Strategic HRM: Best Practice, Best Fit, and Lifecycle Approaches

This essay examines strategic human resource management (SHRM), focusing on the 'best practice' and 'best fit' approaches. The 'best practice' approach emphasizes the link between HRM practices and organizational performance, often associated with high employee commitment, as seen in companies like FedEx and Integer Group. Conversely, the 'best fit' approach, aligned with contingency theory, stresses aligning HRM strategies with the company's situation, exemplified by Lincoln Electric and Nissan. The essay also explores the challenges and limitations of each approach, such as the risk of standardization in 'best practice' and the complexity of adapting to changing environments in 'best fit'. Finally, the essay discusses human resource practices within the organizational lifecycle, including the initial launch phase, and how companies can strategically manage their human resources to enhance employee engagement and achieve competitive advantages. The essay draws on various sources to illustrate the application of these approaches in real-world business scenarios.

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Human resource management is the procedure of recruiting and developing the staff members so
that they turn out to be valuable to the association. In this it contains hiring the competent
employees, arranging the needs and requirements of the personnel, managing compensation,
provides benefits and motivation, assessed performance and communicate with all the staff
members at all level and departments in the organization (Sridhar, 2015). In this essay both the
‘best practice’ and ‘best fit’ approaches of strategic human resource management is discussed.
Strategic human resource management refers to the technique of connecting the human resource
through the planned objectives to progress the performance of the organization (Bailey et al.,
2018). The practices of human resource management which organization adapts through its
lifecycle and the challenges faced by the human resource management practitioners at each of its
stage is also examined in this essay.
The different approaches of strategic human resource management are “Best practice” and “Best
fit” approach. The best practice approach implies the close association among the practices of
the human resources and the performance of the organization. This approach is frequently
connected with the management of the high commitment (Azmi, 2019). The best practice
approach does the number of activities, which gives the optimistic effects on the performance of
the organization and results in encouraging the motivation among the employees and initiates a
design of work, which boosts up the commitment of employees. This approach shows that there
is a set of complete procedure of human resource that leads the better performance and the
definite collection of the human resource activities that maintain and help the organization to
take the competitive advantage (Collins, 2017).
Through adopting best practice approach many companies were in advantage, the approach
raises the commitment of the staff members working in the organization and decrease the
turnover of the employees (Paauwe & Farndale, 2017). For example, the FedEx Corporation is
an association, which has the record of doing well. The company consider that the successes in
the end are in the possession of how an effective staff member works in the company. The
company build up the best practices to motivate the employees, which are the profit of people
service philosophy for providing the better concern to the employees (Michael & Francis, 2018).
The company also take the feedback of the employees annually or develops the program of SFA.
After the survey the organization discuss the outcomes with the staff members, address issues
and discussed to resolve them. This helps the company to enhance the commitment. As the

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employees of FedEx corporation were set to sale their personal belongings when the company
were having losses and diminish the turnover of the staff members (Velázquez & Pulido, 2019).
This approach help the organization to give the superior and better quality and helps in make the
excellent use of the information and talent, which is generated from the market. The companies
take the competitive advantage while applying this approaches for example the Integer group is
the company whose focal point is on promotions and advertising, for this, the company needs
highly creative and innovative staff. The company thinks that the motivated and satisfied
member keeps the consumers happy. For this, the company adopt various best practices like
enjoyable resort outings, awards and recognition, various activities of sports. The company also
consult their employees in decision-making and discuss through the regular meeting and
discussions in-group. This helps the company to take the better use of the information and to
take the competitive advantage. The best practice helps the organization to decrease the wastage
and generates profits in the end (Gilling, 2015). The AMX Company is extremely competitive in
the areas of electronics. The company adopt the practice of open space work area to increase the
communication and trust among the employees. The company also propose high packages to the
staff members and when the employees are layoff, the company placed the members in the new
corporation. This helps the AMX in increasing profits in the highly competitive environment.
The approach also supports the company to the select the skilled and competent employees in the
organization (Lehmann, 2016). Lincoln Electronics Company adopts the approach of selective
employment, which helps the company to attract the capable workers, which can unite to the
high performance of company.
The approach also has various disadvantages, as the best practice helps the company in making
better judgement for the investment, but sometimes this approach makes the differentiation
policy extremely sick (Storey et al., 2019). As in the business of banking the companies adopt
the same practices to make the employees satisfied which results in decreasing the profits and
unable to take the competitive advantage. Some practices like awards and recognition adopted by
the various companies like Eileen fisher which the retailer of clothing which provides the higher
end services to the consumers. It provides the bonus, rewards and personal education to the
competent employees. Through this, it generates the competition among the employees and
diminishes the teamwork or coordination among the staff members. The approach sometimes
considered difficult and complex to execute in the organization. For the reason that to operate the

