‘Best practice’ discusses about the different understanding of the problem. It also argues how an organisation can get competitive advantage through human resources. Jeffrey Pfeffer ( 1994 as cited in Boxall and Purcell 2003) states that the highest profile of ‘best practice’ which is related with employment security, selectivity in recruiting, high wages, incentive pay, employee ownership, information sharing, participation and empowerment, teams and job redesign, training and skill development, cross-utilisation and cross-training, symbolic egalitarianism, wage compression, promotion from within, long term perspective, measurement of the practices, and overarching philosophy.
‘Best practice’ model discusses employees’ abilities and skills through good recruitment and strong training, to make the best human resources, motivating desired behavior though strong incentives, and also ways of opening up opportunities for better trained and more motivated workers to contribute their ideas through work redesign and indirect forms of employee participation. (Boxall and Purcell, 2003).
HOW ‘BEST PRACTICE’ APPROACH HELP IN DESIGNING THE STRATEGIC HR SYSTEM OF AN ORGANISATION:
STRATEGIC FORMULATION: ‘best practice’ discuss about the total quality management (TQM ), equal employment opportunity (EEO), benchmarking, organisational learning , adaptability, internal and external market condition and standard sort of control for practicing which are most important for implementing the strategic HR system at the organisation. According to Boxall and Purcell (2003), state that there is still a valuable role for a concept of best practice and it helps the organisation to intelligently fashion particular practices to organisation’s specific context.
‘Best practice’ model is also involved internal and external analysis, strategic choices, best employee choices. When HRM thinks to design the strategic HR system at the organisation, obviously HRM should to think about the internal and external market condition and strategic choices. And also they can take help from the best practice model for implementing strategic HR system. ‘In strategic HRM, the HR function is involved in both strategy formulation and strategy implementation. Five major components of strategic formulation process are mission, goals, external analysis, internal analysis and strategic choice.’ (De Cieri et al. 2005 pp. 56-59).
‘Best practice’ discusses about potential market capacity, particulars way of working, many types of functions of the organisation, organisational culture, and job redesign. There are some factors which should be considered for implementing SHRM. ‘The factors are workforce capacity, technological capacity and potential, market capacity and potential, particulars way of working, the location of executive power, authority and influence, key character, functions and expertise, the location of activities, local factors, value, frequency, importance and presentation in every area of activity, the quality and effectiveness of decision making processes’ ( Pettinger, 2004).
KNOWLEDGE BASED VIEW AND RESOURCE BASED VIEW:
Most of the firms achieve their organisational goal through their knowledge based view (KBV) and resource based view (RBV). The KBV and RBV are essential developments in strategic management theory that explores the connections between firm’s efforts at knowledge management and their HR strategies (Haesli and Boxall 2005). KBV and RBV help the organisation for ‘best practicing’.
Strategic HRM literature has increasingly been influenced through the resource based view (RBV) of the organisation. Human resource placed greatly emphasized on the knowledge and experience of the management team for the business strategy. RBV focus on the ways in which firms might build unique cluster of human and technical resources that make desirable levels of performance (Boxall and Purcell 2003). So, resource based view play an important role for practicing ‘best practices’.
BUSINESS STRATEGY AND IMPLECATIONS FOR THE ‘SHR SYSTEM’ (R B V AND K B V):
Business strategy plays a vital role for the organisation. According to the Web based strategy definition (2006), Business strategy describes about the actions and the approaches crafted by management to produce winning performance in one specific direction of business. Moreover, the central business strategy issue for achieving a stronger long-term competitive position in the market places.
Pitts and Lei (2006 p.14) state that ‘business strategy is a plans and actions that firms devise to compete in a given product/market scope or setting; addresses the question “how do we compete within an industry”. Business strategy helps the organisation for surviving the global market place. Human resource management system must be modified to the demands of business strategy. All of impressive and sometimes dramatic competitive approaches revolve around a few fundamental business strategies appear to be present to a greater extent in every industry Miles and Snow (1984).
‘Business strategy’ and ‘best practice’ are related with each other. If the organisation practices the ‘best practice’ model, the organisation could make a good business strategy also. Because this model discuss about the measurement of the practices, over searching philosophy, enhancing employee abilities, good recruitment system, strong employee training, in which are essential for making business strategy. According to the Michie and Sheehan (2005), best practice is the universal approach. It emphasis on three main approaches. The approaches are the relation between HR and firm performance, links between ‘business strategy’, HR and use of flexible employment contracts, the moderating effects of strategy on the links between HR policies, practices and performance. A lot of Company focuses on business strategy through the help of best practice model.
CULTURE:
Organisational culture is another important factor for practicing the best practice. Organisational culture is the system of shared beliefs and values that develops an organisation. Moreover it guides the members of the organisation for achieving organisational goal (Wood et el. 2004). The quality of the management process and of the firm’s workplace culture is seen as major factor at the organisation. Resources are not valuable in and of themselves, but they help firm that create advantages in particular markets (Porter 1991 cited in Boxall and Purcell 2003).
