This approach maintains that all firms will see performance gains by identifying and implementing best practice irrespective of the product market situation, industry or location of the firm. Performance gains include improvements in employee behaviours and attitudes, reduced staff turnover, increased productivity, quality and customer service and of course increased profitability. This requires support from top-level managers to adopt these key HR practices, research the latest trends of best practice and reward correct implementation of these practices. Redman (2006) suggests that making changes to individual practices will have a very limited effect whereas making changes together will have a more powerful effect. This leads onto the concept of looking for a ‘bundle’ of practices which need to be combined together (Huselid 1995). Although many researchers agree with the concept of bundling practices together, there has been little agreement about which HRM practices should be included. Consequently, some models have only a few key practices while others have a dozen or more. The most influential work to date is that of Jeffrey Pfeffer. Pfeffer originally devised a list of 16 practices in 1994 but subsequently narrowed them down to the following 7 in 1998: 1.Employment Security
3.Self-managed teams or team working
4.High pay contingent on company performance
6.Reduction of status differences
The HR practices in this bundle, and indeed any bundle should be consistent across workplaces and function together, otherwise known as internal fit. For example, it would be wrong to encourage team work but support individual performance related pay. Any perceived (and actual) inconsistencies between practices will reduce the effectiveness of the bundle and can lead to dissent and dissatisfaction. (Marchington et al 2004). Boxall and Purcell (2003) summarise the core features of best practice models using the AMO rubric: performance is a function of Ability, Motivation and Opportunity. That is, best practice models typically aim to enhance employee skills through appropriate recruitment and effective training, motivate desired behaviour through incentives and empower workers to open up opportunities to them. Critique
Redman (2006) identifies both methodological and theoretical problems with the universalistic approach. Methodologically speaking, the degree and direction of causation can be questioned. Adopting best practice may be just one of several factors that improve business performance. Furthermore, it may only be successful firms who can afford to adopt these practices, thus reversing the perceived direction of causation. Research suggests that best practice models are only really seen in higher value-added sectors. A lot of businesses have proven to be successful without using best...