HR gurus have come to avail themselves of various HRM models to formulate and implement their own HR practices at their own respective organizations. HR practices are implemented within organizations with the aim of achieving organizational efficiency, thereby increasing employee productivity and maximizing value for shareholders. Whether it’s the research-based view model, stakeholder model, best practices model or best fit model, HRM models aimed at increasing organizations efficiency bound in the HR realm. Delery and Doty (1996) have compartmentalized such approaches into- the universalistic, the contingency, the configuration. The so-called best practice HRM model falls within the ambit of the universalistic one. Best practice model deals with bundling of a few HR practices, whose viability in enhancing employee performance, retention rates and productive has been proven unassailable. The concept of bundling involves devising an HRM model consisting of a number of already validated HR practices (McDuiffe, 1995). Bundling deals with incorporating a number of HR practices which have gained proven efficacy and implementing at any firm with a view to effect positive outcome as to organizational performance and efficiency (McDuiffe, 1995). The most prevalent and the most talked-about among such HRM models is undoubtedly the best practice HRM model. The best practice model, which has gained which have gained relative traction in the last decade, will be analyzed in this particular essay. Moreover, the essay also aims to analyze the viability of the best practice HRM model and also examine the model’s limitations.
The so-called ‘best practices’ HRM model espouses that a set of HRM strategies can and do increase organizational efficiency irrespective of the organizational type or strategy, industry or country of operation. Furthermore, it is also posited that the viability of the best practice model is not contingent on variables such as the organizational strategy, the environment corporate strategy, size and etc. Usually, the best practices model encompasses are expressed into two types- ‘High Performance Work Systems’ (HPWS), and ‘High Commitment Management’ (HCM). Huselid (1995) ventured to characterize the use of High Performance Work Systems and positive internal fit culminates in better organizational efficiency at all firms. Moreover, Gephart and van Buren (1996) have gone to enumerate the key features of the HPWS model, which are team-based work, employee involvement, compensation management and selective hiring. Guest (1987) also provides for comparable views at the central features of an HPWS model, citing team-working and employee- employer cooperation as the main elements of an HPWS model.
To effectively analyze the merits and demerits of the best practice HRM model, it is key to analyze its elements, which tend to be broad. The prongs of the best practice HRM model are as follows. Firstly, (i.e. element) of the best practice HRM model is employment security, which is characterized by the chances of an employee being redundant. Secondly, the HPWS model advocates selective recruitment, that while hiring, the firm has to be selective as to who it recruits, and that the criteria for recruitment is transparent and adhered to. Thirdly, the best practice model prefers self-managed teams, emphasizing the benefits that can be derived from self-managed teams as opposed to a peer-based control of work performance, given how self-managed teams were related to more efficiency. Fourthly, the best practice HRM model hails the use of high compensation based on performance, Fifthly, it is training that forms the central part of HPWS models. Nonetheless, there is no consensus as to what elements should be incorporated in a best practice HPWS model, corroborating the relative contention as to the elements of the HPWS model.
Taken at face value, the concept of an ‘one size fit all’ HRM model looks viable and attractive since it promises to help organizations become more efficient and cleaner, even when not factoring other variables such as the type of the organization’s, size, strategy, and etc. However, the best practice HRM model viability and credibility to effect positive change in organizations of varying sizes (as the posited by the Huselid 1995), has been the subject of opprobrium from other research papers.
Notwithstanding the body of work substantiating the viability of the best practice HRM model to a wide range of organizations (Guest 1987 & Huselid 1995), there tends to be inherent limitations involved in implementing the best practice HRM model. These limitations presented by the best practice HRM model will be analyzed below.
Firstly, as above analyzed, best practice HRM model is not contingent upon the business strategy, which involves planning the future undertakings of the company, setting performance objectives, and formulating policies to reach such performance objective of the company (i.e. organization). Strategy choice, as conceived by Pfeffer and Salancik (1978), suggests that decisions of the managements (i.e. strategies) have a bearing on the coalesce of the factors such as- technology, organizational structure, emphasizing the importance of strategy on the overall organizational and financial performance of the organization Pfeffer and Salancik (1978). Therefore, implementing the best practice can render the corporate strategy less nuanced and less effective, testifying to how ‘one size fits all’ HRM model is not viable at all times.
