Best Fit and Best Practice in Strategic Human Resource Management: A Case Study of Coles Supermarket in Australia

This essay discusses the benefits and limitations of Best Fit and Best Practice models in Strategic Human Resource Management and analyzes their impact on Coles Supermarket in Australia. The essay also explores the importance of recruitment, selection, staffing, and employee rewarding in the retail industry.

Running head: STRATEGIC OF HRM
Strategic of HRM
Student’s Name
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Author’s Note

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Introduction
The ideologies of Best Fit and Best practice in the context of Strategic Human
Resource Management have been discussed here indicating the benefits and limitations of
these two models. Furthermore this essay also accomplishes a detailed analysis of how
these two SHRM practices have impacted the retail business of Coles in Australia.
The perspective of Best Fit claims that the strategies involved in Human Resource
management of an organisation becomes more effective when they are closely linked with the
business environment. This model tends to explore the inter-link between the strategic
management and HRM by assessing the level of vertical integration existing between the
business strategies of the company with the HRM policies, standards and practices. On the
other hand Best Practice implies that best HR management practices in an organisation would
result in prolific development of organisational performance. The change brought about as
such, is manifested through improvement in the attitude of the employees towards their work
goals, reduction in the rate of absenteeism, reduction in the rate of employee turnover and
lastly enhancement of skills s leading to higher productivity with enhanced quality. This is
how the Best Practice or the High Commitment Model is of utmost significance and
importance to the companies. In the course of analysis of these two important SHRM
practices, the ways in which these two HR models have impacted the organisational
development of Coles Supermarket of Australia have been highlighted.
Discussion
Both Best Fit and Best Practice models are inclined to help an organisation to achieve
highest impact in their performance. Austin and Stuart (2015), implies that these two models
are matching in the sense that they align the HRM strategies with the concerned
organisation’s objectives.

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The Best Fit SHRM model emphasizes that organisation’s basic strategy is closely
aligned to the other systems. In this context, Booth and Carroll (2015), discusses that every
organisation should start their business campaigns with a predominant business strategy
because a proper business strategy acknowledges what an organisation wishes to accomplish,
the kind of behaviour it expect s from its employees in that context as well as the nature of
performance the employees of a company should demonstrate in order to meet the goals of
the concerned business campaign. In contrast, the theory of Best practice also delineates the
importance of a business strategy regarding the accumulative performances of the employees
and other stakeholders.
Both the concerned SHRM models are similar in that both of them clearly identifies
what is needed of the employee base of a company for achieving the organisational
outcomes. Both of the concepts are hypothecated to the common urge that employees are of
critical importance for the achievement of the goals of an organisation. This is why, both
models in turn puts stress on the staffing as well as hiring needs as well as the procurement
procedures of the companies. According to the opinion of Brea‐Solís, Casadesus‐Masanell &
Grifell‐Tatjé (2015), the HR processes like recruitment, selection, staffing as well as testing
are provided an equal importance. Although, the models do not show unanimity over
identification of best practices that complement the aforesaid processes, a general link, as
identified by Eccles, Krzus and Ribot (2015), provides that selective hiring, security of
employment, extensive and rigorous training, an organisational structure that encourages and
engages the employees in the business project of the company and lucrative payment helps to
keep any organisation ahead of competition in any industry. In the words of Johansen et al.
(2015), another important prospect identified by both models is rewarding the employees for
the best implementation of each of the approaches of the organisation.

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According to Malik (2018), externally competitive pack ages of employee rewards are
very crucial for retaining as well as appraising the qualified employees who undertake major
portion of the workload to accomplish the deliverables of the company. This scenario is
particularly reflective in the case of the Australian retail industry. The amount of competition
among the few major retail brands of Australia like Woolworths, Wesfarmers and Coles and
so on is very high. Naturally, the threat of employee turnover is high, since the companies are
very proactive to screen the potential and most delivering employees engaged with other
firms. Nevertheless, the externally competitive system of employee rewarding in the outlets
and inventories help in satisfying the most valuable employees in the company. At the time
when the employees compare the rewards that they receive from the company against their
services, with that received by other employees in similar positions, they feel that they are in
a beneficial position within the industry.
Ramalingam, Laric & Primrose (2014), have however argued that the Best Fit is more
of a contingency approach. On the contrary, Best Practice is a universal approach. Best Fit, as
an approach, advocates the most impactful Human Resource policies that syncs in properly
with the environment of the organisation. According to the definitions of Styles,
Schoenberger & Galvez-Martos (2015), the predominant contingent factors that can
potentially influence the HR strategy in retail organisations are size of the company, kinds of
technologies applied, geographic locations, the labour market in the associated business
environment and finally the economic condition of the company. Coles Supermarket have
payment discrimination depending on the living cost of the cities. The labour market if not
extensive in all parts of Australia. In places like Eastern and South Eastern Australia where
the labour market is thin, the Coles Company focuses on employment of casual workers. The
consolidated training procedure of the company helps to raise the expertise level of the

