Understanding Strategic Human Resource Management and its Best Fit and Best Practice Approaches

The article discusses strategic human resource management (SHRM) and its application in organizations. It explores the concepts of best fit and best practice in SHRM, analyzing their views and implications. The article emphasizes the importance of aligning HR policies with business strategy and the need for consistent and competitive reward systems. It concludes by highlighting the similarities and differences between the best fit and best practice approaches in SHRM.

Strategic Human Resource Management
Critically analyses, compare and contrasts the best fit as well as the best approach in SHRM
3/27/2019

Strategic Human Resource Management 1
Strategic Human Resource Management
Strategic human resources management refers to the practice that is conducted by the company
with the motive to attract, develop, reward, as well as retain the employees within the
organisation. This will offer the benefit to both the employees as individual as well as the
organisation as whole. In Strategic human resources management, the company consider the best
fit as well as the best approach while performing the business operations. The best fit and best
approach that are present in SHRM has been analysed considering the views of the different
researcher. This research includes the agreement and disagreement views on the concept of best
fit and best approach. In addition, the comparison between the best fit and best approach of
SHRM has been done in the paper. This comparison helps in understanding the concept due to
which these are applied by the company while performing operations related to human resource
management.
According to Noe, Hollenbeck, Gerhart, and Wright, 2017 HR departments that practice in the
strategic human resource management do not work on the independent basis, as they need to
interact with the different departments that are present within the organisation. The motive to
apply the SHRM is to understand their goals as well as to form the strategies that get align with
the objectives of the organisation. The areas of the HR department show and assist the goals of
the remaining administration (Wright, 2018). The strategic HRM is considered as a partner when
it comes to the success of the company as to oppose to the necessity for legal compliance as well
as compensation. This has been witnessed that the goals of the human resource department show
and provide support to the objectives of the rest of the organisation. Contradicting this, Bailey,
Mankin, Kelliher and Garavan, 2018 says that the Strategic HRM is considered as the partner in

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organisation success as it is opposed to the need for legal return as well as compliance. The
strategic HRM make use of the talent as well as opportunities that are present at the department
of HR within the company as it helps in making the other departments much stronger as well as
effective.
The rapid and emerging change in the business world presently makes the most of the companies
realised that their employees are considered as an asset for the company that is essential for the
resources of the organisation. The organisations need to focus on their planning as well as on
implementing the ideal model as well as a strategy that is used for integration as well as on the
connection of the HR for the success and growth of the organisation (Cascio, 2015). In the
research, this has been found that the best fit and best practice approach are majorly used in the
system of strategic human resource management that is implemented in the specific area of the
reward system. Each of the approaches is attempted with the motive to explain the way through
which the HR policies in general as well as reward policies, in particular, can lead to an increase
in the effectiveness of the organisational.
Considering the view of the Collings, Wood and Szamosi, 2018, “Best-fit” perspective claims
that the reward system of company is required to align with the motive to provide the support to
the business strategy of the company with the motive to accomplish the competitive advantage.
In addition, Armstrong and Taylor, (2014) said that the idea of different HR strategies needs to
majorly emphasise on the allocated needs of the organisation as well as its employees. It is
essential for the management of the organisation to bring the major changes that fit best to the
working. It has been found that culture, structure, behaviour, the process of work, technology is
considered as the criteria in the analysis of the needs of the organisation. For instance; Best fit
HR planning tool is used by the real world organisation McDonald’s. The model involves the

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new product line, developing the staff as well as recruiting the personnel with the motive to meet
the assigned objectives of the company (Boon, 2016). The model of best fit is appropriate for the
managers of the company as they can easily manage the long term as well as short term HR
planning by supporting the requirement, feasibility, as well as the availability. The criticism for
the model is that it limits the strategy that the subject of diverse multiple alternating
contingencies as well as this model limits the strategy as it becomes difficult for the HR system
of the company to handle the new challenges.
On the other hand, the “Best practice” states that there is the presence of buddle of policies
related to HR that majorly include the reward system as it contributes in improving the
motivation and commitment of the personnel who are considered as the important organisation's
competitive advantage (Malik, 2018). The organisation applies this practice with the motive to
increase the performance of the company that will help to enhance the better outcome. This has
been found in the literature that the basis of this model is founded on the knowledge of
advantage of the performance of the organisation as well as the Pfeffer’s model that is
considered as a good example of the set. The model majorly shows the seven different important
HR practices that majorly include employee recruitment, selection, hiring, self-managed teams,
as well as high compensation (Rao, 2016). The model, which is presented, is subject to the
different seven criticisms. It might result in the deterioration of the collaboration of the
employee. The implementation of the practice will lead to the initiating the mutual prohibitive
combination related to the team working as well as compensation that is based on the
performance which involved the possibility of the high risk.
The report of the two approaches in the SHRM specifies that there is the presence of one major
area of contract. HR policies should be consistent when comes to applicability within the