Secondly, there tends to be a consensus around how corporate strategy (including HRM strategy) has to keep up with the growth companies gains (Raisch 2008). HRM model or strategy, a key component of that corporate strategy, therefore, has to be in keeping with such growth. To illustrate, as private companies have a tendency to be a secretive, with divulging as little info as possible regarding their financial and other performance. The so-called element of sharing information, as discussed above, is key to a HPWS model. However, it is evident that such element is simply not compatible with the corporate strategy of the organization, which is a testament to the inapplicability of best practices to all types of companies. Moreover, Baird and Meshoulam (1988) ventured to compartmentalize the organization growth stages into five stages- initiation, functional growth, controlled growth, functional integration and strategic integration. HRM strategies (i.e. best fit, best practice etc.) have to develop in a way that is compatible with such organization growth, citing how a static HRM model cannot be sustainable in such circumstances. Thus, best practice model bundles together HR strategies with prevalent viability, such practice omits to allow for a balanced portfolio of solutions posited by Raisch (2008), thereby illustrating another limitation of the best practice HRM model.
Thirdly, implementing best practice HRM model culminates in some key shifts occurring at organizations. For instance, when the reward system, a specific element of an HPWS, is adopted, there is a chance that such implementations might render counterproductive to a shifting change within an organization. Being oblivious to such contingency variables can negate the efficacy of the approach, therefore some organizations might be better off with a different HRM strategy such as contingency or best fit one (Purcell 1994).
Fourthly, as posited by Delery and Doty (1996), best practice approach tends to the one that is oblivious to various variables such as the organization size and its product offerings. Therefore, foisting upon a single set of HR practices on virtually every organization can be abortive, to say the least (Kaufman, 2010). Moreover, implementing best practice HRM can be unproductive considering the costs involved with implementing it. Small organizations (i.e including start-ups) may find it cost-prohibitive, since the elements of the best practice tends to be predicated on the ‘one size fits all’ doctrine, whose validity has been challenged in a number of papers over the years. Considering the costs implications, start-ups lacking the sources are better off architecting an HR strategy based upon their contingency and the resources at the disposal.
Fifthly, the implementation of the ‘best practice’ HRM model can entail the introduction of two counteractive policies. For instance, it is clear that self-managed teams form a central part of the HPWS HR model (i.e. best practice). Self-managed teams tend to distract from centralized authority and decision making, which are considered key to some organizations. Large organizations, in particular, tend to require more structure as to the activities the organizations is involved in. However, as research shows, sustaining self-managed teams can actually lead to lower levels of productivity and efficiency among employees at larger organizations. Therefore, this peculiar element of best practice renders it inapplicable to wide range of companies, which heavily rely on human efficiency and productivity and are different in organization size.
Sixthly, while devising an HR strategy, it is also advised that an HR strategy is anchored on the technological factor that are in play at organizations. There is a positive correlation between the technology the company avails itself of and the organizational structure (Woodward 1965). Notwithstanding the fact that research of Woodward (1965) was limited to manufacturing companies, the best practice was challenged while looked at technology and the organizational structure in juxtaposition. On the other hand, as Huselid (1995) posited, best practice HRM model espouses that a bundle of HR practices can help firm gain efficiency and organizational productivity irrespective of the technology factor present at organizations, best practice HRM model’s applicability seems limited since does not factor in the technological factor.
Finally, the applicability of the best practice HRM is limited considering how it passes over the organization’s environment as a decisive factor, usually measured in external and internal factors. Such key relationship existing between the environment and the organizational structure of firms and their environment cannot be overlooked while devising an effective HR strategy (Paul Lawrence and Jay Lorsch 1986). How HPWS or best practice approach advocates for a bundle of HR practices to be employed by HR managers while omitting to factor into the organization’s structure and the environment illustrates the limitations within the applicability of the best HR practice.
Overall, given how ‘best practice’ model can fall short of helping firms enhance organizational efficiency (i.e. the limitations as discussed above), firms can gain and sustain organizational efficiency by combining specific elements of the best practice with other HRM models such as the best fit one. Predicated upon the above analysis of how the use of ‘best practice’ HRM model can be limiting, the firms, in turn, can achieve employee productivity, retention and satisfaction by opting for a more balanced and combined model rather than following one specific model. Raisch (2008) corroborates the efficacy of such combinations, finding that the if firms are to look for a balanced design approach in attaining organizational growth and efficiency, further emphasizing the need for an HRM model that takes a number of variable- such as industry, product, organization type and strategy, when deciding on an optimal HRM model.