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employees easily. This is how the company becomes successful in opening branches in the
remote locations also and gain maximum percentage of the customer base.
In case of the best Fit policy, the organisational strategy comes first which is followed
by organisation’s system as well as practices. On the contrary, Tandon et al. (2015), professes
that practices comes ahead of strategy, however providing whatever HR needs requirement
for the fulfilment of the organisational outcomes. In case if an organisation is following the
Best Practice model, the organisation beforehand identifies the best Practices and then
measure the performances and rewards the champions. However, this differs from the Best
Fit model whereby the HR managers at first identifies the external fit against the
Operational/marketing strategy appointed by the company and then aligns with the HR policy
and strategy. In case of Coles, the HR management of the company prefer to conduct a highly
rigid employment and employee selection structure. The company identifies how the
recruitment processes are conducted in t5he other companies and in case of selection of
experienced candidates, the employee’s appraisal certificates and key skills are witnessed and
tested. Hence, it can be concluded that in the context of the recruitment process, the company
prefers to follow the Best Practice model. This provides a subtle implication that when the
competitive nature of the market is high and there is high chance of segmentation of the
customer market, it is evident that Best Practice model is the mostly effective in comparison
to the Best Fit strategy.
Best Fit highly recognizes payment as directly linked to employee motivation. As per,
Turner & Clegg (2014), the Expectancy Theory is implemented in this model. This theory
endorses the belief that people in sales network tends to maximise their efforts if they believe
that their efforts would be paid for. In analogy Urban (2018), have opined that the Best Fit
model recognises payment as a more poignant factor to restrict dissatisfaction among the
employees along with sending a recognisable message that the work of the employees are

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valued by the organisation. Employee rewarding is not all professed by the process of Best
Practice. According to the views of Watson, Wood & Fernie (2015), exclusive reward system
can destruct the interrelationship among the employees that is at the heart of best
performance by the retail sales teams and overall organisational commitment. The companies
following Best practice, promotes a system of employee rewarding that which do not
generally mess with the compressed payment bands, endorses the policy of equal pay for all
and allows collective incentives scheme.
Coles have been seen to implement the process of Best Practice generally in regard to
payments. They seldom acknowledges the work strength of individual employees with
material rewards. On the contrary they offer an equally broad platform for earning
performance based incentives to the employees. The managers or the supervisors of the work
groups gets accumulative incentive amount based on the performance of the sales team(s)
delivering under them. The higher managers gets incentive based on the overall sales
performance of the outlet.
According to Boxall & Purcell (2015), there are two major aspects of strategic human
resource management including the strategic fit and best fit. The strategic fit refers to the two
major dimensions associated with the connection created between the management of human
resources and strategies associated with the management of business functions and processes
within the organization. The strategic fit is also considered as an effective way of managing
coordination between the various human resource management practices along with the
improvement of business operations and processes’ efficiency at Coles, Australia (Boxall &
Purcell 2015). While the strategic fit enables consideration of contingency approach where
the HRM policies are linked with the strategic resources and functions for maintaining a
holistic approach, furthermore create a better link between the dependent and independent
variables. Considering the various issues and complexities related to the management of

