Lincoln Case Study
Human Resource Management (HRM) “refers to all those activities associated with the management of people in an organisation” (Boxall and Purcell, 2011). The application of the word ‘strategy’ as a precursor to HRM “implies a concern with the ways in which HRM is critical to the firm’s survival and to its relative success. There are always strategic choices associated with labour management in the firm and these choices are inevitably connected with the firms performance” (Boxall and Purcell, 2011). There is no single way to link HRM with a firm’s strategy, however, there has been much debate between two particular approaches: ‘best practice’ and ‘best fit’.
‘Best practice’ and ‘Best fit’ are two very well known approaches to Human Resource Management (HRM). There is much debate over which approach is the more beneficial strategy for an organisation to adopt. ‘Best practice’ approach to HRM believes that “there are certain ‘best practices’ that are always a profitable choice because they universally improve organisational performance” (Kaufman and Miller, 2011). This approach focuses on what is referred to as the ‘horizontal fit’ which emphasises that “all HR policies and activities fit together so they make a coherent whole, are mutually reinforcing and are applied consistently” (Torrington et al., 2005). Pfeffer has done ample research in this area and in 1998 he introduced seven key HRM practices in relation the ‘best practices’ approach, which he felt were the most beneficial and predominant practices needed for success. These include: employment security, selective hiring of new personnel, pay-for-performance, extensive training, reduction of status differentials, workplace teams & decentralisation, business information sharing with employees, and high pay contingent on organisational performance.
From 1911 to 1955, Lincoln’s Electric had only four locations: Its home operation in Cleveland, and international locations in...
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