Best Practice Approach

Increasingly, organizations are finding that to survive they must cooperate with organizations
around the world. Companies/organizations must both defends their domestic markets from
foreign competitor and broaden their scope to encompass global markets. In order to reach the
goal of organizations/companies HRM play the important role to run the business and make the
good business environment to create smoothly work and also compete with the other to gain
competitive advantage by expansion to the global area/broaden, integration of cultures & values,
got and received the feedback from the consumers to develop the product and service, training
staff many time and encourage getting high competencies. To succeed in the global marketplace,
the challenge for all business is to understand culture and invest in human resources.
The term human resource management was being used by Peter Drucker
and others in North America as early as the 1950s without any special
meaning, and usually simply as another label for personnel management or
personnel administration. By the 1980s, however, HRM had come to mean a
radically different philosophy and approach to the management of people at
work (Storey, 1989; pp45) with an emphasis on performance, workers
commitment, an rewards based on individual or team contribution, differing
significantly in all of these from the corresponding aspects of traditional
personnel management. One of the main characteristics of HRM is the
devolution of many aspects of people management from specialists directly
to line managers. HRM itself has been called the discovery of personnel
management by chief executives. So line managers over the past ten years
or so have frequently been confronted with HRM decisions and activities in
their day-to-day business in a way that was not the case previously.
http://www.researchersworld.com/vol4/vol4_issue1_1/Paper_09.pdf
Best practice approach

The best practice approach claims that certain bundles of HR activities exist
which universally support companies in reaching a competitive advantage
regardless of the organizational setting or industry (Redman and Wilkinson
2009). Best practice models imply a close connection between HR practices

and organizational performance and are often associated with high
commitment management (Paauwe & Boselie 2003). Empirical research in
the best-practice field shows similar groups of HR polices which are
especially suitable for maximizing performance irrespective of market and
product strategies (Peffer 1998, Guest 2000). Best practice bundles of
activities are characterized as mutually compatible HR activities which forge
high levels of workforce competence, encourage motivation and introduce a
workdesign boosting 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 suffers from a series of limitations. 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 overexaggerated competition (Delery 1998 in Redman
and Wilkinson 2009). Secondly, high commitment management systems are
generally a complex undertaking requiring large inputs of planning and top
level management commitment. Thirdly, critics like Milkovich and Newman
(2002) argue that best practice HR lacks direct linkages with organizational
strategies and is minted by the belief that outstanding high performing
human resources will influence strategy. By making HR policy precede
corporate strategy an organization risks prescribing standardized sets of
"one size fits all" best practice approaches which will not support the
particular needs of employees and be detrimental to overall strategic
objectives (Maloney and Morris 2005). Fourthly, discussions with regard to
the appropriate choice of best practice measures resulting from an
insufficient research methodology and theoretical definition exist
(Marchington and Grugulis 2000 in Redman and Wilkinson 2009).
Best fit approach

The best-fit model is considered as a variant from precedent models of
Harvard, Michigan and York and is called "matching model" for HRM (Sparrow
and Hiltrop 1994). It is based on developing 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 support the given corporate strategy
(Lawler 1995). The "best-fit" approach questions 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).

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Increasingly, organizations are finding that to survive they must cooperate with organizations

Best practice approach

2009). Best practice models imply a close connection between HR practices

Best fit approach

of the best-practice perspective. It emphasizes contingency fit between HR

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