Critically discuss the following statement with reference to the Best Essay

Critically discuss the following statement with reference to the Best Practice and Best Fit approaches to strategic Human Re - Essay Example What makes some organisations prosper while others fail? Is applying the ‘best practices’ more successful than applying the ‘best fit’ approach to strategic HRM. These are questions that need to be addressed for a firm to develop the right strategy to drive it to success. According to Boxall and Purcell (2000, p. 193), ‘there are various principles and processes of good labour management but the methods firm adopt to reach their performance goals are affected by societal, sectoral, and organisational factors.’ This is a statement that needs to be explored further bearing in mind the importance attached to SHRM by firms as a means of achieving effectiveness and thus will be the subject of this research. To explore this issue further, the paper will first define the concepts used since various definitions affect the results of any research. Concepts such as strategy, strategic management, HR strategy and business strategy need to be understood for better evaluation of the different approaches involved. It will then discuss the ‘best fit’ and ‘best practice’ approaches to strategic human resource management (SHRM), their strengths as well as weaknesses. Though both approaches have been known to work for organisations, it should be argued that the ‘best practice’ approach is the most suitable in achieving organisational success. Besides the two approaches, the resource-based view of the firm is also worthy noting since it can solve the problems of ‘best fit’ and ‘best practice’ approaches. Definitions The strategic human resource management is derived from two concepts: strategy and HRM. Strategy is defined by Armstrong (2006, p. 113 cited in Johnstone and Scholes, 1993) as ‘the direction and scope of an organisation over longer time which matches its resources to its changing environment and in particular, to its markets, customers and clients to meet shar eholder expectations.’ The strategy is developed by managers to give the firm purpose and direction and as such, for strategy to be developed the firm has to have specific goals it wants to pursue and indicated in its vision and mission statement. It is essential in informing the stakeholders where the company is heading so that all their behaviours can be directed in the same direction. There are various levels of strategy: corporate, business and HR strategy. The corporate strategy is designed to direct the whole organisation whether local or global. It is developed at the top level of the corporation. Business strategy on the other hand, it designed for specific business units to achieve competitive advantage (Armstrong, 2006). HR strategies are aimed at ensuring the employees perform according to expected standards for organisational success, and these will be the concern for this paper. It is a pattern of strategic choices in labour management (Boxall and Purcell, 2000, p. 184). Human resource management is defined by Boxall and Purcell (2000, p. 184) as ‘anything and everything associated with management of employment relations in the firm’. They acknowledge the use of various management styles in contemporary workplaces depending on organisation context and the leadership in place. HRM concept has evolved over time from traditional personnel management to the now popular international SHRM and thus has been the object of debate in social sciences and academics. Theorists have come up with various methods of