INTRODUCTION

Strategic HRM is an approach that defines how the organization’s goals will be achieved through people by means of HR strategies and integrated HR policies and practices (Armstrong, 2009).Business objectives are accomplished when human resource practices, procedures and systems are developed and implemented based on organizational needs, that is, when a strategic perspective to human resource management is adopted.(Baird and Meshoulam, 1988).Strategic HRM  is largely about integration and adaptation. Its concern is to ensure that: (1) human resources (HR) management is fully integrated with the strategy and strategic needs of the firm (vertical fit); (2) HR policies cohere both across policy areas and across hierarchies (horizontal fit); and (3) HR practices are adjusted, accepted and used by line managers and employees as part of their everyday work (Schuler (1992: 18).

THE BEST PRACTICES

This approach is based on the assumption that there is a set of best HRM practices that are universal in the sense that they are best in any situation, and that adopting them will lead to superior organizational performance (Armstrong,2009).Lists of ‘best practices’ have been produced, the best known of which was produced by Pfeffer (1998a), Guest (1999):

1. Employment security.

2. Selective hiring.

3. Self-managed teams.

4. High compensation contingent on performance.

5. Training to provide a skilled and motivated workforce.

6. Reduction of status differentials.

7. Sharing information.

THE BEST FIT

The best fit model seems to be more realistic than the best practice model. As Dyer and Holder (1988: 31).The best fit and competitive strategies are (Porter,1985): 

1. Innovation – being the unique producer.

2. Quality – delivering high quality goods and services to customers.

3. Cost leadership – the planned result of policies aimed at ‘managing away expense’.

To achieve the maximum effect it is necessary to match the role characteristics of people in an organization with the preferred strategy ( Schuler and Jackson,1987).

THE SIGNIFICANT FEATURES OF BEST PRACTICE  AND BEST FIT IN SHRM

It is unwise to pursue so-called ‘best practice’ (the ‘universalistic’ perspective of without being certain that what happens elsewhere would work in the context of the organization (Delery and Doty,1996).

Best fit’ is preferable to ‘best practice’ as long as the organization avoids falling into the trap of ‘contingent determinism’ by allowing the context to determine the strategy (Paauwe, 2004).

The search for best fit is limited by the impossibility of modelling all the contingent variables, the difficulty of showing their interconnection, and the way in which changes in one variable have an impact on others (Purcell, 1999).

Best fit can be pursued in a number of ways, namely by fitting the HR strategy to its position in its life cycle of start-up, growth, maturity or decline (Baird and Meshoulam, 1988), or the competitive strategy of innovation, quality or cost leadership (Porter, 1985), or to the organization’s ‘strategic configuration’ (Delery and Doty, 1996), such as the typology of organizations as prospectors, defenders and analyzers defined by Miles and Snow (1978).

This concept of universality is criticized because it takes no account of the local context. The concept of best fit emphasizes that HR strategies should be congruent with the context and circumstances of the organization. ‘Best fit’ can be perceived in terms of vertical integration or alignment between the organization’s business and HR strategies. (Armstrong, 2009).It is generally accepted that best fit is more important than best practice. HR strategies set out what the organization intends to do about its human resource management policies (Armstrong, 2009).

BEST PRACTICE ORGANIZATION 

Among the 100 “best companies to work for “reputation of being one of the most employee friendly companies in the world In 2000, FedEx employee turnover rate was 6%, well below the industry average of 20%.((fedex.com, 2018).

Employee retention “in our competitive market place, employee loyalty tends to be low. If employees don’t like their jobs they simply walk across the street and find a new one. It’s important to keep your people happy and to create an environment where they want to stay (Mc Mahan, HR manager at FedEx).

History of employee commitment since inception in 1971, its management focused on providing a suitable work environment that encouraged employees to come up with innovative solutions during severe financial difficulties during the first couple of years, the employees were prepared to sell their personal belongings They were also prepared to use their own credit cards to purchase fuel to deliver the packages to the customers continued working even when they didn’t receive their salary on time (fedex.com, 2018).

Best practices at FedEx People service profit (PSP) philosophy adopted by the founder of FedEx. If FedEx took proper care of its employees, they would provide efficient service to the customers. This in turn would benefit the company by generating more profits Survey-Feedback-Action (SFA) Program.Helped management take decisions regarding promotions.Online survey system in the US in 1992.Each April, every employee is asked to participate in the online survey .Managers hold feedback sessions. Best practices at FedEx leadership evaluation and awareness process (LEAP) • Encourage non-managerial cadre employees to move to the managerial level within the company Employee Communication Program.SFA program guaranteed fair treatment procedure and Open Door Policy and Grievance system (fedex.com, 2018).

Best practices at FedEx Job change applicant tracking system (JCATS).Online computer job posting system that allows hourly employees to post for any available job recognition and Reward Program.Awards such as the ‘Bravo Zulu’ and the ‘Golden Falcon Award’ (fedex.com, 2018).

BEST FIT ORGANIZATIONS

Google’s philosophy is that with the right tools, you can attract the best talent, and develop happier and more productive employees. With these HR efforts, Google’s leadership is recognized worldwide.

The Cadbury culture combines positivity and balance, among work and life.

SAS is noted for offering a high-trust environment and exhibiting a low turnover rate. The HR department is recognized as a pioneer in addressing day-to-day stresses and concerns that are common in a workplace environment.

The HR practices at Nissan include transparent salary scales and full autonomy for leaders to recruit and build their own teams. It is a practice not seen in the automobile industry. But, at Nissan, it is the key to production and manufacturing success.

Twitter is able to maintain the scrappy start-up feel while becoming a major tech firm because of the extensive training offered to those in leadership.

The HR team hosts all-company parties, complete with live music and a night club atmosphere to reward staff members for their hard work and dedication to the company.

Mentorships and open-door communication policies with leadership allows for creative freedom and the confidence to share ideas.

The company is recognized for its HR innovation through a highly disciplined culture, outstanding training opportunities, and strong and consistent processes.

The company believes in having a strong, cohesive, and open culture that works together as a team no matter what country the team member is from. Having a global mindset is what sets Shell apart from its competitors.

The Rolls-Royce Company is long synonymous with quality training and apprenticeships. The business model and value chain is incredibly innovative

Sources:

Glassdoor’s Best Places to Work – Glassdoor’s Employees’ Choice Awards 2015

http://www.glassdoor.com/Best-Places-to-Work-LST_KQ0,19.htm

Glassdoor’s Best Places to Work – Glassdoor’s Employees’ Choice Awards 2014

http://www.glassdoor.com/Best-Places-to-Work-2014-LST_KQ0,24.htm

Fortune’s Best Companies – 100 Best Companies to Work For 2014

http://fortune.com/best-companies/

Fortune’s Best Companies – 100 Best Companies to Work For 2013

http://archive.fortune.com/magazines/fortune/best-companies/2013/list/

CONCLUSION

To put everything under consideration, one can see that best fit and best practice approaches offer companies powerful tools for shaping human resource management processes. The concept of best practice is based on the assumption that there is a set of best HRM practices which are universal in the sense that they are best in any situation and that adopting them will lead to superior organizational performance (Armstrong, 2009). This concept of universality is criticized because it takes no account of the local context. The concept of best fit emphasizes that HR strategies should be congruent with the context and circumstances of the organization. ‘Best fit’ can be perceived in terms of vertical integration or alignment between the organization’s business and HR strategies. (Armstrong, 2009).It is generally accepted that best fit is more important than best practice. HR strategies set out what the organization intends to do about its human resource management policies (Armstrong, 2009).