (Kane, 1996). The Best- fit approach integrates human resources with specific organisational and external environmental contexts (Boxall and Purcell, 2003). That is, HR policies are consistent with the firm’s specific strategies (Michie & Sheehan, 2005). Under this approach, the context of the organisation sets the foundations of how the HR strategies are put in place (Lee, 2011). This approach may be favourable as different organisations have different needs and the outline of particular HR practices should vary accordingly (Kinnie et al., 2005). Likewise, as many organisations have different strategies, the HR approach should be matched specifically to the strategy, which can enable organisations to meet its bottom line objectives. This approach can be done through both external fit and internal fit. This is the fit through HR practices with specific industries, organisations and social levels (Boon, Boselie, Paauwe & Den Hartog, 2007). Fit is the extent to which human resource and other management practices are congruent with the overall business strategy and the outer environment. It also refers to the alignment among the various HR functions/units and their policies and programs …show more content…
In comparison to the Best-fit approach, the Best-practice is not a set of discrete actions but rather a cohesive, holistic approach to managing the organisation and its employees (Kane, 1996). The best practice advocates universalism, stating that all firms will be better off if they identify and adopt a 'best practice ' approach in selecting, training and developing their employees to achieve the organisational goals (Boxall and Purcell, 2003). Pfeffer describes the main HR practices under seven categories: employment security, selective hiring, self-managed teams, high pay contingent on company performance, extensive training, reduction of status differences, sharing information (Pfeffer, 2007). These universally known practices can are encouraged to be adopted by HR managers to aid organisational performance, without the need to adapt specific HR practices to different functions of the organisation (Pfeffer, 2007). Unlike the Best-fit approach, there is no risk of having the wrong fit which can be detrimental to an organisation’s success (Boon, Boselie, Paauwe & Den Hartog, 2007). Furthermore, this approach provides a benefit that HRM tactics do not need to change often if all the HR practices are met (Kane, 1996). A common way for best practice to be favourable is to search for the best of the best
Past research has shown that organisations with very different HR practices still result in similar performance (Kane, 1996). The Best- fit approach integrates human resources with specific organisational and external environmental contexts (Boxall and Purcell, 2003). That is, HR policies are consistent with the firm’s specific strategies (Michie & Sheehan, 2005). Under this approach, the context of the organisation sets the foundations of how the HR strategies are put in place (Lee, 2011). This approach may be favourable as different organisations have different needs and the outline of particular HR practices should vary accordingly (Kinnie et al., 2005). Likewise, as many organisations have different strategies, the HR approach should be matched specifically to the strategy, which can enable organisations to meet its bottom line objectives. This approach can be done through both external fit and internal fit. This is the fit through HR practices with specific industries, organisations and social levels (Boon, Boselie, Paauwe & Den Hartog, 2007). Fit is the extent to which human resource and other management practices are congruent with the overall business strategy and the outer environment. It also refers to the alignment among the various HR functions/units and their policies and programs …show more content…
In comparison to the Best-fit approach, the Best-practice is not a set of discrete actions but rather a cohesive, holistic approach to managing the organisation and its employees (Kane, 1996). The best practice advocates universalism, stating that all firms will be better off if they identify and adopt a 'best practice ' approach in selecting, training and developing their employees to achieve the organisational goals (Boxall and Purcell, 2003). Pfeffer describes the main HR practices under seven categories: employment security, selective hiring, self-managed teams, high pay contingent on company performance, extensive training, reduction of status differences, sharing information (Pfeffer, 2007). These universally known practices can are encouraged to be adopted by HR managers to aid organisational performance, without the need to adapt specific HR practices to different functions of the organisation (Pfeffer, 2007). Unlike the Best-fit approach, there is no risk of having the wrong fit which can be detrimental to an organisation’s success (Boon, Boselie, Paauwe & Den Hartog, 2007). Furthermore, this approach provides a benefit that HRM tactics do not need to change often if all the HR practices are met (Kane, 1996). A common way for best practice to be favourable is to search for the best of the best