Advantages and Disadvantages of ‘Best Practice’ Approach to HRM
The ‘best practice’method highlights that particular packages of HR activities take place, and they wholly give support to the companies towards realizing their competitive benefitirrespective of the company situation (Elliott 2003, p. 43). The approach entails a clearlink between Human Resource activities and the growth of the company, and both are usually related to high commitment organization. Experimental research in the ‘best practice’ approach indicates that parallelclusters of HR strategiesare found to be appropriate for exploiting performance regardless of strategies in product and market (Voo, Long and Soehob2017, p. 1728). The approach of ‘best practice’ combines all activates which are considered jointlywell-matchedHR activities and which imitate greatstages of employee capability, present work plan that enhances employee commitment (Elliott 2003, p. 45).
Contrary, the ‘best fit’ method states that companies shouldfamiliarize their approaches in HR to new fundamentals of the strategies of the company and its broader environment. HR resource strategy in a company is assessed in terms of how the company’s social and human capital can help to perform, what are the competitive risks and the potential of the company in HRM(Malik 2018, p. 24) Concerning this, the strategy is assessed in terms of hoe best the company can improve its performance in HR when compared to its potential competitors. Besides, HR strategy can be evaluated through analyzing the strategic processes in HRM, such as effectiveness in HR planning processes (Malik 2018, p. 26) FedEx Corporation is a UK based company that has a track record of being successful. The company believes that its success anchors on the efficiency of its employees since it found out that employees who are satisfied with their jobs when they are treated will result in positive company growth (Boxall and Purcell 2003, p. 47).
This paper critically analyses the merits and demerits of the ‘best practice ‘approach in HRM against the ‘best fit’ method with closer consideration of FedEx Corporation UK.
Advantages of ‘Best Practices and Their Effects on Employee and Company Performance
According to Elliott (2003, p. 48), FedEx Corporation employs the ‘best practice’ of using specific bundles of incorporating human resource policies that promote overall higher worker commitment and motivation. Examples of these bundles include training its employees, employees’ job security, pay scales that are in alignment with other companies in the same industry, and encouraging employee participation. All these bundles are the best ways through which the company motivates its employees. However, incentives in terms of payment can only go very far, but the best motivation is when employees are satisfied and can enjoy their work. It has been found out that regular performance appraisals concerning pay rises, together with other compensations, have proven to be the best motivators. When employees are satisfied with their jobs, and they receive excellent pay, their health improves, which in turn reduces absenteeism besides being physically fit. All these practices amount to ways of avoiding all possible things that can compromise company productivity.
The company employs performance appraisal, career planning, training and development, effective internal means of communication, employee selection and recruitment, and energetic alignment in HRM(Malik 2018, p. 26). All these ‘best practices have a positive relationship with the company’s general performance (Elliott 2003, p. 53)
According to (Voo, Long, and Soehob2017, p. 1730), practices in performance appraisal play a key role in managing employee performance. The company discusses critical success factors in the job. It always provides essential inputs to decision making based on choices that are likely to affect the employees both directly or indirectly. The company emphasizes the importance of effective and efficient management on performance appraisal based on the belief that all that employees do at the workplace at every level contributes to attaining the overall goal of the company. The company is therefore concerned with what the employees do, their behaviors, how they perform at work, and finally their achievements at work. Overall, performance appraisals have an impact on improved employee output, and the grand effect is enhanced and increased company performance.
In terms of employees’ selection practices, the company uses ‘best fit’ approaches since it pursues a highly selective approach inemployment that aims at attracting personnel who are highly skilled and who can connect to the company’s high-performance ethics (Boxall and Purcell 2003, p. 51). The selected company workforce is also able to live up to quality standards. The newly recruited employee has to pass through probation for six months. While on probation, they are supposed to prove their dedication to work through trainee programs.FedEx Corporation promotes employee experience from within, and this can be regarded as a vital element of ‘best fit’ that the company uses to alignitsgoals with strategies that incorporate quality (Croonen, Grünhagen, and Wollan 2016).
Croonen, Grünhagen, and Wollan (2016) continue to point out that the company combines both approaches in realizing its goals. For instance, along with selective recruitment coupled with rewarding them for their long-term achievement in line with their job responsibilities helps to keep the company’s intellectual ability and ensures a very competitive advantage concerning performance fields, knowledge, and quality. Concerning the international management of the company, the company hires external managers who are internationally experienced to address to the needs of the global market and its expansion.According to Boxall and Purcell (2003, p. 56), aspects of education and quality requires the ‘best fit’ approach. The approach should be in conjunction with relationships and social networks that are considered typical at a global level.
The best practice approach is also used in the area of employee involvement with the company processes using open-door policies whereby all employees are allowed to contact management directly freely. This practice leads to minimal supervision hence reduced barriers to communication, and this creates a wide range of opportunities for company employees to take responsibility. Participation is one of the critical indicators of employee remuneration. It thus encourages the generation of ideas and employee involvement in significant decision making. Employee participation is best achieved through the Employee Advisory Board (EAB) hence leading to a high degree of employee loyalty. The ‘best practice participation helpin supporting the core business competence and a sustainable competitive advantage and quality in innovation as the company’s primary strategic objectives (Boxall and Purcell 2003, p. 63).
References
Elliott, H.G., 2003. SHRM best-practices & sustainable competitive advantage: A resource-based view. Otago Graduate Management Review, 1, pp.43-57.
Boxall, P., and Purcell, J., 2003. Strategic HRM: best fit’ or ‘best practice.’ Strategy and human resource management, pp.47-70.
Malik, A., 2018. Strategic HRM & ER: Best-Practice Versus Best Fit. In Strategic Human Resource Management and Employment Relations (pp. 23-34). Springer, Singapore.
Croonen, E.P., Grünhagen, M., and Wollan, M.L., 2016. Best fit, best practice, or stuck in the middle? The impact of unit ownership on unit HR performance in franchise systems. International Entrepreneurship and Management Journal, 12(3), pp.697-711.
Voo, I.C., Long, C.S., and Soehob, K., 2017. Investigating the Relationship of Human Resource Management Practices and Firm Performance. Journal of Engineering and Applied Sciences, 12(7), pp.1727-1731.