Best practice vs best fit approaches PDF

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The concept of ‘best fit’ and ‘best practice’ approaches are well known in human resource management. The ‘best practice’ approach claims the best human resource practices would result in better organisational performance and yield which can be seen from improved employee behaviour, lower turnover rates and higher levels of productivity with better quality and efficiency. Best practice combines activities that are characterized as mutually compatible HR activities which feigns high levels of workforce competence, encourage motivation and introduce a work design enhancing employee commitment (Maloney and Morris, 2005). The ‘best fit’ approach makes HR strategies become more efficient when its linked towards the environment of the business. It investigates the close linkage between strategic management and HRM by measuring the extent the vertical integration between the organisations business strategy and the HRM policies and practices it has. The best fit approach is also subjected to severe criticism. It is criticized that in a changing business environment company and their strategies are subjected to multiple contingencies that are rotating which makes it impossible to adjust the entire HR system to new challengers frequently (Boxall and Purcell, 2003). Both approaches agree that using external competitive renumeration packages are important in attracting and retaining exceptional employees. Both approaches emphasize the importance of external competition for enticing and retaining employees. In order to be effective, the remuneration system must give out rewards in a way that enables the organisation’s best employees to feel satisfied when they compare it with other individuals doing similar jobs in other similar organisations. The concepts of ‘best fit’ and ‘best practice’ approaches in human resource management share some very similar points. In a sense, both concepts view HRM as one of the most important role in holding up organisational strategy and objectives. Both approaches concur that reward systems should be in line with other HR practices. Both concepts also see remuneration as a way to reinforce organisational culture and structure. Best fit is normally seen as the contingency approach as it is based on the premise that picking the most efficient and effective HR policies depending on whether they are matched perfectly to the organisation’s environment which makes it situational. Best practice is known to be the universal approach as it takes in all the benefits of HRM across all context....