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organisation (Boselie, 2016). Reward system is considered as one of the policy areas that need to
be interconnected and complement the different other policies that include the selection of
employee, training as well as the appraisal of employees based on performance. Further, the
Wood (2018) analyses that both the theories of strategic human resource management is formed
with the motive to accomplish the high performance within the organisation. According to
Wright, (2018), the matching models can classify these approaches because of their common aim
that is to contest the HR strategy linking it with that of the business.
Best-fit or Best practice organisation needs related to the personnel and employees are required
to be acknowledged. The approaches include staffing as well as hiring strategies and procedures,
which are generally followed by the company. In the present market, companies found that
competition is increasing and this is the reason every company is willing to hire and retain the
best employees that are present in the market (Brewster, 2017). Thus, this is happening because
of the need of the employees for the effective work within the organisation.
The approaches of best-fit, as well as best practice, agree with the fact that externally
competitive reward packages are essential with the motive to attract and retain the skills as well
as qualified employees. Thus, these approaches are applied by the company with the motive to
provide attractive rewards to attract and retain the employees (Storey, Ulrich and Wright, 2019).
For example, Deloitte, a well-known company who offers a good salary to employees but with it
additional rewards that are offered include:
 Holidays, starting at 25 days a year
 Pension arrangement
 Personal accident insurance

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 Life assurance of six times your core salary
 Occupational sick pay
 Reimbursement for expenses
The approach of best fit majorly emphasis on the importance of attracting as well as retaining the
qualified employees. The approach of best fit majorly focuses on the reward system that
company need to distribute rewards in an effective manner so that the personnel or employees
within the organisation feel valuable and satisfied while comparing their rewards with the other
individuals who are performing the similar jobs. Considering the view of Brewster, Chung and
Sparrow, (2016), the good performers within the organisation tend to work with the organisation
when their performance is effectively acknowledged as well as rewarding. Moreover, the best
practice shows that the labour markets are far away from effortlessly efficient. There is the
presence of the association between the organisation payment as well as the quality of workforce
that contribute in attracting the employees.
Thus, in end, this can be said that in SHRM, the ideas of the best fit and best practice have some
of the similar points which include the HR approaches agree with the fact the reward practice
need to be consistent with other HR practice.
Although, this has been found that there is a presence of fundamental disagreement that is best-
fit policies are contingent. The policies in the best fit are majorly developed with the motive to
preserve a line of vision with the strategy in an effective manner. This simply means that the
reward system of the organisation will be single and should possibly bring the change with the
quite majorly adjustments that are linked to the strategy of the organisation. The HR strategy of
the company is influenced by different contingent factors, which include a business strategy that

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is adopted by the company, size of the company, type of technology as well as the labour market.
According to Collings, Wood and Szamosi, 2018, the contingency approach is defined as a
process of decision making that is rarely applied in planning the effective HR strategies. Thus,
this approach is majorly used by the company so that they can make a quick and beneficial HR
decision that can help them in maintaining effective personnel within the organisation.
The best-fit approach is a contrast to the best practice methods and it is considered as the
universal approach. The bundle of policy does not change regardless of the fact associated with
the organisation strategic thrust. This provides the suggested that similar sort of reward system
will succeed within the organisation and at the workplace. This is witnessed that both best-fit and
best practice differs in this concern. In this approach, the HR manager begins with identifying
the best practice and then provides HR with a high profile to get the top-level promise, sell it, do
it, as well as quantity it with the prize- winners (Armstrong, 2011). However, this method is very
different from the approach of best fit. In the approach of best fit, the HR managers of the
company determine the external fit that is related to the marketing, operational and many other
strategies of the company.
According to the Brewster, Mayrhofer and Farndale, (2018), another different that is found in
the approaches of SHRM is related to the view related to the influence of the pay in the
performance of people.
The system of the best fit in SHRM reflects the high margin of the confidence that is linked with
the pay to employees that works as a motivator. This approach includes the implementation of
the expectancy theory that majorly believes that the employees within the company will perform
maximum improve if they have the faith that all their efforts will be rewarded. Thus, this has

