Critically compare and contrast the ‘best fit’, BP and RBV models of HRM strategy – explain how EACH approach is argued to contribute to improve organizational performance.
As the global business environment becomes increasingly competitive, more and more organisations are targeting human resources as a means of strategically gaining competitive advantage. Strategic human resource management (SHRM) is a constantly evolving process which is concerned with providing a strategic framework that supports an organisation’s long term business goals. The logic behind this is that organisations are using new innovative technologies to provide qualitative low- cost solutions, and are trying to manage their human assets more effectively (Wright,
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In response to criticisms of the ‘best fit’ and ‘best practice’ approaches, the ‘resource based view’ model focuses on leveraging competitive advantage through both tangible and intangible organisational resources. However, questions arise regarding whether there is a best way of achieving strategic HRM. Evidence suggests that firms rarely adopt a single style of management and that it is likely that they use a mix of approaches for different groups (Wilton 2011).
The ‘‘best fit’’ approach promotes the concept that strategic HR should be inextricably linked to the formulation and implementation of strategic corporate and business objectives (Wilton, 2011). This means that the HR strategy is concerned with matching the employee’s role behaviour with the company‘s mission, values and goals. Wilton (2011) explains this by giving an example whereby if a company‘s business strategy is based on delivering a high quality service, then the HR strategies and policies need to focus on the quality of its employees. This would be achieved by rewarding attitudes and behaviour that match this approach. Boxall and Purcell (2008) support this idea by highlighting that companies may fail if they do not adapt to their environment. The best fit approach therefore aims to improve organisational performance by integrating all activities in such a
HR must enact its own strategies which can aid the organization in meeting its goals and mission. They are referred to as strategic human resource management (SHRM). SHRM is “a pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals” (Noe et al., 2002, 55). The following are examples in which HR strategies can positively impact an organization in meeting its desired outcomes.
Alignment between HRM practices and organizational strategy establishes a coherent system for organizations. There has to be a "fit" between the human resource planning and organizational strategy, Internal fit aligns HR practices with strategic organizational objectives while external fit aligns HR practices with the external environment. The external fit exhibits a more precise fit between quality policy and assertive performance HRM practices (Youndt,
Today 's fast-paced, competitive business environment has resulted in "rediscovery" of the human resource management function as a group that may be able to enhance firm competitiveness and performance by being "strategic" (Dyer & Kochan, 1995; Ulrich, 1997). Strategic Human Resource Management is a term describing an integrated approach to the development of Human Resource Strategy that will enable the organization to achieve its goals (Armstrong, 2005). Whiles strategy is an action that managers take to attain one or more of the organization’s goals. Strategy presents a general direction set for the company and its various components to achieve a desired state in the future. This results from the detailed
Wright and McMahan (1994) define strategic HRM as “the pattern of planned Human Resource deployments and activities intended to enable the organisation to achieve its goals.” A HR function should impact the success of an organisation; a policy must remain current and suitable to both the internal and external environment. Ulrich and Lake (1990) affirm, ‘HRM systems can be the source of organisational capabilities that allow organisations to learn and capitalise on new opportunities.’
The focus on integration of HRM with strategy provides a wider range of solutions to difficult organisational problems and results in achieving a competitive advantage (Lengnick-Hall and Lengnick-Hall, 1998).
This assignment will assess three main schools of thought that apply to Human Resources Management (HRM). With regards to contemporary HRM concepts it is evident that a consideration of the ‘larger picture’ is necessary to be able to effectively push an organisation towards its ideals goals. A consideration of ‘system thinking’, ‘best practice’ and ‘ best fit’ systems
Strategic Human Resource Management has been developed to give companies a competitive edge over other companies. Since widespread access to and the use of technology have resulted in tighter margins for maintaining a competitive edge,
The term Human Resource Strategy is well defined as - “Human Resource management (HRM) is a strategic approach to managing employment relations which emphasises that leverage people 's capabilities is critical to achieving sustainable competitive advantage, this being achieved through a distinctive set of integrated employment policies, programmes and practices.” [ Bratton and Gold,4e,p3]
CRITICALLY COMPARE AND CONTRAST THE 'BEST FIT', 'BEST PRACTICE' AND 'RESOURCE-BASED VIEW', MODELS OF HRM STRATEGY AND EXPLAIN HOW EACH APPROACH IS ARGUED TO CONTRIBUTE TO IMPROVED ORGANISATIONAL PERFORMANCE.
The "best-fit" approach questions the universality assumption of the best-practice perspective. It emphasizes contingency fit between HR activities and the organization's stage of development, an organization's internal structures and its external environment like clients, suppliers, competition and labour markets (Redman and Wilkinson 2009). HR policy should be minted by the appropriate context of individual employees and therefore support the overall competitive strategy. Aligning HRM practices to strategies can enable companies to create potential competitive advantages (Schuler and Jackson 1987 in Redman and Wilkinson 2009).
More firms’ business strategy can be better realized using the integrative model of HRM. Both employees and firms’ aspirations can be met if the right strategy is used. . HR professionals must be well trained to implement this strategy.
HRM is a distinctive approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce, using an array of cultural, structural, and personnel techniques. (Storey, 1995)
Hard HRM, on the other hand, stresses 'the quantitative, calculative and business-strategic aspects of managing the "headcount resource" in as "rational" a way as for any other factor of production', as associated with a utilitarian-instrumentalist approach (Storey 1992: 29; see also Legge 1995 b). Hard HRM focuses on the importance of 'strategic fit', where human resource policies and practices are closely linked to the strategic objectives of the organization (external fit), and are coherent among
As the world is turning out to be more aggressive and unstable than any other time in recent memory, producing based enterprises are looking to increase upper hand at all cost and are swinging to more inventive sources through HRM practices (Sparrow, Schuler, & Jackson, 1994). HR practices has been defined by (Smallbusiness.chron.com, 2016) as “the means through which your human resources personnel can develop the leadership of your staff.”
Within this essay an in depth analysis will be conducted on the difference between Human Resource Management and Strategic Human Resource Management using contemporary perspectives. Human Resource Management (HRM) is the process of managing human resources in a systematic way. It is a practice devised to maximise the performance of employees and is concerned with the application of management principles to manage organisational personnel while paying attention to the policies and systems of the entity (Delaney & Huselid, 1996). Strategic Human Resource Management (SHRM) is a function of management which entails development of policies, programmes and practices related to human resources, which are aligned with business strategy so as to achieve the strategic objectives of the organisation (Patrick M. Wright, 1992). Its primary purpose is to improve the performance of the business and maintain a culture that encourages innovation and works continuously to gain competitive advantage. In this essay the Resource-Based View, High Performance Management and High Commitment Management perspectives of Strategic Human Resource Management and Traditional and Collaborative