Hughes (2002 p.221) states that ‘best practices include establish a service – oriented culture, building a strong capital base, motivating employees and providing employees with the opportunity to contribute’. So we can say that best practice is not only helping the strategic HR system of the organisation but also it helps to improve the organisation culture also.
ETHICS:
Ethics is a moral belief. It is also related with equal opportunity, affirmative action of the organisation, work life balance, participation in company’s decision, right to fair wages, cultural control etc (De Cieri et al. 2005). Best practice also discuss about the moral belief, fair wages, affirmative action of the organisation. So best practice also help in designing the best ethics of the organisation.
HR professionals play an important role for the process of developing, updating, communicating, training about and enforcing ethics program. Three of the roles that HR is expected to play in the HR arena. Roles are determined employees’ trust and loyalty, provide consistent and credible information about the organisation and asses perception about corporate leadership (Anonymous 2005).
ORGANISATIONAL SETTING:
Organisational setting discuss about the well organized settings of the organisation. Best practice also helps the organisation for well organized setting of the organisation through the human resources and well controlled HR strategy. Baruch and Yehuda (1998) state that Human Resources managers try for practicing the best practices, though it is tough work for HR manager. A balance is needed when making tactical and strategic choices in human resource management. Best practice highlights possible benefits and the main pitfalls to avoid when applying this approach in ‘organizational settings’.
COMPETITIVE STRATEGY AND IMPLECATIONS FOR THE ‘SHR SYSTEM’ (R B V AND K B V):
According to the Mcbain (2004), competitive strategy is a stable set of practices and it helps the HR system remarkably. Best practice creates the superior performance. This approach is typically underpinned by a resource view of strategic HRM, which argue that human resources can provide competitive advantage through ‘best practice’ and it helps the organisation for designing competitive strategy. According to the definition of the competitive strategy we can say that best practice help the organisation for making competitive strategy through the stable set of practices which are emphasis on knowledge and experience of the management, quality of management process.
Competitive strategy helps the organisation for getting the competitive advantage from local and global market. HR manager of the organisation make the competitive strategy through the consideration of current market position, ability of human and technological resources. Best practices also help the organisation for making the competitive strategy. Best practice show the way for making the competitive strategy easily. Because best practice is universalistic and it helps us to intelligently fashion particular practices to organisational specific context. The integration of human resource functions into the organisational strategy support and implement the strategic plan to achieve competitive advantage (Wofford 2002).
RESOURCE BASED VIEW:
Large scale reviews of the strategic management literature now emphasis on resource based view as a major body of thought concerned with explaining sources of competitive advantage. Resource based model concerns about internal analysis (strengths and weaknesses) and external analysis (opportunities and threats) in which is very significant for the organisation (Boxall and Purcell 2003). HRM of the organisation make competitive strategy by considering SWOT analysis that is strength, weakness, opportunities and threats.
Core capabilities are knowledge sets composed of four dimensions. The content dimensions are employee knowledge and skill, physical technical systems, managerial systems and values & beliefs (Leonard 1998 as cited in Boxall and Purcell 2003).
Business strategy includes all stake holders such as investors, customers, employees, suppliers, regulators. It is also a well organized plan and action that firms formulate to compete in a given market setting. Competitive strategy emphasis on the industry attractiveness, competitive environment, firm’s capabilities with opportunities, competitive advantage through distinction, responding to shifts in competitive advantage (Pitts and Lei 2006).
STRATEGIC IMPLEMENTATION: After completing the strategy formulation, SHRM implement the strategy which is involved with five important variables. ‘Five important variables of strategic implementations are organizational structure; task design; types of information and information systems; the selection, training and development of people; and reward systems’ (De Cieri et al. 2005 p.63). Some important strategies, the strategies are cost leadership (an integrated set of actions designed to produce products at the lower cost), differentiation strategy (an integrated set of actions designed to produce products that customers perceive as being different in ways that are important to them) (class lecture sheet).
DIFFICULTIES OF IMPLEMENTING SHRM: There are some difficulties for implementing SHRM through the best practice. Sometimes strategic human resource manager can not put his strategy what he thinks. Because implementing strategy depends on current situation of the internal and external environment. SHR manager should conscious about some features such as organizational culture, strategy, technology, structure, size, legislation, external market situation. According to the Hill, Jones and Galvin (2004), if the company does not emphasis on environmental condition, the company can face some problems. HRM need to be conscious about the proper practicing of ‘best practice’.
Reference list:
Miles R E and Snow C C, 1984, ‘designing strategic HR system’ p.37
Definition of business strategy in the web, viewed 9th august 2006,
