STRATEGIC HR SYSTEM: Strategic human resource management performs an important role in today’s competitive market. It is noticeable that, Organizations are benefited through the strategic HRM. In addition, strategic HRM assists the organization for achieving the goal through the human resources. Before exploring how the ‘best practice’ approach can help in designing the strategic HR system of an organisation, we have to know about the Strategic HR system.
It is a one kind of frame work and direction for action. According to the McKinnon and Murphy (2006), strategic HRM is an overall approach to the management and it deals with organisation’s structure, culture, values, quality, performance, commitment, trust, competence and management development concerns. Strategic human resource management give well organized direction to the employees for achieving the goal of organization.
Strategic HR system shows the way of taking competitive advantage. According to the (Boxall and Purcell, 2003) HR strategy consists of critical goals, unavoidably affects the firm’s performance, whole management structure, interactions between divisional and business unit level. It is also perform as a lead indicator for facing the global organizational challenges. HRM functions must be considerably involved in the strategies management process.
Human resource manager should be conscious about his responsibility which is greatly related with strategic plan, implement strategic alternatives, employees’ skill behavior and attitude and also develop some programs for ensuring the employees’ effectiveness and efficiencies. (De Cieri et al. 2005). BEST PRACTICE / BEST FIT: some authors argue that ‘best fit’ model is more effective for designing the strategic HR system and some authors argue that ‘best practice’ is the universalism model and it helps the organization for managing the people strategically.
One of the more fundamental aspects of the on going debate about the added value of HRM relates to ‘best practice versus ‘best fit’. Best practice suggests the universal success of certain HR practices, while best fit acknowledges the relevant impact of contextual factors (Paauwe and Boselie 2003). According to the (Boxall and Purcell, 2003) When HRM covers a range of models which advocate fitting strategy to its surrounding context is called ‘best fit’.
Moreover, most models of ‘best fit’ discuss about the ‘external fit’ of the organisation and how to achieve it. And ‘best fit’ model emphasis on competitive strategies, staffing and development strategies, performance appraisal and pay policies. When HRM covers a best practice thinking which is related with universal prescription is called ‘best practice’. Moreover, best practice argues that all firms will see performance improvement if they implement best practice at the organisation.
So, we can say that ‘best practice’ and ‘best fit’ approach both help in designing the strategic HR system of an organisation. But it is also noticeable that ‘best practice’ model help in designing the strategic HR system remarkably. According to the McKinnon (2006, p. 4-6) state that ‘the best fit philosophy assumes that HR are strategy will be more effectual if it is fittingly integrated with its particular organisational and broader environmental context.
But this context is complex, which contingences are the most critical, and how to best connect them are debatable. ‘ So from my view that, ‘best practice’ describes the main detail about the organisation. ‘Best practice’ contain a lot of important practices which are seen into the ‘best fit model’ also. So I think that ‘best practice’ does alone determine the design of the SHR system of an organisation. ‘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).