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best practices in the organization it needs a large and efficient planning as well as greater
commitment of the executives, which are in the top level hierarchy. More investigation and
research needed to make the approach efficient, which needs lots of time (Cieri, 2017).
Sometimes the effective and efficient practices do not work in the organization. For examples
Best buy, American multinational company in the year 2011 were in losses due to the poor
strategies of marketing and same practices followed in all the departments.
The best-fit approach is line up with the theory of contingency. This approach underlines that the
strategies of Human resource supposed to be match with the situation and the conditions of the
company (Wilkinson & Johnstone, 2016). Best fit recognized in the phrase of vertical integration
as well as associated among the business of the company and the strategies of human resource.
The strategies engage the preparation for the activities of future, objectives and goal of
performance and the policies to accomplishing the company objectives. It is based on creating
the methods and guidelines of human resource management depending on the strategies of the
business (Croonen et al., 2015).
The best fit approach is benefited the various companies in many ways which includes that the
approach helps the organization to link the objectives and goals of human resource with the
strategy of the company (Malik, 2018). The strategy adopted by the company of Lincoln’s
Electronics includes connecting the excellent workers and rewarding for the long-term
accomplishment to take the competitive benefit in conditions of proficiency, qualities and the
performance. The organization also adopts this approach to improve the capabilities of the staff
members, technological and business knowledge. Lincoln’s Electronics improves the abilities of
employees by investing in the best practice training techniques internationally and provides
vocational training, which is for the qualified personnel. These measures help the company to
sustain and continue the excellent effectiveness objectives. This approach inspires the personnel;
as the Lincoln Electronics develops a high compensate system of piecework, which is associated
to the performance of the staff members. This benefited the company to attain commitment of
the employees by compensation; the Lincoln Electronics also align the system of rewards
practices with the overall strategy of the company to achieve the high level of performance of the
personnel as well as the company. The best-fit approach is also develops for the area of the
participation of employees (Rees & Smith, 2017). Nissan Company adopts this approach to

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enhance the participation of the employees by the regular improvements and programs of
feedback and the company believes that the employees should be involved in making the vital
decisions. The Wal-Mart also applied best fit approach to maintain its position and choose
strategy of low cost, the company through using this approach develop various practices of
human resources which includes standardized system of training, hiring part-time employees and
graduates. This helps the company to attain success and sustain in the competitive environment
(Abbasi & Hammad, 2016).
The approach also has limitations that this approach overlooks the needs and requirements of the
personnel. This approach facilitates to take the competitive advantage which ignores the interest
of the staff members, for example The Company Wal-Mart recruits the applicant in the low costs
to decrease the cost of operation but through this company does not recruit the competent and
talented employees, this also affects the performance of the Wal-Mart. This approach lacks in
making the investment for long term like Wall-Mart not offer higher packages to the competent
employees which results in lower motivated among the employees. The best fit approach match
the strategy of human resources with the circumstances of the organization, but some companies
operates in the changing environment of business. So it is very complex to maintain and match
with this changing environment, which is mainly discouraging for the personnel because through
this the frequent changes are made for managing personnel (Wilton, 2016). The Lincoln
Electronics also faces this difficulty due to altering legal environment in US, which includes
changes in the hours of working, requirements of vacations. Further, the Lincoln is also affected
by the diversity of culture in the country of China and Europe, as the culture of Chinese is more
changing so the practices of critical plan generation will not succeed in this situation.
After the approaches of strategic management, the human resource practices have been taken
under focus. Human resources practices are tactical in character, it characterize a system of
guidance that match up with the organization overall objectives and goals. This helps the
organization to support and maintain the human resources; it comprises the techniques of
assessing and examining the effects of the programs of rewards which is developed for the staff
members (Bratton & Gold, 2017). The HR practices also includes the formation of various other
programs to decrease the injuries which is related to the work and builds the structure to make
sure that organizations are stick to the laws of employment. It is the way to increase the skills of

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the leadership among the staff members, through the wide-ranging courses of training as well as
programs of motivation. The Human resource practices help the organization to attract,
encourage and maintain the most competent and talent personnel, to take the competitive
advantage. Human resource practices are made within the organization, which is executed to
make sure that employees adds to the accomplishment of the objectives. HR practices are used
by the companies to manage the employees and to create social relations as well as to produce
the information about the organization (Haider et al., 2015).
The organization undergone various stages through its life cycle, the first stage of the
organization is the stage of launching in which the company started its functioning by launching
the new and innovative products or the services. In this phase the sales of the company are lower
but slowly expanding. The focus of the company is to target the sections of the customers
through promotions. In this stage, the profits are very little but the expenses of the initial start up
are higher, companies can earn losses. The flow of cash is also depressing but it is lower than the
profits, because the costs of the initial start-up are not shown in the profits or the earnings of
business but it is shown in the cash flow (Sonnemann & Margni, 2015). The organization can
adopt various practice to progress, which includes that due to the lower resources and low profits
the organization can hire the employees who are specialized and training were given to them
only on the requirement. The practice of keeping the patterns of the work flexible should e
developed in this phase. The company can operate within the little formalities and unions should
not be developed during this phase. The company can also use the style of the open book
administration, in which organization distributes the information about the procedures, policies
and other necessary information about the organization. This helps the organization to motivate
the employees as well as links the strategy with the objectives. In this stage, organization might
adopt the practice of fair appraisal by obtaining the feedback from cross functional. Through this,
employees will remain motivated and works efficiently. In this phase the various problems were
faced by the manager of human resource, which includes keeping the link between the policies of
the organization as well as recruiting the competent and talented employees which fit with these
objectives. To retain the competent employees is also consider the major challenge, because in
this stage organization does not have huge finances to make investment in various programs.
Other challenges include alerting in the procedure of selection method as well as controlling the
employees due to flexible system of working.