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human resources and implementation of strategies at Coles, Australia, and the company
should make effective strategic choices not only for the purpose of ensuring successful
functioning but also for mitigating the contingencies through the adoption of the most
suitable practice for managing the human resources properly (Cania 2014).
As stated by Boxall & Purcell (2015), the best fit enables managing the HR activities
related to the structure and systems all throughout the various stages of the development life
cycle. The best fit has enabled managing the flexible styles of human resource management,
furthermore the management of professionalized styles, which has often become of the major
causes of increasing the numbers of employees and improving their skills, knowledge and
expertise too (Boxall & Macky 2014). Gannon, Roper & Doherty (2015) stated that the best
fit approach to strategic HRM has also helped in coping up with the complex issues arising
between the coordination and decentralization while managing diversification among the
organizations. The most effective best fit model has defined the external fit that can allow the
organization to gain competitive advantage and at the same time, the business performance
would enhance, thereby resulting in reinforcing the organization’s choice of cost or product
differentiation at Coles, cost leadership and prioritizing on creating a competitive edge over
its competitors (Gannon, Roper & Doherty 2015). Boxall & Purcell (2015) argued that the
best fit model for practice has also aligned the business processes to fit with the previous
competitive strategies and for ensuring better flexibility in terms of the level of skills,
knowledge and expertise obtained to cope up with the various issues in the future.
Based on the statements provided by Farndale, Brewster & Poutsma (2014), the
human resources strategy should create an impact on the competitive goals and objectives as
well as ensure that the processes of recruitment and selection are successful along with roper
motivation of workers through training and developmental sessions at Coles, Australia
(Farndale, Brewster & Poutsma 2014). This has created the ability among the organization to

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encourage the staffs and thus the best fit has been facilitated with the development of skills
and knowledge for creation of new business capabilities along with adjusting with the
technological advancements to improve the level of customer services, furthermore create
higher level of satisfaction among the customers.
On the other hand, the best fit approach to strategic human resource management, on
the other hand, focused on the security regarding employment of individuals, selective hiring
or recruitment, self-managed teams and managing compensation of workers based on their
performances. According to Alfes et al. (2013), the best practices also include providing
necessary training to them for facilitating their skills, knowledge and expertise to create a
motivated workforce and form a great culture where people can work in coordination and as
an unit at Coles in Australia (Alfes et al. 2013). The best practices to strategic HRM also has
included the various ways of sharing and exchange of information, which has also improved
the communication process along with the betterment of teamwork and coordination among
the workers to achieve the business goals and objectives with much ease and effectiveness.
Bal, Kooij & De Jong (2013) stated that the communication process has enabled two way
processes, which has made each and every members of the organization informed about the
business related aspects along with the updated policies, laws and rules to be followed at
Coles to smooth business functioning. The best practice approach focused more on the
development of high performance work systems with the various strategic HR practices
required to improve the organizational performance largely (Bal, Kooij & De Jong 2013).
This also includes the management of internal career ladders along with the arrangement of
formal training systems and results oriented appraisal and performance based compensation
structures. The security of employment is managed and the consideration of employees’
opinions and ideas have further assisted in the process of decision making and deliver the
best for benefiting the organization to the utmost level possible. While these are the basic

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speculations of the best practice approaches to strategic HRM, the best fit approach focused
primarily on the contingency theory to ensure that the HR strategies remain inclined with the
circumstances of the company.
According to Therioub & Chatzoglou (2014), the best fit approach has been perceived
based on the vertical alignment of the organization operations with the HR related strategies
with the consideration of competitive strategies, strategic configuration and lifecycle. The
best fit strategies have provided various benefits to the organization by enabling innovation,
which has allowed Coles to become a unique producers and even delivering the best quality
products and services for customer satisfaction (Theriou & Chatzoglou 2014). The cost
leadership strategies were implemented to reduce the cost of operations while the policies and
procedures aimed at managing the costs by maintaining a proper budget through without
compromising on the production of good quality products and services. The best fit model or
approach to HRM also has aligned the human resource strategies with the organizational
strategies, which has allowed the organization to implement the right HR strategies at the
right circumstance and this has even created a positive impact on both the organizational
culture and the business operations and processes. Based on the information provided by
Boxall & Purcell (2015), it could be thus demonstrated that the best fit approach has been
considered as more effective, because of its efficiency in aligning the HR strategies with the
organizational strategies for focusing on both the needs and preferences of the organization
and its employees.
Conclusion
In conclusion it can be stated that it is not possible to select any one SHRM policy as
ideal over the other. There are variety of perspectives associated with the perception through
which the researchers in empirical findings have described the best organisational out comes

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with alignment to both the models. Nevertheless, when the pressure on the marketing and
sales domain of a company is high the Best Practice method generally works in favour of the
company. The policies undertaken by HR management of Coles Supermarkets for ensuring
business proficiency shows that the process of Best Fit requires extensive market research to
undertake and mostly favours a company during the conditions of market entry preferably. At
times when the company is operating in a known atmosphere and the rival players are also
known to them, then Best Practice seems to work better for organisational success.

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