Human resource management typically refers to practices which facilitate any organization to magnetize, employ and develop adequate proficient and motivated employees involving such practices as job design and assessment, human resource planning, employee selection, performance management, rewards and appraisal, employee payment, induction, training and growth and employee satisfaction (Armstrong and Taylor 2014). These practices enable any business firm to attain anticipated improved organizational performance by achieving preferred employee performance. Business aims and objectives are attained successfully when human resource practices, mechanisms, procedures and approaches are developed and successfully implemented relying on organizational purposes and needs, such situation implies when a strategic perception or view to human resource management is espoused (Jamali, El Dirani and Harwood 2015). HRM procedures are typically ensured by line managers and in some business organizations comprising major proportion of staffs normally with conceptual, methodological, and systematic, administrative sustainability of proficient and efficient human resource professionals.
Human Resource Management and strategic HRM are identified as identical and is further employee interchangeably. Concepts of HRM are further been defined as strategic planning and management of human resources for modern organizations. However, there is can be witnessed a visible peculiarity between the previous concept of personnel management and modern HRM practices (Armstrong and Taylor 2014). It has been noted that personnel management is essentially being recognized as an administrative-operational function which deals with certain roles related to recruiting, selecting applicants, assessment or providing resolutions for employee grievances (Jackson, Schuler and Jiang 2014). While modern HRM practices are recognized as human resource evaluation, planning or effectively formulating compensation regulation, policies and strategies (Wood and Kispál-Vitai 2014). The following paper highlights the comparison between ‘best fit’ and ‘best practice’ approaches in the process of strategic human resource management. In addition to this, the paper will evaluate the elements of best practices, strategic functions of HRM and the varied approaches towards strategic HRM. Furthermore, it will focus on the way these approaches are employed within the context of various organizational settings and certain arguments and claims made towards best practice HRM.
‘Best practice’ approach essentially argues that specific segments of Human Resource activities which tend to commonly facilitate organizations in attaining competitive advantage despite of the organizational setting or sector. Best practice model aligned to strategic human resource management signifies an integrated linkage between HR systems and the level of performance by the organizations and are further been related to elevated rate of commitment management (Boon et al. 2018). The idea related to ‘best practice’ HRM must be considered as a recognizable concept to majority of experts engaged in the field of HRM as well as industrial relations (Wood and Kispál-Vitai 2014). However, it has been noted that a specific sort of Human Resource Management practice which is typically disseminated is recognized as the one that tends to depend on employers supporting high-cost, improved proficiency employment regulations. Thus the elements of HRM must fundamentally be comprehended before evaluating its capacity to function as ‘best practice’ in the process of strategic human resource management (Armstrong and Taylor 2014).
Employment security, one of the primary element of ‘best practices’ is identified as a highly essential to strengthen the remnants or loose ends of HR practices, as it viewed as impractical to ask staffs to provide ideas, immense effort, assurance and commitment without any specific probability of security on their part. Thus in underlying the value of employment security it has been indicated that equivalence between organizations which tend to provide ‘employability’ and further anticipate commitment and loyalty (Jackson, Schuler and Jiang 2014). However, it is significant to note that concept of ‘employment’ security is essentially implemented which emulates the situation in some Australian multinational companies such as Woolworths, Telstra and Wesfarmers whereby staffs have been offered certain degree of security as a response for reflecting certain level of mobility and flexibility in their working techniques (Jamali, El Dirani and Harwood 2015). Secondly, the practice of self-managed teams has attained considerable recognition in recent times as an effective way of magnetizing ideas, strategies and enhancing work procedures. The practice of team working has thus gained utmost prominence whereby employers seek for new recruits (Wood and Kispál-Vitai 2014).