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The next stage in the life cycle of the business is stage of growth, in this phase companies has
fast growth of sales. In this stage sales of the organization raises speedily, the organization starts
earning profits, and it has surplus inflow of the cash. The organization wants to expand the
business and wants to take the benefit of the demand (Cubico et al., 2018). In this compensation,
practice will work to attract the adequate workers with the essential abilities. In this phase, the
practices of the planning for career of the employees and enhancing the department of human
resource should be adopted, to retain the competent and to attract talented employees. The
company can also adopt the procedure of managing the performance and various methods of
rewards and recognition as well as the program of employee engagement. Human resource
manager faced several difficulties, to adapt with the change in the organization due to the
growing procedure, framework and to learn new or innovative technology. The problem also
includes that to which plan should be made regarding career for the employees and the
compensation given to the staff members, so that they feel motivated and work effectively in the
expanded business.
After the growth stage, the stage of the organization is shake out, in this stage the sales of the
organization is continue to raise but at slower amount. In this phase the profits of the
organization starts decreasing but flow of cash increases (Ellermann et al., 2016). The
organization might use the practice of training and development to enlarge the abilities of the
staff members, so that they can adapt with the changing macro business environment. The
company also use the recruitment and selection practice to hire the talented employees and also
develop various benefits packages for the employees to motivate them. The difficulties faced by
the HR practitioners, to select the method of training which is considered suitable in the
situation, selecting the benefit packages as well as to select the procedure of selection to hire the
talented employee.
The Next stage is the maturity stage in which the sales and profits of the company starts
diminishing. In this phase the organization, develop several plans to increase the business and
reinvest again by further investing in the innovative and latest technology and in the new market
(Koch & Lockwood, 2016). The organization should mainly focus to adopt the practice of
compensation by providing additional benefit, bonus and other programs of rewards. The
organization has to keep attention for controlling the cost of labour and put concentration in

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enlarging the productivity of the organization. For this training and development should also
developed as well as the open-ended communication in the organization should be followed, so
that employees communicate freely and share the ideas, information in decision-making. In this
stage also the evaluation of the performance should be done fairly, so that employees feel
motivated. The various challenges human resource manager face in this stage are making
selection of the techniques of training and also to make the various long duration strategy to
retain the workers. In this the evaluation is done fairly, which is also a challenge to choose the
systematic techniques for the appraisal.
The final stage in the business life cycle is the declining stage in which the sales of the
organization, profits and the flow of cash decease. In this stage a company become unsuccessful;
an employee become inactive and the organization lastly exits from the market (Shams, 2016). In
this declining stage, the organization should adopt the practices of longstanding to decrease the
cost of labour as well as retain the employees. In this stage, the organization can also select the
experienced employee, so that the expenditure will not be incurred in providing training to them.
The problems, HR practitioners faced like selection of the programs to motivate and retain the
employees, make strategies to lessen the cost of labour. In this the HR manager also find difficult
to provide training to the employees, so that they become active in this stage.
From the above it concludes that the human resource management is the method of hiring and
developing the workers of the organization. The two approaches of strategic management
include best practice and best fit approach. Best practice deals with making the close connection
between the practices of HR and performance of the company and Best fit refers that the
strategies and policies of HR should be coordinated with the situation of the organization. The
various examples of the company like FedEx Corporation, Wall-Mart, Lincoln Electronics shows
that both “Best practice” and “Best fit” approach benefited the organization in many ways, which
includes decrease in the rate of turnover, take competitive advantage, motivate the employees
and also sustain in the competitive environment. It also concludes that both the approaches also
have certain limitations like lack of differentiation in the policies, difficult to execute,
complexity in linking the strategies of human resource with the company objective. From the
essay it also shows that the organizations undergone from various stages of life cycle over time,
in this organization might adopt several practices to progress in the long run like compensation,

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training and development, reward system. Further the challenges also faced the human resource
practitioner in each stage to maintain the profitability and to increase the productivity of the
organization by motivating the employees, enhancing their skills and to involve them in decision
making as well as encouraging to adapt the new changes of management.
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