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).
Hi Gabriel,
ReplyDeleteConceptually, the idea of fit is persuasive, which is why it continues to play an important role in strategic HRM research (Becker & Huselid, 2006). However, to date, only limited empirical support for the impact of fit exists. For example, how to measure the potential synergistic effects of systems of HR practices proposed in internal fit is not clear (Boselie et al., 2005). In addition, the current operationalization do not do justice to the complexity of the fit concept (Gerhart, 2004). In strategic fit models, strategy is often oversimplified in static constructs (e.g. cost leadership versus differentiation) that do not capture the full breadth of business strategies in contemporary organizations (Boxall & Purcell, 2008).
According to Hendry and Pettigrew (1986),strategic HRM has four meanings.
Delete1)The use of planning
2.A coherent approach to the design and management of personnel systems based on an employment policy and manpower strategy and often underpinned by a ’philosophy’.
3.Matching HRM activities and policies to some explicit business strategy.
4.Seeing the people of the organization as a ’strategic resource’ for the achievement of ’competitive advantage’.
Armstrong (2008) opines that it is not wise to pursue “Best Practice “strategy without knowing what happens elsewhere would work in the context of the organization. Author feels “Best Fit” strategy is preferred to “Best Practice” strategy. However,” Best Fit” strategy also has its limitations such as impossibility of modelling all the contingent variables, the difficulty of showing their interconnection and how a change in one variable impact other. This has led to emergence of a concept called “Bundling” which is development and implementation of several HR practices together so that they are interrelated and therefore complement and reinforce each other to achieve improved performance.
ReplyDeleteIt is often said that best fit is better than best practice but this statement can only be accepted
Deletewith reservations.There may be merit in both approaches where the debate is between general principles/bundles (training and development, staffing, compensation and benefits,communication and participation,and planning) and the manner in which they are carried out... It seems that the ‘best fit’ and ‘best practice’ approaches of the HR-performance relationship are not necessarily mutually exclusive.On the contrary, they may be combined to provide a more holistic picture.(Stavrou et al (2010: 952–53).
To manage human resources effectively, it is essential for an organization to encourage their employees behaviour towards the success of their competitive strategy (Hsieh, 2011). Best practice strategy will lead to a highly motivated environment and helps employee committed towards what they do. To achieve competitive advantage, it is always better to apply best fit strategy. In the modern world, organizations should align their practices with their strategy in both individual and organizational level for a high-level performance.
ReplyDeleteIn addition to your comment and following this contribution from Guest, any explanation of the impact of HRM on organizational performance is likely to be based on three propositions:1) that HR practices can make a direct impact on employee characteristics such as engagement, commitment, motivation and skill; 2) if employees have these characteristics it is probable that organizational performance in terms of productivity, quality and the delivery of high levels of customer service will improve; and 3) if such aspects of organizational performance improve, the financial results achieved by the organization will improve. This can be described as the HR value chain.
ReplyDelete