Thirdly, Williams and Beck (2018) have stated that extensive training practices that emphasizes on highly exceptional human skills whereby these employee will lead the vanguard of the organization not only for professional specialization or product awareness but also in successfully generating the most the organizational situations. Such roles are observed to be typically assigned to the ones in managerial positions or team associates. Thus the practice of ‘extensive training’ is identified as a vital component engaged in human process benefits that is the notion that business firms purpose to synergize the far-reaching contribution of proficient and excellent employees (Jackson, Schuler and Jiang 2014). Lastly there can be witnessed two vital explanations behind the implementation of the practice of information distribution. It has been observed by others that transparent or open communication related to financial performance, approaches along with operational evaluation provides symbolic and vital information which employees are believed and further condensing the role of the grapevine in spreading false information (Wood and Kispál-Vitai 2014). Furthermore, Latorre et al. (2016) if team effort is to be attainable as well as elevate the level of enthusiasm in employees to provide ideas and strategies, it is highly crucial for organizations to constitute information which can be relied upon in order to base their propositions and attain the knowledge related to financial context in which the strategies are to be evaluated.
‘Best fit’ practices is fundamentally based on developing significant Human Resource Management regulation and policies in reliance to business strategies which aims to incorporate planning prospective activities, directives, performance aims and policies in successfully attaining vital corporate objectives (Albrecht et al. 2015). Best fit approach has received severe criticism and disapproval which reflects that in varying business situational contexts and their approaches are questioned to diverse sporadic contingencies. However Brewster (2016) claims these strategies reduce the potentiality of an organization to regulate wide range of HR processes to recently developed challenges and threats. Furthermore, as globalized organizations progress through important organizational procedures, HR systems has to be successfully associated resulting to an irregular or sporadic management of employees which can further elevate an unconstructive impact and reveal high level of discrepancy and contradiction in organizational culture (Ramalingam, Laric and Primrose 2014).
Best practices in HRM are referred to systems and practices which are implemented by the most efficient organizations in similar situational contexts and aim to pursue parallel goals (Glaister et al. 2018). These forms of practices are employed to business organizations specifically the ones who have global operations and purpose to attain continuous enhancement of organizational performance by significant assumptions of both strategic and systemic practices in the arena of human resources management of the most efficient organizations in specific sector or origin (Tjader et al. 2014). However, the appliance of best practices is essentially based on benchmarking, methodical or efficient procedures of comparing organizational functioning with then level of performance of the most proficient business organizations in particular sector or industry (Taylor, Doherty and McGraw 2015). The fundamental objective of the process of benchmarking is to successfully comprehend the reasons of equivalent organizations to achieve better growth and the approaches utilized by the organizations in their sector and attain benefits and further apply essential changes and developments in order to enhance organizational growth and advancement in accordance to individualistic conditions (Kaufman 2015).
However it has been observed by Tjader et al. (2014) that the association between diverse range of practices involved in HRM system and functioning, market or financial outcomes of an organization is arbitrated by competencies, capacities, dedication, motivation as well as performance of employees and are further subjective to both internal and external conditions of the organization. Ivars and Martínez (2015) have noted that various best practices in HRM employed by multinational organizations like Telstra Corporation Ltd impact the competence, dedication and capacities of employee base in order to provide services which are appreciated by their consumers. However, among the best practices in HRM which facilitate managers to drive skills, motivation, dedication, involvement, outcomes and conduct which are further identified as proven practices in the field of job design, employee selection and recruitment, performance assessment, employee pay, human resource planning and organizational development (Al Ariss and Sidani 2016). Thus these forms of best practices provide guidance to deal with organizational performance and challenge arising while attaining competitive benefits (Urban 2018). Thus best practices are perceived to have performed a vital role to effectively optimize HRM system and further aid to alter the concepts of philosophy and management and leadership techniques of employee base (Elmes and Barry 2017).
Studies revealed by Ramalingam, Laric and Primrose (2014) claim that is not implicit that employment security is to be attained by negotiating corporate advantages. It has been observed that the financial flexibility of an employer is fundamentally been sustained by basing compensation and pay on the level of organizational performance and further elevating the rate of employee pressure and workloads. However, in the opinion of Urban (2018) comparable arguments can be made in terms of self-managed teams and team effort which exhibit a tendency to suggest representations of working in cooperation and taking into utmost considerations certain notions of correspondence and proper regulation by peers and efficiently utilizing utmost proficiency and developing competency of serving a contributory role in the organization (Kaufman 2015). Certain evidence claims that employees who perform in cooperation typically exhibit higher level of job engagement and satisfaction and thus are highly enthusiast in comparison to their competitors who perform under the regulation of customary administrations (Elmes and Barry 2017). However, it has been noted that significant evaluation used by observers has been diminutive in relation to broader aspect of employment security which has been emphasizing fundamentally to the range of production generated by teams (Albrecht et al. 2015).
