"Best-Fit" Vs "Best Practice": Which is better for a contemporary Organization.
In today’s context, HR departments need to adopt suitable HR policies and practices to achieve organizational objectives
through the effective use of human resources. The Best Practice and Best-Fit models
are the two main HRM perspectives.
According to Armstrong (2014), the Best Practice Model is the notion that there are set of best HRM practices that can be applied at any situation and any organization adopting such HR practices will lead to better performance and this is also known as the ‘universal approach’, in contrast, Best Fit model is about HR strategies, policies, and practices that are dependent and should match with the specific context of the Organization and based on ‘contingency theory’.
Figure 1: (Source: Digital HR Tech,
2021)
Best Practices and Outcome
Based on a comparative study conducted by Huazhong University
of Science & Technology China, they found out that effective
implementations of five HRM best practices such as “Recruitment and selection,
Training and Development, Performance Appraisal, Promotion, and Compensation and
Social Benefits” leads to higher employee satisfaction, improved employee
retention and higher employee commitment in both public and private sectors in
countries Pakistan and China (Rida et al, 2020). One of the well-known
Best Practices were suggested by Pfeffer and he
introduced 7 best practices as shown in Figure 2 below.
Figure 2: Best Practices by Pfeffer (Source:
Digital HR Tech, 2021)
Best-Fit and Outcome
The findings and conclusion of the research on the Contingency approach (Best-fit) suggests that this approach can favorably effect
performances of an organization when this is applied appropriately and
aligned with the strategy of the Organization
Weaknesses
Purcell (1999, as cited by
Armstrong, 2014) argued that there is no congruence between Best Practice
approach and Resource-based view of Human Resources and competitive advantage, as the best practices are available universally and can be adopted by everyone, and his question was how the Universalism of best practice can be viewed as rare and inimitable and claimed
that it would lead us to a closed-end.
Similar to Best Practice, the Best-Fit model also has its weaknesses and one of them as Armstrong (2014)
mentions the Best-fit model does not really consider the change process and
institutional forces which shape Strategic HRM and Employers are not free agents to make decisions independently.
Conclusion
It is clear that both Best Practice (Universal) and Best-Fit (Contingency) can contribute to improved performances of organizations but at the same time, each of the models has its downsides as well. The factors such as regional, social, cultural, political, and the environment may not be favorable to apply Best Practice model in all circumstances and in all organizations, likewise, Best-Fit model may not fit well or even be detrimental to employees if HR strategies are not prudently selected due to a lack of principles and morals. In order to achieve the objectives of the organization, the HR Managers along with other department heads should systemically analyze and apply either one or both models combined as appropriate to the organizations and if necessary, the other models and theories also should be integrated into the process to achieve positive outcomes.
References
Anbu, D., 2019. A Review of Human Resources
Management (HRM) Theories and Effective Human Resource Management Models. Asian
Journal of Multidimensional Research, 8(5), pp. 81 - 93.
Armstrong, M., 2014. Armstrong's
Handbook of Human Resource Management Practice. 13th ed. London: Kogan
Page Limited.
Hamid and Saloua,
2014. Strategic Human Resource Management and Performance: The Contingency
Approach Case of Tunisia. International Journal of Humanities and Social
Science, 4(6), pp. 282 - 291.
John E Delery, Harold
Doty, 1996. Modes of Theorizing in Strategic Human Resource Management: Test of Universalistic, Contingency, and Configurational Performance Predictions. Academy of Management Journal, 39(4), pp. 802-835.
Rida Batool, Y. S. I.
B., 2020. A Comparative Study: Impact of Best HRM Practices on HRM Outcomes in the Organizations of Pakistan and China. International Journal of
Information, Business and Management, 12(2), pp. 54 - 68.
TECH, D. H., 2021. 7
Human Resource Best Practices (A mini-guide to HRM). [Online]
Available at: https://www.digitalhrtech.com/human-resource-best-practices/
[Accessed 19 July 2021].
Well written Fayas. According to the best practice perspective best human resource practices would result in enhanced organisational performance, manifested in improved employee attitude, lower level of absenteeism ,and turnover, higher level of skills for higher productivity, enhanced quality and efficiency. The best fit approach explores the relationship between strategic management and HRM. Agreed, to achieve a favourable outcome HR department must apply proper combination of them. Thankyou for sharing.
ReplyDeleteThank you very much for the comments Rukmali
DeleteAs you discussed both strategies what to be used depends on the organisation policy. But either will lead to enhance the motivation of the employees in order to achieve the goals and objectives of the organization. It's a good article and very nicely presented the idea.
ReplyDeleteThank you for the comments Dhanushika
DeleteBest practices leads higher employee satisfaction, best fit favourably effect on perfomance of an Organisation. Agreed with recommendation that Organisation should apply both approaches or as suitable according to situation.
ReplyDeleteVery Good analysis Fayaz .
Thank you for the comments Sunith
DeleteBoth are very important and can be used for better outcome depending on the situation. However perfect combination would be much more appropriate for ultimate benefits
ReplyDeleteVery interesting topic. organizations should identify the ways of doing things right and practicing right thing which could be fit for the need. A process improvement and change management division will do this appropriately.
ReplyDeleteInteresting topic Fayas, However the best fit approach is subject to several criticism. First one is, during a changing business environment, organisations and their strategies are subject to several alternating contingencies which it's merely probable to manage full HR systems to new challenges frequently. Second one is, as organisations change through their life-cycle HR practices got to be aligned which finishes up in an alternating treatment of staff which may have a demotivating effect and show inconsistency in company culture.
ReplyDeleteAdding to the article, Some organizations specialize in the area of best practice and offer pre-made templates to standardize business process documentation and also Best practices or the best fit can improve organizational performance in the long run by selecting proper method (Saifalislam and Osrum, 2014).
ReplyDeleteVery useful topic to discuss in HRM, Using best practices makes it easier, faster, and less expensive to make big changes (Axson, 2007, p. 34).
ReplyDeleteThis perspective asserts that there is no universal way of doing things because what works in one place may not work in another. This requires the alignment or contingent connection between business strategy and HRM practice in the organization (Miles and Snow 1978).
Key differences between Best Practice and Best Fit
Best Practice
1. Suggest a set of HR policies that includes a reward system
2. Introduced HR practices will increase employee motivation and commitment
Best Fit
1. The reward system should link with the company’s strategy
2. The strategy’s main objective is achieving competitive advantages
Thanks for sharing Fayaz
best fit. Organizational strategy comes first, and all organizational systems and practices follow. Whereas for best practice, a prescriptive set of practices precedes strategy and provides the human resources required to achieve the organization's objectives, whatever they may be. We can observe how the two concepts differ in their approach. Within the ‘Best practice' paradigm, the HR manager begins by identifying best practice, then raises the profile of HR, obtains top-level commitment, sells it, does it, measures it, and rewards champions.
ReplyDeleteVery useful topic Fayaz, Best fit is a situational approach, whereas best practice is a universal approach at its most basic level. The concept of best fit is founded on the idea that selecting the most effective HR policies and practices is contingent on matching them to the organization's environment. thanks for sharing.
ReplyDelete