Critical Appraisal: Best Fit and Best Practice HRM in Global Firms

This essay provides a comprehensive analysis of the Best Fit and Best Practice approaches to Human Resource Management (HRM) within globally operating companies. It critically appraises the advantages and disadvantages of both approaches, examining their consequences on employee and organizational performance. The Best Fit approach focuses on aligning HR practices with specific organizational needs and strategies, while the Best Practice approach advocates for universally applicable HR activities to achieve a competitive advantage. The essay explores the internal and external factors influencing these strategies, including organizational structure, resources, and economic conditions. It also discusses the limitations of each approach, such as the rigidity of the Best Fit model and the potential for standardized approaches to overlook individual employee needs in the Best Practice model. The essay concludes that both approaches are valuable tools for shaping HRM processes, and the choice between them depends on the specific circumstances and objectives of the organization. Desklib offers a variety of resources, including past papers and solved assignments, to aid students in understanding these complex concepts.

Running Head: ESSAY
HUMAN RESOURCE MANAGEMENT

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TOPIC A
The modern business environment is constantly evolving and a large number of
companies are focusing on employees as an important asset than ever before. Within the area
of human resource management, the debate between the Best Fit approach and Best Practice
approach have created a widespread controversy. “Best fit and Best practice approaches to
HRM not only engages in a theoretical controversy but also attracts a higher degree of
practical significance in management practices.” The present essay aims at analysing the best
fit and best practice approaches to HRM within a globally operating company. Further, the
purpose of this essay is to critically appraise the advantages and disadvantages for both of the
approaches to HRM and also include consequences of each over the employee and
organizational performance.
Strategies have been an integral part of any businesses, government bodies or
agencies and many leading authors and experts have produced different articles and reviews
regarding Best Fit and Best Practice approach as effective strategic tools for achieving a set
of predefined objectives (Paauwe and Boon, 2018). These objectives include business and
corporate objectives or functional objectives for any form of an organization operating at the
multinational level by utilizing Human Resource Management as the tool of implementation.
According to Boselie (2016), the term Best Fit approach means meeting the need of an
organization which are agreed upon at both functional and corporate level of organizational
management. On the other hand, when organizational goals are achieved through some set of
predefined procedures or guidelines for gaining competitive advantages then it is known as
Best Practice approach to HRM (Croonen et al. 2016). The Best Practice approach is often
described as the HR strategy that has an additive, universal and positive effect on
organizational performance. Hornung et al. (2017) added that many strategies are based on
various factors that are many internal or external factors. The internal factors include
organizational structure, financial, physical and human resources while the external factors
include economic, sociological, political and technological factors (Voo et al. 2017). All
these factors are aimed at gaining a competitive advantage which led to evolution of Best Fit
and Best Practice approach. The in-depth detail of both the approaches along with its
advantages and disadvantages and its consequences over organizational performance are
discussed in the following.

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The approach of Best Practice is based upon certain HR activities that are universally
applicable to the companies for attaining a competitive advantages irrespective of the
industry or organizational setting (Fratričová and Rudy, 2015). The model of Best Practice is
implied upon a close connection between organizational performance and HR practices
which are further associated with fiercely committed management practices. Researches have
shown that these kind of approach are most suitable for maximizing performance regardless
of the product and market strategies (Stenius et al. 2017). The activities or strategies
incorporated within the Best Practice approach are characterized by high competence levels
among the workforce, encouraging motivation and introducing a working design for boosting
employee commitment. As referred by expectancy theory, the Best HR Practice is going to
result in a higher level of productivity, quality and low rate of wastage and absenteeism
(Boselie, 2016). On the contrary, Best Fit approach to HRM or also known as contingency
model mentions that there is no single or universal way for managing employees as one
strategy might be successful for one and not for other business organization (Sanders, 2016).
Here it needs contingent or alignment relationship for business strategy to organizational
HRM practice and then advocates this approach for suggesting vertical integration. Control
can be therefore achieved through human resource process and practices and set managerial
strategies which would determine the long-run objective of every individual organization.
According to Garavan et al. (2016), the best-fit approach is further classified into three
models, namely competitive strategy, lifecycle, and strategic configuration. All the combined
strategies aim at achieving competitive advantage through innovation, quality excellence and
cost leadership. The model of Best Fit approach to HRM signifies that organizational
strategies and human resource strategies must be aligned together. Further, Syed Aktharsha
and Sengottuvel (2016) added that it emphasizes to assure that HR strategies are applicable in
various circumstances and among operational and culture process. Therefore different
companies will have different HR strategies which will be individually focused upon the
needs of both employees and organization. The management will be incorporating changes in
strategies from the previous experiences and apply as relevant to fit the organizational long
term objectives.
However, as compared to Best Practice approach to HRM, this model has major
disadvantages. Villajos et al. (2018) criticized the model by stating that it limits the strategy
since they become subjective to multiple alternating contingencies and are difficult for
tackling new challenges. HR system is rigid, unlike the Best Practice approach which is