Though this evaluation has revealed greater degree of incompetence in efficiently shaping the level to which these teams typically obtain the ability to regulate themselves or successfully act as an autonomous association whereby a major proportion is based on decision making procedures pertaining to inter alia that is regarded as a preference of team leader, accountability of successfully organizing work agendas and efficiently focusing on quality control (Al Ariss and Sidani 2016). While the critical areas of concern have been witnessed in terms of self regulated teams, these teams have further been perceived as failure of successful implementation, however a segment of theorists like Taylor, Doherty and McGraw (2015) identify this particular form of business organization as potentially inconsistent because of its tendency of signifying the notion of regulation without decentralizing any forms of existent authority or decisiveness.
The best practice model essentially claimed that specific segments of HR activities exist which tend to universally aid globalized organizations like Woolworths, Telstra who have global operations in attaining a competitive benefits despite of sector or organizational setting (Tjader et al. 2014). It further signifies that best practices typically contemplate these collections of HR practices can successfully be implemented in majority of the organizational situation contexts in order to enhance performance level that further aids the organization to generate improved business outcomes (Glaister et al. 2018). Best practices involve well-established linkages between Human Resource practices and level of organizational performance which necessitates enhanced performance management. However, best practice model reveal high level of dependence on the idea of superiority of the organizational performance and Pfeffer’s model is identified as a good example of the set. Pfeffer’s model of best practice reveals seven vital HR practices related to self-regulated teams, high level compensation reliance on performance, induction, recruitment process, employment security, diminution of status discrepancies and information distribution (Al Ariss and Sidani 2016). Furthermore, best practice model has undergone significant criticisms that emphasized on the way best practice model has impacted the level of employee collaboration, as application of this model will initiate collective exorbitant sets like team performance and employee pay based on individual performance, it might raise huge risks to organization (Tjader et al. 2014).
While on the other hand, best-fit model casts light on the proper alignment and support of effective HR strategies as well as organizational policies. Thus it is highly essential for modern organisations to ensure appropriateness of HR processes in diverse situational contexts related to cultural aspects and operational procedures as well (Kaufman 2015). However authors have observed that management should effectively introduce various strategic transitions which are relevant to organizations’ operational procedures to successfully fit the organisation. Furthermore on the other hand it has been observed that similar to best practice model, best-fit model also constitutes of wide-ranging limitations (Al Ariss and Sidani 2016). Ivars and Martínez (2015) claimed best-fit model tends to restrain approaches in a way which proves their dependence to irregular contingencies which will give rise to complexities in handling developing challenges because of lack of regulation in HR system.
However studies reveal that both the models of SHRM intend to offer organizations with well-established mechanisms for successfully developing HRM processes. Furthermore, empirical studies claim that HR policies are typically being influenced by situational contexts that involve organizational, societal and industrial aspects (Ramalingam, Laric and Primrose 2014). However, there can be identified several processes which are common in nature such as employee compensation, appraisal or selection which develops the value for adapting ‘best practice’. Though, at certain situations constructive outcomes tend to rise when this model is considered to be universal in both small and large sized organizations (Brewster 2016).
Extensive frameworks have been considered to be immensely vital as analytical models which facilitate the ability of managers to efficiently recognize various subject areas and further implement choices in individualistic situational perspectives (Williams and Beck 2018). Furthermore, there have been observed an extensive range of observation such as relative industrial associations, global business approaches and operations management. However in order to perceive the facets of strategic human resource management, emphasis must be provided to three analytical levels such as society, industry and organization (Jamali, El Dirani and Harwood 2015). This form of structure thus has been recognized to be efficient in order to efficiently execute significant evaluation of challenges and instabilities which might further impact the human resource practices in the organization (Wood and Kispál-Vitai 2014).
