Best Fit vs Best Practice

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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 and Jackson (1987) developed a framework under the ‘best fit’ model which argues that human resource practices should mutually reinforce the ‘generic strategies’ defined by Porter (1985). They argue that “firms will enjoy higher performance if they fit their HR strategy to their competitive strategy or posture”, because different competitive strategies imply different types of employee behavior. For example, should the management of an organization select a competitive strategy of differentiation, employees would be higher skilled, they would utilize higher levels of

creativity, and be rewarded based on success in product innovation. Schein (1977) suggested a more helpful model for practice in which human resource management integrates organizational strategy with employee interests, a simultaneous flexibility that allows for both the desired human resource strategy and cooperative employee behavior. Despite the advantages of the ‘best fit’ model which appear to help the organization become more competitive by meeting the business needs, there are disadvantages for the approach as well. One significant criticism of the model includes overlooking employee interests. This is to say that by aligning the desired competitive strategy with the required employee behaviors, the organizations fails to recognize the interests of the employee in terms of motivation, commitment, and productivity. For example, should the management of an organization pursue a competitive strategy of cost leadership, employees would be forced to perform repetitive tasks, which of course would demotivate the workforce due to its unappealing nature. In addition, training would involve development of only very minimally practical skills, the number of staff would be reduced to a minimum, and pay would be distributed based on high output. Additionally, the ‘best fit’ model lacks sophistication to its strategy. The practices of ‘best fit’ call for an approach that strictly work towards achieving...
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