Limitations of Best Fit and Best Practice

Limitations of Best Fit and Best Practice models with

Strategic Human Resource Management.

Due to the recent rapid changes in the business world, more and more companies realize that their employees are regarded as an asset and an important resource for the organization. 

In the same way Armstrong,(2014) emphasizes that the basic goal of strategic human resource management is to develop organizational capabilities by ensuring that the organization has the skilled,dedicated, loyal, and                aggressive employees needed to achieve sustained competitive advantage. Hence Best FIT and Best Practice      are two strategic approaches that most of the companies are adapting.

However, there are some limitations in Best Fit and Best Practice models when implementing.

The Best Fit approach is also severely criticized. First, Boxall and Purcell (2003) criticized that in a rapidly and constantly changing business environment, the company and its strategy are affected by many alternating factors, and the entire human resources system can only be adjusted frequently to adapt to new challenges. Second, as the company moves forward in its life cycle, it must coordinate human resource practices, which may lead to alternative treatment of employees,which may have an incentive effect and show inconsistencies in the corporate culture.

According to Beardwell and Claydon,(2004) Criticisms of the best-fit approach Several problems that were found in the basic theoretical assumptions and application to the organization.Torrington and Hall (1998),states that further The criticism is that in order to pursue higher economic performance, the most appropriate model often ignores the interests of employees. Therefore, in practice, alignment tends to focus on the definition of "fit".
Schuster and Zingheim (1993, p.7) discuss the negative impact on employee motivation of small rewards when they state that ‘It is disheartening to tell employees they did an excellent job and then award a merit increase that is no more than one percent larger than the raise granted to employees doing a satisfactory job.

According to Armstrong (2009) Best fit models tend to be static and don’t take account of the processes of change. They neglect the fact that institutional forces shape HRM cannot be assumed that employers are free agents able to make independent decisions. The most suitable policy is usually modified according to the company’s strategic changes to respond to competition in the external environment, which will anger the company’s employees and eventually motivate them in the process of inspiring employees to achieve the company’s goals (Samnani and Singh, 2013).

The main disadvantage of the best practice HRM system is that it may result in standardized HR practices that are not ideal at the unit level (Becker and Huselid 2010; Samnani and Singh 2013). Best practice methods are plagued by a series of restrictions. First, when implementing best practice standards, the risk of mutual introduction between organizations is too high (such as team work and compensation based on personal performance), thereby weakening employees ’ability to collaborate due to excessive competition (Redman and Wilkinson,2009). Critics such as Milkovich and Newman(2002) believes that HR deficiencies in best practices are directly related to organizational strategy, this trust is generated by excellent and efficient human resources that encourage strategy. Maloney and Morris (2005) argues that by making HR policy lead corporate strategy an organization, risks advising standardized sets of “one size fits all” best practice approaches which will not upkeep the particular needs of employees and be unfavorable to overall strategic objectives.

Best practice relies primarily on Herzberg’s Two Factor Model which classifies ‘salary’ as a hygiene factor that can lead to dissatisfaction. Improving motivation requires careful consideration of the work itself and creating an environment where workers can grow, advance and achieve.  Individual incentives damage relationships and the organisational capacity that are the ultimate source of competitive advantage (Maloney and Morris ,2005).  Meloney and Morris, (2005) Further argues that Best practice believers have very little confidence in pay as a motivator, partly because of their reliance on Herzberg’s Two Factor Model.

Purcell (1999: 26) noted that ‘the search for best practice tends to take on the flavour of a moral crusade’. Further Purcell,(1999) also criticized the best practice or universalist view by pointing out the inconsistency between a       belief in best practice and the resource based view. As per Marchington and Wilkinson (2002),   the best practice approach is not suitable for small organisations since the best practices are sophisticated and rigid with the           organizational strategies that will not compatible with the prevailing business competition.Armstrong,(2014) further argues that the concept of best practice is based on the assumption that there is a set of best HRM practices that are best in any situation, these practices are common in a sense, and adopting these best practices will lead to    excellent organization Performance. The concept of universality has been criticized because it does not take into   account local conditions.

References

Armstrong, M (2014) A Hand Book of Human Resources Management Practice, 13^th Edition.

Armstrong, M ( 2009) A Hand Book of Human Resources Management Practice, 11^th Edition. Beardwell, I.H., L. & Claydon, T.(2004). Human resource management: A contemporary approach, 4.

Becker, B.E. and Huselid, M.A., 2010. SHRM and job design: Narrowing the divide. Journal of Organizational Behavior.

BOXALL, P. and PURCELL, J. (2003): Strategy and human resource management. Basingstoke: Palgrave Macmillan.

Maloney, M., Morris, D. (2005): Strategic Reward Systems: Understanding the Difference between 'Best Fit' and 'Best Practice'. National University of Ireland, Galway.

Marchington, M. and Wilkinson, A. (2002), People Management and Development, London: Chartered Institute of Personnel and Development.

Milkovich, G. and Newman, J. (2002) Compensation, 7th ed. Homewood, IL. McGraw-Hill Higher Education.  

Purcell, J (1999) Best practice or best fit: chimera or cul-de-sac, Human Resource Management Journal, 9 (3), pp 26–41.

Redman, T. and Wilkinson, A. (2009): Contemporary Human Resource Management - Text and Cases (3rd ed), Harlow: Pearson Education.

Samnani, A.K. and Singh, P., 2013. Exploring the fit perspective: An ethnographic approach. Human Resource Management, 52(1), pp.123-144.

Schuster, J. and Zingheim P. (1993) ‘New pay strategies that work,’ Journal of Compensation & Benefits, 8 (6), p. 5-9.

Torrington, D. and Hall, L. (1998) Human Resource Management, 4th edn. Hemel Hempstead: Prentice Hall, Europe.