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been found that the approach majorly emphasises on the aspects of financial terms, which are
used as a driver majorly for the corporate human resource. Considering the view of Bakshi,
Mathur, Bhagat and Kalyankar (2014), the best-fit proponents view to the rewards as the stick as
well as the carrot. This has been evident by the author that pay varies a lot with the performance
of the employees, as the excellent performance of the employees will enhance their large pay
differential that works as a reward for their performance. Contrasting this, the employees who
are not performing effectively with the company will not be able to attain high pay.
Comparing this that pay influences the performance of personnel in the organisation, this has
been found that best practice does not really have faith in in the major impact of pay that best
practice promoters want to show (Armstrong, 2011). This has been found that the organisations
pay more as an influence that helps to avoid the disappointment and offers the acknowledgement
in a symbolic manner that means that the employees are valued. In the best practice, this is
evidence that the rewards for the best practice supporters can finish that trust as well as the
relationship that is considered as the base of the administration committee. Thus, this indicate
them to encourage the system of rewards that do not discriminate with the compressed pay
groups with equivalent pay for all the team members with the shared encouragements.
In the research Cania, 2014 said that this has been determined that the best practice majorly
includes the policies which are performed by the HR of the company. These policies include the
reward system policies that can create an influence on the management of the personnel by the
corporation. However, comparing it with the best fit, it is believed that the reward system of the
company needs to be aligned with the strategy of the company. The organization works with the
motive to provide the rewards to the company so that they remain associated and helps the
company to achieve the desired objectives as well as gaols (Lin and Sanders, 2017) The reward

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system leads to the motivation among the employees to work in an effective manner and to retain
within the organisation. This motivation and retention of the employees support the strategy that
is formed by the company.
Moreover, the set of HR practices that are introduced by the company leads to high motivation as
well as improved employee commitment. Thus, the best practice employee is majorly the
companies who remain the employee-centric as they give the importance to the employees as
they treat them like the assets of the company. For instance; the FedEx corporation is the
company who work with the motive to track the record to achieve success. The company
believed that its success majorly lies with the fact that how effectively employees are performing
(Reynolds, 2018). The company value their customers and this is discovered that they practice
the concept of the People-service-profit with the motive to provide the care and value to the
employees. The implementation of the approach by the company helps them to maintain the
employees and to keep motivating them to work effectively. Most of the employees retain within
the organisation because the company is offering additional benefits to their employees.
On the other hand, the best-fit approach of SHRM strategy results in accomplishing the
competitive advantage. In the competitive world, every company wants to establish a
competitive advantage so that they can easily face the competitor present in the market. There
are companies who form the strategies so that they can meet the strategies of the company. The
accomplishment of the strategies will help to maintain the competitive advantage (Hashim,
Ismail and Hassan, (2016). In the present world, companies with skilled personnel are improving
their performance with the effective use of knowledge and skills of workers. Thus, the approach
of the best fit is applied by numerous companies who are dealing in a tough market.

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At the end of the paper, this has been found that the practice of strategic human resource
management is common within the organisation. The organisation conducted the strategic human
resource management with the motive to develop, attract and retaining the employees as these
employees are considered as the assets of the company. Strategic human resources management
within the company is the set of the managerial decisions actions that help the company in
identifying the long run performance that is performed by the organisation. SHRM practice
generally includes the two major approaches that are best-fit and best practice. The approach of
best fit and best practice is deeply discussed which shows how they are linked with the common
theme that is to attract and retain the employees within the organisation. The best-fit approach is
majorly used with the motive to generate a competitive advantage for the company. However,
comparing it with the best practice in SHRM, the company implement the best practice with the
motive to generate the motivation and high level of commitment among the employees. The
major similarity that is present in the approaches is that they include the reward system. Thus,
both the approaches have a positive relationship of rewards that is implemented by the company.
These approaches of best fit and best practice varies a lot due to which the differences between
both the approaches are discussed. In addition, the concepts are supported with the example of
the real-life companies who apply the approaches of the strategic human resources management.

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