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The best practice approach

This approach is based on the assumption that there is a set of best HRM practices and that adopting them will inevitably lead to superior organizational performance. Four definitions of best practice are given in Table 9.2.

The 'best practice' rubric has been attacked by a number of commentators. Cappelli and Crocker-Hefter (1996) comment that the notion of a single set of best practices has been overstated: There are examples in virtually every industry of firms that have very distinctive management practices... Distinctive human resource practices shape the core competencies that determine how firms compete.'

Purcell (1999) has also criticized the best practice or universalist view by pointing out the inconsistency between a belief in best practice and the resource-based view
Table 9.1

Linking HR and competitive strategies

Competitive Strategy

Resourcing

Achieve competitive advantage through innovation

Achieve competitive advantage through quality

Achieve competitive advantage through cost-leadership

Achieve competitive advantage by employing people who are better than those employed by competitors

HR Strategy

Recruit and retain high quality people with innovative skills and a good track record in innovation.

Use sophisticated selection procedures to recruit people who are likely to deliver quality and high levels of customer service.

Develop core/ periphery employment structures; recruit people who are likely to add value; if unavoidable, plan and manage downsizing humanely

Use sophisticated recruitment and selection procedures based on a rigorous analysis of the special capabilities required by the organization.

HR Development

Develop strategic capability and provide encouragement and facilities for enhancing innovative skills and enhancing the intellectual capital of the organization.

Encourage the development of a learning organization, develop and implement knowledge management processes, support total quality and customer care initiatives with focused training.

Provide training designed to improve productivity; inaugurate just-in-time training that is closely linked to immediate business needs and can generate measurable improvements in cost-effectiveness.

Develop organizational learning processes; encourage self- managed learning through the use of personal development plans as part of a performance management process.

Reward

Provide financial incentives and rewards and recognition for successful innovations.

Link rewards to quality performance and the achievement of high standards of customer service.

Review all reward practices to ensure that they provide value for money and do not lead to unnecessary expenditure.

Develop performance management processes which enable both financial and non-financial rewards to be related to competence and skills; ensure that pay levels are competitive.