Societal fit is associated to whether organizations acclimatize to nature of the society in which they have their location (Taylor, Doherty and McGraw 2015). Concepts of societal fit in the domain of HRM associates to wide ranging aspects of economy and the society that expands beyond legal aspects (Glaister et al. 2018). Tjader et al. (2014) have revealed the way organizations tend to regulate their employment systems in order to sustain with the elevated economic development of a specific country. It has been observed that the economic factors are highly beneficial to Woolworths as Australia comprises economically consistent environment (Woolworths 2018). Studies reveal that national boundaries do not necessarily act as impervious constraints to HRM whereby multinational organizations seek strategic approaches of generating economy through transferring their financial resources. However on the other hand, multinational companies often encounter human facets of executing a business which are fundamentally local (Jamali, El Dirani and Harwood 2015). Furthermore organizations entering into any new nation tend to interact with national labour legal system with localised labour markets. Globalised organizations often enter into foreign countries as they essentially provide lower-expenditure models of HRM.
At this juncture, factors related to societal fit are taken into consideration whereby it essentially sheds light on the ways in which national aspects impact HRM processes. It is recognised as an idea related to industry fit which often summarizes the association between organizations and the technological, systematic, economic and socio-political factors which are distinctive to their specific sector (Wood and Kispál-Vitai 2014). It is important to note, public sector human resource management is not revenue oriented but is highly reliant to the governmental regulations which differ as economic provision and political strategies transition. Modern researchers like Williams and Beck (2018) further suggest that industrial features act as a highly decisive role on ways in which organizations regulate performance and the employee bases (Latorre et al. 2016). There have been recognised significant divergences across diverse sectors within each sector and its contradictory approaches existing between customer segments or other strategic associations within sectors.
Culture fit is considered as a vital aspect which aims to hold an organisation together. However an outcome of unconstructive cultural fit emerging from turnover can cost an organisation around 60% of an individual’s annual wage (Brewster 2016). Thus prior to the evaluation of candidate’s culture fit, organizations essentially require to develop the competence of defining and further express the cultural aspect of organization along with its values, standards, practices and principles and further interlace these interpretations into recruitment process (Elmes and Barry 2017). Furthermore, culture fit exhibit a propensity that individual will signify or be competent to adjust towards fundamental principles, behaviour, attitudes, and culture aspects that form the organization (Al Ariss and Sidani 2016). Taylor, Doherty and McGraw (2015) have explored that candidates who adjust appropriately with organizations, workplace peers, managers and supervisors reveal a greater degree of job engagement and satisfaction and tend to remain associated with organization (Felin, Foss and Ployhart 2015). However, there can been a substantial discourse related to the way culture fit can give rise emancipate prejudice and discrimination against applicants and a severe lack of diversity (Glaister et al. 2018). Thus it is highly essential for contemporary organisations to develop the understanding that recruiting as per aspects of culture fit doesn’t necessarily signify selecting applicants who belong to similar ethnic backgrounds. Furthermore, principles and standards which compose cultural dimensions of organizations must be fundamentally exhibited in an opulently diversified workforce (Tjader et al. 2014).
An intermittent idea developed in the domain of SHRM literature reveals that organizations require to strategically adjusting their human resource approaches to their business operations to effectively facilitate the former play a contributory role to the successful execution of the latter. Furthermore, significant proportion of sectoral as well as organization-oriented observations have revealed the way contemporary organizations with global business operations encounter transformations within competitive environment which have further been responsive towards developing business tactics. However these strategies in response necessitate a significant change in the organization’s approach towards employee regulation which has requested for an effective configurational approach towards strategic HRM, whereby it has been argued that this approach is a pattern of HRM processes which underpins the attainment of organizational aims and purposes in alignment with irregular approaches can adjust with strategies. This process is identified to be significant for organizations in order to interpret HR practices especially performance nexus. Thus to conclude it can be stated that configurational approach chooses the best-fit perspective and further claims about series of other specific ideal forms which aim to offer both horizontal fit among vital HR practices as well as a vertical fit between HR processes and business strategies.
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