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flexible. Also, the flaws are mainly focused upon the limitation that search for a contingency
and have difficulty in managing the interconnection. On the other hand, Wickramasinghe and
Wickramasinghe (2017) opined that Best Practice model is claimed to have certain activities
that exist and are universally supported by leading companies to attain a higher competitive
advantages irrespective of the industry environment. The Best Practice approach is strongly
based upon the assumptions that the set of human resource strategies are universally
applicable (Lazarova et al. 2017). This means they can be applied to any type of organization
operating at the global level and prove to be best for any situation. Further Glaister et al.
(2018) mentioned that adopting such strategies always lead to superior organizational
performance. There is a number of advantages and benefits associated with Best Practice
approach to HRM which makes it stand out from the Best Fit approach as it fails to deliver
the same. These are employment security, self-managed teams, selective hiring, and sharing
information efficiently along with the reduction of status differentials (Haque, 2018).
Moreover, the Best Practice approach produces a high compensation contingent over
employee performance and also provides training to gain a skilled and motivated employees.
Along with its numerous advantages, the Best Practice approach also projects a series
of limitations. First, while implementing the standards and practice in Best Practice approach
to HRM, a multinational level organization automatically embrace the risk of introducing
mutually prohibitive combinations like compensation and team working that are based upon
individual performance level (Boselie, 2016). This results in a negative influence over
employee collaboration and deteriorates the performance with the over exaggerated
competition. Second, there is a complex undertaking required within the high commitment
management system that also includes top-level management commitment and large inputs of
planning. Third, Stenius et al. (2017) argued that the Best Practice approach to HRM lacks
direct links with the core organizational strategies and therefore it is generally believed that
organizational strategies are influenced by outstanding high-performance human resource.
Paauwe and Boon (2018) mentioned that when the human resource strategy precedes the
strategy at an organizational or corporate level, the organization runs the risk of introducing
standardized or common sets of approaches. This means it fails in supporting the individual
needs of employees and are detrimental towards overall strategic objectives. Finally, Sanders
(2016) added the fourth disadvantage of Best Practice approach results from an insufficient
researches and existence of theoretical definition that fails to address the gap and
improvisation over the human resource strategies.

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According to Veloso et al. (2015) the Best Fit approach highlights that HR techniques
should be good with the novel situation and states of the business industry it belongs to. Best
Fit approach can be seen to the extent vertical joining or game plan between the affiliation's
obvious certainty and HR philosophies. The present HR divisions enrol and develop the key
human resource needs of a multinational business. The image of enrolling, planning and
improvement has changed and can be used as a key driver for passing on financial specialist
regard (Fratričová and Rudy, 2015). Organizations are growing coercing the best execution
from just employees. Best Practice approach has the potential to produce the capacities of the
present workforce, and with enrolling it will invigorate the lifestyle of an uncommonly
skilled work drive. Subsequently in the occasion that Best Fit Approach successes, by then it
is possible to show the kind of HR required for a given sort of business, and this preparation
can be grasped in a wide number of firms in equivalent conditions. Hornung et al. (2017)
opined that this view reflects a longstanding business visionary custom in which the product
is viewed as a trademark at a global scale. The impressive maltreatment may be paternalist
and kind, regardless, comparatively, it may neutralize the interests of workers. Essentially,
experts are only advantages to be pounded and disposed of as business necessities oversee.
Even more basically, the interests of workers and their flourishing are of no criticalness in
themselves (Boselie, 2016). In the wrong hands, HRM ends up both a sharp weapon to
appraise each individual with their potential from their organization and a contraption to
threaten the employee wellbeing. Many theorists agree that there is no convincing motivation
to look any more far off than the human advantage for increment high ground, in spite of the
way that the models use change. Each other model in the sweep for elective recruitment of
progressive advantage and fight that the principle favoured point of view is to direct
workforce to fit an agent-centred procedure, exhibiting a model (Croonen et al. 2016). This is
the foundation for best work on appearing human resource practices can be agreed with the
capacities and practices required for the business system. These practices join work security,
specific enrolling, independently directed gatherings and the decentralization of fundamental
initiative, correspondingly high pay subordinate upon progressive execution and wide sharing
of budgetary and execution information all through the organization.
As opposed to Best Fit approach, the Best Practice approach make it possible to select
and carefully use the selection tests for identifying personnel who have the potential to make
an effective contribution (Lazarova et al. 2017). Moreover, the Best Practice approach also
engages communication that ensures a two-way process is engaged for keeping every

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individual informed. The job design ensures flexibility, motivation and commitment which
includes steps for assuring the employees are given the privilege and autonomy of fully
utilizing their skills and knowledge towards organization growth. Even if Best Practice brings
more value to an organization many different small and medium multinational business
hesitate to adopt this model as foremost it is difficult to implement. Wickramasinghe and
Wickramasinghe (2017) argued that they are often crisis-driven and the cost/time
effectiveness in short term falls below the average productivity rate. The national or cultural
differences often acts as a hindrance and have a poor track record for entrepreneurial kind of
business organizations (Voo et al. 2017). Both the approach advocates the regard that is
placed in the human resource and changed in accordance with the legitimate framework.
Stenius et al. (2017) opined Best Practice approach highlight on the middle abilities of the
managers and develop these to address the general workforce framework. In spite of the fact
that Best Fit HR will complement the method and fit in with the affiliations culture, neither
one of the models is a perfect solution in every given situation. Organisations should pick HR
practices and procedures that fit with their business objectives and requirements. The leaders
of an organization should be a regarded resource composed into the definitive philosophy.
Finally, to end at the discussion, both, Best Fit approach and Best Practice approach
to HRM are powerful tools for an organization to shape the human resource management
processes. Since the foundation of these approaches, there is no final judgement on which is
better as both have its significance in different circumstances. The essay has critically
appraised and analysed the advantages and disadvantages of a Best Practice as opposed to a
Best Fit approach to HRM in a globally operating company, including the consequences of
each for employee and organizational performance. The Best Fit approach is found to be
aligned towards the contingency of strategies which neglect the internal capabilities and
environmental forces and therefore produces the risk of HR failure in the global market.
Within the global context, the Best Practice approach is suitable in adapting localized needs
for the international subsidiaries and use HRM as a powerful tool to drive competitive
advantages.

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