Generally speaking, the paper "Best Practice vs. Best Fit Human Resource Management Approaches" is a perfect example of human resources coursework. The focus on human resource management has increased in recent times as organizations increasingly recognize the importance of human resource management. Human resource management is important as it has a direct impact on organizational performance. In today’ s competitive, complex and dynamic business environment, companies must have high skills, knowledgeable, enthusiastic and highly committed workforce to succeed (Armstrong, 2012). In addition to having the right people, firm is forced to adopt HR practices that promote good organizational performance.
However, there are two HRM approaches namely best-fit and best-practice. Traditionally, the best practice approach to HRM has predominantly been applied across industries (Enz & Siguaw, 2000). However, the recent trend in the across industries indicate that most organizations are adopting a best-fit HRM approach as a means of promoting organizational performance. However, there is an ongoing debate as to whether a best-practice approach to HRM is dead or not. This essay discusses the reasons for the increased adoption of the best-fit approach to HRM instead of a best-practice approach. Best practice (universalism) is one of the two HRM schools of thoughts.
Best practice schools of thought maintain that there are a set of HRM practices that results in high commitment and high performance of an organization regardless of context (Wright & Snell, 1998). According to this school of thought, the best practices HRM practices work for any organization and results in high performances manifested through lower rates of absenteeism, improved employee attitude, low turnover, high productivity, and enhanced efficiency and quality (Boxall & Purcell, 2000).
There are a number of best practice models that have been proposed by different theorists, key among them being Pfeffer’ s (1998) model. Pfeffer’ s model highlights seven critical HRM practices that result in high performance and organizational success, which include employment security, high compensation, selective hiring, managed teams, information sharing, reduction of status differentials and training. Best fit school of thought, on the other hand, maintains that the HR strategy is more efficient when HR practices are linked to the business environment (Brewster, 1999). In this respect, the best fit HR approach is based on the assumption that environmental context, such as micro and macro-environmental factors differ from business to business and from industry to industry.
Therefore, to achieve greater efficiency and superior performance, HR strategies need to be tailored to suit the context or business environment (Paauwe & Boselie, 2005). Additionally, this school of thought maintains that different HR strategies need to focus on the distinct needs of the people and organization (Collins & Clark, 2003). Although best practice approach has traditionally been the main HRM approach, this approach is falling out of favor of the best-fit approach is increasingly being adopted by businesses across industries.
Critics of best practice school of thought maintain that universalism has no place in the modern world considering the changing nature of the business environments in which companies operate. Sisson and Storey (2000) are some of the key critics of best practice approach argues that it is not easy to accept the claim of the existence of universal best practice on the grounds that what works well in one company will not necessarily work well in another firm.
Lawler (1996) opines that, rather than adopting best practice, companies ought to begin by thinking critically about being unique in order to achieve a competitive advantage in the industry where they operate.